RNBZ decision and UK budget tomorrow

Asia market update: Mixed day again in Asia with no fresh catalysts; Delayed US data tonight; RNBZ decision & UK budget tomorrow.

General trend and developments

- Markets continued an overall positive bias in light liquidity week heading into Thanksgiving, with many larger traders already on holiday so relatively light liquidity. Market tone assisted by further dovish remarks overnight supporting a Fed rate cut in Dec by Fed’s Waller and Daly due to their labor market concerns. (Comes after the Friday rally helped in part by Fed’s Williams being open to a cut). With Fed rate cut expectations for Dec now >80% compared with just 42% only one week ago. Russia-Ukraine peace talks also likely adding to retail trader potentially buying the recent dip in light trading conditions.

- Nikkei, Kospi and Hang Seng all started out with early 1%+ gains but fell back sharply mid-session (Nikkei and Kospi down into negative territory, recovering somewhat but still well off of highs). Japan heavyweights Softbank and TEPCO down >10% at worst levels.

- Amid the Japan-China diplomatic tensions, Japan PM Takaichi and US Pres Trump unexpectedly talked by phone, with Takaichi later saying that Trump explained recent-US-China relations following Trump's talk with China Pres Xi earlier in the day and Trump adding that US and Japan are 'very close friends' and that the Japan PM could call 'any time'.

- JP 40-year JGB auction tomorrow, with the 2-years on Fri (Nov 28th).

- South Korean Consumer Confidence continued to climb higher in November, hitting an eight-year high.

- Tonight sees the delayed release of US Sept PPI, US Sept Retail Sales, US Aug Business Inventories.

- New Zealand's RBNZ expected to cut again tomorrow, down to 2.25%, and then tomorrow evening the much-anticipated UK Autumn budget to see if Chancellor Reeves can pull a rabbit out of the fiscal hat.

- US equity FUTs flat to slightly down during Asian trading.

Looking ahead (Asian-weighted releases, using Asian time zone)

- Tue Nov 25th (Tue night delayed US Sept PPI, US Sept Retail Sales, US Aug Business Inventories).

- Wed Nov 26th AU Oct CPI, NZ RBNZ Rate Decision, (Wed eve UK Autumn Budget, DE Dec Consumer Confidence) (Wed night delayed US Sept Durable Goods).

- Thu Nov 27th NZ Nov Biz Confidence, KR BOK Rate Decision, JP MOF meetings with JGB investors & dealers, JP BOJ’s Noguchi.

- Fri Nov 28th JP Oct Retail Sales & Industrial Production, (Fri eve: various EU Nov prelim CPI).

Holidays in Asia this week

- Mon Nov 24th Japan.

- Thu Nov 27th US Thanksgiving (US time).

- Fri Nov 28th US Thanksgiving half-day (early close, US time).

Headlines/economic data

Australia/New Zealand

- ASX 200 opens +0.4% at 8,556.

- Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 87.1 v 84.2 prior (update).

- Australia sells A$400M vs. A$400M indicated in 4.25% Jun 2034 bonds; Avg Yield: 4.3168% v 4.2249% prior; bid-to-cover: 4.54x v 4.88x prior.

China/Hong Kong

- Hang Seng opens +0.9% at 25,948; Shanghai Composite opens +0.4% at 3,850.

- China Pres Xi: Affirms to enhance energy partnership with Russia – press.

- China PBOC 1-year Medium-Term Lending facility (MLF) setting: Leaves rate unchanged at 2.00%; Conducts CNY1.0T v CNY1.0T indicated; Net injects CNY100B in liquidity.

- US Pres Trump: Discussed many topics with China Pres Xi (in phone call), including agricultural products; He invited me to Beijing in April 2026, which I have accepted - Truth Social post [overnight update].

- China Pres Xi and US Pres Trump held a call today; Xi told Trump return of Taiwan to China is important part of post-WWII international order - Chinese state media [overnight update].

- China PBOC sets Yuan reference rate: 7.0826 v 7.0847 prior.

- China PBOC Open Market Operation (OMO): Injects CNY302B in 7-day Reverse Repos; Net drains CNY105B v injects CNY56B prior.

Japan

- Nikkei 225 opens +1.0% at 49,113- Japan PM Takaichi: Confirms spoke with US President Trump on the phone.

- Japan Economic Revitalization Minister Kiuchi: Watching FX including speculative moves 'with urgency' - financial press.

- Japan Chief Cabinet Sec Kihara: Govt to hold cabinet meeting on supplementary budget this Fri (Nov 28th) - press.

- Japan Fin Min Katayama: Japan has established a Japanese-equivalent version of US's DOGE to abolish ineffective subsidies.

- Japan is expected to name AI and nuclear fusion among the 6 strategic technology fields - Nikkei [overnight update].

- Reportedly Japan's Govt plans to require crypto exchanges to set aside reserves to back liquidity – press [overnight update].

- Reportedly the Japanese Govt considers tightening requirements for naturalization – Nikkei.

