• Asia-Pac equities traded mostly higher following strong tech earnings in the US. ASX lagged after political difficulties in Australia
• ECB sources suggest that the extension of the PSPP will be subject to a swift taper at the end of next year
• Looking ahead, highlights include US GDP, PCE, and ECB’s Praet

ASIA

A deluge of corporate results dominated focus in Asia-Pac trade, with the region’s indices mainly in the green after a similar close in US and where Nasdaq 100 futures rallied after-market as tech giants Alphabet, Amazon, Intel, Microsoft and Western Digital all surpassed Q3 estimates. ASX 200 (-0.4%) and Nikkei 225 (+1.1%) both opened positive in which the energy sector lead Australia after Brent crude rose above USD 59/bbl and printed its highest in more than 2 years, while the Japanese benchmark outperformed on JPY weakness and with the biggest gaining stocks underpinned by earnings releases. However, Australian stocks were later spooked after the High Court ruled now-former-Deputy PM Joyce was ineligible for his parliamentary seat and would have to contest it again at a by-election, which meant the government loses its 1-seat majority. Elsewhere, Shanghai Comp. (+0.3%) was higher following another firm liquidity operation by the PBoC which utilized a 63-day reverse repo for the 1st time ever, and the Hang Seng (+0.8%) was led by gains among the Big 4 after China’s 2nd largest lender China Construction Bank posted a 4% increase in Q3 net. Finally, 10yr JGBs were flat as a positive risk tone in Japan sapped demand for safety, with downside also stemmed amid the BoJ’s presence in the market for long to super-long JGBs.

PBoC injected CNY 60bln via 7-day reverse repos, CNY 30bln via 14-day reverse repos and CNY 50bln via 63-day reverse repos, for a net weekly injection of CNY 390bln vs. Prev. CNY 560bln net injection last week. (Newswires)

PBoC set CNY mid-point at 6.6473 (Prev. 6.6288)

Chinese Industrial Profits (Sep) Y/Y 27.7% (Prev. 24.0%). (Newswires)

Japanese National CPI (Sep) Y/Y 0.7% vs. Exp. 0.7% (Prev. 0.7%)

Japanese National CPI Ex-Fresh Food (Sep) Y/Y 0.7% vs. Exp. 0.7% (Prev. 0.7%)

EUROPE/UK

Catalan parliament spokesperson said they will implement results of the referendum from today. (Newswires)

The ECB assume that their newly extended bond-buying scheme will be subject to a quick taper at the end of next year, according to sources. (Newswires)

FX

AUD wobbled after the Australian High Court ruling that left the Turnbull government without a majority until former-Deputy PM Joyce wins back his parliamentary seat at a by election. Elsewhere, price action across the major currencies was mainly a continuation from the prior day with EUR/USD further weakening from the ECB’s dovish-perceived 'down size', while GBP/USD followed suit and broke below 1.3150. This benefitted the greenback, which alongside the positive risk tone saw USD/JPY extend above the 114.00, although gains in the pair were only moderate on fatigue from the prior day’s exuberance and after a mostly inline CPI release.

Australian High Court ruled now-former-Deputy PM Joyce was ineligible for parliament seat, which also meant that government loses its 1-seat majority at Parliament. However, Barnaby Joyce will contest to win his seat back at the by-election expected on December 2nd. (Newswires)

BoC Governor Poloz said if the economy continues to evolve, less stimulus is needed in future. Poloz also stated he expects hike in rates to hit harder than in the past and that the central bank is most concerned how rate hikes will impact highly-indebted consumers. (Newswires)

COMMODITIES

Commodity prices were lacklustre overnight with oil consolidating after yesterday’s gains in WTI and Brent crude futures, in which the latter rose above USD 59/bbl and traded at its highest in over 2 years. Elsewhere, gold prices languished near 2½-month lows due to a firmer greenback and copper, while copper was subdued alongside broad weakness in the metals complex and 4% declines in Dalian iron ore futures.

GEOPOLITICAL

North Korea states it took into custody a South Korean fishing vessel on October 21st and will be releasing the crew and vessel this Friday. (KCNA)

US

At settlement, US Treasury yields were little changed, rising slightly on the day. In late morning trade, the Treasury complex was taking its cues from German Bunds, which rose after the ECB’s dovish “downsizing” of asset purchases (Draghi was keen to emphasise this was not a “taper”). Bonds saw some choppy action on Fed chair reports as Politico reported that the race was now down to Fed Governor Jerome Powell and Stanford Economist John Taylor, with incumbent Janet Yellen and former governor Kevin Warsh out of contention. In the afternoon, the US Treasury sold $28bln of 7-year notes in a poor auction, which tailed by 0.8bps. 10-Year T-Note futures settled 2+ ticks lower at 124-12.