Weekend News Round Up - Newsquawk Asia-Pac Market Open

• US stocks rallied on Friday after the below-forecast US jobs report pointed to a slowing US economy, reducing Fed tightening expectations.
• Friday’s US macro releases hit the Dollar and DXY hard, as NFP missed consensus and came with a negative net two-month revision on top of an unexpected rise in the unemployment rate.
• Israeli PM Netanyahu said there will be no ceasefire until hostages are returned, according to Reuters. Israel's army says it has cut the Gaza Strip in two, according to AFP.
• Hezbollah lawmaker Fadallah said the Israeli strike which killed children is a “dangerous development”, and will have repercussions, according to Reuters.
• South Korea to ban all stock short-selling through the first half of 2024 to help create a "level playing field" for both retail investors and institutional and foreign investors. 
• Looking ahead, highlights include Australian MI Inflation Gauge, New Zealand Commodity Price Index, Australian ANZ Jobs, Japanese PMIs, BoJ Minutes. 
• US clocks moved back an hour on Sunday to EST, as such the London-New York time gap has re-widened to five hours.

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US TRADE

• US stocks rallied on Friday after the below-forecast US jobs report pointed to a slowing US economy, reducing Fed tightening expectations. There was particular outperformance in the Russell 2k small-cap index vs the SPX and NDX.
• SPX +0.94% at 4,358, NDX +1.21% at 15,099, DJI +0.66% at 34,061, RUT +2.71% at 1,760.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Bostic (2024 voter) said the jobs report didn't vindicate the view that the Fed does not have to hike rates again and he is pleased with the jobs number and consistent with the outlook, according to a Bloomberg interview. He said credit is tight and more will happen on that front, and tighter credit conditions will be a drag on the economy. He noted previous rate hikes still working through the economy and he does think the Fed can get to 2% inflation without seeing a recession. He expects growth to moderate to a methodical pace and said if inflation continues to wane it confirms Fed policy is in the right place. He said wage pressures developing in a good direction and welcomes more moderate wage gains. Bostic expects to see inflation cooling into next year and noted down the road the Fed can consider rate cuts (previously said late 2024). He added that as 2% inflation gets closer, the Fed will have to weigh interest rate levels. He hopes the housing market will not be under pressure for years to come and clarified zero is not where interest rates will need to be.
• Fed's Kashkari (2023 voter) said there is a lot of uncertainty around what is driving the yield curve and let's not bet on any one explanation. He said the labour market is slowing and that is helpful, but he does not want to overreact to one report, and said the Fed has to keep watching data, according to Reuters.
• UAW said GM (GM) union leaders support sending this tentative agreement with GM to the membership for a vote. UAW said auto workers at Toyota (7203 JT), Honda (7267 JT), Volkswagen (VOW3 GY), Hyundai (005380 KS), and Tesla (TSLA) deserve record contracts too, according to Reuters.
• Citizens Bank, a small bank in Iowa, closed by regulators, making it the 6th US bank failure this year, according to BNO News.
• BoC's Rogers said a rate hike is on the table until “we are confident that we are clearly on our way”, according to Bloomberg. Rogers added that restoring price stability remains the central bank's focus, and despite the delay, the bank is seeing monetary policy "really starting to take hold".

DATA RECAP

• US Non-Farm Payrolls* (Oct) 150.0k vs. Exp. 180.0k (Prev. 336.0k, Rev. 297k); two-month net revisions: -101k (prev. +119k).
• US Unemployment Rate* (Oct) 3.9% vs. Exp. 3.8% (Prev. 3.8%)
• US Average Earnings YY* (Oct) 4.1% vs. Exp. 4.0% (Prev. 4.2%, Rev. 4.3%).
• US ISM N-Manufacturing Price Paid Index (Oct) 58.6 (Prev. 58.9)
• US ISM N-Manufacturing Business Act (Oct) 54.1 (Prev. 58.8)
• US ISM N-Manufacturing New Orders Index (Oct) 55.5 (Prev. 51.8)
• US S&P Global Comp Final PMI (Oct) 50.7 (Prev. 51)
• US S&P Global Services PMI Final (Oct) 50.6 (Prev. 50.9)
• Canadian Unemployment Rate* (Oct) 5.7% vs. Exp. 5.6% (Prev. 5.5%)

