• APAC stocks eventually traded mostly higher but with gains limited as sentiment remained cautious.
• RBI kept the Repurchase Rate unchanged at 6.50%, as expected.
• JPY remains the key focus in the FX space with USD/JPY sub-144.00, EUR/USD and Cable tested 1.08 and 1.26 respectively. 
• European equity futures are indicative of a higher open with Euro Stoxx 50 future +0.3% after the cash market closed down 0.2% yesterday.
• Bunds are marginally softer, Brent and WTI are back above USD 75/bbl and USD 70/bbl respectively.
• Looking ahead, highlights include German CPI (Final), US NFP, UoM Inflation Expectations Survey, BoE Inflation Attitudes Survey.

US TRADE

EQUITIES

• US stocks gained led by strength in the communications and tech sectors with Alphabet boosted by AI prospects after Google unveiled its latest AI model, Gemini and with firm gains also seen in semiconductor names, while participants digested another bout of data releases which were somewhat mixed as the focus now turns to the approaching Non-Farm Payrolls report.
• SPX +0.80% at 4,585, NDX +1.48% at 16,022, DJIA +0.17% at 36,117, RUT +0.87% at 1,868.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US Treasury Secretary Yellen said Fed performance has been strong and she is feeling very good about the US economy's path. Yellen also stated that the US and Mexico discussed the possibility of more deeply integrating cross-border payment systems.
• A criminal case against US President Biden's son Hunter Biden was filed in California, while the court document stated that Hunter Biden engaged in a four-year scheme to not pay at least USD 1.4mln in self-assessed federal taxes and that he spent millions on an extravagant lifestyle instead of paying his tax bills. Furthermore, the DoJ confirmed that three felony offences and six misdemeanour tax offences were filed and if convicted, he faces a maximum of 17 years in prison.

APAC TRADE

EQUITIES

• APAC stocks eventually traded mostly higher but with gains limited as sentiment remained cautious heading into the incoming US NFP jobs report and after the recent BoJ speculation.
• ASX 200 finished marginally higher in choppy trade as weakness in financials and tech was offset by resilience in the commodity-related sectors including energy after confirmation of early merger talks between Woodside Energy and Santos to form an AUD 80bln Australian gas giant.
• Nikkei 225 underperformed amid pressure from a firmer currency after speculation that the BoJ could exit NIRP sooner than thought with markets pricing around a 20% chance they could lift rates at the December meeting, while a downward revision in Japan’s Q3 GDP to a deeper annualised contraction of -2.9% also clouded over the risk tone.
• Hang Seng and Shanghai Comp just about shrugged off the early indecision amid a lack of fresh drivers with the downside cushioned after the PBoC conducted a net liquidity injection for the first time this week.
• US equity futures traded flat with participants sidelined as the key US jobs data looms on the horizon.
• European equity futures are indicative of a higher open with Euro Stoxx 50 future +0.3% after the cash market closed down 0.2% yesterday.

FX

• DXY was rangebound as participants awaited the incoming jobs data and after tumbling yesterday beneath 104.00 as JPY strength dominated price action owing to increased BoJ-related speculation.
• EUR/USD lacked direction after fading some of the prior day’s advances and with resistance at the 1.0800 level.
• GBP/USD was little changed and looks to test 1.2600 to the upside after several failed breakout attempts.
• USD/JPY languished at a sub-144.00 level amid the recent BoJ exit bets but was off the prior day’s lows as a steeper contraction in Japan’s revised GDP offset some of the exit speculation.
• Antipodeans were mixed alongside the choppy mood in stocks and lack of pertinent catalysts.
• PBoC set USD/CNY mid-point at 7.1123 vs exp. 7.1427 (prev. 7.1176)
• BoC Deputy Governor Gravelle said the economy is now roughly in balance but the BoC is closely watching inflation expectations, wage growth and corporate pricing behaviour. Gravelle also said it is still pretty clear that Canada is not on a sustainable path to the 2% inflation target.

