• Asia stock markets were mostly negative as the tech-sell off on Wall St. dampened sentiment in the region and overshadowed better than expected Chinese PMI data
• UK is reportedly close to a deal regarding Northern Ireland, with officials said to predict an agreement within weeks
• Looking ahead, highlights include German jobs report, Eurozone CPI, personal income, Chicago PMI, ECB’s Mersch, Praet and Fed’s Kaplan

ASIA

Asia stock markets were mostly negative as the tech-sell off on Wall St. dampened sentiment in the region and overshadowed better than expected Chinese PMI data. ASX 200 (-0.6%) was pressured by its largest weighted Financial sector after the announcement of a royal commission inquiry into the industry, while Nikkei 225 (+0.7%) recovered from opening losses as JPY weakness provided support. Elsewhere, KOSPI (-1.1%) weakened as the BoK delivered a widely anticipated 25bps rate hike and Chinese markets were also subdued with the Hang Seng (-1.2%) reeling on tech weakness, although losses in the Shanghai Comp. (-0.4%) were somewhat stemmed by encouraging Chinese Official PMI data. Finally, 10yr JGBs were lower amid spill-over selling from their US counterparts and as a mixed 2yr auction failed to inspire demand.

Chinese Official Manufacturing PMI (Nov) 51.8 vs. Exp. 51.4 (Prev. 51.6). (Newswires)

Chinese Non-Manufacturing PMI (Nov) 54.8 (Prev. 54.3)

PBoC injected CNY 150bln via 7-day reverse repos, CNY 120bln via 14-day reverse repos and CNY 10bln via 63-day reverse repos to total a net neutral operation for a 4^th consecutive day once maturing repos are accounted for. (Newswires)

PBoC set CNY mid-point at 6.6034 (Prev. 6.6011)

BoK 7-Day Repo Rate (Nov) 1.50% vs. Exp. 1.50% (Prev. 1.25%). (Newswires)

BoK Governor Lee said the rate decision was not unanimous as board member Cho dissented, while he added that uncertainties for the economy are higher than ever and that additional adjustment depends on growth and inflation.

UK

UK GfK Consumer Confidence (Nov) -12 vs. Exp. -11 (Prev. -10). (Newswires)

UK Lloyds Business Barometer (Nov) 24 (Prev. 26)

UK PM May denied that a deal has been struck with the EU for a EUR 50bln divorce bill. However, did not correct suggestions that a ‘Brexit bill’ could be as much as GBP 50bln and reiterated that the UK will honour its commitments. (Sky News) Elsewhere, UK PM May has been put on notice by hardline Conservative Eurosceptics that they could be prepared to vote against her final Brexit deal if the UK continues to pay the £50bn divorce bill for years to come or does not get good trade terms. (Guardian)

UK is reportedly close to a deal regarding Northern Ireland, with officials said to predict an agreement within weeks, subsequently paving the way for EU leaders to offer the UK a two-year Brexit transition deal. (Times)

EUROPE

ECB’s Knot said current inflation outlook poses no tspaneat to price stability. (Newswires)

FX

Focus in FX markets centred around the deluge of data releases with AUD supported by better than expected Building Approvals, an upward revision to the annual Capex estimate and encouraging Chinese PMI data. NZD suffered from poor ANZ Business Conditions and Activity Outlook with the former at its lowest in 8 years, while GBP continued to benefit from recent reports regarding a divorce bill agreement despite PM May adding to the denial camp. KRW was another notable mover with the currency pressured after the BoK hiked rates for the first time in over 6 years, as this was widely anticipated and later accompanied by an uncertain tone on the economy.

Australian Building Approvals (Oct) M/M 0.9% vs. Exp. -1.8% (Prev. 1.5%, Rev. 0.6%). (Newswires)

Australian Building Approvals (Oct) Y/Y 18.4% vs. Exp. 14.1%    (Prev. 0.2%)

Australian Private Capital Expenditure (Q3) 1.0% vs. Exp. 1.0% (Prev. 0.8%, Rev. 1.1%). (Newswires)

Australian Private Capex Survey 2017-2018 (AUD)(Est.4) 108.9B (Prev. 101.8B)

New Zealand ANZ Business Confidence (Nov) -39.3 (Prev. -10.1); 8-year low. (Newswires)

New Zealand ANZ Activity Outlook (Nov) 6.5% (Prev. 22.2%)

COMMODITIES

WTI crude futures found some reprieve from the selling during the US session where builds in gasoline and distillate inventories, coupled with reports regarding a possible review of the output cut deal after the first 3 months saw prices slip briefly below USD 57/bbl. Elsewhere, gold languished near the prior day’s lows after Yellen’s testimony at the Joint Economic Committee where the Fed Chair noted progress in the economy and that rate hikes were warranted, while copper was also subdued alongside the broad risk averse tone triggered by the US tech sell-off.

JMMC was said to be discussing a 9-month extension which would be reviewed after 3 months, which was similar to a source report released on Tuesday, (Newswires)

Iran Oil Minister Zanganeh said Iran will go along with either a 6-month or 9-month extension to the supply cut deal, while Nigeria’s Oil Minister said that Nigeria backs a 9-month rollover with mid-year review and that Russia & OPEC are aligned. (Newswires)

GEOPOLITICAL

US Ambassador to the UN Haley said latest the North Korean provocation brings the world closer to war and that if war occurs it would be due to continued acts of aggression similar to what was witnessed the prior day. Haley also urged China to cut off oil to North Korea or the US will take situation into its own hands. (Newswires)

US

US Treasuries sold-off in Wednesday trade, with the curve bear-steepening after decent GDP data and an optimistic testimony to US lawmakers by current, outgoing Fed Chair Janet Yellen. The major curves were steeper, as a result, with the 2s30s spread rising by around 5bps by settlement, 2s10s steepening by just over 3bps, while the 5s30s was up by just under 3bps. US 10-Year T-Note Futures settle 8 ticks lower at 124-23.

Fed’s Beige Book noted a "modest-to-moderate" expansion of economic activity and that price pressures have strengthened since the last Beige Book. It also noted that wage growth remains "modest-to-moderate", that most districts reported moderate employment growth and that reports of labour market tightness was widespread. (Newswires)

Fed’s Williams (Non-Voter, Soft Hawk) said FOMC should continue to raise rates over the coming year and that not lifting rates may risk a recession, while he added that he sees 4 rate hikes between now and the end of 2018. (Newswires)

Marvin Goodfriend was nominated for the Fed Board of Governors position. (Newswires)

US Senate voted 52 vs 48 to pass tax reform bill tspanough the procedural hurdle which allows for debate on the Senate floor with the final vote likely by Friday. (Newswires)

White House adviser Kushner is said to have met with Special Counsel Mueller's team for discussions regarding former National Security Adviser Flynn. (Newswires)