FX

• Friday’s US macro releases hit the Dollar and DXY hard, as NFP missed consensus and came with a negative net two-month revision on top of an unexpected rise in the unemployment rate. The index retreated further below 106.00 from 106.22 at best before succumbing to another bout of downside pressure when the services ISM slowed more than forecast irrespective of a marked acceleration in new orders.
• The Loonie lagged in the wake of a disappointing Canadian LFS that should set the seal on no change in policy from the BoC this week.
• Cyclical currencies and commodity blocs were boosted by a revival in broad risk sentiment as the debt rout bottomed out and reversed course

FIXED INCOME

• Treasuries saw massive bull-steepening after the soft US jobs report eased inflationary concerns and unwinds "higher for longer" pricing

COMMODITIES

• Oil futures were sold into the weekend on soft US jobs data and after Hezbollah's leader said the group doesn't plan on conducting a large-scale attack now, despite warnings for the future.
• Saudi Ministry of Energy reaffirmed that Saudi Arabia will continue the voluntary cut of 1mln BPD through December, according to the state news agency SPA.
• Russia's Deputy PM Novak reaffirmed Russia to continue the additional voluntary supply cut of oil and petroleum products exports by 300k BPD until the end of December this year. He said the voluntary cut decision will be reviewed next month to consider deepening the cut or increasing oil production, according to Reuters. Russian Deputy PM Novak reportedly instructed Russia's oil companies to raise winter diesel output, according to Reuters.

CRYPTO

• Bitcoin prices fluctuated on either side of USD 35,000 over the weekend.

GEOPOLITICAL

ISRAEL-HAMAS

• Israeli PM Netanyahu said there will be no ceasefire until hostages are returned, according to Reuters. Israel's army says it has cut the Gaza Strip in two, according to AFP.
• Hezbollah said it fired multiple Grad rockets at the northern Israeli town of Kiryat Shmona in retaliation for an Israeli airstrike in South Lebanon, according to Reuters.
• Hezbollah lawmaker Fadallah said the Israeli strike which killed children is a “dangerous development”, and will have repercussions, according to Reuters.
• Lebanon said it will submit a complaint to the United Nations over the killing of civilians including children in an Israeli strike in South Lebanon, according to the Lebanese Foreign Minister cited by Reuters.
• Israeli military spokesperson said their attacks in Lebanon are made based on intelligence information, according to Reuters.
• Evacuations from Gaza to Egypt through Rafah crossing were reportedly suspended since Saturday after Israeli strikes on ambulances, according to Egyptian official sources cited by Reuters.
• Qatar's Foreign Ministry spokesperson said the Hamas political office in Doha will remain open so long as it can be used towards peace, and there's no reason to close it now, and added that Qatar is working with Egypt to ensure Rafah crossing remains open, according to Reuters.
• Egyptian Foreign Minister Shoukry says he cannot justify Israel's actions against Palestinians as self-defence, according to Reuters.
• Diplomatic adviser to the UAE President said Israel's response to the October 7 attack is disproportionate, and added the Palestinian issue is an Arab issue, according to Reuters.
• Saudi Arabia strongly condemned the statement issued by an Israeli minister regarding dropping a nuclear bomb on the Gaza Strip, according to Reuters.
• US President Biden said "yes" when asked if there has been any progress on a humanitarian pause in Gaza, according to Reuters.
• US Central Command announced that the Ohio-class nuclear submarine has arrived in the Middle East, according to NewsNow.
• US Secretary of State Blinken said the US is intensely focused on bringing home hostages from Gaza. He said a humanitarian pause could advance the prospect of getting hostages back, while adding the current flow of aid to Gaza is grossly insufficient, according to Reuters.
• US Secretary of State Blinken told Palestinian leader Abbas that the Palestinian Authority should play a central role in what comes next in Gaza, according to a Senior State Department Official cited by Reuters. Blinken made clear that Palestinians must not be forcibly displaced and reiterated US commitment to advancing dignity, and security for Palestinians and Israelis alike, according to Reuters.
• Iran's Defense Minister warned the US it "will be hit hard" if it does not implement a ceasefire in Gaza, according to Tasnim cited by Reuters. Iran's Vice President said the tragedy in Gaza cannot be ignored, according to Reuters.
• The Turkish Foreign Minister reportedly discussed the situation in Gaza with the Egyptian and Jordanian counterparts. They exchanged views on stopping attacks on civilians in Gaza and achieving an urgent ceasefire, according to a Turkish diplomatic source cited by Reuters.
• French Foreign Minister said too many civilians have died in the strikes on Gaza, in particular, schools, hospitals, and humanitarian workers, and added that journalists must be preserved. French Foreign Minister Colonna added the humanitarian conference on November 9th will cover the respect of international law, and will call for a concrete mobilization for the civilian population in Gaza, according to Reuters.
• TotalEnergies (TTE FP) has raised security vigilance for its operations in the Middle East, according to Reuters.

