In Australia, the week's dataflow kicked off with a bang as Westpac-MI Consumer Sentiment surged 12.8% in November to 103.8, the first reading above the optimist / pessimist divide since the economy reopened after the 'delta' outbreak. A calmer geopolitical backdrop following the de-escalation of US-China trade tensions and a more assured domestic recovery look to be behind the result.

While respondents showed some renewed concerns over inflation and the interest rate outlook, these negatives were offset. It is interesting to note that responses received after the RBA's November decision were positive, suggesting the Board's decision and communications were construed as measured rather than outright hawkish.

On balance, these factors led to a significant improvement in views on the economic outlook for one year (+16.6%) and five years (+15.3%). The 'time to buy a major household item' sub-index also jumped (+14.9%); together with less-restrained intentions for Christmas spending, this outcome suggests the foundation for the consumer recovery is firming. Positive wealth effects associated with the housing upswing are arguably also at play, as evinced by strong investor-led growth in home lending and Westpac-MI house price expectations moving to a new cycle high.

While consumers have grown more anxious on the jobs outlook, this week's labour force data confirmed that the labour market is only softening at a very gradual pace. Employment was firmer-than-expected in the month, rising +42.2k, keeping annual growth steady at 1.5% on a three-month average basis. The unemployment rate also fell from a 'thin' 4.5% in September to a 'fat' 4.3% in October (–0.1ppt from 4.45% to 4.34%). Looking through the noise, the steady-but-modest uptrend in the unemployment rate in place throughout 2025 remains intact. At its current level, the unemployment rate is broadly consistent with full employment – indicative of a labour market in good health but which poses little-to-no risk to inflation via wages.

The rebalancing of employment growth from the 'jobs-rich', public-funded care economy to the less 'jobs-intensive' market sector is a key driver of the softening employment trend. The latest NAB business survey suggests this transition remains in good stead, the business conditions index rising to its highest level since March 2024. Confidence is re-emerging but remains fragile. Given the weak starting point for investment, businesses might hold off on capacity expansion.

The main development offshore this week was US Congressional approval to end the government shutdown in place since the beginning of October. While a welcome development, another partial shutdown from the end of January is a distinct possibility, with only the Departments of Agriculture and Veteran's Affairs, the Food and Drug Administration, military construction projects and Congress funded through to end-September. There is no guarantee a vote on extending the Obamacare subsidies will pass over year end, and so debate is likely to remain highly politicised over funding the remainder of the Government from February.

In coming weeks, US statistical agencies will attempt to bring the dataflow back up to date, though the market has already been told some upcoming releases will be incomplete. FOMC members, by and large, continue to focus attention on inflation risks, viewing these as more significant and immediate than the labour market's ongoing deceleration. Arguably then, it will take a material deterioration in conditions for the Committee to ease again at the December meeting.

Source: ACTIONFOREX

South Korea's government said on Friday it would boost subsidies for electric vehicles (EVs) by 20% next year as part of a package to help the country's auto industry weather risks caused by U.S. tariffs.

The government said in a statement passenger EV subsidies would be increased to 936 billion won ($658.47 million) in 2026, up from 780 billion won this year, in a bid to stimulate local demand.

The package will also include support to help auto parts suppliers, with the government pledging to supply policy finance at levels above the 15 trillion won it provided in 2025.

South Korea will also strengthen guarantee programmes for auto parts makers operating overseas, such as in the United States and Mexico, to offer long-term, low-interest loans.

The Asian country's auto industry shipped exports worth $70.8 billion in 2024, accounting for more than 10% of the country's $683.8 billion in total exports.

Hyundai Motor, which together with its affiliate Kia Corp is the world's third-biggest automaking group by sales, has been hit by a 25% tariff for exports to the United States, its biggest market generating about 40% of revenue.

That tariff rate was lowered to 15% after Washington and Seoul reached a trade agreement last month.

However, the 15% rate has not been applied to South Korean autos and parts makers as the countries have yet to issue a joint fact sheet outlining the agreement on trade and security issues struck last month.

More than two weeks after U.S. President Donald Trump and South Korea's Lee Jae Myung announced they had resolved months of negotiations over tariffs and security matters, the two sides have yet to release any written agreement.

South Korean Foreign Minister Cho Hyun asked U.S. Secretary of State Marco Rubio to work for the swift release of a joint fact sheet on the sidelines of a meeting of G7 foreign ministers in Canada, the Yonhap News Agency reported on Thursday.

Source: Investing

Asian shares joined a global selloff on Friday as hawkish comments from Federal Reserve (Fed) officials doused hopes for a US rate cut next month, while a still messy data calendar added to the angst, hitting bonds, the dollar and even gold.

