• Asia equity markets were higher across the board as the regional bourses received a lift from their US counterparts
• Crude prices bolstered by the latest API report which showed a larger than expected drawdown and the largest draw in 3 months
• Looking ahead, highlights include the UK budget, US durables, weekly jobs, DoEs, FOMC minutes and Baker Hughes

ASIA

Asia equity markets were higher across the board as the regional bourses received a lift from their US counterparts, where tech outperformed and all major indices posted fresh record levels. ASX 200 (+0.4%) was led by energy names as crude prices extended on post-API gains after the latest inventory report showed the largest drawdown in 3 months, while Nikkei 225 (+0.6%) sspanugged off a firmer currency and jumped aboard the tech-rally ahead of tomorrow’s market closure. Elsewhere, the Taiex (+0.4%) posted a 27-year high, while Hang Seng (+0.9%) rose to its highest in a decade above the 30,000 level after the PBoC upped its liquidity operations again, with blue-chip energy names also underpinned. Finally, 10yr JGBs sspanugged off the positive risk tone across the region and traded higher with mild support seen amid the BoJ’s presence in the market for nearly JPY 1tln of JGBs ranging from 1yr-10yr maturities.

PBoC Governor Zhou said China should allow markets to play a decisive role in financial resource allocation, while he added they will reduce FX intervention and push ahead on CNY internationalization. (Newswires)

PBoC injected CNY 100bln via 7-day reverse repos, CNY 80bln via 14-day reverse repos & CNY 10bln via 63-day reverse repos. PBoC set CNY mid-point at 6.6290 (Prev. 6.6356). (Newswires)

EUROPE/UK

The Telegraph report that UK PM May’s relationship with Chancellor Hammond is close to breaking point after Downing Street took control of a last-minute Budget briefing amid fears Wednesday's financial statement will fall flat. (Telegraph)

The UK government have told the EU that resolving issues surrounding the Irish border will only be possible once a trade deal between the UK and EU has been agreed. (Newswires)

Sources close to German Chancellor Merkel suggest that she favours a grand coalition with the SPD to bring an end to the political impasse. (Newswires)

ECB’s Coeure expects the link between inflation and asset purchases in policy message to be changed between now and September 2018. (Newswires)

FX

Commodity linked currencies were in focus during early trade, amid strength in crude and an overall humdrum tone across the FX space. NZD/USD initially strengthened on a break tspanough Tuesday’s highs and after AUD/NZD retreated from resistance at 1.1100, while AUD found brief support from a surprise expansion in Construction data, before gains in the antipodeans were eventually pared. Elsewhere, aside from the continued flows into JPY, the remainder of major currencies were uneventful with outgoing Fed Chair Yellen’s uncertain tone regarding low inflation failing to spur a reaction, which has left participants looking towards the upcoming UK Budget and FOMC minutes releases for a better catalyst.

Australian Construction Work Done (Q3) 15.7% vs. Exp. -2.3% (Prev. 9.3%). (Newswires)

COMMODITIES

Crude prices caught a second wind overnight in which Brent briefly broke above USD 63/bbl and WTI gained by nearly a buck following the latest API crude inventory report, which showed a larger than expected drawdown and the largest draw in 3 months. Conversely, gold languished as demand was sapped by the broad positive risk tone and as participants look ahead to today’s upcoming FOMC minutes release, while copper consolidated near the prior day’s highs alongside the aforementioned risk appetite.

US API weekly crude stocks (Nov 17) -6.356M (Prev. 6.513M). (Newswires)

Iran's oil min Zanganeh suggested that (based on reports & discussions), most of the main players in the market agree that the output cuts should continue for at least another 8-9 months in 2018, but OPEC must first meet before a decision is made. (Newswires)

GEOPOLITICAL

UN Command said that North Korea violated Armistice Agreement after a video showed a North Korean soldier crossed the armistice line in pursuit of a defecting soldier. (Newswires)

US

Gold and Treasuries mirrored one another catching a bid on initial USD weakness, before moving back to worst levels as the dollar recovered, with the 2s10s and 5s30s curves both flattening. December ‘17 T-Note futures settled at 124-22, unchanged on the day.

Fed Chair Yellen said the Fed must keep an open view and not be trapped by forecasts and said so far so good in terms of reducing the balance sheet. Yellen also commented that she is uncertain whether low inflation is transitory and is keeping an open view that it could be long-lasting. (Newswires)

US Senator Murkowski, who is seen as a key moderate swing vote, is said to support the repealing of ObamaCare's individual mandate. (Newswires)

US Special Counsel Mueller is reported to be probing Kushner's contact with foreign leaders. (Newswires)