OTHERS

• Armed factions claim to target Ain al-Assad base with 4 missiles, according to Sky News Arabia citing their correspondent.
• US Secretary of State Blinken in Iraq, said he had a very good and candid conversation with the Iraqi leader and said attacks on US personnel are a matter of Iraqi sovereignty and against its own interests, according to Reuters.
• The Turkish military conducted air strikes against Kurdish militants in northern Iraq, hitting 15 targets, according to the Defense Ministry cited by Reuters.
• Russian Defense Ministry said a new atomic submarine conducted a test launch of a Bulava intercontinental missile in the White Sea, according to Reuters.
• Belarus Foreign Ministry summons Polish Charge D'Affaire over violation of its airspace on Nov 2nd, according to a statement.
• Russia is moving to expand its military presence in eastern Libya, according to Bloomberg.
• Japanese PM Kishida said Japan will continue to contribute to enhancements of Philippine security capabilities and stated that in the South China Sea, a trilateral cooperation to protect the freedom of the sea is underway, according to Reuters.
• China's Defense Ministry, in response to Canada accusing Chinese fighter jets of 'unsafe interception,' states that China's response was professional while adding Canada's move violates China's laws and jeopardizes China's security, according to Reuters.
• Six militants attacked an air force training base in central Pakistan in the area of Mianwali on Saturday morning, according to Reuters.

ASIA-PAC

NOTABLE HEADLINES

• China Premier said China will continue to promote opening up and market opportunities, and China will actively expand imports, and promote coordination of trading goods and services. He added China will further expand market access and remove barriers to foreign investment in manufacturing. China Premier said in the next five years, China's imports of goods and services are expected to reach USD 17tln on cumulative terms, and China will soon release a plan to promote high-standard institutional opening up in the Shanghai Free Trade Zone, according to Reuters.
• China's Finance Minister said China will accelerate the issuance and use of government bonds, and China will steadily promote the resolution of local government debt risks, according to Reuters citing state media.
• South Korea to ban all stock short-selling through the first half of 2024 to help create a "level playing field" for both retail investors and institutional and foreign investors, according to financial regulators cited by Reuters.
• The Japanese government reportedly plans to submit an extra budget to Parliament on November 20th, according to Asahi.

EU/UK

NOTABLE HEADLINES

• ECB President Lagarde said the ECB is determined to bring inflation down to 2%. “According to our projections, we will get there in 2025”, according to an interview with Greek press conducted on 30th October and released on 4th November.
• BoE's Haskel said an estimate of 6% equilibrium unemployment is an upper bound for him, and higher equilibrium unemployment does put upward pressure on interest rates. He added equilibrium unemployment rate is probably a bit higher than BoE's latest estimate, according to Reuters. BoE's Haskel said with an impaired labour market, rates would have to remain higher for longer than would otherwise be the case.
• BoE's Pill said the decision to keep rates on hold reflected the view that some restraint on the economy needs to be maintained. Still, a need to bear down on inflation, according to Reuters.

DATA RECAP

• EU Unemployment Rate (Sep) 6.5% vs. Exp. 6.4% (Prev. 6.4%)