• APAC stocks traded lower across the board as the sharp Wall Street selloff reverberated through the region despite the absence of fresh catalysts.
• JPMorgan no longer expects the Federal Reserve to cut rates in December, vs its prior forecast of a 25bp cut.
• 10yr JGB futures retraced some of this week's losses whilst the session saw a slew of commentary from Japanese Finance Minister Katayama, who, on the bond market, attempted to alleviate some fiscal woes.
• Japan may intervene before USD/JPY reaches 160, according to Bloomberg, citing a government panellist.
• Crypto markets continue bleeding with Bitcoin falling under USD 85,500 at a 7-month low, while Ethereum fell to a 4-month low.
• Looking ahead, UK PSNB (Oct), Retail Sales (Oct), EZ, UK & US Flash PMIs (Nov), US Real Weekly Earnings (Sep), Canadian Retail Sales (Sep), US Uni. of Michigan (Nov), Euro Area Indicator of Negotiated Wage Rates (Q3), Moody’s on the UK & Italy, ECB’s de Guindos, Lagarde, Nagel; Fed’s Williams, Barr, Jefferson, Logan; SNB’s Schlegel.
• Click for the Newsquawk Week Ahead.

US TRADEEQUITIES

• US stocks ended with heavy selling. Initially, markets saw notable risk on sentiment, with US indices seeing extensive gains, high beta FX outperforming, and the crude complex strengthening, which came after a stellar NVIDIA (NVDA) report and guidance. Thereafter, markets turned, although the risk-off had no fresh driver. AI valuations remain a concern, even after the strong NVDA report, while Goldman Sachs warned Wednesday of USD 39bln in equity sales from trend-following hedge funds after the SPX fell to sub 6,725 on Monday.
• SPX -1.56% at 6,539, NDX -2.38% at 24,054, DJI -0.84% at 45,752, RUT -1.82% at 2,305.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US Treasury Secretary Bessent said the Fed should keep going with its cutting cycle and should be looking at the data, via Bloomberg.
• Fed’s Goolsbee (2025 voter) said part of the Fed’s job is to be the steady hand, noting that the Fed set a 2% inflation target and that 3% inflation is too high, calling the 2% goal a sacred promise. He said inflation seems to have stalled and that he is a little uneasy about inflation, uneasy about front-loading rate cuts, and uneasy about relying on “transitory” inflation. He said official data is a mess because “the lights went out,” and that in the dark he was more paranoid about inflation due to less available information. Goolsbee noted a notable slowdown in job creation but said he is dubious that the payroll slowdown points to recession; he described the current low-hiring, low-firing environment as a sign of uncertainty. He said the boom in data centres makes it harder to gauge the business cycle, warned that AI investment raises concerns about a possible bubble, and said 50-year mortgage rates could reduce the impact of monetary-policy decisions, according to Reuters.
• Fed’s Goolsbee (2025 voter) reiterated he is uneasy about front-loading rate cuts before knowing whether the inflation uptick is transitory. He said he is not hawkish over the medium term and believes rates will ultimately settle well below current levels. After the Fed’s September cut he felt just one more cut would be needed for 2025, and when he voted for the October cut he assumed the job market was cooling gradually.
• Fed’s Cook (voter) said not all market volatility is problematic, adding that one major vulnerability is maturity mismatch in hedge-fund Treasury-securities trading strategies, according to Reuters.
• Fed’s Paulson (2026 voter) said she is approaching the December rate decision cautiously and that the September labour-market report was encouraging overall, though she remains, on balance, more worried about the labour market than inflation. She said rate cuts so far have been appropriate but each one raises the bar for the next, and with upside risks to inflation and downside risks to employment, monetary policy must walk a fine line. She expects to learn a lot between now and the December meeting and said her longer-term policy thinking is focused on balancing inflation and labour-market risks. Paulson said the US economy is doing OK, but aggregate growth is unusually dependent on high-income earners and is particularly sensitive to equity valuations. She added that tariff effects are smaller than feared and that the overall demand environment is helping contain inflation, according to Reuters.
• JPMorgan no longer expects the Federal Reserve to cut rates in December, vs its prior forecast of a 25bp cut.
• OpenAI CEO Sam Altman is bracing for possible economic headwinds in catching up to a resurgent Google (GOOGL), according to The Information. He told colleagues last month that Google’s recent AI progress could “create some temporary economic headwinds” for OpenAI, and the company’s narrowing tech lead and rising cash-burn projections have raised questions among investors.

