• Asian equity markets were positive across the board as sentiment picked up from the holiday lull and as the region digested mostly better than expected Chinese trade data
• Chinese trade figures showed a much narrower than expected contraction in exports and a surprise expansion to CNY-denominated imports
• DXY was softer overnight as the constructive risk appetite sapped demand for the greenback
• US President Trump says the administration is very close to completing a plan to re-open the country and is hopefully ahead of schedule
• UK Foreign Secretary Raab is to announce on Thursday that the UK will extend the lockdown until at least May 7th
• The FT reported that the EU is said to have called on national governments to adopt a co-ordinated lock-down exit strategy
• Looking ahead, highlights include US import & export prices, APIs, Fed's Evans, earnings from JP Morgan, Wells Fargo, Johnson & Johnson

CORONAVIRUS UPDATE

US President Trump said we're very close to completing a plan to re-open the country and hopefully ahead of schedule. Trump said he will know in the next few days when he wants to reopen the country and should have a decision this week on WHO funding. (Newswires)

NY Governor Cuomo said he is to co-ordinate a re-open with New Jersey, Connecticut, Pennsylvania, Delaware, and Rhode Island Governors after the coronavirus shutdown. Cuomo added that the working group on a coordinated reopen will begin deliberations tomorrow and wants to reopen as soon as possible. Furthermore, there were also comments from New Jersey Governor Murphy that his state has not plateaued and is a couple of beats behind New York, while Connecticut Governor Lamont said it is important not to pull the trigger too early on the reopening. (Newswires)

US Treasury Secretary Mnuchin said we're ahead of schedule on delivering checks in the mail to Americans and that the administration wants a bipartisan bill for additional relief for small businesses. In other news, US Department of Agriculture will unveil as much as USD 15.5bln in first phase of coronavirus aid to the farming industry according to sources. (Newswires)

US NIH's Fauci said even though we had a bad week last week, we are starting to see flattening including in hot spots such as New York. (Newswires)

UK Foreign Secretary Raab is to announce on Thursday the UK will extend the lockdown until at least May 7th. Senior ministers are split on whether or not to encourage people to return to work when it is safe to do so if they cannot work from home. (Times) Separate reports note that ministers have been told to abandon talk of its exit strategy amid public fears over the eventual curtailing of lockdown measures. (Telegraph)

French President Macron extended the coronavirus lockdown until May 11 and will extend aid measures for companies as well as workers hit by the coronavirus. However, there were also reports the EU is said to have called on national governments for a co-ordinated lock-down exit strategy. (FT)

IMF said it will disburse debt relief to 25 countries under catastrophe containment and relief trust, in which it will provide grant-based debt relief of about USD 500mln to support countries efforts to address the coronavirus pandemic. (Newswires)

China gave approval for 2 experimental coronavirus vaccines to enter clinical trial. (Newswires)

ASIA

Asian equity markets were positive across the board as sentiment picked up from the holiday lull and as the region digested the mostly better than expected Chinese trade data, but with some of the gains capped heading into the start of US earnings season and as participants pondered how soon the US will reopen its economy. ASX 200 (+0.9%) was led by strength in gold miners after the precious metal surged above the USD 1700/oz level to its highest in more than 7 years, while Nikkei 225 (+2.7%) outperformance was fuelled by favourable currency moves with SoftBank shares also reversing the initial glut of sell orders that followed its preliminary results that showed the first loss in 15 years. Hang Seng (+1.1%) and Shanghai Comp. (+0.7%) conformed to the regional optimism after the latest trade figures showed a much narrower than expected contraction in Exports and a surprise expansion to CNY-denominated Imports, although there were mixed comments from the customs bureau which noted there are signs of recovery for China’s foreign trade which is resilient but also warned of increasing uncertainties and that trade is encountering larger difficulties which cannot be underestimated. On the coronavirus front, China recently approved 2 experimental coronavirus vaccines to enter clinical trials and Beijing was said to have resumed all of the city’s 2130 major construction projects. Finally, 10yr JGBs were subdued in tandem with the downside in T-notes amid gains in riskier assets, but with losses stemmed after somewhat improved demand at the enhanced liquidity auction for long to super-long JGBs.

