The Hang Seng fell by 104 points or 0.5% to close at 19,601 on Thursday after a slight gain in the previous session, dragged by a modest drop in US futures following Nvidia's earnings forecast which fell short of some investors' high expectations. Meantime, Goldman Sachs analysts noted a clear shift in the macro environment post-US election, with a stronger dollar posing headwinds for Asian equities. Still, losses were mitigated by hopes that Beijing might adopt stronger fiscal policies next year to counter the impact of Trump's tariffs on Chinese exports. All sectors declined, with tech and property among the top losers. Kuaishou Tech tumbled 1.8% due to concerns about future profit growth, while Alibaba Pictures fell 8.4% on lower profits in H1 of 2024. Other major losers included Yadea Group (-5.2%), Chow Tai Fook Jewellery (-4.2%), and KE Holdings (-2.8%). Traders now await Hong Kong's inflation data, due later today, after the September figure reached a three-month low of 2.2%.

USD/JPY sticks with the push and pull mood on the week.The price action in the pair has been rather up and down on the week, with levels now returning back to the weekly pivot around 154.21. Earlier in the day, USD/JPY was trading around 155.15 in the handover from Asia to Europe.

Mexican Peso consolidates ahead of Retail Sales data.The Mexican Peso (MXN) consolidates in its most-heavily traded pairs during the European session on Thursday. This follows the Peso's average half-a-percent fall in its key pairs on Wednesday, which marked an end to a five-day winning streak.

The business climate indicator in France fell to 96 in November 2024, edging lower from 97 in the previous month. Sentiment deteriorated across most market sectors, namely building construction (99 vs 100 in October), services (99 vs 101), and retail trade (98 vs 99). In contrast, morale among manufacturers improved to 97 from 93 in October. Meanwhile, the employment climate indicator has rebounded to 99, gaining two points from a month earlier and nearing its long-term average of 100, primarily driven by higher opinion balances on workforce size in services (including temporary work agencies) and, to a lesser extent, in the manufacturing sector.

The manufacturing climate indicator in France improved to 96.7 in November 2024, up from a revised 93 in October and above market expectations of 95. Manufacturers were less pessimistic about past production (-7 vs. -12 in October), overall order books (-21 vs. -25), and foreign order books (-19 vs. -22). Assessments also turned positive for expected workforce changes (2 vs. -1) and personal production outlook (5 vs. -2). The gauge for perceived economic uncertainty eased to 23, down from 25 in the previous month. However, views were more negative regarding general production expectations (-14 vs. -12) and less optimistic about expected selling price trends (3 vs. 7).

EUR: Geopolitics and Trump threat weigh – ING.EUR/USD looks to have been buffeted by events in Ukraine this week. The war is going through a period of escalation as both sides seek to gain ground ahead of potential ceasefire discussions early next year, ING's Chris Turner notes.

USD: Dollar holds gains – ING.The DXY dollar index is holding gains and it is not hard to see why. US rates are being repriced modestly higher as the market shifts away from pricing a December Fed rate cut, ING's Chris Turner notes.

Iron ore prices for cargoes with 62% iron content rose toward $102 per tonne, halting a recent decline amid renewed hopes for a rebound in demand from top consumer China. The city of Guangzhou recently expanded its program to purchase older apartments, which could stimulate demand for construction materials, including iron ore. Meanwhile, China’s central bank kept key lending rates unchanged this week, as expected, providing no new signals that would significantly impact demand in the world’s largest metals consumer. On the supply side, reports of higher iron ore shipments from major producers such as Australia, along with rising stockpiles at Chinese ports, continued to put downward pressure on prices.

Silver prices rose above $31.20 per ounce on Thursday, recovering from losses in the previous session as heightened geopolitical tensions boosted demand for safe-haven assets like precious metals. On Wednesday, Ukraine launched a series of UK-made missiles into Russia, following a previous strike with US-made missiles. Additionally, the US vetoed a UN Security Council resolution calling for a ceasefire in Gaza, further escalating geopolitical uncertainties. On the monetary policy front, Federal Reserve governors Michelle Bowman and Lisa Cook offered conflicting views on inflation and the future path for interest rate cuts in separate statements on Wednesday. In China, the PBOC kept key lending rates unchanged this week, as expected, offering no new signals that could affect demand in the world’s largest consumer of metals.

GDP in Norway’s mainland economy, which excludes the largely petroleum-based offshore sector, grew by 0.5% quarter-on-quarter in the three months to September 2024, exceeding market estimates and up from the previous period’s upwardly revised 0.3% growth. The expansion was driven by a 2.3% rise in industry and mining output, led by increases in oil refining, chemicals, pharmaceuticals, and machine repair. Fishing and aquaculture also surged by 14%, following a weak previous quarter. However, these gains were partially offset by a decline in electricity production due to reduced hydropower output and a fifth consecutive quarterly drop in construction activity, primarily due to weaker housing construction. On the expenditure side, household consumption remained largely unchanged in Q3, with car purchases declining, while service consumption and spending abroad rose. Annually, the GDP in mainland Norway expanded 1.6%, slowing from a 2.9% growth in the prior quarter.