- Chip producers in Japan to face cybersecurity test as a precondition for obtaining government subsidies - Nikkei [overnight update].

- Japan Defense Min said Tokyo to deploy missiles to military base near Taiwan - US financial press [overnight update].

Korea

- Kospi opens +2.5% at 3,942.

- South Korea Nov Consumer Confidence: 112.4 v 109.8 prior.

- South Korea ruling party to introduce "US Investment Act" this week to National Assembly - Korean press.

- South Korea Agriculture Ministry: Raises Swine Fever alert level following case in Chungcheong - statement.

- Follow up: BOK, National Pension Service (NPS) to discuss ways to balance NPS profit, FX stabiltiy; To form consultative body - South Korea press [overnight update].

Other Asia

- (IN) IMF: Likely to alter classification of India's Forex framework - financial press- Thailand Oct Customs Trade Balance:-$3.4B v -$1.1Be.

- Taiwan Pres Lai: The Republic of China (Taiwan) is a fully sovereign and independent country - financial press.

- Taiwan Oct Unemployment Rate: 3.3% v 3.4%e.

- Taiwan Oct M2 Money Supply Y/Y: 5.0% v 5.4% prior.

North America

- US Army Sec Driscoll said to have held 'secret' peace talks with Russian officials in Abu Dhabi - CBS.

- (US) Fed's Kashkari (non-voter in 2025; voter in 2026): There are real use cases for AI, but not for crypto.

- Canada, India said to be finalizing a 10-year uranium deal, may be worth up to $2.8B - Canadian press.

- Reportedly Meta considers spending billions of dollars on Google Cloud Tensor Processing Units (TPUs), incl for Meta data centers.

- (US) Fed's Waller (voter): Most private-sector data says jobs market is soft; I'm advocating for rate cut in Dec due to concern over job market; Jan will be tricky with flood of data - Fox Business.

- (US) Fed's Daly (non-voter in 2025 & 2026): Supports cut at Dec's rate decision; Disagreement among officials reflects uncertainty; Notes that a sudden deterioration in the job market is both likely and will be harder to manage than a sudden rise in inflation.

- (US) Commerce Sec Lutnick: Seeking to enhance US-EU deal; US-EU trade talks include rules on Big Tech; Decisions like one on Nvidia chips and China on Pres Trump's desk - TV interview.

- (US) Reportedly Trump's heath plan sees 2-year ACA subsidy extension; Includes income caps for ACA tax credits and minimum premium payments - Politico.

- (US) White House said to delay healthcare framework proposal due to significant Congressional backlash over to Trump's proposed plan which reportedly included a 2-year extension of ACA subsidies - press.

- (US) Nov Dallas Fed Manufacturing activity: -10.4 V -2.0E.

- (US) US Aug Industrial output revised lower to -0.1% from +0.1%.

- (US) US district court judge dismisses the cases against former FBI Director James Comey and NY AG Letitia James; Judge disqualifies interim US attorney Lindsey Halligan, saying she wasn't properly appointed - press.

- (US) Treasury $69b 2-year note auction draws 3.489% V 3.504% prior; bid-to-cover ratio: 2.68 V 2.59 prior and 2.62 over the last 12 auctions.

- (US) US BEA: Q3 GDP advanced estimate has been cancelled; The second estimate of Q3 GDP still remains to be reschedule.

Europe

- Russia Dep PM Novak: Confirms China and Russia discussed Russia oil exports increase to China.

- (UR) German Chancellor Merz: Do not expect breakthrough in Ukraine talks this week; Ukraine cannot be forced into giving up territory; Russia must come to negotiating table now.

- (UR) Pres. Trump: Is it really possible that big progress is being made in Peace Talks between Russia and Ukraine??? Don’t believe it until you see it, but something good just may be happening. GOD BLESS AMERICA!

- (RU) Russia Kremlin Spokesperson Peskov: No plans yet for meeting this week of Russian and US delegations.

- (FR) France PM Lecornu: Will hold further meetings with political groups in coming days over budget; There are signs of tension around budget talks; Need to stick to deficit target <5% of GDP in 2026.

- (FR) France parliament said to have rejected 2026 budget draft - FT.

- (IL) Israel central bank (BOI) cuts base rate by 25bps to 4.25%; as expected.

- (UR) US Press Sec Leavitt: US and Ukraine discussions have been productive; Trump is optimistic that a deal can be reached; Only a couple points of disagreement remain.

Levels as of 01:20 ET

- Nikkei 225 +0.2%, ASX 200 0.1%; Hang Seng +0.7%; Shanghai Composite +0.9%; Kospi +0.9%.

- Equity S&P500 Futures flat; Nasdaq100 -0.1%; DAX -0.2%; FTSE100 flat.

- EUR 1.1515-1.115.30; JPY 156.56-156.98; AUD 0.6452-0.6470; NZD 0.5598--5622.

- Gold +0.3% at $4,180/oz; BTC +0.8% at $88,326; Crude Oil -0.4% at $58.69bbl; Copper +1.1% at $5.1445/lb.