• Asian equity markets traded cautiously as the region failed to follow through on the optimism seen on Wall St
• DXY remained lacklustre after having recently slipped below the 99.00 level amid easing funding pressures and declining yields
• Brexit negotiators are to conduct a video call today to finalize next week's large-scale trade negotiations
• US President Trump stated that he instructed the administration to halt funding to the WHO as a review is conducted
• US President Trump said plans to reopen the country are nearing completion and he will speak to all Governors shortly
• Looking ahead, highlights include Swedish CPI, IEA Oil Market Report, US Retail Sales, Industrial Production, Business Inventories, NAHB Housing Market Index, BoC Rate Decision, DoEs, BoC's Governor Poloz & Deputy Wilkins, earnings from Citi and Goldman Sachs

CORONAVIRUS UPDATE

US President Trump said plans to reopen the country are nearing completion and he will speak to all Governors shortly as well as authorize them to open states in appropriate time and manner, which could happen for some before May 1st. Furthermore, President Trump stated that he instructed administration to halt funding to the WHO as a review is conducted, while there were also reports that US President Trump is to work on a coordinated global response to the coronavirus pandemic with G7 leaders in a teleconference on Thursday. (Newswires)

US House Democrats said US President Trump has no authority to halt WHO funds and there were also comments from UN Secretary General Guterres that now is not the time to reduce resources for WHO operations. (Newswires)

US NIH's Fauci said the May 1st target to reopen the economy is "overly optimistic" for many parts of the US and there were separate comments from New Jersey’s Governor that there needs to be further testing in order to reopen the economy. (Newswires)

US COVID-19 cases rose 4.4% to 579,005 (prev. +5.6% at 554,849) and the death toll rose 1.4% to 22,252 (prev. +7.1% at 21,942). New York City revised its coronavirus death toll to 10367 which now includes 3700 probable deaths. (Newswires)

ASIA

Asian equity markets traded cautiously as the region failed to follow through on the optimism seen on Wall St where all major indices posted firm gains as liquidity conditions normalized from the Easter break and after comments from President Trump stoked optimism for the US to re-open its economy soon. Nonetheless, the momentum petered out in Asia trade with ASX 200 (-0.7%) dragged lower by heavy losses in the energy sector after WTI crude prices dipped another 7% and briefly tested the USD 20.00/bbl level on demand concerns and with financials subdued after poor earnings results from their stateside peers. Nikkei 225 (-0.2%) exporters were hampered by the ill-effects of a firmer currency and amid the global production shutdown extensions, while KOSPI remained closed for National Assembly elections which is seen as a referendum for President Moon and the government’s handling of the coronavirus outbreak. Elsewhere, Hang Seng (-0.1%) and Shanghai Comp. (-0.2%) traded rangebound and conformed to the indecisive regional tone despite PBoC’s efforts in which it conducted a CNY 100bln 1-year Medium-term Lending Facility at a reduced rate of 2.95% (Prev. 3.15%), while the first phase of its previously announced 100bps targeted RRR cut took effect today but this was also unsuccessful in spurring momentum. Finally, 10yr JGBs were pressured from the open and proceeded lower before finding support near the 152.00 level, while the BoJ Rinban announcement provided little inspiration with the central bank only in the market for JPY 400bln in up to 3yr maturities.

PBoC conducted CNY 100bln 1-year Medium-term Lending Facility at 2.95% vs. Prev. 3.15%. (Newswires) PBoC set USD/CNY mid-point at 7.0402 vs. Exp. 7.0389 (Prev. 7.0406)

UK/EU

Brexit negotiators are to conduct a video call today to finalize next week's large-scale trade negotiations, as well as discuss a potential extension to the transition period amid coronavirus. (Telegraph) However, it was also reported that the UK is holding out on providing EU with detailed fishing rights proposals which could derail approaching talks. (FT)

FX

DXY remained lacklustre after having recently slipped below the 99.00 level amid easing funding pressures and declining yields, but with price action overnight muted alongside mixed trade seen in its major counterparts. EUR/USD consolidated around the prior day’s highs after taking out several key MA levels including the 50DMA at 1.0967 and GBP/USD retraced some of this week’s gains although just about held on to the 1.2600 handle. Elsewhere, USD/JPY briefly fell below support at 107.00 and JPY-crosses were also pressured by the cautious risk tone, while antipodeans were hampered by their high-beta statuses, the ongoing oil rout and weak Australian consumer confidence data with AUD/USD homing in on 0.6400 to the downside.