DELAYED DATA UPDATE

• Federal Reserve scheduled Industrial Production and Factory orders data for 3rd December at 09:15EST/14:15GMT.

DATA RECAP

• US 30-year fixed rate mortgage (Nov 20th): 6.26% (prev. 6.24%)

TRADE/TARIFFS

• US President Trump signed an order modifying the scope of tariffs on Brazil, stating that certain agricultural products will not be subject to the additional ad valorem duty imposed under Executive Order 14323, according to the White House. Bloomberg reported that Trump has expanded his reductions of certain food tariffs by extending them to the 40% surcharge placed on Brazil over the Bolsonaro case, noting that last week’s exemptions did not apply to that portion of the tariffs. White House said US President Trump's order on Brazilian imports removes tariffs announced on July 30th on imports of Brazilian beef, coffee, and orange juice.
• EU Trade Commissioner said momentum is improving on the Australia–EU trade deal and expects another round of talks early next year, according to Reuters.

APAC TRADEEQUITIES

• APAC stocks traded lower across the board as the sharp Wall Street selloff reverberated through the region despite the absence of fresh catalysts.
• ASX 200 was dragged down by all sectors, with gold and mining leading declines; tech held up relatively better alongside defensive names.
• Nikkei 225 slipped at the open, pressured by mining and metals, while financials found some relief as yields eased off highs. No move was seen on the budget, which came in line with expectations.
• Hang Seng and Shanghai Comp both opened softer but recovered to trade firmer, though still reflecting the cautious global tone.
• US equity futures consolidated after Thursday’s heavy selloff, with the ES finding support around 6,550 and the NQ stabilising near the 24,000 area.
• European equity futures are indicative of a lower cash open with the Euro Stoxx 50 -1.5% after cash closed +0.3% on Thursday.

FX

• DXY held flat in a tight 100.08–100.22 band amid a lack of fresh overnight drivers, following a relatively stable Thursday session despite the equity sell-off. The index stayed comfortably within yesterday’s 100.02–100.36 parameters.
• EUR/USD was uneventful in a quiet session with no major catalysts as traders positioned ahead of the Eurozone Flash PMIs.
• GBP/USD remained capped below 1.3100, with UK-specific newsflow light and caution setting in ahead of next week’s Budget. UK Retail Sales and Flash PMIs were in focus to close out the week.
• USD/JPY was choppy within a tight range between 157.10-157.54 despite extensive verbal intervention from Japanese Finance Minister Katayama, who suggested that they take appropriate action if FX moves excessively, whilst FX intervention is an option. Meanwhile, Japanese CPI printed in line while Flash PMIs flagged that "Inflation remains a key concern, however, with average input costs rising at the quickest rate in six months amid reports of higher labour costs and supplier price hikes. As a result, firms raised their own selling prices at a solid pace, as they looked to protect their margins."
• Antipodeans narrowly outperformed in the G10 space following the prior session's underperformance, with little movement seen on the New Zealand Trade Balance and Australian Flash PMIs.
• PBoC set USD/CNY mid-point at 7.0875 vs exp. 7.1154 (Prev. 7.0905)

FIXED INCOME

• 10yr UST futures were holding a mild upward bias and retaining most of yesterday's gains amid the broader risk aversion in Asia.
• Bund futures were flat/subdued despite the broader risk aversion, with Bund futures holding above 128.50 heading into EZ Flash PMIs.
• 10yr JGB futures retraced some of this week's losses whilst the session saw a slew of commentary from Japanese Finance Minister Katayama, who, on the bond market, attempted to alleviate some fiscal woes, suggesting they are not trying to increase the size of spending, whilst they will guide appropriate debt management policy to ensure Japan does not lose market trust in its finances.

