• Asian bourses traded higher across the board amid a positive Wall St close with energy names leading the charge
• RBA stood pat on rates as expected. RBNZ act looks to maximise employment as a goal
• Looking ahead, highlights include US APIs, ECB’s Draghi, Lautenschlaeger and Fed’s Yellen

ASIA

Asian bourses higher across the board, having drawn encouragement from the close on Wall Street, where all tspanee major indices touched yet more record highs over the surge in energy names amid rising oil prices. ASX 200 (+1.0%) briefly pushed tspanough the key 6000 level for the first time since 2008 as miners lifted shares in Australia with iron prices continuing to rise. Similarly, the Nikkei 225 (+1.6%) traded at better levels, making fresh 25yr highs after topping 22,750. While, Chinese markets also eked out gains this morning with Evergrande the notable outperformer in China after the company stated that they were to sell CNY 60bln of property assets. In credit markets, across the Japanese curve, the short end outperformed with the curve somewhat steeper. JGBs had been tracking lower, in tandem with USTs as equities continue to reach new highs.

EUROPE/ UK

UK BRC Retail Sales YY (Oct) -1.00% vs. Exp. 0.90% (Prev. 1.90%)

National Audit Office states that more than one third of gilts (ex-BoE purchased ones) are linked to the retail price index measure of inflation, if inflation rises 1% or more over the next 5yrs, payments on those bonds could rise by GBP 26bln. (Telegraph)

FX

NZD saw a move higher as the NZ Finance Minister outlined review of RBNZ act in which the act will include maximising employment as a goal, while also including a committee-based decision-making model. However, the Finance Minister noted that there is no desire to have the exchange rate in the review. In turn, this took NZD to a high of 0.6954 which is circa 10pips shy of the 23.6% Fib retracement of the 0.7435-0.6818 decline. AUD rose following the RBA monetary policy decision where they unsurprisingly kept rates unchanged, although they maintained a neutral stance despite some analysts suggesting that they may lean to the dovish side amid recent subdued inflation data.

Australian RBA Cash Rate (Nov) 1.50% vs. Exp. 1.50% (Prev. 1.50%).

- RBA says forecasts are largely unchanged with the forecast remaining that inflation will pick up. Higher currency would slow the economy, adding that it is restraining price pressures. Labour market has continued to strengthen, although inflation remains low and will likely do so for some time. (Newswires)

New Zealand Financial Minister stated that they will retain the 1-3% inflation target for RBNZ. There is no desire to have NZD included in the RBNZ review. The RBNZ review to include maximising employment as their goal. (Newswires)

COMMODITIES

Brent and WTI crude futures hovered around yesterday’s highs with the latter holding above USD 56 and is at the highest level in 2yrs. Gold prices off slightly by 0.2%, easing in line with the firmer risk tone across Asia, while Dalian iron ore prices (+3%) yet again continued to surge higher.

US

With a lack of Tier One data, and policymaker speeches that didn’t touch on current policy, volumes in the Treasury complex were extremely thin on Monday, with investors also warry of headline risk related to House/Senate tax comments. Once again, we saw longer-dated yields fall – narrowing the curve to fresh decade lows – with the familiar narrative that the Fed will raise rates in December, while benign inflation and uncertainties around whether Republicans will be able to legislate meaningful tax reforms in a timely fashion being cited. Corporate issuance was also a factor, with Apple’s launch of $7bln multi-tranche deal, and a 40-year offering from Corning, keeping a lid on the Treasury rally. T-Note futures for December settled 6+ ticks higher at 125-11+

White House requests from congress USD 4bln for missile defense to counter North Korea. (Newswires)