Thanksgiving Day News Round Up - Newsquawk Asia-Pac Market Open

• US markets were closed for Thanksgiving Day.
• USD was marginally softer with DXY stuck to a tight range of 103.52-103.88 amid the holiday lull for Thanksgiving Day.
• Looking ahead, highlights include New Zealand Retail Sales, Japanese CPI & Flash PMIs, Singapore Industrial Production, Supply from Japan.

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LOOKING AHEAD

• Highlights include New Zealand Retail Sales, Japanese CPI & Flash PMIs, Singapore Industrial Production, Supply from Japan.
• Click here for the Newsquawk Week Ahead.

US TRADE

• US markets were closed for Thanksgiving Day.

FX

• USD was marginally softer with DXY stuck to a tight range of 103.52-103.88 amid the holiday lull for Thanksgiving Day.
• EUR eked mild gains albeit with price action choppy around the 1.0900 level, while there were several hawkish-leaning comments from ECB officials and the ECB Minutes also noted that members argued in favour of keeping the door open for a possible further rate hike.
• GBP extended on its mid-week recovery and made further headway above 1.2500 after UK PMI data topped forecasts.
• JPY reverted to flat territory with USD/JPY around 149.50 after an initial dip was reversed following a bounce off support at 149.00.
• CBRT hiked its Weekly Repo Rate by 500bps to 40% (exp. 250bps hike to 3.75%, expectations ranged from 250-500bps). CBRT stated the pace of monetary tightening will slow down and the tightening cycle will be completed in a short period of time, while it noted that monetary tightness will be maintained as long as needed to ensure sustained price stability.
• South African Reserve Bank maintained the Repo Rate at 8.25% vs. Exp. 8.25% (Prev. 8.25%). SARB said while South Africa's power cuts have declined, domestic growth in the near term is likely to remain muted and although the baseline inflation forecast has improved, risks to inflation outlook are still assessed to the upside.
• Swedish Riksbank maintained its key rate at 4.00% vs. Exp. 4.25% (Prev. 4.00%). Riksbank stated that monetary policy needs to be contractionary and is prepared to raise the policy rate further if inflation prospects deteriorate.
• Banxico Minutes stated most members underlined that overall inflation is expected to converge to the central bank’s target by the end of 2024 or during 2025. Furthermore, all members stated that despite the progress in disinflation, the outlook continues to be challenging and they agreed that the balance of risks for the trajectory of inflation within the forecast horizon remains biased to the upside.

COMMODITIES

• Dubai set the official crude differential to DME Oman 10Qc1 for February at a premium of USD 0.05/bbl (Unch. M/M).
• OPEC+ is moving closer towards a compromise with African oil producers, according to Reuters citing two OPEC+ sources.
• Nigeria’s OPEC Governor said he is not aware of disagreements within OPEC+ and said they are only seeking alignment.
• Angola’s OPEC official said they have no plan to leave OPEC+ and are happy, while the official added they are fighting to raise oil production and investments are being made.
• The OPEC conference, JMMC and ONOMM are to be held online on November 30th, according to a statement.

GEOPOLITICS

• Qatar said the truce in Gaza is to start on Friday at 07:00 local time (05:00GMT/00:00EST) and the list of civilians to be released from Gaza has been received, while Qatar’s spokesperson said they aim for this deal to lead to a permanent truce.
• Israeli sources said the obstacle to the truce is Hamas' condition for the entry of humanitarian and medical aid into northern Gaza, according to Sky News Arabia.
• Israel’s military said achieving control over the northern half of Gaza is only the first stage in the campaign to destroy Hamas, while they are preparing for the next stages and are looking forward in the coming days in which they will focus on planning and fulfilling the next stages of the war, according to Reuters.
• Hamas’s armed wing spokesperson called for an escalation of confrontation with Israel on all resistance fronts.
• Hezbollah launched 48 Katyusha rockets in the latest barrage which marked the "biggest escalation" in the north since the beginning of the war and occurred hours after the assassination of the son of a senior member of the organisation, according to Walla News.

ASIA-PAC

NOTABLE HEADLINES

• China is reportedly mulling unprecedented builder support with unsecured loans and could permit banks to offer unsecured short-term loans to qualified developers for the first time, according to Bloomberg sources.
• WHO held talks with Chinese health authorities in which requested data on the upsurge of respiratory illnesses among children in northern China was provided and no changes in the disease presentation were reported by Chinese health authorities. Furthermore, Chinese health authorities said the rise in respiratory illness has not resulted in patient loads exceeding hospital capacities and there has been no detection of unusual or novel pathogens or unusual clinical presentations including in Beijing and Liaoning.
• Taiwan's main opposition party reportedly walked out of talks on forming a joint presidential bid with the smaller opposition party, according to Reuters citing live TV. However, it was separately reported that Taiwan's main opposition party stated that talks have not broken down.

EU/UK

NOTABLE HEADLINES

• ECB Minutes said all members agreed with Chief Economist Lane’s proposal to maintain the three key ECB interest rates at their current levels and members argued in favour of keeping the door open for a possible further rate hike, while it was also argued that the GC should be careful that its efforts to tame inflation do not eventually lead to an undershooting of the target.
• ECB's Nagel said ECB policy is working but inflation isn't tamed yet and he is open to reform of the German debt brake, according to Der Spiegel. Nagel also said the central bank is still facing the most difficult part of the inflation fight and it would be a mistake to loosen policy too early, while he added that the ECB needs to be patient and wait for the full effect of policy tightening on inflation to materialise.
• ECB's Makhlouf said he would not rule out the possibility of one more rate rise and said they are there or there about in terms of rates, while he added it is too soon to talk about cutting rates and expects December projections will show the ECB achieving the 2% inflation target before the end of 2026.
• ECB's Wunsch said his base case is that no more rate hikes are needed but ECB can wait until Spring to make that call, while he added that market pricing of rate cuts is "very optimistic" and increases the likelihood that more tightening is needed.
• Germany is to suspend the borrowing limit for 2023 for the fourth consecutive year after the budget ruling. German Finance Minister Lindner said they will put to the Cabinet next week the supplementary budget for 2023 and said they can only decide about the 2024 budget once the country has a supplementary budget for 2023, while he confirmed the debt brake suspension for 2023 but added that the suspension does not mean new debt.

DATA RECAP

• UK Flash Manufacturing PMI (Nov) 46.7 vs. Exp. 45.0 (Prev. 44.8)
• UK Flash Services PMI (Nov) 50.5 vs. Exp. 49.5 (Prev. 49.5)
• UK Flash Composite PMI (Nov) 50.1 vs. Exp. 48.7 (Prev. 48.7)
• German Flash Manufacturing PMI (Nov) 42.3 vs. Exp. 41.2 (Prev. 40.8)
• German Flash Services PMI (Nov) 48.7 vs. Exp. 48.5 (Prev. 48.2)
• German Flash Composite PMI (Nov) 47.1 vs. Exp. 46.5 (Prev. 45.9)
• EU Flash Manufacturing PMI (Nov) 43.8 vs. Exp. 43.4 (Prev. 43.1)
• EU Flash Services PMI (Nov) 48.2 vs. Exp. 48.1 (Prev. 47.8)
• EU Flash Composite PMI (Nov) 47.1 vs. Exp. 46.9 (Prev. 46.5)