Weekend News Round Up - Newsquawk Asia-Pac Market Open

• US stocks were choppy on Friday amid quad witching but ultimately closed mixed in which the Dow slightly outperformed to print another record closing high while the S&P and Nasdaq finished with slight losses and the Russell 2000 was the worst hit, while sectors were predominantly lower with Industrial, Materials and Tech the laggards.
• Israel Defence Forces said it struck Hezbollah targets in Lebanon after over 100 rockets were fired towards northern Israel by the military group, while it added that strikes would continue and intensify against Hezbollah.
• Looking ahead, highlights include New Zealand Trade Data, Australian Flash PMIs, Malaysian CPI, Japanese Holiday Closure.

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LOOKING AHEAD

• Highlights include New Zealand Trade Data, Australian Flash PMIs, Malaysian CPI, Japanese Holiday Closure.
• Click for the Newsquawk Week Ahead.

US TRADE

• US stocks were choppy on Friday amid quad witching but ultimately closed mixed in which the Dow slightly outperformed to print another record closing high while the S&P and Nasdaq finished with slight losses and the Russell 2000 was the worst hit, while sectors were predominantly lower with Industrial, Materials and Tech the laggards.
• SPX -0.19% at 5,703, NDX -0.24% at 19,791, DJIA +0.09% at 42,063, RUT -1.10% at 2,228
• Click here for a detailed summary.

NOTABLE HEADLINES

• US VP Harris is expected to release new economic proposals this week with the proposals aimed at middle-class wealth-building and the economic incentives for business to facilitate that, according to Reuters sources. It was also reported that Harris accepted a CNN debate invitation and challenged former President Trump although Trump rejected the offer and said it is 'too late' for another debate.
• US House Republicans unveil three-month stopgap bill to avert a government shutdown which would fund the government through December 20th and omits changes to voter registration that Trump had called for.
• Fed’s Bowman (voter) said on Friday regarding dissent that she agreed it was appropriate to recalibrate the Fed Funds Rate, but she preferred a smaller first move and sees a risk that the FOMC's larger policy action could be interpreted as a premature declaration of victory on inflation. Bowman added that they have not yet achieved the inflation goal and believes moving at a measured pace towards a more neutral policy stance will ensure further progress is made in returning inflation to the 2% goal.
• Fed‘s Waller (voter) said on Friday that 50bps was the right number and they are at the point where the economy is strong and that they want to keep it that way. Waller said Core PCE is running below their target and inflation is softening much faster than he thought it was going to which is what made him support a 50bps cut, while he could imagine going 25bps at the next meeting or two if the data comes in fine but noted the Fed could do more if the labour market worsens and inflation data softens quicker, or could even pause depending on the data. Furthermore, he would support aggressive rate cuts and is fine with moving in 50bps to get to where they want to go if inflation is soft.
• Fed's Harker (non-voter) said on Friday that risks to inflation and employment are balanced, while he added that there are risks inflation could stall and the US labour market could soften.

GEOPOLITICAL

MIDDLE EAST

• Israeli PM Netanyahu said that they inflicted a series of blows on Hezbollah in the past few days that it never imagined.
• Israel’s Defence Minister said Hezbollah is beginning to feel some of Israel’s military capabilities and Israel will continue its operations against the group until northern Israel residents can return home safely, according to Reuters.
• Israel’s military chief said operations against Hezbollah are a message to anyone in the Middle East looking to harm Israeli citizens, while he added that Hezbollah will keep getting hit until it understands that Israel will return its citizens to their homes safely. Furthermore, he said Israel is well-prepared for the next stages planned in the coming days, according to Reuters.
• Israel Defence Forces said it struck Hezbollah targets in Lebanon after over 100 rockets were fired towards northern Israel by the military group, while it added that strikes would continue and intensify against Hezbollah, according to Reuters.
• Hezbollah said it targeted Ramat David Airbase with dozens of missiles in response to repeated Israeli attacks on Lebanon, according to a statement. Hezbollah also stated its top commander Ahmed Wahbi was killed during Israel’s strike on Beirut suburbs.
• Hezbollah’s Deputy Leader said the confrontation with Israel entered a new phase of an open-ended battle of reckoning.
• Islamic Resistance in Iraq launched cruise missiles and explosive drones towards Israel’s north and south, while it said it targeted with drones a military post in northern Israel on Sunday morning and launched a drone attack on a target in Jordan Valley in ‘occupied territories’.
• Iran’s Supreme leader Khamenei said Israel is committing “shameless crimes” against children, not combatants, while he called for inner strength among Muslims to eliminate the ‘malignant cancerous tumour’ from Palestine.
• Iranian Supreme Leader Khamenei's Chief of Staff said on Friday that a response to Haniyeh's assassination will come soon, according to Al Arabiya.
• Iran’s Revolutionary Guards said they arrested 12 operatives collaborating with Israel and planning actions against Iran’s security, according to SNN.
• US directly warned Israel against a full-blown war with Hezbollah, according to the FT. It was separately reported that the UN special coordinator in Lebanon said with the region on the brink of imminent catastrophe, it cannot be overstated enough that there is no military solution that will make either side safer, according to Reuters.
• Qatari Al Jazeera TV said Israeli forces stormed its bureau in West Bank’s Ramallah with a military order to close it for 45 days.
• A bomb explosion killed a police officer in the security details of foreign ambassadors in northwest Pakistan, while all foreign diplomats were safe and were reported to travel back to the capital of Islamabad.

OTHER

• Ukrainian President Zelensky thanked the military for a new attack on Russian arsenal and said the end of the war against Russia depends on the decisiveness of Ukraine’s partners, as well as noted that Ukraine’s defences would be better if its partners provided the needed weapons and permission to use them.
• Russian Defence Ministry said Russia hit Ukrainian energy facilities with high-precision weapons and drones, according to agencies.
• Russian Foreign Ministry said Moscow will take no part in the follow-up to the Swiss-organised peace summit.
• US official said Quad leaders expressed concern about the Russian-North Korean relationship, as well as about the South China Sea and maritime disputes.

ASIA-PAC

NOTABLE HEADLINES

• US President Biden said his view is that Chinese President Xi is looking to buy diplomatic space to aggressively pursue China’s interests and is trying to minimise turbulence in diplomatic relations. Biden said that China continues to behave aggressively in the South China Sea and Taiwan Straits, while he noted the US sees engagement with China as important for conflict prevention and crisis management, according to Reuters.
• US President Biden’s administration is to propose barring Chinese software and hardware in connected vehicles on US roads with the Commerce Department expected to propose making prohibitions on software effective in the 2027 model year and prohibitions on hardware would be in January 2029, according to Reuters sources.
• US President Biden and Japanese PM Kishida reaffirmed a commitment to developing and protecting technologies like AI and semiconductors while increasing resilience to economic coercion, while they also discussed diplomacy with China and destabilising activities including in the South China Sea during a meeting on Saturday.

EU/UK

NOTABLE HEADLINES

• French PM Barnier did not rule out a tax hike for the rich and is open to changes in pension reform with input from employers and unions, while he said they must protect France’s credibility with investors and the government will take pragmatic measures to limit immigration.
• French President’s Chief of Staff said Antoine Armand was named as Finance Minister and Jean-Noel Barrot was named as Foreign Minister, while Bruno Retailleau was named as Interior Minister.
• German Chancellor Scholz’s SPD narrowly beat the far-right AfD in elections in the eastern state of Brandenburg as exit polls showed the SPD at 31%-32% vs AfD at 29%-30%, according to BBC.
• Fitch affirmed Portugal at A- and revised the outlook to Positive.