APAC stocks traded somewhat mixed with gains capped as markets await incoming US CPI data.
US House Speaker Johnson's plan to prevent a government shutdown will be considered by the House on Tuesday, according to CBS.
Hamas armed wing spokesperson said they told mediators they are ready to release up to 70 children and women in a five-day truce.
European equity futures are indicative of a relatively flat open with the Euro Stoxx 50 -0.1% after the cash market closed +0.8% yesterday.
DXY is steady, EUR/USD eyes 1.07 to the upside, USD/JPY is flat after recent jawboning.
Looking ahead, highlights include UK Jobs Data, Spanish CPI (Final), Employment, GDP, German ZEW, US CPI, Cleveland Fed CPI, Japanese GDP, Speeches from Fed’s Jefferson, Mester, Goolsbee, Williams & Barr, ECB’s Lane, Centeno & Elderson, German Supply
US TRADE
EQUITIES
US stocks finished little changed after initial losses were faded into the US afternoon in choppy pre-CPI trade, while there was little tier-1 US data to dig into ahead of Tuesday's main event although the latest NY Fed consumer inflation expectations showed a slight decline in 1yr and 5yr expectations.
SPX -0.08% at 4,412, NDX -0.30% at 15,483, DJIA +0.16% at 34,338, RUT +0.01% at 1,706.
US President Biden said he hasn't made a judgement yet on whether he would veto the stop-gap spending bill and said let’s see what negotiators come up with, while it was later reported that Johnson's plan to prevent a government shutdown will be considered by the House Tuesday (US time), according to CBS.
US Senate Majority Leader Schumer signalled an openness to House Speaker Johnson’s "far from perfect" spending bill, according to The Hill.
US Treasury Secretary Yellen said APEC finance ministers affirmed a desire to expand the productive capacity of their economies while reducing inequality and protecting the environment. Yellen also said she disagrees with Moody's decision to move the US rating outlook to negative, while she added that a government shutdown would pose an unnecessary economic headwind and it is critical that House Republicans work in a bipartisan manner.
Fed Vice Chair of Supervision Barr said bank supervision must intensify at the right pace and that March's "acute stress" in the banking system has receded, while he added that the banking system is well positioned on liquidity levels.
APAC TRADE
EQUITIES
APAC stocks traded somewhat mixed with gains capped as markets awaited incoming US CPI data.
ASX 200 was led by strength in the commodity-related sectors with outperformance in energy after the recent rebound in oil prices, which helped participants shrug off weak Consumer and Business Confidence data, while financials lacked conviction after Australia’s largest lender CBA posted flat cash profit for Q1.
Nikkei 225 advanced amid earnings releases and with Japan’s government said to consider corporate tax breaks as an incentive for companies that implement an 8% wage increase.
Hang Seng and Shanghai Comp were indecisive following mixed New Yuan Loans and Aggregate Financing data which both weakened from the prior month, while price action was also kept rangebound ahead of the Biden-Xi meeting with the leaders said to announce a deal on a fentanyl crackdown by China.
US equity futures flatlined during Asian hours as participants braced for the incoming US inflation data.
European equity futures are indicative of a relatively flat open with the Euro Stoxx 50 -0.1% after the cash market closed +0.8% yesterday.
FX
DXY was rangebound after yesterday's pullback from resistance near the 106.00 level amid headwinds from the improvement in risk appetite and a decline in consumer inflation expectations, while the attention turns to US CPI.
EUR/USD remained stuck near the 1.0700 level following the prior day’s whipsawing and ECB rhetoric.
GBP/USD took a breather but held on to the spoils seen in the aftermath of the UK cabinet reshuffle.
USD/JPY traded sideways following recent intervention speculation and familiar government jawboning.
Antipodeans were indecisive as soft data offset the tailwinds from the risk tone and rebound in commodities.
PBoC set USD/CNY mid-point at 7.1768 vs exp. 7.2885 (prev. 7.1769)
FIXED INCOME
10-year UST futures lacked direction with participants sidelined heading into the US inflation data and after the prior day’s choppy performance amid corporate supply and a more dovish NY consumer inflation expectations survey.