PBoC skipped open market operations and were net neutral on the day. (Newswires) PBoC set USD/CNY mid-point at 7.0406 vs. Exp. 7.0397 (Prev. 7.0300)

Chinese Trade Balance (CNY)(Mar) 130.0B vs. Exp. 158.5B (Prev. -42.6B). Chinese Exports (CNY)(Mar) Y/Y -3.5% vs. Exp. -12.8% (Prev. -16.6%) Chinese Imports (CNY)(Mar) Y/Y +2.4% vs. Exp. -7.0% (Prev. -0.3%)

Chinese Trade Balance (USD)(Mar) 19.9B vs. Exp. 18.55B (Prev. -7.09B). Chinese Exports (USD)(Mar) Y/Y -6.6% vs. Exp. -14.0% (Prev. -17.2%) Chinese Imports (USD)(Mar) Y/Y -0.9% vs. Exp. -9.5% (Prev. -4.0%)

China's customs said the global economy faces mounting downward pressure, uncertainties are increasing and that China's foreign trade is encountering bigger difficulties, while it added that there are signs of recovery for foreign trade from Jan-Feb period and that China's foreign trade is resilient but also stated difficulties facing trade cannot be underestimated. (Newswires)

UK/EU

EU & UK Brexit Negotiators Barnier and Frost are on Wednesday, via a call, to determine the dates for the next rounds of negotiations; call will not discuss the possibility of extending the transition period. Note, originally the schedule had 3-rounds of negotiations completed by now. (FT)

FX

In FX markets, the DXY was softer overnight as the constructive risk appetite sapped demand for safe havens which the greenback’s major counterparts took advantage of. This included EUR/USD which extended its rebound from the near-term support level at 1.0900 heading into the return of European participants from the Easter break and GBP/USD briefly approached its 50-DMA of 1.2568 despite press reports the UK will announce a lockdown extension on Thursday to at least May 7th. Elsewhere, JPY-crosses were underpinned by the improved risk tone although USD/JPY mostly failed to comply amid the USD-softness, while antipodeans benefitted due to their high beta statuses and the surprise expansion in Chinese Imports, which saw AUD/USD and NZD/USD break through the prior day’s resistance and reclaim the 0.6400 and 0.6100 handles respectively.

Australian NAB Business Confidence (Mar) -66 (Prev. -4), record declines in conditions and confidence. (Newswires) Australian NAB Business Conditions (Mar) -21 (Prev. 0)

COMMODITIES

Commodities traded higher but with the overnight gains in WTI crude futures only marginal as upside was contained by resistance at the USD 23.00/bbl level and after the OPEC+ agreement over the weekend to cut by 9.7mln bpd was met with pessimism in terms of sufficiency and compliance doubts. Elsewhere, gold prices held onto gains above the USD 1700/oz level after having surged to its highest in more than 7 years, while copper prices were underpinned by the risk appetite and mostly better than expected Chinese trade data.

Russian Energy Minister Novak said he met with domestic oil producers and they supported the OPEC+ deal, while he added that total oil output cuts in May-June will total between 15-20mln BPD. (Newswires)

Oman informed its oil producing companies to reduce output by 200k bpd from May 1st for 2 months inline with the OPEC+ deal. (Newswires)

CME raised natgas Henry Hub futures maintenance margins by 13.8% to USD 1650/contract from 1450/contract, while it raised margins for COMEX 100 gold futures and gold enhanced delivery futures (4GC) by 9.6% to USD 9150/contract from USD 8350/contract. (Newswires) 

US

It is hard to read too much into Monday’s Treasury moves, particularly given many participants around the world are away for Easter. Yields were higher across the curve, and the shape of the curve was towards modest bear-steepening. However, the TPLEX was at odds with the cautious tone seen in other macro markets (equities down, crude mixed, gold to the best levels since 2012). Some desks had suggested that Treasuries were red due to positive comments by the CDC that the outbreak could peak this week. However, others have argued that the case counts/death tolls are now priced, with traders now focusing on when the economy re-opens, to what degree, and what shape the recovery will look like. Elsewhere, the NY Fed intends to reduce the frequency of overnight repo operations in light of more stable market conditions; will now conduct one overnight operation in the morning. It is also worth noting that the NY Fed will this week will be purchasing assets at a pace of around USD 30bln per day, reduced from an average of USD 50bln per day last week. It is also worth noting that the NY Fed will be purchasing assets at a pace of around USD 30bln per day this week, reduced from an average of USD 50bln per day last week. US T-note futures (M0) settle 5+ ticks lower at 138-02+.

NY Fed intends to reduce the frequency of overnight repo operations in light of more stable market conditions and will now conduct one overnight operation in the morning and no more in the afternoon, while the Fed is also scaling back 3-month repo operations to once every two weeks from once a week. (Newswires)

US Senator Bernie Sanders formally endorsed Joe Biden and stated it is time to unite in the effort to defeat President Trump in November. (MSNBC/AFP)