Morning Markets

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ASIA

Asian equity markets traded higher following last week’s firm US gains which saw the S&P 500 post its best week YTD, although a slump in commodities capped further gains in the region. ASX 200 (+0.2%) led the region higher amid gains in consumer staples following reports of interest in retail giant Woolworth’s Big W unit. Shanghai Comp. (-0.6%) initially traded higher as margin debt approached 3-month highs before paring gains heading into the European open, while the Hang Seng (-0.2%) was weighed on by energy as crude tests the USD 41/bbl level and mild weakness in the financial sector amid reports that banks are set to keep deposit rates high. Markets in Japan are closed due to Labour Thanksgiving holiday.

Japan government is said to mull increasing wages by 3% in its plan to achieve the JPY 600trl GDP target and to provide timeframe for reduction of corporate taxes, according to a draft paper. (RTRS/Nikkei)

PBoC set the CNY mid-point at 6.3867 vs. last close. 6.3850 (Prev. mid-point 6.3780); which was the weakest setting since August 31st. (BBG)

EUROPE

S&P raises the Netherlands to AAA from AA+ with a stable outlook and reaffirmed Switzerland at AAA with a stable outlook. (BBG)

Eurogroup President Dijsselbloem said that the Eurozone have agreed that Greece has conformed with the reforms of its first package of measures which paves the way for Greece to receive the next loan tranche and cash for bank recapitalisation. (BBG)

Brussels continues to be under the highest terror alert with military and armed police remaining on the streets and services suspended on all of its subway and underground tram lines. (CNN)

UK 

Moody's said that Britain may not face a credit rating downgrade if it votes to leave the European Union in a membership referendum due by the end of 2017. (Telegraph)

FX

USD-index broke last week’s highs and approached 100.00 which pressured its major counterparts and saw USD/JPY regain 123.00 and EUR/USD test 1.0600 to the downside. Commodity linked currencies were pressured from the continued slump seen in energy and metal prices which resulted in underperformance in AUD/USD as it fell by around 1% to below 0.7200.

COMMODITIES

WTI crude futures continued its losses overnight to approach the USD 41/bbl level after the USD strengthened with Venezuela also stating that oil prices could hit USD 20/bbl if OPEC refrains from acting to stabilise the market. Gdold (-0.61%) fell in line with the sharp losses seen in the metals complex in which silver prices fell to its lowest level in 6yrs and copper print under USD 4500/ton for the 1st time since August 2009, as Chinese demand concerns persist. 

Iranian oil minister Zanganeh said he does not see OPEC changing its production policy at the next meeting scheduled for December 4th. (RTRS) 

US 

Fed’s Williams (voter, hawk) said he sees a strong case for a rate lift-off in December as long as the data remains encouraging and added that he expects long term rates to rise and the yield curve steepening as the Fed tightens policy. (RTRS)