• European bourses are firmer this morning with US futures stronger in excess of 1% at present; note, Eurex has been experiencing operational difficulties
• US President Trump said we're very close to completing a plan to re-open the country and hopefully ahead of schedule
• 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
• FX sees the DXY modestly softer this morning, while the ZAR underperforms after SARB cut rates to 4.25% (Prev. 5.25%) in an emergency decision
• Johnson & Johnson (JNJ) revenue and EPS beat expectations and have boosted dividend; however, are lowering guidance given COVID-19
• Looking ahead, highlights include US import & export prices, APIs, Fed's Evans, earnings from JP Morgan, Wells Fargo

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)

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)

WHO spokesperson says the virus peak has not been seen yet, the virus picture in Europe is mixed, some countries show deceleration in cases whilst UK and Turkey still show increased rates in cases, 90% of cases are coming from Europe and US. (Newswires)

The head of Germany's Robert Koch Institute says there is no clear sign of numbers falling further, Germany must wait and remain disciplined. RKI adds that the lower case count over the Easter period is largely due to lower testing levels. (Newswires)

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)

Spanish coronavirus cases 172,541 (Prev. 169,496) and deaths stand at 18,056 (Prev. 17,489); deaths increase by 567 (prev. 517). (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 (+1.9%) 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 (+3.1%) 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 (+0.6%) and Shanghai Comp. (+1.6%) 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)

The Chinese FX regulator has relaxed rules to facilitate cross-border businesses. (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)

GEOPOLITICS

North Korea reportedly fired multiple short-range cruise missiles into the sea, according to the South Korean military. (Newswires) Reportedly, anti-ship short range missiles; some reports suggest they were fired from Sukhoi jets

Russian Foreign Minister Lavrov says Moscow is ready for discussions with the US on hypersonic weapons, according to RIA. (Newswires)

EQUITIES

European equities remain mostly firm following a broad pickup in sentiment across APAC and US regions, with the former also aided by better-than-forecast Chinese trade data overnight. That being said, eyes turn to the resumption of earning season to gauge the initial impact of the virus outbreak on large-cap businesses. For reference, states-side earnings today include Johnson & Johnson (4.1% weighting in DJIA), JP Morgan (2.9% weighting in DJIA) and Wells Fargo. Back to Europe, UK’s FTSE 100 (-0.4%) lags regional peers as a firmer Sterling weighs on exporters, whilst reports also noted that the UK gov’t is poised to extend its lockdown to May 7th, although some reports over the weekend touted May 25th. Other European bourses see broad-based gains, with some possibly underpinned by comments from EU’s Competition Chief Vestager, who said member countries should purchase stakes in companies to repel the threat of Chinese takeovers. Broader sectors are somewhat mixed with underperformance in the Energy Sector, whilst Healthcare names lead the gains thus far. The sector breakdown does not give much by way of additional colour, although Travel & Leisure resume its downbeat performance as the sectors see no reprieve for the near future, whilst Carnival (-7.0%) sees pressure after the group is to extend its suspension on North American cruises. In terms of individual movers; AstraZeneca (+6.0%) props up the healthcare sector as shares were bolstered at the open after the Co. said its Tagrisso Adjuvant trial has been overwhelmingly positive. Separately, Co’s Koselugo has been approved in the US for paediatric patients with a rare genetic condition. Finally, the Co. has also initiated the Calavi clinical trials with Calquence against COVID-19. Renault (+3.0%) remains firm despite a cancellation to FY19 dividend after the Co. is to transfer its 50% stake in Dongfeng Renault to Dongfeng in a non-binding memorandum. Publicis (-0.3%) saw losses at the open after reporting that organic revenue dell 2.9% YY, although the Co. launched a EUR 500mln cost reduction plan. Accor (-2%) saw early-morning pressure after French Finance Minister Le Maire said he cannot say when hotels and restaurants will reopen. Note: Eurex and Deutsche Boerse have been experiencing technical problems that are being investigated.

Johnson & Johnson (Q1 20) (USD): Adj EPS 2.30 (est. 2.00/1.43 on a reported basis); Revenue 20.7bln (est. 19.48bln); boosts dividend 6.3% to 1.01/shr; lowers guidance to reflect COVID-19. (Newswires)

FX

USD - The Dollar remains depressed after last Thursday’s mega Fed stimulus package and ramp up in Gold through the Usd1700/oz threshold to fresh 7 year peaks, with the DXY unable to regain a foothold above 99.500 within a 99.432-121 range amidst selective risk-on flows in wake of latest COVID-19 updates, the eventual OPEC+ crude output accord and Eurozone Finance Ministers finally agreeing on a substantial fiscal stimulus package. Ahead, US import export prices are scheduled, but unlikely to prompt much, if any reaction, but Wednesday’s data releases are top tier.

GBP - The Pound is off best levels, but still the best performing G10 currency after UK PM Johnson’s discharge from hospital. Cable remains comfortably above the 1.2500 handle and briefly crossed the 50 DMA at 1.2568 to print a fresh 1.2575 recovery high before reports from the ONS emerged raising the number of fatalities in England and Wales by 15% vs NHS figures published to April 3rd, while Eur/Gbp is back above 0.8700 from circa 0.8784 at one stage awaiting revised GDP and deficit estimates from the OBR under various coronavirus scenarios due at 12.00BST.

