USD Weaker Ahead Of US Retail Sales, RBA Gov Lowe Comments On Inflation

General trend

• Nikkei has traded generally flat amid similar US equity session.
• S&P ASX 200 lagged amid RBA comments, Resources index underperformed.
• Shanghai Composite ended morning trading slightly higher (+0.3%) after the lower open.
• Hang Seng has outperformed and extended gains ahead of the conclusion of the Biden/Xi virtual meeting, TECH index rises [Online gaming firms rise amid speculation that China could soon resume approvals]; Property index also advances.
• RBA Lowe indicates still a ways away from a rate move, but would be prepared to respond to very, very sharp rise in inflation pressures.
• Companies due to report earnings during the NY morning include Aramark, Youdao, DouYu, Home Depot, NetEase, Sea Limited, TransDigm, Walmart.

Headlines/Economic data

Australia/New Zealand

• ASX 200 opened 0.0%.
• (AU) Reserve Bank of Australia (RBA) Gov Lowe: Have yet to see broad based pick up in wages; Wages need to grow 3.0% of more to hit CPI midpoint, still possible cash rate won’t rise before 2024, data doesn’t warrant a rise in 2022.
• (AU) RBA Gov Lowe Q&A: Would be prepared to respond to very, very sharp rise in inflation pressures, Decision on QE won’t be made until Feb.
• (AU) RESERVE BANK OF AUSTRALIA (RBA) OCT MINUTES: Further pick up in inflation was expected, remain committed to maintaining highly supportive monetary conditions to achieve a return to full employment in Australia and inflation consistent with the target.
• (AU) Australia APRA Chair Byres: Considering additional measures to rein in housing lending if the need arises – AFR.

Japan

• Nikkei 225 opened -0.1%.
• (JP) Japan Fin Min Suzuki: Expects economy to pick up during Q4; Stimulus to have real impact in 2022.
• (JP) Bank of Japan (BOJ) Reviewing regional bank support program, the central bank said to be seeking to avoid excessive payouts to banks – Nikkei.
• (JP) Japan MoF sells ¥2.5T v ¥2.5T indicated in 0.005% 5-year JGBs; Avg Yield: -0.077% v -0.790% prior, bid-to-cover 4.54x v 3.86x prior.
• (JP) Japan Industry Min: Economic stumulus package will include plan to strengthen chip industry as national policy (yesterday after the close).

Korea

• Kospi opened -0.1%.
• (KR) ‘Serious’ COVID cases in South Korea have hit a new high; Cases >2.0K for 7th straight day – Yonhap.

China/Hong Kong

• Hang Seng opened +0.2%; Shanghai Composite opened -0.1%.
• (CN) Comments from US President Biden and China President Xi meeting: President Xi: China stands ready to move US China relations forward in a “positive direction”.
• (CN) China State Television: China President Xi and US President Biden had full and deep communication on development and bilateral issues.
• (CN) China PBOC sets Yuan reference rate: 6.3924 v 6.3896 prior.
• (CN) China PBOC Open Market Operation (OMO): Injects CNY50B in 7-day reverse repos v CNY10B prior; Net drain CNY50B v Net drain CNY90B prior.
• 728.HK Has requested US Appeals court to block FCC decision to revoke US authorization – press.
• (CN) China said to potentially restart approvals of online gaming soon – Chinese press.

North America

• (US) Fed’s Kashkari (dove, non-voter): Fed will never allow price expectations to become unanchored.
• (US) Fed’s Barkin (FOMC voter, hawk): Do not think the infrastructure bill will provide any near term stimulus – media interview.
• (US) House Rep Smith (D-WA) said to be open to including a China provision to the Defense Bill – press.
• (US) President Biden: Discussed complex nature of bilateral relations, US remains committed to “One China” policy, but opposed to efforts to change status of Taiwan – White House read out of meeting with China President Xi.

Europe

• (EU) European Union Parliament and Council have reached a provisional deal for the 2022 Budget.

Levels as of 00:15ET

• Hang Seng +1.2%; Shanghai Composite +0.2%; Kospi -0.2%; Nikkei225 +0.1%; ASX 200 -0.7%.
• Equity Futures: S&P500 +0.0%; Nasdaq100 +0.1%, Dax +0.1%; FTSE100 +0.1%.
• EUR 1.1386-1.1359; JPY 114.32-114.11; AUD 0.7369-0.7342; NZD 0.7064-0.7038.
• Commodity Futures: Gold +0.1% at $1,868/oz; Crude Oil +0.7% at $80.27/brl; Copper +0.4% at $4.43/lb.