• Asian equity markets were slightly mixed amid a deluge of earnings and with the region tentative at the start of a risk-packed week
• The greenback pared some of the gains from Friday’s strong US GDP numbers which marginally benefitted its counterparts
• Looking ahead, highlights include regional German CPIs, US PCE and personal consumption

ASIA

Asian equity markets were slightly mixed amid a deluge of earnings and with the region tentative at the start of a risk-packed week. An initial positive tone was observed after Friday’s fresh records on Wall St where sentiment was inspired by a surge in the tech giants, stronger than expected GDP and reports that President Trump was leaning towards Powell for the Fed chair role. This benefitted the ASX 200 (+0.4%) and Nikkei 225 (+0.1%) at the open in which the energy sector led in Australia after Brent crude rose back above USD 60/bbl for the first time since July 2015, while gains in Japan were later pared due to a firmer JPY. Taiwanese Apple suppliers coat-tailed on the tech giant’s recent strength due to strong iPhone X demand, while Hang Seng (-0.1%) traded indecisive and Shanghai Comp. (-1.1%) underperformed on a retreat below the 3,400 level amid broad mainland weakness. Finally, 10yr JGBs were mildly higher amid an indecisive risk tone in Japan and with the BoJ also active in the belly to short-end of the curve.

PBoC injected CNY 70bln via 7-day reverse repos, CNY 30bln via 14-day reverse repos and CNY 50bln via 63-day reverse repos. (Newswires) PBoC set CNY mid-point at 6.6487 (Prev. 6.6473).

BoJ Governor Kuroda is likely to stay on for another 5-year term, according to reports. (Nikkei)

EUROPE/UK

Spain dissolved the Catalan parliament on Friday in which the central government ministries are to take control, while elections are to be held on December 21st. (Newswires)

A poll suggested the number of Catalans that were in favour of the dissolution of the regional parliament and the holding of elections was at 52% vs. 43% against, while the poll also showed the number in favour of independence declaration was at only 41% vs. 55% against. (El Pais)

ECB’s Coeure stated he hopes bond buying will not be further prolonged again. (Newswires)

S&P affirmed Germany at AAA; Outlook Stable and raised Italy to BBB from BBB-; maintains Outlook at Stable. Fitch affirmed Netherlands at AAA; Outlook Stable. S&P affirmed UK sovereign rating at AA; Outlook Negative and Fitch also affirmed UK at AA; Outlook Negative. (Newswires)

UK PM May will sack Cabinet ministers if they are proven to be sex pests, the Telegraph understands, as a rapidly growing list of MPs accused of harassment circulated in Westminster. (Telegraph)

UK Chancellor Hammond may have to abandon his target for getting rid of the deficit at this month’s budget if he wants to increase spending on public services, the Institute for Fiscal Studies said. (BBC)

FX

FX markets traded quiet overnight due to a lack of tier-1 data releases and as the region awaited this week’s deluge of risk events including US jobs data and policy decisions from the BoJ, FOMC and BoE. Nonetheless, the greenback pared some of the gains from Friday’s strong US GDP numbers which marginally benefitted its counterparts across the pond, while commodity linked currencies held on to most of the recent advances spurred by higher oil prices, with NZD the exception on cross related flows as AUD/NZD reclaimed the 1.1200 handle and NZD/JPY retreated below 78.00.

COMMODITIES

Commodities were rangebound as crude prices took a breather from last week’s ascent in which WTI briefly broke above USD 54/bbl and Brent reclaimed the USD 60/bbl for the first time since 2015. Gold prices lacked firm direction ahead of this week’s FOMC meeting and NFP jobs data, while copper also consolidated amid a somewhat indecisive risk tone in the region.

US Baker Hughes Rig Count (Total) 909 (Prev. 913). (Newswires)

Saudi Arabia have affirmed their backing of an extensions to current OPEC cuts. (FT)

GEOPOLITICAL

North Korea was said to be conducting nuclear war safety drills, according to press reports over the weekend. (NYPost)

US

Despite firm risk sentiment in the equity space, as well as US Q3 GDP putting in an upside beat and short end yields jumping to nine-year highs, Treasury yields were lower on the day by 2-3bps across the curve by settlement, on a combination of reports suggesting Trump will favour Powell over Taylor (Powell is the more status-quo candidate, versus the Taylor, who is perceived as a hawk); additionally, the situation in Spain is getting messy, with PM Rajoy firing the Catalan Government and calling regional elections on 21 December. US T-note futures for December settled 7 ticks higher at 124-19.

US President Trump is likely to name Fed’s Powell as the next Fed Chair, according to WSJ sources. (Newswires)

US Special Counsel Mueller is reported to serve first indictment in Russia probe today. (Newswires)