US stocks gained in quiet pre-Thanksgiving trade with gains led by tech as Microsoft shares climb to record highs - Newsquawk Asia-Pac Market Open

• US stocks were firmer with outperformance in the Nasdaq amid a big tech bias which was underscored by Microsoft's (MSFT) shares climbing to a record high amid the fluid OpenAI situation in an otherwise quiet session, while attention was also on treasuries with bull-flattening seen amid a well-received 20yr auction.
• USD was pressured and the DXY printed a trough of 103.37 after breaching beneath a key fibo at 103.44 in the wake of a solid US 20yr bond auction on what was a day of thin news flow in a holiday-shortened week, while the focus for the dollar turns to Tuesday's FOMC minutes release.
• Looking ahead, highlights include New Zealand Trade Data & Credit Card Spending, RBA Minutes, Speech from RBA Governor Bullock, Supply from Japan.

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LOOKING AHEAD

• Highlights include New Zealand Trade Data & Credit Card Spending, RBA Minutes, Speech from RBA Governor Bullock, Supply from Japan.
• Click here for the Newsquawk Week Ahead.

US TRADE

• US stocks were firmer with outperformance in the Nasdaq amid a big tech bias which was underscored by Microsoft's (MSFT) shares climbing to a record high amid the fluid OpenAI situation in an otherwise quiet session, while attention was also on treasuries with bull-flattening seen amid a well-received 20yr auction.
• SPX +0.74% at 4,547, NDX +1.19% at 16,027, DJIA +0.58% at 35,151, RUT +0.52% at 1,807.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Barkin (2024 voter) said it is not a big time for offering forward guidance and they will be data dependent, while he noted that overall and core inflation numbers are "coming down nicely", but added that a lot of that is for goods and business contacts on the ground report they are still raising prices faster than before the pandemic.
• US Treasury Secretary Yellen said they are making considerable progress in bringing inflation down but added that Americans are still seeing increases in some important prices including food.

DATA RECAP

• US Leading Index Change MM (Oct) -0.8% vs. Exp. -0.7% (Prev. -0.7%)

FX

• USD was pressured and the DXY printed a trough of 103.37 after breaching beneath a key fibo at 103.44 in the wake of a solid US 20yr bond auction on what was a day of thin news flow in a holiday-shortened week, while the focus for the dollar turns to Tuesday's FOMC minutes release.
• EUR benefitted from the softer dollar and gained a firmer grip on the 1.0900 handle, while there were several comments from ECB officials including ECB's Wunsch who stated that bets on rate cuts risk prompting a hike instead if they undermine the policy stance.
• GBP reclaimed the 1.2500 status against the greenback, while participants also digested comments from BoE Governor Bailey that it is far too early to be thinking about rate cuts with returning inflation to the target an "absolute priority" and will take no chances when inflation is high.
• JPY was among the outperformers which saw USD/JPY hit a low of 148.11 after sliding from an earlier peak of 149.99.

FIXED INCOME

• Treasuries bull-flattened into and after the strong 20-year auction in the absence of any other major catalysts.

COMMODITIES

• Oil prices continued their recovery as prospects of deepened OPEC+ action provided support.
• UAE Energy Minister noted no short-term oil impact from the current Israel-Hamas conflict.
• Workers union at Peru's Las Bambas copper mine went on strike and are seeing "partial compliance", while the strike is to last three days and the action commenced on Sunday, according to a Reuters source. Furthermore, the union at Peru's Las Bambas mine is considering an indefinite strike from November 28th if demands are not met, according to the Union Secretary General.
• First Quantum Minerals is reportedly considering putting the Panama copper mine in care/maintenance mode, according to Reuters citing sources.

