• Sentiment was hit early doors on the Eurogroup being postponed, US futures currently little changed
• Eurogroup President Centeno confirmed talks will resume tomorrow with no deal reached yet and cancelled today’s press-conference
• Core debt futures flew on Centeno’s remarks as peripheries sunk along with EUR/USD; albeit, the latter has fought back
• US President Trump said he will ask Congress for an additional USD 250bln in small businesses relief
• Iran Oil Minister Zanganeh stated in a letter to OPEC that Iran doesn't agree with holding any OPEC+ meeting without having a clear and consensual outcome
• Looking ahead, highlights include DoEs, FOMC & Banxico Minutes, supply from the US

CORONAVIRUS UPDATE

US President Trump said the US is being hit hard now and it will be a painful week but also noted we see glimmers of hope and that the US may be on track for far fewer deaths than projected, as well as may be getting to the top of the coronavirus curve. President Trump added they are starting to look at reopening the economy very thoroughly which will be open again much sooner rather than later, while he initially stated the US is going to put a hold on contribution to the WHO and noted they were China centric and disagreed with his travel ban, but later stated we will look at holding off funding. (Newswires)

US President Trump said he will ask Congress for an additional USD 250bln in small businesses relief and there were earlier reports that the US Treasury is preparing to ask Congress for an additional USD 200bln for the small business lending programme according to sources. (Newswires/Washington Post)

US VP Pence said we continue to see evidence of stabilization in coronavirus hot spots and that the CDC will have new guidance on Wednesday regarding quarantining and how someone can return to work. (Newswires)

Hong Kong extended social distancing measures to April 23rd from April 11th, while it ordered the closure of beauty parlours and massage facilities. (Newswires/Xinhua) Hong Kong is to offer in excess of HKD 100bln in a new relief package, according to SCMP.

France's COVID-19 confinement measures should be extended for several weeks, according to the Head of the French Medical Advisers to the Government. (Newswires)

Spanish coronavirus cases 146,690 (Prev. 140,510) and deaths stand at 14,555 (Prev. 13,798); deaths increase by 757 (Prev. increase 743). (Newswires)

ASIA

A tentative tone was observed in Asia-Pac bourses following the lacklustre performance stateside where all major indices finished with marginal losses after the initial risk on tone eventually lost steam ahead of looming key risk events including the conclusion of the Eurogroup deliberations and tomorrow’s OPEC+ meeting. ASX 200 (-0.8%) traded choppy with the early heavy losses in Australia triggered by weakness across the top-weighted financials sector after the regulator issued guidance on banks and insurers in an effort to restrict dividends and with sentiment also dampened after S&P cut the outlook on the country’s AAA sovereign rating to negative from stable, although the index later shrugged off the losses as the sentiment improved in late trade, while the Nikkei 225 (+2.1%) was also indecisive for most the session after the cabinet approved a record JPY 108tln stimulus package and declared a month-long state of emergency as expected. Hang Seng (-1.1%) and Shanghai Comp. (-0.2%) conformed to the early cautious tone in the region amid PBoC liquidity inaction but with downside stemmed after the State Council continued to outline supportive measures and after outbound travel restrictions were lifted from Wuhan which was the former epicentre of the coronavirus outbreak. Finally, 10yr JGBs traded back above the 152.00 level but with price action rangebound amid the indecision in Japan and following a tepid Rinban announcement in which the BoJ are present in the market for a total of JPY 670bln of JGBs in 1-3yr and 5-10yr maturities with the amounts unchanged from prior operations.      

PBoC skipped open market operations for a met neutral daily position. (Newswires) PBoC set USD/CNY mid-point at 7.0483 vs. Exp. 7.0483 (Prev. 7.0939)

UK/EU

EuroGroup head Centeno tweeted: 'After 16h of discussions we came close to a deal but we are not there yet'; suspended the Eurogroup which will continue on Thursday. Also confirmed the press conference (originally scheduled for 0900BST) was cancelled.

-        The Dutch Finance Minister tweeted that the use of the ESM has not been agreed, but the Netherlands are prepared to use it; also, reiterates that they are against Eurobonds, indicates a majority of EZ countries are in agreement on this

-        European Commission has reportedly warned EZ Finance Ministers that the EU economy could shrink by up to 10% in 2020; sources added that the ECB told ministers that EZ financing could be up to EUR 1.5tln to address the virus crisis; however, sources reported Germany supports EUR 500bln worth of measures at this stage.