Japan's Nikkei tumbled 1.8% on Friday, Australia's resources-heavy shares slid 1.5%, while South Korea plunged 2.3%.

China will report its monthly activity figures later in the day, after weak lending data flagged concerns from households and businesses to take on more debt amid economic uncertainties.

Overnight, Wall Street tumbled with steep losses in Nvidia and other artificial intelligence heavyweights on valuation concerns, while Treasuries retreated as investors scaled back expectations of a rate cut from the Fed in December to just 51%, down from 63% a day earlier.

The dollar failed to get a lift on higher yields, losing ground to the likes of the yen and Swiss franc.

"The drawdown seen across assets was pronounced, and looking across the suite of investible markets there were few places to hide," said Chris Weston, head of research at Pepperstone.

"With the US government open for business, traders now await the Bureau of Labor Statistics (BLS) schedule for key economic data... So far, positioning has been set largely on Tier 2 data, and that will need to be reconciled against the headline data that truly drives the Fed's decision-making process."

The White House, however, dashed hopes for a clearer view of the US economy any time soon, saying that the US unemployment rate for October may never be available. Adding to the downbeat mood and pointing to worries about high inflation, a growing number of Fed officials overnight signalled caution about further rate cuts.

Alberto Musalem, who runs the St Louis Fed Bank, said there was limited room to ease further without becoming overly accommodative, while Cleveland Fed President Beth Hammack said interest rate policy should remain restrictive in order to put downward pressure on inflation.

Minneapolis Fed President Neel Kashkari told Bloomberg that he opposed a rate cut last month and is on the fence about December.

Treasuries fell overnight as investors pared back bets for a Fed cut next month. Two-year Treasury yields held at 3.597%, having risen three basis points (bps) overnight, while the 10-year yield rose 1 bp to 4.125%, after gaining three bps overnight.

The rise in yields, however, failed to support the US dollar, which was down 0.2% against its major peers overnight and was at 99.254, close to the lowest level in two weeks.

The yen got some much-needed respite and last traded at 154.7 per dollar, just a touch above a nine-month low of 155.05 per dollar. The Swiss franc jumped 0.6% on the dollar.

Sterling, however, lost 0.3% to US$1.3153 on Friday after the Financial Times reported Prime Minister Keir Starmer and finance minister Rachel Reeves have ditched their manifesto-busting plan to increase income tax rates.

Oil prices rose in early trade but were set for the third straight week of declines. US West Texas Intermediate crude gained 0.4% to US$58.91, but were down 1.4% this week.

Spot gold prices rose 0.3% to US$4,183 per ounce, having lost 0.6% overnight to snap a four-day winning streak. It remained well off its record top of US$4,381.

Source: Theedgemarkets

The downturn in Britain's labour market abated slightly last month as recruiters reported the first increase in demand for temporary staff in over a year, a survey showed on Friday.

The monthly Report on Jobs from accountants KPMG and the Recruitment and Employment Confederation (REC), a trade body, showed permanent job placements contracted in October at the slowest rate since July last year.

While the readings still fitted with a subdued picture of the labour market, they pointed to a stabilisation ahead of finance minister Rachel Reeves' November 26 budget.

"Today's data reflects the more positive outlook we have been hearing from recruiters since the start of the autumn," said Neil Carberry, REC chief executive.

Carberry added that recruiters held similar optimism ahead of last year's budget, dashed by large tax increases on employers that resulted in higher unemployment and redundancies.

Official data earlier this month showed the unemployment rate hit 5.0% in the third quarter, which some economists linked to the tax hikes that took effect in April.

"As we go into Budget 2025, there can be no repeat. If Government cares about growth, as it claims, measures must stoke business investment, not deter it," Carberry said.

Reeves is widely expected to raise income tax later this month, which would break a manifesto promise not to raise taxes on working people. On Monday she said sticking to the pledges would mean harmful cuts in capital spending.

The KPMG/REC survey's gauge of permanent staff starting salaries rose to a three-month high, but still indicated only tepid growth.

The survey is watched by Bank of England interest rate-setters as a gauge of employment and private sector wage growth, which cooled in the three months to September as the central bank had expected.

Source: Investing

The dollar struggled to claw back steep losses on Friday and was on track for a weekly fall, as investors awaited a backlog of U.S. data following the government's reopening, which they expect will likely point to a weakening economy.

The overnight move lower in the dollar came alongside a selloff in U.S. equities and bonds eerily reminiscent of the market turmoil in April, as investors pared back bets of a Federal Reserve rate cut in December.

