• Asian equities traded with little in the way of firm direction with the Shanghai Comp. unable to stage any major recovery from yesterday’s sell-off
• FX trade mostly resumed the consolidation observed during the Thanksgiving US market closure
• Looking ahead, highlights include German IFO, ECB’s Coeure and Constancio

ASIA

Asia equity markets traded with an indecisive tone as markets lacked impetus with US away from market and mainland Chinese markets reeling from yesterday’s late sell-off. ASX 200 (-0.1%) and Nikkei 225 (+0.1%) were negative at the open with the latter dampened by a firmer currency on return from holiday, while Mitsubishi Materials underperformed as its shares dropped nearly 10% after the Co. disclosed it had falsified product data. However, Japanese stocks then reversed losses in late trade underpinned by a mild rebound in USD/JPY. Hang Seng (+0.5%) and Shanghai Comp. (-0.1%) were mixed with the mainland index jittery after its 2.3% decline on Thursday which was attributed to tighter regulations and deleveraging concerns, as well as a slump in the bond market. 10yr JGBs were subdued with demand weighed by a reserved BoJ Rinban announcement for only JPY 390bln and in which the central bank reduced the amount of buying in 25yr+ maturities. This also coincided with overnight weakness in USTs which tripped tspanough stops at 125.00 to the downside.

PBoC injected CNY 30bln via 7-day reverse repos, CNY 10bln via 14-day reverse repos and CNY 10bln via 63-day reverse repos, for a net weekly injection of CNY 150bln vs. Prev. CNY 810bln net injection last week. (Newswires)

PBoC set CNY mid-point at 6.5810 (Prev. 6.6021)

China Finance Ministry said it will lower import tariffs on some consumer products from December, with import duties to be cut to an average 7.7% from 17.3%. (Newswires)

EUROPE/UK

ECB's Coeure said the ECB deposit rate will stay at -0.4% for a long time, while he added that EU recovery is robust and homogeneous across countries and sectors. (Newswires)

Germany's Green Party called for Chancellor Merkel's CDU/CSU to form a coalition with SPD. (Newswires)

Republic of Ireland could face a general election after the second largest party Fianna Fail said it would table a motion of no confidence against Deputy PM Fitzgerald related to miss-handling in a police whistleblower incident. According to reports, if Fitzgerald does not resign before the motion debate which will be scheduled for Tuesday, the government will fall and a December election will follow. (Newswires/BBC)

Brussels is no longer holding the UK to a "strict ultimatum", but wants to know what offer will be on the table ahead of the European Council, on 13 and 14 December. (CityAM) This comes after EU’s Chief Negotiator Barnier told reporters a fortnight ago that the UK had two weeks to give clarity on the financial settlement or risk trade talks being blocked.

FX

FX trade mostly resumed the consolidation observed during the Thanksgiving US market closure. This kept the USD subdued with participants away and as inflation-uncertainty remained the narrative, while the PBoC also continued to strengthen its reference rate accordingly. Elsewhere, USD/JPY partially nursed losses, NZD/USD was rangebound amid mixed trade data and GBP/USD finally gave up the 1.3300 level after numerous tests for a breakdown.

New Zealand Trade Balance (Oct) M/M -871mln vs. Exp. -760mln (Prev. -1143mln). (Newswires)

New Zealand Exports (Oct) 4.56B vs. Exp. 4.20B (Prev. 3.78B)

New Zealand Imports (Oct) 5.43B vs. Exp. 4.95B (Prev. 4.92B)

SNB’s President Jordan said CHF is highly valued, while he added that policy is still aimed at weakening the currency despite the recent reduction in value. (Newswires)

COMMODITIES

WTI crude futures were quiet but still maintained the gains above the USD 58/bbl level as major producer chatter continues to suggest willingness for an extension of the output cut deal. Elsewhere, copper held near 3-week highs and gold consolidatedalongside an uneventful greenback post-Thanksgiving.

Russian Energy Minister Novak will discuss OPEC deal extension and duration at November 30th meeting and that all are committed to see OPEC deal results. (Newswires)

GEOPOLITICAL

Russia is likely to substantially reduce its military forces in Syria which begin before the end of 2017, according to the head of Russia’s general staff Gerasimov. (Twitter)

US

US President Trump commented on Obamacare via Twitter and stated that even though Democrats want to obstruct, will repeal and replace Obamacare right after tax cuts. (Twitter)

US President Trump reportedly wants Jared Kushner and Ivanka Trump to go back to New York. (Business Insider)