Rise and shine everyone.

Global markets are navigating trade tensions, Chinese economic signals, and new U.S. policy directions.

Equities are mostly down in Asia, with European markets mixed as corporate earnings diverge.

In the U.S., bond market volatility (the MOVE Index) subsided after last week’s election-driven spikes, and the crypto market shows strong bullish momentum.

The Japanese yen weakened to just below 154 against the U.S. dollar following the Japanese Parliament’s decision to retain PM Ishiba. In South Korea, early November trade data revealed a sharp drop in exports, especially to China and the U.S., with semiconductor exports notably lower than expected.

It’s a busy week for data. We have US CPI on Wed, PPI on Thu, and Retail Sales on Friday. Fed Chair Powell will speak on Thu.

We also get employment data from the UK on Tue, and GDP Growth data from the EA on Thu.

China Retail sales data will be released Thu night / Fri morning. Investors will be closely monitoring Chinese “Single’s Day” spending data later this week as a barometer for consumer demand.

Finally, the week also brings us a number of big earnings including, Home Depot, Applied Materials, Disney, Spotify, and Cisco.

China faces tensions

Asian equities are largely down as trade policy uncertainty looms, with global companies aiming to stay aligned with the anticipated policies of U.S. President-elect Trump. One notable example is Australian appliance manufacturer Breville, which has announced plans to move 120V appliance production out of China in response to potential U.S. trade restrictions.

China’s National People’s Congress Standing Committee revealed a long-awaited CNY6 trillion ($820 billion) debt swap program for local governments, spread over three years to address debt levels, but markets reacted with disappointment. Many had expected an additional CNY1-2 trillion in fiscal stimulus aimed at consumers. Finance Minister Fo’an noted that there is “significant room” for increased borrowing, hinting at more measures to come. However, with the People’s Bank of China (PBOC) citing limited flexibility for further rate cuts, thin bank net interest margins and concerns over FX stability (specifically, the yuan’s value) may restrict monetary easing.

Inflation concerns are also intensifying in China. October’s Consumer Price Index (CPI) registered a low 0.3% month-over-month, falling below the forecasted 0.4% year-over-year, as rising food prices offset broader consumer spending weakness. Producer prices continued their decline, with the Producer Price Index (PPI) down 2.9% year-over-year—its prolonged weakness is largely due to falling factory gate prices, affecting both the Chinese economy and middle- to lower-income classes.

Bitcoin crosses $80k

Bitcoin surged past $80,000, marking a historic high as Trump’s win and rumored pro-crypto stance fuel market enthusiasm.

President-elect Trump’s stated intention to replace SEC Chair Gensler, a crypto opponent, has also stoked optimism among crypto investors. Additionally, Dogecoin saw a strong uptick, rising over 85% over the last week amid broader sentiment toward digital assets.

Chart of the Day

Wells Fargo and Oxford Economics present what may happen to Inflation and Unemployment in the US under different tariff scenarios.

Calendars

(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)