"There's a whiff of 'sell America' back in the air," said Ray Attrill, head of FX research at National Australia Bank.

However, expectations of a more hawkish Fed failed to lift the dollar, which fell to a two-week low against the euroovernight. The common currency bounced back above the $1.16 mark and last bought $1.1630.

The Swiss francsimilarly held near an over three-week high and steadied at 0.7933 per dollar. Against a basket of currencies, the greenback languished near a two-week low at 99.27.

The dollar index was headed for a weekly fall of 0.3%

"Starting from next week, we're going to get a lot of economic data from the U.S., and we think it's going to be pretty bad. I think that the market is now preparing for the coming deluge of poor U.S. economic data," said Joseph Capurso, Commonwealth Bank of Australia's head of foreign exchange, international and geoeconomics.

While that would normally fuel expectations of more aggressive Fed easing to shore up a weakening economy, Capurso said the impending patchy data releases may explain why Fed funds futures have moved the other way.

The White House indicated that the U.S. unemployment rate for October may never be available, since it is dependent on a household survey that was not conducted during the shutdown.

"When you're in the fog, you drive slower... when you don't know what's going on in the economy, maybe you slow down your cuts," said Capurso.

While investors see less than a 50% chance of a 25-basis-point cut in December, the odds for such a move in January are almost fully priced. Rate expectations for 2026 have also hardly moved. (0#USDIRPR)

In other currencies, sterlingfell 0.3% to $1.3152, failing to sustain its 0.45% overnight gain against a weaker dollar.

The move lower in the pound came after a report by the Financial Times that British Prime Minister Keir Starmer and Finance Minister Rachel Reeves have abandoned plans to raise income tax rates, marking a sharp shift just weeks ahead of the November 26 budget.

"A weakening of fiscal resolve on the back of political uncertainty is not good news for the GBP," said Sim Moh Siong, a currency strategist at Bank of Singapore.

The battered yenfound some reprieve on Friday thanks to the pullback in the dollar, though remained pinned near a nine-month low hit earlier this week. It last stood at 154.58 per dollar.

The Japanese currency was on track for a fall of nearly 0.8% for the week

Down Under, the Australian dollarfell 0.02% to $0.6529, having slid overnight owing to the broad risk-off sentiment.

The New Zealand dollarlast bought $0.5654, having similarly lost 0.25% in the previous session.

Source: TradingView

More than 900,000 displaced civilians are at risk of flooding in southern Gaza as a severe weather system approaches, amid worsening humanitarian conditions and widespread destruction from Israel's two-year war, municipal authorities warned Thursday.

According to Anadolu Ajansi (AA), the approaching storm "is dangerous and threatens to flood thousands of tents along the coastline and damage large areas inside the city,"

Saeb Lakkan, a spokesman for Khan Younis Municipality, told Anadolu, citing collapsed sewage networks and rainwater retention ponds filled to levels that pose a threat to residents.

The Palestinian Meteorological Department has warned of possible flash floods on Friday and Saturday in valleys and low-lying areas.

Lakkan said municipal authorities are facing an "unprecedented and catastrophic" situation, with more than 900,000 displaced people living in severe hardship as destruction exceeds 85 per cent of road, water, and sewage networks. He said the city cannot handle nearly 15 million tonnes of rubble left by Israeli airstrikes.

"Israeli attacks destroyed roughly 210,000 metres of roads, 300,000 metres of water pipelines and 120,000 metres of sewage lines, leaving the city almost completely paralysed," he added.

He cautioned that sewage stations may shut down entirely due to fuel shortages, which could lead to large-scale sewage overflow and flood entire neighbourhoods.

The spokesman said since the ceasefire took effect on Oct 10, municipal authorities have received only 16,000 litres of diesel, enough to operate for just three days, while municipal crews work with rudimentary equipment to build earthen barriers and redirect valley pathways to protect tents and low-lying areas.

Since the ceasefire took effect, Israel has violated the agreement daily, resulting in hundreds of Palestinian casualties and limiting the entry of food and medical supplies, according to Gaza officials.

Lakkan said 1,900 of the city's 2,200 rainwater drains were completely destroyed, though an emergency project supported by a UN-affiliated organisation is cleaning the remaining drainage channels.

He said the municipality urgently needs mobile pumps and additional emergency equipment to prevent the city from flooding during the expected storm.

The Palestinian official described conditions in Khan Younis as "extremely bleak," saying the city needs immediate international support to remove rubble and restore essential services.

He urged the international community to "act immediately to save two million displaced people facing the risk of flooding and death along Gaza's coastline."

Source: TradingView