COMMODITIES

• Crude futures were softer amid the broader risk aversion and following the somewhat constructive updates on the Russia-Ukraine front, as Ukraine’s President Zelensky said he agreed to work on the US draft plan to end the war, and is ready to work with the US and Europe for peace. Meanwhile, US President Trump's 28-point plan for peace in Ukraine would force Kyiv to give up additional territory in the east, cap the size of its military, and agree it will never join NATO, according to a draft obtained by Axios.
• Spot gold was subdued despite a flat dollar and softer overall sentiment, with the yellow metal choppy within a tight range under USD 4,100/oz.
• Copper futures were lower amid the broader risk aversion, but with price action contained amid a lack of fresh catalysts.

CRYPTO

• Crypto markets continue bleeding with Bitcoin falling under USD 85,500 at a 7-month low, while Ethereum fell to a 4-month low.

NOTABLE ASIA-PAC HEADLINES

• Japan’s cabinet approved a JPY 21.3tln economic stimulus package (vs expectations of JPY 20–21.3tln), with JPY 17.7tln in fresh spending via the extra budget and an overall impact of JPY 42.58tln, according to Bloomberg. Japan PM Takaichi said new bonds will be issued to fund the package if tax revenue falls short, but total JGB issuance will be smaller than last year, adding that sustainable state finances must be achieved through economic growth, according to Reuters.
• Japanese Finance Minister Katayama said she will take appropriate action if there are excessive FX moves, noting that FX intervention is an option as it was mentioned in the Japan–US agreement in September. She said the government will issue debt to fund part of the stimulus package as needed, is not trying to increase the size of spending, and is alarmed by recent one-sided and rapid foreign-exchange moves, according to Reuters.
• Japanese Finance Minister Katayama said she is closely watching FX moves with a high sense of urgency and will take appropriate action based on the US–Japan forex agreement. She declined to comment on FX levels, noted that recent moves have been sharp and one-sided, and stressed that currencies should move in a stable manner reflecting fundamentals. She said that at her meeting with BoJ Governor Ueda and the Economy Minister, Ueda explained the BoJ will gradually adjust monetary support in line with economic and price improvements, adding that specific policy decisions are up to the BoJ. She said the three officials also reaffirmed they will coordinate closely on market developments, according to Reuters.
• Japanese Finance Minister Katayama said JGB yields move based on domestic economic, price and monetary-policy developments, fiscal conditions, and overseas market moves. She added that Japan will guide appropriate debt-management policy to ensure it does not lose market trust in its finances, according to Reuters.
• Japanese Finance Minister Katayama said Japan is only halfway toward achieving sustainable, stable price increases accompanied by wage gains. She also said Japan’s debt-to-GDP ratio should edge down from last year, even after an extra budget for the stimulus package, according to Reuters.
• BoJ Governor Ueda said a weak JPY lifts import prices and contributes to higher consumer inflation, and that FX moves may have a larger impact on prices given current conditions. He said companies are increasingly willing to raise wages and prices, noted he is mindful that FX moves could affect inflation expectations and underlying inflation, and said the BoJ will scrutinise the impact of FX volatility on prices, according to Reuters.
• Japan may intervene before USD/JPY reaches 160, according to Bloomberg, citing a government panellist.
• Foxconn (2317 TT) said it will launch a joint venture with Intrinsic to build an AI factory and plans to invest USD 2–3bln per year in AI. Foxconn and OpenAI will also collaborate to strengthen US manufacturing across the AI supply chain, with OpenAI receiving early access to evaluate Foxconn’s systems and an option to purchase them, according to Reuters.
• Foxconn’s (2317 TT) VisionBay AI unit said it plans to deploy 27MW using NVDA’s GB300 chips in the first half of 2026. This will be Taiwan’s largest advanced GPU cluster and the first GB300 AI datacenter in APAC, according to Reuters.
• Singapore raised its 2025 GDP growth estimate to around 4%, from the previous 1.5–2.5%, according to Reuters.

