• USD dips following WSJ reports suggesting that US Special Counsel Mueller has issued a Subpoena for Russia-related documents from Trump campaign officials.
• Asian equities pulled back from better levels amid reports that North Korea conducts aggressive work on construction of a ballistic missile submarine.
• Looking ahead, highlights include Canadian CPI, US Housing Starts and comments from ECB’s Draghi.

ASIA-PAC

The Nikkei 225 took its time to catch up to a report suggesting that US Special Counsel Mueller has issued a Subpoena for Russia-related documents from Trump campaign officials, although reports pointing to North Korea conducting 'aggressive' work on the construction of a ballistic missile submarine probably helped the selloff. The Japanese blue-chip index rose as much as 1.8% in early dealing, but the broad-based dollar retreat led to the index unwinding the bulk of its gains; the index finished the session up 0.2%.

Australia’s ASX 200 added 0.2% with IT, healthcare and telecoms leading the way, as utilities lagged. Mainland Chinese stocks fell, with the Shanghai Comp down circa 0.4% as the PBoC’s injections have done little to underscore risk appetite, as Kweichou Moutai (viewed as a bellwether among Chinese blue chips) fell sharply. This left the index facing its biggest weekly loss in 3 months, while the Hang Seng rallied with IT leading the way higher

The PBoC injected a net CNY 810bln this week, against a net drain of CNY 230bln last week.

Japanese PM Abe promised to rid the country of deflation once and for all. He pledged to use all policy tools, including tax reforms and deregulation, to push up wages in order to put an end to the country's persistent deflation he also noted that he wants to increase pressure on North Korea along with the international community. (Nikkei)

Japanese Finance Minister Aso stated that Japan is to continue to firmly escape deflation. (Newswires)

South Korea's FX authority warned that the pace of the KRW's gains has been fast. (Newswires)

A BoK official warned that the KRW has appreciated fast in a short time, and reiterates that FX authorities are monitoring the situation. (Newswires)

Moody’s raised India's sovereign rating to Baa2 from Baa3, outlook to stable from positive.

EUROPE/ UK

ECB's Nowotny sees the Europe recovery going on for the next two years. He also noted that corporate bond purchases as a share of QE, may rise from January.  (Newswires)

ECB Smets said that too low inflation and deflation are just as bad as too high inflation; says low inflation is not worrying, and patience is required. (Newswires)

German Deputy Finance Minister rejects an increase in EU budget, according to Handelsblatt.

BoE's Carney stated that if the economy evolves as the BoE expects, BoE could raise rates a couple of times over the next few years. (Newswires)

UK Brexit Sec Davis sees a 2-year transition period, says EU and UK can go further than Canada trade model. (Newswires)

UK Brexit Secretary Davis said to be ready to accept interim EU Court Jurisdiction. (Suddeutsche Zeitung)

The Telegraph suggested that Brussels has begun to circulate the first confidential papers on how to plug the gaping hole in EU finances after Brexit, provoking serious alarm in regions and poorer countries across the bloc.

SNB’s Maechler said that the CHF remains highly valued despite recent weakening, no acute appreciation pressures on the Franc. (Newswires)

SNB'S Moser said that recent swiss CHF weakening remains fragile, cannot rule out renewed large-scale rise in future. (Newswires)

German government coalition talks have been delayed to Friday afternoon according to sources familiar with the matter. The head of Germany's Free Democrats party is optimistic that the remaining differences between potential coalition partners can be overcome, while the CDU noted that talks could extend tspanough to Saturday. (Newswires)

GEOPOLITICS

South Korean & US nuclear envoys agreed to resolve the North Korean nuclear programme in a peaceful, diplomatic manner. (Newswires)

A US Institute has suggested that images point to North Korean 'aggressive' work on ballistic missile submarine. (Newswires)

US Defence Secretary Mattis said there is an opportunity to talk with North Korea if it halts tests and developments of missiles. (Newswires)

Sources suggest that Canada is open to Mexico's five-year NAFTA review proposal. (Newswires)

ISDA says a credit event has occurred regarding Venezuela (Newswires)

FX

A WSJ piece suggesting that US Special Counsel Mueller has issued a Subpoena for Russia-related documents from Trump campaign officials triggered an initial, mild USD dip against the JPY, with the pair crossing below 113 the figure. It took the other major currencies a while to cotton on, but the dollar did eventually sell off across the board, with the GBP and EUR leading the AUD and NZD, as the USDJPY moved towards 112.50. However, the Antipodeans moved into negative territory late on, as the USD began to pare some of its losses as a report suggested that the revised US Senate tax proposal will target the carried interest break, although EUR, GBP & JPY clung on to most of their gains.

Elsewhere, the KRW continued to appreciate despite further verbal intervention from the Korean authorities., while the INR benefited from a one notch Indian sovereign rating upgrade at Moody’s.

China’s central bank injected the most cash (on a weekly basis) into the system since January, with many pointing to the shoring up of the bond market as the reason behind the injection, with 10-year yields hovering around 4%.

COMMODITIES

WTI Crude was more resilient to the risk aversion than its Brent counterpart, while gold topped USD 1,280/oz. Treasuries and JGBs also garnered support, as risk off flow outweighed the BoJ trimming the size of its shorter end Rinban operations.

US

Reports suggest that US Special Counsel Mueller has issued a Subpoena for Russia-related documents from Trump campaign officials. (Newswires)

The revised US Senate tax proposal is said to target the carried interest break. (Newswires)

The US House voted to pass Republican tax reform legislation. (Newswires)

The US Senate Panel voted to advance the Republican tax legislation to the full Senate, expected to sit in the week of 27th November 2017. (Newswires)

Fed’s Kaplan (Voter) reiterated that he is open-minded on rate hikes at upcoming meetings. (Newswires)

Fed's Mester (Non-Voter) said that inflation will hit 2% in 2018, but not in Q1; notes the slight acceleration in wage growth and reiterates that gradual hikes remain appropriate. (Newswires)

Fed's Williams (Non-Voter) stated that a December hike, followed by 3 hikes in 2018 is perfectly reasonable but what really matters is gradual normalisation not timing, should raise rates to around 2.5% in the next couple of years. He also opined that low inflation in a way is lucky as it allows strong growth, however, if it does not pick up over the next few years he will re-think the rate path. He went on to suggest that that central banks should consider unconventional policy tools for use in the future, including higher inflation targets. (Newswires)