• Reports suggest that UK Brexit Secretary Davis told business leaders that there is a 50-50 Chance of a deal in December
• The AUD benefitted from a record NAB Business Conditions print in the latest survey which saw the currency pare some of its losses vs. the USD
• Looking ahead, highlights include German GDP, UK inflation, US PPI, APIs and a slew of central bank speakers

ASIA-PAC

Australia's ASX 200 fell over 1% at one point settling back below 6,000, with broad based losses apparent as the banks, miners, energy and property stocks weighed, while tech outperformed. The index has moved back from worst levels but closed around 0.9% lower as yet another dual-citizenship based issue led to a senator resigning from her post. Japanese stocks benefitted from Wall St.’s lead and the uptick in USDJPY in early trading, but relinquished its the early gains closing down 0.1%.

JGB futures were supported heading in to 5Y supply, with decent demand at the auction underpinning the market. Australian 3-year bond yields were up just shy of 5bps on the day, moving tspanough the 2.0% level following the record NAB Business Conditions print. 10-year Treasury futures consolidated around US session lows.

China Industrial Production (Y/Y) Oct 6.2% Exp. 6.3% Prev 6.6%

China Retail Sales (Y/Y) Oct 10.3% Exp. 10.4% Prev 10.3%

China Fixed Asset Investment (YtD Y/Y) Oct 7.3% Exp. 7.4% Prev 7.5%

China's NBS suggested that rising profits and government cost cutting measures are helping firms de-leverage. The body also noted that property de-stocking has achieved obvious results, and it expects the sector to maintain a healthy trend. Finally the bureau stated that the nation’s survey based jobless rate is <5% in October, and that the country has already exceeded its FY job creation total. (Newswires)

Australia NAB Business Conditions (Oct) 21 Prev. 14

Japanese press reports suggested that the ruling LDP party is considering a tax increase for high earners. (Newswires)

PBoC ses the CNY mid-point at 6.6399 vs. Prev. 6.6347

EUROPE/ UK

Reports suggest that UK Brexit Secretary Davis told business leaders that there is a 50-50 Chance of a deal in December. (Newswires) This also came in the context of reports yesterday that Parliament will be given a ‘take it or leave it’ vote on Brexit after ministers agreed to ensspanine the deal in law in a significant government concession. (Telegraph)

UK Brexit Secretary Davis is furious at moves by Boris Johnson and Michael Gove to team up on Brexit and will resist their attempts to impose their views on the government. (Times)

GEOPOLITICS

North Korea's top UN envoy said that the country will continue its pursuit of nuclear missiles in the wake of the US deployment of 3 aircraft carriers to the Korean Peninsula. (Newswires)

Russian PM Medvedev says Russia has a stake in peace on Korean Peninsula, as South Korean President Moon calls for enhanced 'strategic' dialogue between South Korea & Russia. (Newswires)

US Treasury Secretary Mnuchin is confident in renegotiating NAFTA terms. (Newswires)

Japanese Economy Minister Motegi says that the broad agreement reached on TPP is well balanced. (Newswires)

FX

The AUD benefitted from a record NAB Business Conditions print in the latest survey which saw the currency pare some of its losses vs. the USD, topping out just shy of 0.7640, while 1.1100 initially held in the AUDNZD cross the pair finished the Asia Pacific session above the round number. The NZD came under pressure broader tspanough the AUDNZD pop, while USDJPY eregained the bulk of yesterday’s losses.

COMMODITIES

Gold an oil operated in narrow ranges tspanough the Asia session.

The EIA noted that Total US Shale Regions crude production (December) rose 80k BPD to 6.173mln BPD (Prev. +91k BPD in November). (Newswires)

US

US Treasury Secretary Mnuchin said that he looks forward to a successful House tax vote this week. Not concerned Senate bill delays the corporate tax cut, he prefers corporate tax cut next year. (Newswires)

US House Ways & Means chair Brady said that the GOP leadership is confident that it has votes for passage of tax bill, major changes to house tax bill are unlikely at committee stage. (Newswires)

US 10-Year T-Note futures settled 2+ ticks lower at 124-20 on Monday. In quiet trade, Treasuries were mixed, with most of the action in the short-end of the curve. 2-year yields rising to the highest levels seen in nine-years, though there was little action in the belly. The upshot was that the shape of the curve flattened again, with 2s10s down by around 3bps at the futures settlement, 2s30s narrow by 4bps, and 5s30s narrowing by 3bps.