Household consumption of goods in Norway rose by 1.8% month-on-month in September 2024, accelerating from 1.4% in the previous month. This marked the highest growth in household spending since June, as expenditures rose for food, beverages and tobacco (4.5% vs 1.2% in August) and other goods (2% vs 0%). Moreover, consumption rebounded for electricity and heating fuels (1.0% vs -0.2%). Meanwhile, purchases of vehicles and petrol declined (-3.2% vs 6.6%).

The Bank of Japan will seriously consider exchange rate movements when forming its economic and inflation outlook, Governor Kazuo Ueda said in a speech. He also mentioned that the central bank would incorporate the effects of US policies under the next president into its economic outlook once Donald Trump announces details. The dollar's recent surge, fueled in part by market expectations that Trump's proposed inflationary policies might restrict the Federal Reserve's rate cuts, has put downward pressure on the yen. On monetary policy, Ueda said the BoJ would make decisions "meeting by meeting" based on available information. Recently, he signaled his readiness to raise interest rates again if the Japanese economy and prices align with the central bank's forecast.

TTF Gas increased to a 51-week high of 47.44 EUR/MWh. Over the past 4 weeks, Natural Gas EU Dutch TTF gained 15.2%, and in the last 12 months, it increased 6.06%.

The Norwegian economy contracted by 1.8% quarter-on-quarter in the three months to September 2024, following a revised 2% expansion in the previous period. This marked the first contraction in exactly a year, driven primarily by a sharp decline in petroleum activities and ocean transport (-5.8% vs. 5.1% in Q2). Net trade also weighed on GDP, as exports fell 4.4% (vs. 6.2% growth in Q2), while imports declined more modestly by 0.3% (vs. 4%). Additionally, growth in government spending slowed (0.8% vs. 1.1%), and household consumption stagnated (0% vs. 1.5%). On the other hand, fixed investment growth accelerated further (4.5% vs. 3.5%). Year-on-year, Norwegian GDP grew by 3.5%, down from a significantly higher revised 5.4% expansion in the previous quarter, which had been the fastest pace of growth since Q4 2021.

European equity markets were set to open higher on Thursday, as investor sentiment stabilized following four consecutive days of selling. However, caution remained in the air as Nvidia, the AI industry leader, reported earnings that surpassed quarterly estimates but showed signs of slowing growth. Investors will also be focusing on a series of key economic reports from Europe, including new car registrations in the Eurozone and French business confidence data. There are no major earnings releases scheduled for the day. In premarket trade, Euro Stoxx 50 and Stoxx 600 futures were both up by around 0.4%.

Public sector net borrowing excluding public sector banks in the UK increased to £17.35 billion in October 2024 from a downwardly revised £16.13 billion in September and much higher than forecasts of £12.3 billion. Borrowing was the 2nd highest for an October month since monthly records began in January 1993. Current budget deficit which refers to borrowing to fund day-to-day public sector activities, and is part of borrowing, was £12.7 billion. Debt interest payable was £9.1 billion. Central government’s receipts were £81.2 billion, of which tax receipts increased to £61.3 billion, including Corporation Tax, Income Tax and VAT. Compulsory social contributions decreased to £13.8 billion, largely because of the reductions in the main rates of National Insurance in early 2024. Central government’s total expenditure was £88.5 billion. Borrowing in the financial year to October was £96.6 billion, the 3rd highest financial year-to-October borrowing since monthly records began in 1993.

Industries in Sweden operated at 87.5% percent of their production capacity in the third quarter of 2024 from 88.4 percent in the previous three-month period. Compared with the same quarter a year earlier, capacity utilization was 2.6 percentage points lower at 90.1 percent.

The GDP for Mainland Norway, which excludes the largely petroleum-based offshore sector, showed no increase in September 2024 over the previous month, following a 0.1% fall in August. The rolling three-month growth was 0.5% from April-June to July-September.

The benchmark KOSPI closed nearly flat at 2,481 points on Thursday, pausing after a three-session rally, as chip stocks traded mixed following strong earnings from US chipmaker Nvidia. However, optimism was tempered as Nvidia’s results showed slowing growth compared to the previous three quarters and fell short of high investor expectations. Index heavyweight Samsung Electronics soared 2.2%, while its rival and Nvidia supplier, SK Hynix, tumbled 0.8%, reversing earlier gains. Among healthcare stocks, Samsung Biologics slipped 0.3%, while Celltrion gained 1.7% after announcing a KRW 100 billion share buyback to enhance shareholder value. In economic news, South Korea's exports increased 5.8% year-on-year during the first 20 days of November. Investors now await the Bank of Korea's rate decision, with expectations to hold rates at 3.25%.