FIXED INCOME

• 10-year UST futures trickled lower to beneath the 111.00 level but remained within yesterday's parameters amid recent choppy price action heading into the key US jobs data.
• Bund futures marginally softened in muted trade with prices remaining north of 135.00.
• 10-year JGB futures remained pressured in early trade as yields edged higher although JGBs gradually pared most of today's earlier losses after dismal GDP data and with the BoJ present in the market under its scheduled bond-buying operations.

COMMODITIES

• Crude futures found a reprieve from recent selling with Brent and WTI back above USD 75/bbl and USD 70/bbl, respectively.
• Iraq’s oil minister said the country renewed its support for the OPEC+ agreement and commitment to voluntary cuts.
• EU is to give member states the power to block Russian gas imports, according to FT.
• Spot gold was relatively flat and kept to within a tight range of USD 2027-2034 per ounce ahead of the key US jobs data.
• Copper futures eked mild gains as risk appetite somewhat improved but with upside capped amid a lack of conviction.

CRYPTO

• Bitcoin notched marginal gains with prices back above USD 43,500.

NOTABLE ASIA-PAC HEADLINES

• Australia's Treasurer announced a new policy statement with the RBA in which the RBA board and the government agreed that a flexible inflation target is an appropriate framework for achieving price stability with the goal for consumer price inflation kept between 2%-3%. RBA board will set monetary policy so that inflation is expected to return to the mid-point of the target with the appropriate timeframe for this to depend on economic circumstances, while the RBA will publish detailed forecast data and assumptions including the Cash Rate. Furthermore, once the new monetary policy board is operational, it will publish an unattributed record of votes and will convene and engage with an expert advisory group on monetary policy to provide the board with a wide range of external views.
• RBI kept the Repurchase Rate unchanged at 6.50%, as expected, while it maintained its stance of remaining focused on the withdrawal of accommodation in which 5 out of 6 members voted in favour of the policy stance. RBI Governor Das said the Indian economy is resilient and has momentum, while he noted broad-based easing in core inflation but added that inflation could see an uptick in November and December. Furthermore, he stated that the target of 4% CPI has yet to be reached and they have to stay the course on inflation, as well as noted that monetary policy has to stay alert about shocks getting generalised and has to remain actively disinflationary with the need to remain vigilant and ready to act.

DATA RECAP

• Japanese GDP Revised QQ (Q3) -0.7% vs. Exp. -0.5% (Prev. -0.5%)
• Japanese GDP Revised Annualised (Q3) -2.9% vs. Exp. -2.0% (Prev. -2.1%)
• Japanese All Household Spending MM (Oct) -0.1% vs. Exp. -0.2% (Prev. 0.3%)
• Japanese All Household Spending YY (Oct) -2.5% vs. Exp. -3.0% (Prev. -2.8%)
• Japanese Overall Labour Cash Earnings YY (Oct) 1.50% vs. Exp. 1.00% (Prev. 1.20%)

GEOPOLITICS

• Israel agreed to a US request to open the Kerem Shalom border crossing for screening and inspection of humanitarian aid into Gaza, according to a US official cited by Reuters.
• UAE asked the UN Security Council to vote on Friday morning on a draft resolution demanding an immediate humanitarian ceasefire in Gaza, according to diplomats cited by Reuters.
• White House said they are not close to another deal for a pause in the Israel-Hamas conflict and the US is still trying to get more information on Hamas hostages.
• US Secretary of State Blinken said attacks in the Red Sea are unacceptable and they believe attacks are being carried out with the support of Iran, according to Al Jazeera via social media platform X.
• US State Department said it welcomes the release of Armenian and Azerbaijani soldiers, while it added that Secretary of State Blinken looks forward to hosting Azerbaijani and Armenian foreign ministers in Washington for the next round of peace talks soon.

EU/UK

NOTABLE HEADLINES

• Fitch said major UK banks are resilient to the economic backdrop and underpinned by strong buffers, while it added that the performance of major domestically focused UK banks will remain sound over the next two years.
• Italy's Treasury said it is to sell up to EUR 6bln in BTP bonds at auction on Dec 13th.