ZAR - In contrast to Sterling, Rand gains against the Buck were initially reversed from 18.0000+ to just shy of 18.2000 in wake of an unexpected 100 bp SARB rate cut that was announced via social media and came after May’s scheduled policy meeting was brought forward. However, Usd/Zar subsequently soared beyond 18.3300 as Central Bank Governor Kganyago

JPY/EUR/CHF/AUD/NZD - All firmer vs the Greenback, as the Yen defies improved risk sentiment to hold at the upper end of 107.79-39 parameters, but not quite close enough to disturb decent option expiry interest protecting 107.00 at 107.05 (1.1 bn). Note, no real rection to latest BoJ source talk about increased and wider QE remits at this month’s meeting that might include expanding the range of assets accepted for collateral. Similarly, the Euro is hovering closer to the top of 1.0957-06 confines and the Franc nearer 0.9637 than 0.9679 even though latest weekly Swiss sight deposits indicate significantly more intervention by domestic banks on behalf of the SNB. Elsewhere, some loss of overnight momentum forged on the back of Chinese trade revealing a surprise rise in Yuan denominated imports for the Aussie and Kiwi, but both retaining sight of big figure/psychological resistance marks at 0.6400 and 0.6100 respectively.

CAD/NOK/SEK - In keeping with the rather muted response following knee-jerk relief in oil on the aforementioned OPEC+ pact, the Loonie is paring advances from around 1.3863 to sub-1.3900 as attention switches towards tomorrow’s BoC meeting and the prospect of downbeat/dovish guidance, assuming no further action. Meanwhile, the Norwegian Krona has also retreated from almost 11.1700 vs the Euro to 11.2800, but its Swedish peer showing a bit more resilience above 10.9000 due to signs of the case and death count from nCoV flattening.

EM - The Lira is struggling to contain losses below 5.7900 amidst heightened coronavirus contagion and the Turkish banking regulator slashing FX swap and derivative limits, while the already unstable political backdrop has been rocked by the resignation of the country’s Interior Minister.

SARB cut rates to 4.25% (Prev. 5.25%) in an emergency decision, bringing their May meeting forward to do so. Decision saw some gradual depreciation of the ZAR as the decision was initially posted on SARB social media and as such took a while to circulate elsewhere.

BoJ are reportedly to discuss taking further steps at this month's meeting, options include: increasing commercial paper and bond purchases, expanding assets that are accepted as collateral, according to sources. (Newswires)

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

FIXED

In truth, UK debt and equivalents were already on divergent paths before a still unknown issue halted trade on Eurex (and the Deutsche Boerse incidentally), but with little external company or source of distraction given muted US Treasuries, price action on Liffe has virtually fizzled out. For the record, Gilts faded just ahead of 137.00 and drifted back down towards their very early 136.70 low before picking up fresh underlying bids and Bunds stopped at 170.84 between 170.28-90 parameters, as 10-year T-notes sit a tick under 138-06 overnight highs. Ahead, some lesser US data and Fed speak plus APIs

COMMODITIES

WTI and Brent front-month futures reverse course after initially eking mild gains following the fallout of the OPEC+ and G20 ad-hoc meetings which failed to spur a rally but more-so stemmed declines in the complex (in the short-term at least). As a recap for European players, OPEC+ agreed to cut joint output by 9.7mln BPD, starting on 1 May 2020, for an initial period of two months that concludes on 30 June 2020. For the subsequent period of 6 months, from 1 July 2020 to 31 December 2020, the total adjustment agreed will be 7.7mln BPD. It will be followed by a 5.8mln BPD cut from 1 January 2021 to 30 April 2022. The baseline for the calculation of the adjustments is the oil production of October 2018, except for the Kingdom of Saudi Arabia and Russia, both with the same baseline level of 11.0mln BPD. The agreement will be valid until 30 April 2022; however, the extension of this agreement will be reviewed during December 2021. Saudi, UAE and Kuwait all pledged voluntary over-compliance, whilst G20 is to curtail output by some 3.7mln BPD. Yesterday, Saudi Aramco cut their OSPs for several grades for the second month in a row despite the output cut deal; albeit, OSPs for all grades to the US were raised. The Arab Light discount to Asia reflects the supply glut. Furthermore, 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. WTI straddled around USD 22.50/bbl in early trade before briefly dipping below USD 22/bbl, whilst Brent meanders just below USD 31.50/bbl, having confirmed to the modest sell-off during the session The difference between the contracts meanwhile remains wider to the tune of around USD 9.50/bbl vs. a pre-OPEC sub-5/bbl number. Elsewhere, spot gold holds onto a bulk of yesterday’s gains and remains north of USD 1700/oz and near recently-set 7yr highs given USD weakness and as investors stock up on the yellow metal following the liquidity-induced declines last month. Copper meanwhile has given up the gains seen during the APAC session after Freeport-McMoRan said it will temporarily shut its Chino copper mine (produced 88k tons of copper in 2019) due to the virus outbreak, albeit the red metal remains caged in a narrow 2.3250-2.3480 band.

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)

Source: Newsquawk