The consumer confidence index in Denmark declined to -9.3 in November 2024 from -8.9 in October. This was the lowest reading since December 2023, as assessments of families' financial situations compared to a year ago became more pessimistic (-10.1 vs -8.9 in October), along with views on the economic situation in the coming year (-10.9 vs -8.5). Meanwhile, consumers’ expectations regarding the climate for major purchases improved (-3.7 vs -8.0), as did views on their finances (0.0 vs -1.0). Among aspects not factored into the confidence indicator, expectations for price development in the coming year rose (23.2 vs 21.0), while expectations for unemployment trends over the next twelve months worsened (13.7 vs 10.2).

The consumer confidence index in Turkey fell to 79.6 in November 2024 from a sixteen-month high of 80.6% in the previous month. Households were more pessimistic regarding their financial situation over the next 12 months (80.6 vs 82.1 in October), as well as the general economic outlook for the same period (73.8 vs 75.3). At the same time, assessments of spending on durable goods in the coming year turned negative (98.6 vs 100.1). Meanwhile, views on the current household financial situation improved (66.1 vs 64.7).

Pound Sterling declines even though BoE dovish bets ease.The Pound Sterling (GBP) weakens against most of its peers on Thursday even though traders doubt whether the Bank of England (BoE) will cut interest rates again in the December meeting. Market speculation for BoE rate cuts next month diminished after the release of the United Kingdom (UK) Consumer Price Index (CPI) data for October on Wednesday showed that price pressures accelerated faster than expected.

Bitcoin broke above $97,000 on Thursday, hitting fresh record highs and inching closer to the key $100,000 mark as Donald Trump's imminent return to the White House raised optimism about a more favorable US regulatory environment. Throughout his campaign, Trump has expressed strong support for cryptocurrencies, pledging to make the US the “crypto capital of the planet” and to accumulate a national stockpile of Bitcoin. In the wake of the election, US-based Bitcoin ETFs have attracted over $4 billion in inflows. Meanwhile, Galaxy Digital Holdings CEO Mike Novogratz highlighted on X that countries are increasingly purchasing Bitcoin in large volumes, signaling a notable shift toward global adoption of the digital currency.

ECB's Villeroy: Wage data backward-looking, advocates agile pragmatism.French ECB Governing Council member François Villeroy de Galhau, speaking at a conference today, emphasized a cautious and pragmatic stance on monetary policy, downplaying the significance of recent stronger-than-expected wage data.

Foreigners selling Indian bonds won't return in a hurry, ANZ India's Agarwal says.Foreigners that sold Indian government bonds in November may not be in hurry to return as pressure on the local currency is expected to continue and as interest rate cuts seem to be delayed, ANZ India's treasurer said.

BoJ's Ueda: FX impact on economy and prices taken ‘seriously' in policy decisions.At a forum today, BoJ Governor Kazuo Ueda admitted that the central bank takes exchange rate movements “seriously” when forming its economic and inflation outlook. He also stressed the importance of understanding the factors driving current exchange rate changes and their broader implications.

Copper futures held steady at around $4.14 per pound on Thursday, pausing their recent upward movement as the dollar rebounded. The dollar's strength was fueled by expectations that Trump’s policies could fuel inflation, which in turn may limit the Federal Reserve's ability to cut borrowing costs. In China, the People's Bank of China kept key lending rates unchanged this week, as expected, offering no new signals that could impact demand in the world’s largest copper consumer. Meanwhile, copper spot treatment and refining charges in China showed signs of improvement as smelters scaled back production following several years of rapid expansion. Copper inventories in the country have also been declining, currently sitting below August levels with seven days' worth of supply readily available.

Japan's largest insurer to raise expected interest rates for the first time in 40 years.This is but another sign that perhaps things are starting to change in Japan with the BOJ looking to hold interest rates at a higher level amid their recent policy shift. Nippon Life Insurance is now reportedly set to raise the expected interest rates for its annuities and whole life insurance for the first time in 40 years.

US Money Markets Now Put Probability of 25 bps Fed Rate Cut in December at Only 50%.Geopolitical developments keep hijacking headlines. Risk sentiment improved at the start of yesterday's trading session on talk that Russian president Putin would be open to talks on a ceasefire deal in Ukraine with the US.

In Tokyo, the Nikkei 225 Index decreased 282 points or 0.74 percent on Thursday. Losses were driven by IHI (-3.83%), Mitsui Engineering & Shipbuilding (-3.59%) and East Japan Railway (-3.52%). Biggest rises came from Tokyo Gas (4.96%), M3 (4.40%) and Taiheiyo Cement (4.16%).