- US stocks were mostly higher in a quiet session to start the week owing to Veterans Day and with trade largely a function of the Trump Trade with Republicans looking increasingly likely to take the House for a red sweep. This saw T-Note futures sell off to fall back beneath 110-00 and settle just beneath the aforementioned level, while the Dollar surged with DXY hitting its highest since July and Bitcoin rose to a fresh record above USD 88,000.
- USD strengthened to start the week in typical ‘Trump Trade’ behaviour amid very sparse newsflow on account of Veterans Day in the US and with no Fed speak or US data, while participants look ahead to the deluge of Fed speak this week with Powell, Williams and Waller all speaking and with the focus on US CPI on Wednesday.
- Looking ahead, highlights include Australian Westpac Consumer Sentiment & NAB Business Confidence, Japanese Machine Tool Orders, Supply from Australia.
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LOOKING AHEAD
- Highlights include Australian Westpac Consumer Sentiment & NAB Business Confidence, Japanese Machine Tool Orders, Supply from Australia.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks were mostly higher in a quiet session to start the week owing to Veterans Day and with trade largely a function of the Trump Trade with Republicans looking increasingly likely to take the House for a red sweep. This saw T-Note futures sell off to fall back beneath 110-00 and settle just beneath the aforementioned level, while the Dollar surged with DXY hitting its highest since July and Bitcoin rose to a fresh record above USD 88,000.
- SPX +0.10% at 6,001, NDX -0.05% at 21,107, DJIA +0.69% at 44,293, RUT +1.47% 2,43%.
- Click here for a detailed summary.
NOTABLE HEADLINES
- US President-elect Trump is expected to name Stephen Miller as the White House Deputy Chief for policy, according to CNN.
FX
- USD strengthened to start the week in typical ‘Trump Trade’ behaviour amid very sparse newsflow on account of Veterans Day in the US and with no Fed speak or US data, while participants look ahead to the deluge of Fed speak this week with Powell, Williams and Waller all speaking and with the focus on US CPI on Wednesday.
- EUR was pressured during the European morning and fell beneath the 1.0700 handle against the firmer dollar before proceeding sideways near today's lows.
- GBP gave up ground with GBP/USD retreated to sub-1.2700 as the dollar reigned supreme, while participants now await UK employment and average earnings data.
- JPY underperformed and was also hit by the latest BoJ SOO which continued to highlight a lack of urgency for immediate hikes.
FIXED INCOME
- T-notes futures declined on Veterans Day with the Trump Trade in focus and bond cash trade closed.
COMMODITIES
- Oil prices started the week on the back foot amid a couple of bearish catalysts including reports that Hezbollah stated there are negotiations to stop the war and with headwinds from a firmer dollar, while there was a further return of production that had been shut in response to Rafael.
- BSEE said 25.69% of oil production in US Gulf of Mexico is shut in response to Rafael (prev. 27.6%) and 13.06% of nat gas production is shut in (prev. 16.67%).
- Gas pipeline in Venezuela's eastern region reportedly exploded, according to Reuters citing sources and local media.
GEOPOLITICAL
MIDDLE EAST
- Hezbollah said there are negotiations to stop the war, according to Al Arabiya.
- Israeli Foreign Minister said they are ready to end the war when their objectives are achieved and noted there is progress on Lebanon ceasefire talks which they are working with the Americans on. Furthermore, he stated there is no decision on the issue of annexing areas of the West Bank and the main challenge will be to enforce what is agreed, while he added the war is not over yet and that Hezbollah's capabilities are severely reduced with the majority of its missile capacity destroyed.
- A senior official in Israel says that if Hezbollah does not accept the terms of the ceasefire agreement that are taking shape these days, "Israel is ready with powerful operational plans to continue the campaign in Lebanon", according to local press.
- Israel's message to the US is that it wants a settlement within weeks as fighting in the country is exhausted, according to Al Jazeera citing Israel's Channel 13.
- An agreement is expected to be reached soon on the "American document" that guarantees freedom of movement for Israel in the event of a violation of the agreement in the north which is said to be a positive development in settlement negotiations between Israel and Hezbollah, according to Sky News Arabia citing Israel Broadcasting Authority.
- Israeli Defence Minister said Iran is more vulnerable than ever to damage to its nuclear program and there is a possibility to thwart and eliminate the threat, according to Sky News Arabia.
OTHER
- Ukraine military spokesman told Reuters that Russian forces in southern Zaporizhzhia region are preparing for assault operations and Russian troops heavily outnumber Ukrainian defenders.
- Russia's Kremlin said rumours of a Putin/Trump call were false and that there was no call.
ASIA-PAC
NOTABLE HEADLINES
- PBoC will step up counter-cyclical adjustment and it reiterated its accommodative monetary policy stance, while it will actively prevent and resolve financial risk, as well as improve tools to deal with abnormal stock market news. Furthermore, it will broaden FDI channels and increase loans for "white list" housing projects.
- China's Finance Ministry front-loads part of 2025's central government fiscal funds for affordable housing, renovation of villages, towns and residential quarters.
- China's Natural Resource Ministry said priority should be given to reclaiming and acquiring residential and commercial land that enterprises are either unwilling or unable to continue developing.
- Japan is reportedly to propose a USD 65bln plan to support the domestic chip industry and calls for JPY 50tln of total public/private investment in the sector over the next decade with Rapidus reported to be specifically targeted, according to Reuters citing a draft. It was later reported that Japanese PM Ishiba said they are to provide over JPY 10tln in chip and AI support by 2030.
- EU sees little chance of a quick China deal to avoid EV tariffs, according to Bloomberg.
DATA RECAP
- Chinese New Yuan Loans (CNY)(Oct) 500B vs Exp. 770B (Prev. 1590B)
- Chinese Aggregate Financing (CNY)(Oct) 1400B vs Exp. 1545B (Prev. 3760B)
- Chinese Money Supply M2 YY (Oct) 7.5% vs Exp. 7.0% (Prev. 6.8%)
EU
- Brussels to free up billions of euros for defence from EU budget and policy shift will allow the bloc’s capitals to redirect ‘cohesion funds’ amid Ukraine conflict and Trump victory, according to FT.