Australian Westpac Consumer Confidence Index (Apr) 75.6 (Prev. 91.9). (Newswires) Australian Westpac Consumer Confidence (Apr) M/M -17.7% (Prev. -3.8%)

Czech Central Bank's Benda said further rate cuts cannot be ruled out and nor can a special board meeting before May 7 although there is no decision to hold one so far. (Newswires)

COMMODITIES

Commodities were rangebound amid the cautious risk tone and although WTI crude futures attempted to nurse some of the recent losses the rebound was insignificant compared to the hefty declines of more than 7% the prior day which saw prices briefly test support at the USD 20.00/bbl level owing to the ongoing demand concerns, while a larger than expected build in the weekly private inventory headline crude stockpiles also provided no favours for the energy complex. Elsewhere, gold prices were flat above USD 1700/oz as the precious metal took a breather from the recent surge to its highest levels in more than 7 years, while copper reflected the overnight indecision.

US Private Inventory Crude Stocks (w/e 10th Apr) +13.1mln vs. Exp. +11.7mln (Prev. +15.2mln). (Newswires)

Saudi Arabia Energy Minister Abdulaziz said the pricing war was an unwelcome departure from Saudi Arabia but we had to because of a desire to capture revenues instead of doing nothing, while he added that if prices stay within the border of USD 35-40/bbl, he would not be surprised if natural declines are even more severe as we move into the next few months. (FT)

US

The TPLEX grinded higher through the session, despite an equity rally and amid returning liquidity conditions. The T-Note found support in APAC trade after a sell-off (in both equities and bonds) on Easter Monday, and liquidity helped to sustain the moves. Strong gains in the equity complex on Tuesday did little to change the dial either, with equities, gold and Treasuries rising in unison. Further, with the Fed paring back its daily purchases this week (average daily pace of USD 30bln vs 50bln last week), the appetite for USTs remains strong. The strength could be a function of equity hedges, as some desks view the stock market’s retracement as reaching peak “realistic” levels with corporate earnings depressed: BofA’s FMS recommended taking profits in the SPX between 2,850-3,000; survey respondents also noted long US Treasuries as the most crowded trade. Investors may also have been discomforted by the IMF’s latest gloomy assessment of the global economy on track to suffer the worst since the Depression. Additionally, JPMorgan’s and Wells Fargo’s Q1 earnings reports both caught participants off-guard with the extent of their loan provisions, shining a light on the extent of financial pain the wider economy is facing. However, the fiscal and monetary backstops being implemented will limit such extremes. By settlement, major spreads were slightly steeper, 2s -2bps at 0.22%, 10s unchanged at 0.75% and 30s +2 at 1.41%. US T-note futures (M0) settled 4+ ticks higher at 138-07.

Fed's Barkin (non-voter, hawk) said the economy has a tough path ahead of it but added the Fed is willing to be creative and innovative with support efforts. (Newswires)

Fed's Bostic (non-voter, dove) said he is confident support will reach businesses on time but added that more is likely needed for small businesses, local government, and GIG economy workers. (Yahoo Finance)

Fed's Bullard (non-voter, dove) said the US should get down to a low number of coronavirus cases and deaths in the weeks ahead, while he reiterated the Fed is willing to do more if other markets experience trouble. (Newswires)

Fed's Evans (non-voter, dove) said the US economy will recover in H2 but there is a risk it could be delayed, while he added there is no way you could have insured against this shock and noted there is a part for the government to socialise the costs. (Newswires)

US Treasury Secretary Mnuchin said several US airlines will participate in the payroll support program including American Airlines (AAL) Delta (DAL) and United (UAL), while discussions continue with other airlines about potential aid, while other reports noted that Delta (DAL) said it it will receive USD 5.4bln in Treasury grants. (Newswires)

US Small Business Administration said more than 1mln loans have been approved through the payroll protection program as of April 13th with approvals totalling USD 247.5bln from over 4600 lenders. (Newswires)

US congressional sources said they are working with SBA on expansion of pandemic relief for small businesses and are looking to get USD 16bln in grants and USD 50bln in loans for Economic Injury Disaster Loans in the next phase, as the first USD 10bln round is nearly depleted. Furthermore, US Democrat Senator Doug Jones understands a fair amount of progress has been made in discussions between Senate Democrat Leader Schumer and Treasury Secretary Mnuchin on extending the small-business Paycheck Protection Program funding, while he commented that we may be seeing some packages pretty soon. (Newswires)