EU Commission is discussing proposals to overhaul the EU budget to bolster post-pandemic recovery which could result in an extra EUR 1.5tln for spending and investment over 3-years. (FT)

ECB's Kazak states that the ECB can expand and extend the stimulus scheme if needed, ECB can increase asset purchase volume or even look at new instruments including OMT, capital key deviations be short-term and operational. (Newswires)

EU have reportedly introduced tariffs of up to 18.9% on stainless steel products emanating from China, Indonesia and Taiwan - to last for a period of 6-months. (Newswires)

GEOPOLITICS

US plans to block Iran's request for USD 5bln loan from the IMF to deal with the coronavirus. (WSJ)

EQUITIES

The risk tone across Europe took a turn for the worse after Eurozone Finance Ministers yesterday failed to agree on the stimulus measures to deploy in light the coronavirus crisis. Italy noted that it will reject a final report sent to EU leaders unless debt mutualisation is mentioned as a tool whilst also demanding no conditional attachments to the ESM loans. Netherlands reiterated their objection Eurobonds and intimated a majority agree on this. Price action this morning saw futures sliding off following reports of the impasse in talks, and confirmation via Eurogroup President Centeno of the delay. European cash markets are subdued by circa 1.0-2.0% across the region (Euro Stoxx 50 -1.4%). Sectors are mostly in the red with underperformance seen in Energy amid yesterday’s losses in the complex, whilst Financials also bear the brunt of the Eurogroup deadlock and lower yield environment. Looking at the breakdown, Oil and Gas are the laggards whilst Travel & Leisure continue to feel some reprieve. In terms of individual movers, Tui (+3.5%) leads the early doors gains in the Stoxx 600 after the Co. confirmed the signing of EUR 1.8bln state aid bridge loan. Tesco (-5.0%) shares remain in negative territory after the Co. noted that COVID-19 is having a material impact on business and the group is incurring significant additional costs. The estimated impact is seen on retail cost lines seen between GBP 650-925mln. Commerzbank (-6.4%) remains near the bottom of the pan-European index after reports the sale of its Polish unit mBank could be delayed amid the virus crisis

Chinese retail passenger car sales -36% Y/Y in March, according to prelim data. (Newswires)

UK banks are reportedly in talks with the Bank of England regarding new capital relief measures, sources state. (Newswires)

FX

AUD/NZD/CAD - The Aussie has reversed further from Tuesday’s post-RBA peaks in wake of S&P’s ratings review that came with a sting in the tail as the agency downgraded its outlook on the sovereign’s AAA standing. Aud/Usd is back below 0.6150 vs 0.6200+ when broad risk sentiment was still buoyant and its Antipodean peer was also outpacing the Usd on the 0.6000 handle compared to just under 0.5950 currently. In terms of Kiwi specifics, RBNZ Deputy Governor underlined the severity of the COVID-19 contagion overnight by stating that QE can be expanded to include other assets like linkers given that the pool of conventional bonds that can be purchased is limited. Elsewhere, the Loonie has lost 1.4000+ status after failing to test sub-1.3950 resistance ahead of Canadian housing data and against the backdrop of idling crude prices awaiting tomorrow’s OPEC+ showdown.

EUR/CHF/GBP - All on a weaker footing against the US Dollar as risk appetite wanes, but with the Euro also undermined by the Eurogroup’s failure to resolve differences on a coordinated fiscal response to the coronavirus even though dire economic predictions continue to unfurl, ie French Q1 GDP -6% per the BdF and Germany contracting almost 10% in the current quarter according to leading institutes. Eur/Usd holding between 1.0902-1.0831 parameters and perhaps propped by an array of decent option expiries stretching from 1.0800 to 1.0900 – full details available via the headline feed at 7.33BST. Meanwhile, the Franc is skirting 0.9700, but retaining an underlying safe-haven premium relative to the single currency as the cross hovers around 1.0550 and Sterling is also somewhat mixed awaiting more UK nCoV updates and progress reports from hospital where PM Johnson remains in intensive care. Cable is clinging to 1.2300 and Eur/Gbp is meandering in the low 0.8800 area, well above 1.5 bn expiry interest from 0.8700 to 0.8710.

JPY/DXY - The Yen and Buck are still jostling for position amidst fluctuating risk-on/off phases, with Usd/Jpy confined to narrow 109.00-108.50 extremes and the index not much more adventurous in advance of weekly US mortgage applications and FOMC minutes either side of 100.00, albeit with a firmer bias on balance up to 100.430 at best.

