• Sentiment remains strong following APAC hours on upbeat, albeit caveated, Gilead virus updates
• US President Trump noted that experts say the curve has flattened and we have passed the peak of new cases; unveiled the 3-phase approach to re-opening
• German Health Minister Spahn said that "as of today, the outbreak has become manageable again"
• China's Parliament Standing Committee is to meet from April 26-29th, according to Xinhua
• FX sees the DXY once again eclipsing 100.00 to the upside, to the detriment of GBP in particular
• Chinese GDP Y/Y at -6.8% vs. Exp. -6.5% Y/Y, although GDP Q/Q was a slightly narrower than expected contraction
• Looking ahead, highlights include the Baker Hughes Rig Count

CORONAVIRUS UPDATE

US President Trump noted that experts say the curve has flattened and we have passed the peak of new cases, while he also expects fewer deaths than even most optimistic of projections. President Trump also unveiled a 3-phase approach to re-opening the economy and expects the economy to boom once opened. Phase 1) reopening of certain places such as restaurants, cinemas, gyms as long as they observe strict social distancing, high-risk individuals to stay at home, non-essential travel is discouraged 2) Travel can resume, schools can reopen, size of gatherings can be expanded and social distancing measures moderated, high-risk individuals to stay at home 3) High-risk individuals would not need to remain at home but would need to practice social distancing, large venues operate with limited social distancing rules, employers start lifting restrictions on staffing (Politico). Trump also noted that some states can reopen sooner than others and states which have met the criteria to start Phase 1 of reopening, can literally begin tomorrow. Furthermore, Trump commented that 29 states should be able to reopen relatively soon and that Governors will be empowered to tailor the approach to their own states and if they need to stay closed, that will be permitted. US President Trump's reopening guidelines suggested a 14-day downward trajectory in coronavirus cases before beginning a phased reopening although the document was said to not offer a specific timeframe for opening up the economy. (Newswires)

There were reports that the Chicago hospital treating severe COVID-19 patients with Gilead’s (GILD) antiviral medicine Remdesivir is seeing rapid recoveries in fever and respiratory symptoms, with nearly all in the closely observed clinical trial discharged in a week. However, Gilead later stated that anecdotal reports do not provide statistical power necessary to determine safety and efficacy profile of its Remdesivir drug as treatment for COVID-19. (Newswires)

Italy are reportedly considering reimbursing tourism spending at EUR 325/family, could cost EUR 1.2-1.5bln in total, Il Sole 24.

In Germany, each virus hit individual is infecting less than one other person according to AFP citing data. At a press conference, German Health Minister Spahn said that "as of today, the outbreak has become manageable again". RKI President Estimates R0 at 0.7 but notes that the number of deaths has been increasing, particularly this week. (Newswires)

Japanese PM Abe says that Tokyo and Osaka have still not seen the target levels reached for person-to-person contact. Will judge whether to extend the nationwide State of Emergency after convening with and hearing the opinions of experts. (Newswires)

ASIA

Asian equity markets notched firm gains after tracking the advances in US equity futures following the announcement of reopening guidelines for the US economy and amid hopes of a COVID-19 treatment after positive results for Gilead's Remdesivir drug in closely observed clinical trials, despite the Co. downplaying the reports. In addition, Boeing shares took off after-hours as the Co. plans to resume commercial airline production in Washington state factories next week. ASX 200 (+1.3%) and Nikkei 225 (+3.2%) surged from the open with corporate updates contributing to the stock rally in Australia including Rio Tinto which posted higher quarterly iron ore output and shipments, while Tokyo sentiment benefitted from the government’s relief efforts including the JPY 100k cash handouts to all citizens, and the TAIEX (+2.1%) was also boosted with chipmakers inspired by strong earnings from global semiconductor giant TSMC. Hang Seng (+1.5%) and Shanghai Comp. (+0.7%) conformed to the broad optimism following reports the PBoC will continue to the guide credit funds to support smaller firms through targeted RRR cuts and with the gains maintained regardless of the slew of mixed tier-1 data which showed Chinese GDP Y/Y at -6.8% vs. Exp. -6.5% Y/Y, although GDP Q/Q was at a slightly narrower than expected contraction. Furthermore, Industrial Production and Retail Sales added to the varied narrative although China’s stats bureau remained optimistic in which it suggested a visible improvement in major economic indicators last month and likelihood of a continued recovery. Finally, 10yr JGBs were pressured amid spillover selling from T-notes with prices dampened as stocks rallied from US reopening guidelines and hopes of progress for COVID-19 treatment.