GEOPOLITICS

• Senior Biden adviser Hochstein arrived in Israel on Monday for talks with senior Israeli officials on preventing a war between Israel and Lebanon, according to Axios sources.
• Iranian Foreign Ministry said "Washington's obstruction of the ceasefire in Gaza leads to reactions from the resistance forces in the region", according to Al Jazeera.
• Russia made a formal protest to Finland over the closure of border crossing points with Russia, according to a statement.
• Japan's Coast Guard said it received notice of a satellite rocket launch plan towards the Yellow Sea, East China Sea, and east of Luzon Island between November 22nd and December 1st. It was also reported that the Japanese PM's office posted on X that Japan will work with the US, South Korea, and others to strongly urge North Korea not to launch the satellite rocket.

ASIA-PAC

NOTABLE HEADLINES

• Chinese President Xi held a call with French President Macron and welcomed more French firms to invest in China, while it was stated that China is ready to strengthen cooperation with France in the UN and other multilateral institutions.
• China's Central Financial Commission meeting said it is necessary to focus on improving the quality of economic and social development of financial services, while it wants to maintain the soundness of monetary policy and increase support for major strategies, key areas and weak links. Furthermore, it wants to strengthen financial supervision, as well as tighten and consolidate the responsibility for financial risk disposal, according to state media.
• China is reportedly drafting a "whitelist" of 50 developers for a financing boost which is designed to guide institutions as they consider support for the industry, while China Vanke, Seazen and Longfor are among those referenced, according to Bloomberg.
• China's Defence Ministry said Australia's remarks on the navy incident are completely inconsistent with the facts, while China firmly opposes remarks and has lodged solemn representations with Australia.
• US Treasury Secretary Yellen said the US and China recognise they have an opportunity to work together after the Biden-Xi meeting and Biden made it clear to Xi that Taiwan policy has not changed, while Yellen also said she discussed issues concerning China's investments in the US with her Chinese counterpart, according to CNBC.
• White House's Kirby said US President Biden and Chinese President Xi agreed to meet again but no date has been specified.

EU/UK

NOTABLE HEADLINES

• BoE Governor Bailey said it is far too early to be thinking about rate cuts and that returning inflation to the target is an "absolute priority", while he said they will take no chances when inflation is high. Bailey also stated that interest rates will have to stay high enough for long enough to make sure the bank gets back to the 2% target and that they must watch for further signs of inflation persistence that may require interest rates to climb again.
• UK PM Sunak said they believe in cutting taxes carefully and sustainably and the approach starts with controlling inflation. Sunak said to grow the economy, they will need to take five long-term decisions and will cut taxes to reward hard work. Furthermore, he said tax cuts don't automatically pay for themselves and that they can only cut taxes once inflation and debt are under control, while he added they will need to prioritise tax cuts but can't do everything all at once.
• EU is to work on proposals to mitigate post-Brexit tariffs on EVs and will draft plans after France said it is open to a short transition, according to Bloomberg.
• ECB's de Cos said the ECB is not expected to return to forward guidance on monetary policy and that it is absolutely premature to start talking about interest rate cuts.
• ECB's Villeroy said their reliance on forward guidance was excessive and should be more modest with future guidance, while he sees rates plateauing for at least the next several meetings and the next few quarters. Furthermore, Villeroy said should expect further bond volatility and renewed increases would be another reason not to hike rates, as well as noted that they will have to discontinue PEPP reinvestments in due time and possibly earlier than end-2024.
• ECB's Wunsch said bet on rate cuts risk prompting a hike instead if they undermine the policy stance and markets are optimistic to rule out further hiking, while he added rates should stay unchanged in December and January.
• Germany is reportedly looking at easing debt restrictions after last week's court ruling which wiped EUR 60bln from the federal budget, while it was also reported that German industrial projects are in jeopardy including chip factories, decarbonised steel production, and expanding the battery supply chain, according to Reuters sources.

DATA RECAP

• German Producer Prices MM (Oct) -0.1% vs. Exp. -0.1% (Prev. -0.2%)
• German Producer Prices YY (Oct) -11.0% vs. Exp. -11.0% (Prev. -14.7%)