SCANDI/EM - A general loss of momentum alongside risk assets overall, and with the Nok perhaps acknowledging another dip in Norwegian inflation plus a pretty stark prognosis from the Stats office about the scale of non-oil growth for the month of March alone (-14%). However, the Zar has regained composure and is trying to resume its recovery mission from record lows following some rare positive news from Eskon claiming it has enough funding for 2020 and will not need more cash from the Government.

S&P cut Australia sovereign Outlook to Negative from Stable; affirmed AAA rating. (Newswires)

RBNZ Assistant Governor Hawkesby said the central bank was open to expanding QE in a rapidly evolving situation and noted there is a limit to how much of the bond market the RBNZ can buy but they are considering other assets for QE including linkers. (Newswires)

FIXED

Core debt remains firmly underpinned, but off best levels as stocks and oil pare worst declines and sentiment in general settles down. However, Gilts are holding above 136.00 and nearer the top of the Liffe range following yet more well received cash auctions vs Bunds hovering closer to their Eurex base (170.64 vs 171.31 at one stage) even though 10 year German issuance was also absorbed comfortably. Elsewhere, US Treasuries are flat-lining and rather side-lined ahead of a pretty sparse US agenda aside from FOMC minutes that may be deemed somewhat stale already.

COMMODITIES

Choppy price action is seen in the energy complex in the run-up to arguably the most OPEC+ meeting to date. A delegate overnight noted that scenarios range from 10mln BPD of output curtailment to no cuts at all. The OPEC+ group’s monitoring committee is said to be preparing a draft for prospective output cuts. Several sources via Energy Intel note two scenarios will reportedly be presented: 1) The first scenario sees OPEC+ no longer being bound by production restrictions. This set-up would see a continuation of the current state of affairs - Saudi would stick to its current production quota in excess of 12mln BPD (vs. 9.7mln BPD in March) 2) In the second scenario, OPEC members alongside Russia and other producers would implement joint 10mln BPD reductions through to the end of the year, whilst TASS yesterday reported a time-frame of three months. Elsewhere, last night’s APIs proved to be another bearish release, with inventories building 11.9mln barrels vs. Exp. build of 9.3mln. Albeit, prices remained locked onto OPEC headlines. The release of the EIA STEO (ahead of next week’s OPEC and IEA Oil Market Reports) encapsulated the March impact of COVID-19, the agency cut 2020 world oil demand growth forecast by 5.6mln BPD to 5.23mln BPD and raised 2021 forecast by 4.68mln BPD to 6.41mln BPD. Nonetheless, WTI and Brent front-month futures are now mixed after sentiment was hit by news of a roadblock among EZ finance ministers on a stimulus package for the bloc. WTI outperforms its Brent counterpart with the former currently residing around USD 24.50/bbl, having had earlier topped its 21DMA (USD 24.98/bbl) to a high of USD 25.29/bbl in overnight trade. Brent meanwhile briefly dipped below USD 32.00/bbl having earlier tested resistance at USD 33/bbl (intraday high). Elsewhere, spot gold remains steady and within a relatively narrow USD 1640-57/oz intraday band. Copper prices meanwhile wiped out mild overnight gains as risk sentiment deteriorated after reports EZ finance ministers failed to reach a consensus on EU-wide stimulus to combat COVID-19. The red metal looks to retest its 21DMA to the downside at USD 2.25/lb.

US Private Inventory Crude Stocks (Apr 3) +11.9mln Vs. Exp. +9.3mln (Prev. +10.5mln). (Newswires)

Iran Oil Minister Zanganeh stated in a letter to OPEC that Iran doesn't agree with holding any OPEC+ meeting without having a clear and consensual outcome, while he added that vague circumstances around OPEC+ meeting is of grave concern to him and that the absence of any clear outcome is a failure message even before the meeting starts which may aggravate current low oil prices further. Furthermore, he stated that volume of output cut, duration, baseline level and distribution of cuts, as well as cuts by US and Canada should be addressed prior to the meeting. (Newswires)

OPEC+ monitoring committee is preparing a draft for prospective output cuts, according to RIA. Separately, Russia's Kremlin declines to signal Russia's position for tomorrow's OPEC+ meeting. (Newswires)

Two Republican senators who have introduced a bill into the Senate, which is aimed at withdrawing troops and defense systems from Saudi Arabia, in the event the nation does not reduce oil output, are set to host a call with kingdom officials on Saturday, according to sources. (Newswires)

Goldman Sachs said OPEC is no longer a price-setter in the shale age but has a key role in managing inventories and setting shape of the oil forward curve, while it added that OPEC+ short-term market share maximization strategy is counterproductive but OPEC's long-term market share gains are inevitable. (Newswires)