DATA RECAP

• Japanese CPI, Core Nationwide YY (Oct) 3.0% vs. Exp. 3.0% (Prev. 2.9%)
• Japanese CPI Ex Fresh Food & Energy (Oct) 3.10% (Prev. 3.00%)
• Japanese CPI, Overall Nationwide (Oct) 3.0% (Prev. 2.9%)
• Japanese CPI Index Ex Fresh Food (Oct) 112.1 (Prev. 111.4)
• Japanese Imports YY (Oct) 0.7% vs. Exp. -0.7% (Prev. 3.0%)
• Japanese Exports YY (Oct) 3.6% vs. Exp. 1.1% (Prev. 4.2%)
• Japanese Trade Balance Total Yen (Oct) -231.8B vs. Exp. -280.1B (Prev. -237.4B)
• Japanese S&P Global Composite PMI Flash SA (Nov) 52.0 (Prev. 51.5); "Inflation remains a key concern"
• Japanese S&P Global Services PMI Flash SA (Nov) 53.1 (Prev. 53.1)
• Japanese S&P Global Manufacturing PMI Flash SA (Nov) 48.8 (Prev. 48.2)
• Australian S&P Global Composite PMI Flash (Nov) 52.6 (Prev. 52.1)
• Australian S&P Global Services PMI Flash (Nov) 52.7 (Prev. 52.5)
• Australian S&P Global Manufacturing PMI Flash (Nov) 51.6 (Prev. 49.7)
• South Korean PPI Growth YY (Oct) 1.5% (Prev. 1.2%, Rev. 1.2%)
• South Korean PPI Growth MM (Oct) 0.2% (Prev. 0.4%, Rev. 0.4%)
• New Zealand Annual Trade Balance (Oct) -2.28B (Prev. -2.25B, Rev. -2.39B)
• New Zealand Trade Balance (Oct) -1542.0M (Prev. -1355.0M, Rev. -1384M)
• New Zealand Imports (Oct) 8.04B (Prev. 7.18B, Rev. 7.17B)
• New Zealand Exports (Oct) 6.5B (Prev. 5.82B, Rev. 5.78B)

GEOPOLITICS

RUSSIA-UKRAINE

• US President Trump’s 28-point plan for peace in Ukraine would force Kyiv to give up additional territory in the east, cap the size of its military, and agree never to join NATO, according to a draft obtained by Axios.
• US President Trump's peace plan for Ukraine includes a security guarantee modelled on NATO's Article 5, which would commit the US & European allies to treat an attack on Ukraine as an attack on the "transatlantic community", via Axios.
• The White House said it believes the Ukraine plan should be acceptable to both sides and that it is having good conversations with both regarding ending the war; Special Envoy Witkoff and Secretary of State Rubio met with Ukrainians this past week to discuss the plan, according to Reuters.
• Ukraine President Zelensky said he discussed the peace process with US Secretary of the Army Driscoll in Kyiv and that US and Ukrainian teams will work on points of the peace plan, according to Reuters.
• Russia’s President Putin said Russian forces are already fighting in Ukraine’s Kostiantynivka and that Ukrainian soldiers should have the opportunity to lay down their arms and surrender; he also said 15 Ukrainian battalions are blocked in the Kupyansk area. Russia’s Chief of General Staff Gerasimov said Russia took control of Kupyansk and over 80% of Vovchansk, according to Reuters.

OTHERS

• Japanese PM Takaichi said there is no change in the plan with China to build a constructive, stable and mutually beneficial relationship, according to Reuters.
• The White House said President Trump is interested in taking additional action against cartels, according to Reuters.

EU/UK

NOTABLE HEADLINES

• Brussels set to issue formal warning to Italy over ‘golden power’ rules, according to FT

DATA RECAP

• UK GfK Consumer Confidence (Nov) -19.0 vs. Exp. -18.0 (Prev. -17.0)