PBoC skipped open market operations and were net neutral on the day. (Newswires) PBoC set USD/CNY mid-point at 7.0718 vs. Exp. 7.0745 (Prev. 7.0714)

Chinese GDP (Q1) Q/Q -9.8% vs. Exp. -9.9% (Prev. 1.5%). Chinese GDP (Q1) Y/Y -6.8% vs. Exp. -6.5% (Prev. 6.0%) Chinese Industrial Production (Mar) Y/Y -1.1% vs. Exp. -7.3% (Prev. -13.5%) Chinese Retail Sales (Mar) Y/Y -15.8% vs. Exp. -10.0% (Prev. -20.5%)

China stats bureau said there was a visible improvement in major economic indicators last month and that economic activity is being restored with China's economic rebound will likely continue. The stats bureau also stated there has not been large scale layoffs, while it expects Q2 economic performance to be better than Q1 and noted that China will step up support measures. (Newswires)

China's Parliament Standing Committee is to meet from April 26-29th, according to Xinhua. (Newswires)

RBI Governor Das announced that the Policy Repo Rate remains unchanged at 4.40%, while the Fixed Rate Reverse Repo Rate was cut by 25bps to 3.75% with immediate effect. RBI Governor Das said the RBI is to announce certain additional measures with objective to maintain sufficient liquidity in the system, adding that the decision has been made to undertake TLTRO ops 2.0 valued at INR 500bln which can be stepped up as necessary. (Newswires)

US

US Senate Democrat leader Schumer said that talks on additional relief funding are ongoing. (Newswires)

UK/EU

ECB's Weidmann (hawk) says it is too early to determine whether current measures will be enough. (Newswires)

EQUITIES

European equities hold onto a bulk of sentiment-driven gains (Euro Stoxx 50 +3.6%), albeit the region has waned off highs alongside US equity futures. The slight fade in risk appetite follows questions regarding whether reopening the US economy soon will revive an outbreak of COVID-19. Meanwhile, the second catalyst is attributed to Gilead’s treatment showing rapid recoveries among severe cases, but the Co. caveated stating the data does not satisfy safety and efficacy profiles. Traders may also be wary to open/hold onto risky positions heading into another weekend of uncertainty. Nonetheless, broad-based gains are seen across major European bourses as April option expiries provided the region with impetus, with CAC 40 (+3.8%) modestly outpacing peers amid post-earning gains from giants L’Oreal (+2.7%) and LVMH (+4.9%) – which together account for almost 14% of the French index and around 5% of the Euro Stoxx 50. Sectors are in the green across the board and lean towards a risk-on session – with cyclicals outperforming defensive. The breakdown sees Travel & Leisure outperforming whilst the underperformance in Healthcare seems to be more of a risk-driven move. In terms of individual movers, Airbus (+8.7%) shares soar amid reports Boeing (+8.1% pre-mkt) is to resume production at its Seattle factory as soon as Monday next week. Thus, engine makers also gain impetus, with Rolls Royce (+11.3%) and Safran (+8.8%) buoyed. Elsewhere, Rio Tinto’s (+3.3%) iron ore shipment update supports share prices, with peers Antofagasta (+2.9%), Glencore (+9.0%), BHP (+5.1%) and Fresnillo (+2.0%) all higher in tandem. On the flip side, Diasorin (-7%) shares reside at the foot of the Stoxx 600, potentially Gilead seemingly leads the race between the Cos regarding antibody testing.

