• The Greenback weakened overnight amid gains across its major counterparts and EM currencies, with AUD and NZD mildly supported
• Asian equities put in a mixed performance overnight with the KOSPI the outperformer in a catch-up play
• Looking ahead, highlights include UK production numbers, Fed’s Kashkari and Kaplan

ASIA

Asia equity markets were mixed after a cautious tone in the US, although the KOSPI (+1.8%) surged as it took its turn to play catch up from a 10-day closure. ASX 200 (-0.3%) was indecisive with weakness in energy names offset by strength in gold miners, while Nikkei 225 (+0.5%) found support from a weaker currency following dovish comments from BoJ Governor Kuroda. Hang Seng (+0.1%) and Shanghai Comp. (-0.3%) were subdued with profit taking seen in the mainland after yesterday’s outperformance. Finally, 10yr JGBs were flat with demand dampened amid a positive risk tone in Japan and a reserved BoJ Rinban announcement for just JPY 605bln of JGBs.

BoJ Governor Kuroda said Japan's economy is expanding moderately and expects CPI to pick up pace towards 2% goal, while Kuroda added the BoJ is to expand the monetary base until inflation overshoots target. (Newswires)

PBoC injected CNY 40bln via 7-day reverse repos. (Newswires)

PBoC set CNY mid-point at 6.6273 (Prev. 6.6493)

EUROPE

Catalan President is to declare gradual independence and has reportedly drafted a declaration of independence. There were also unconfirmed reports that Catalans approached the Socialists to form a partnership to oust Spain PM Rajoy, although the Socialists said they were on the side of the government with regards to independence. (Newswires)

UK

UK BRC Retail Sales YY (Sep) 1.90% (Prev. 1.30%). (Newswires)

UK September Visa spending rose 1.4% M/M vs. Prev. 0.4% decline, but fell 0.3% Y/Y vs. Prev. 0.2% increase. (Newswires)

UK PM May is said to see a need for mutual UK-EU rule recognition and told business leaders that two-year transitional period is assured. There were also reports that UK government is intent to pursue new trade negotiations with those outside the EU during the Brexit implementation period with reports also suggesting that May has provided detailed plans as to what a ‘no deal’ could look like for the UK in order to put pressure on Brussels. (Newswires)

FX

The greenback weakened overnight amid gains across its major counterparts and EM currencies, with AUD and NZD mildly supported by better than expected Australian NAB Business Confidence and ANZ New Zealand Inflation Gauge growth. USD woes were also exacerbated after the PBoC strengthened its reference rate which pressured USD/CNH below 6.6000, while JPY weakened after comments from BoJ Governor Kuroda who remained steadfast in his policy stance and stated that the BoJ is to expand the monetary base until inflation overshoots the target.

COMMODITIES

WTI crude futures traded sideways overnight in which prices languished below USD 50/bbl, with participants sidelined and looking towards this week’s inventories reports for catalysts. Elsewhere, gold marginally benefitted from a subdued greenback and lingering geopolitical concerns, while copper was choppy alongside an indecisive risk tone.

OPEC Secretary General Barkindo expects 2017 global oil demand growth of 1.45mln bpd and 2018 demand growth at 1.40mln bpd. (Newswires)

GEOPOLITICAL

North Korea accused the CIA and South Korea’s Intelligence Service of a failed assassination attempt on North Korean leader Kim Jong Un which occurred in May 2017. (Twitter)

US Defense Secretary Mattis said the US Army must be prepared on North Korea, while there were also reports that US nuclear powered sub Michigan is to arrive in South Korea later this week for drills. (Newswires)

US

Treasury futures lacked direction with their cash equivalents closed and US 3, 10 and 30y supply due later this week. US Dec’17 10y T-note futures settled at 125.03, up 2 ticks on the day.