Bund futures remained afloat with price action confined to within a tight range after recent fluctuations.
10yr JGB futures were eventually supported after mostly stronger-than-previous results at the 5yr JGB auction.
COMMODITIES
Crude futures were slightly firmer amid the mostly positive mood and higher demand growth forecasts.
US is planning to purchase 1.2mln bbls of oil for the Strategic Petroleum Reserve, according to Reuters.
EIA sees US total shale regions oil production for December down about 1.2k BPD at 9.865mln BPD (vs 4.1k BPD fall in November), while Permian production is seen at the highest on record.
Spot gold traded sideways amid an uneventful dollar as participants lacked conviction ahead of US CPI data.
Copper futures took a breather after the prior day's rally which was spurred amid reports of reduced processing operations at First Quantum's Panama mine due to port blockades by protestors.
CRYPTO
Bitcoin prices were little changed with demand subdued after a recent slip beneath the USD 37,000 level.
NOTABLE ASIA-PAC HEADLINES
US President Biden and Chinese President Xi are to announce a deal on fentanyl crackdown by China.
White House National Security Adviser Sullivan said US President Biden and Chinese President Xi are to focus on strengthening open lines of communication and noted that the administration is looking for specific outcomes from the Biden-Xi meeting on November 15th. Furthermore, President Biden will make a point to Xi that Iran acting in a destabilising way is not in China's interest and Biden will set out the vision for peace and stability across the Taiwan Strait, while Sullivan added US-China ties could easily veer into conflict or confrontation if it's not well managed.
US Senator Manchin (D) urged the “strictest possible standards" for US Treasury guidance on EV tax credits to prevent Chinese minerals from winning subsidies.
Japan's government is reportedly considering corporate tax breaks as an incentive for companies that implement an 8% wage increase, according to Yomiuri.
Japanese Finance Minister Suzuki reiterated it is important for currencies to move stably reflecting fundamentals and that excessive moves are undesirable. Suzuki added they will continue to take all possible steps for forex moves and are aware there are pros and cons of a weak yen.
DATA RECAP
Australian Westpac Consumer Confidence Index (Nov) 79.9 (Prev. 82.0)
Australian Westpac Consumer Sentiment MM (Nov) -2.6% (Prev. 2.9%)
Australian NAB Business Confidence (Oct) -2.0 (Prev. 1.0)
Australian NAB Business Conditions (Oct) 13.0 (Prev. 11.0)
New Zealand Food Price Index (Oct) -0.9% (Prev. -0.4%)
GEOPOLITICS
Israeli PM Netanyahu said Hezbollah is playing with fire and warned attacks will be met with much stronger fire.
Hamas armed wing spokesperson said they told mediators they are ready to release up to 70 children and women in a five-day truce, while the truce should include a ceasefire and allow aid relief everywhere in the Gaza Strip.
Iranian proxies attacked US troops after US strikes in Syria with US troops targeted at least four times after the air strikes, according to CNN.
US President Biden said there is an effort to use the pause to deal with the release of prisoners which is being negotiated with Qatar.
US special envoy for Yemen Lendering will travel to the Gulf this week and meet with international partners to discuss necessary steps to secure a durable ceasefire, according to Reuters.
US Defence Secretary Austin said they share interests in maintaining peace and stability in the Korean Peninsula and that the UN Command plays a crucial role in facilitating dialogue with North Korea. Furthermore, Austin said he is deeply concerned China and Russia are helping North Korea expand its capabilities and is troubled by the recent growth of military cooperation between Russia and North Korea.
South Korean Defence Minister Shin said the UN Command is a symbol of deterrence against North Korea's military provocations and that the UN Command meeting will send a warning to groups or countries that attempt to change the status quo by force.
EU/UK
NOTABLE HEADLINES
EU countries and lawmakers were reportedly set to reach a deal on rules to secure the supply of critical raw materials, according to Reuters citing an EU official.
A Reuters poll showed all 72 economists surveyed expect the ECB to keep the Deposit Rate at 4.00% through year-end, while 40 out of 72 respondents expect the ECB to wait until at least Q3 2024 before cutting rates.