FX

DXY - The Dollar is back in demand despite renewed risk appetite for global equities if nothing else on the back of more moves to scale back COVID-19 restrictions and positive anti-virus treatment results. The index has bounced firmly from 99.689 lows to reclaim 100.000+ status and is only marginally shy of Thursday’s 100.300 high amidst almost blanket Greenback gains vs G10 peers.

JPY/NZD/AUD - The Yen continues to resist the Buck’s advances and the bulk of safe-haven unwinding, with reports of Japanese offers into rebounds over 108.00 in Usd/Jpy capping the headline pair, while crosses remain bearish barring extreme bouts risk asset buying. On that note, the Kiwi has regained a degree of stability after yesterday’s RBNZ-related jolt to retest 0.6000 climes and reverse some underperformance against the Aussie, as the cross slips back below 1.0600 and Aud/Usd fades ahead of 0.6400 following mixed Chinese data overnight (GDP contraction not quite as bad as feared overall, retail sales weaker than forecast, but ip vice-versa).

CAD/EUR/CHF/GBP - All making way for the latest broad Dollar upturn, as the Loonie retreats from just under 1.4000 to sub-1.4100 against the backdrop of waning oil prices and the Euro loses more momentum having failed to retain grip of the 1.0900 handle earlier this week. However, the single currency may derive some traction from option expiries again given hefty interest between 1.0835-50 (1.9 bn) and the 1.0800 strike (1.7 bn), in contrast to Usd/Cad that could see 1.9 bn at 1.4000 defended or protected. Meanwhile, the Franc is still caught in the crossfire in terms of weakness around 0.9700 vs the Greenback and strength relative to the Euro as Eur/Chf skirts 1.0500, but Sterling is softer across the board as Cable tops out above 1.2500 and Eur/Gbp rebounds through 0.8700. Note, the former continues to respect the 200 HMA at 1.2525 and latter is prone to almost daily or intraday periods of fix induced volatility. Ahead for the Pound, Moody’s UK ratings review poses downgrade risk to current standing and/or outlook.

SCANDI/EM - Contrasting fortunes for the Sek and Nok, as the aforementioned downturn in crude scuppers the Norwegian Krona irrespective of independent Euro weakness, while the Rub takes note of Brent contagion from WTI and guidance from the CBR Governor to the effect that a rate cut is on the agenda for the April 24 policy meeting.

BoC Governor Poloz said when we get back to normal, interest rates will certainly increase and that it will take the economy a couple of years to make up for lost ground. There were also comments from BoC’s Wilkins that recovery for Canada could begin over the summer but recovery from low oil prices could take longer, while she noted that their corporate bond program will purchase 1yr-5yr maturities. (Newswires)

FIXED

Marginal new intraday highs for Bunds, Gilts and US Treasuries, at 172.77, 137.03 and 139-01 for the 10 year debt futures, but still not breaching wtd peaks amidst extended gains for EU equities on April index option expiry Friday. Ahead, Fed’s Bullard and ECB’s Rehn both slated before US LEI that is almost bound to fall short of expectations or paint a gloomy picture at the very least, though whether enough to push bonds through established ranges and stocks out of their recovery stride is another question as positions are tweaked into the weekend.

COMMODITIES

WTI and Brent June futures remain choppy in early European trade, with the former’s June contract quoted given the shift in volume as its front-month expires in the coming days. Due to the colossal contango in the market, WTI May contract trades lower by some 9% (around USD 18/bbl), whilst the June future sees prices in the green on the day above USD 25.50/bbl at the time of writing. Market fundamentals remain unchanged thus far as participants await the OPEC+ pact to go into effect on May 1st, whilst on the lookout for commitments from outside the group. On that front, desks highlight that ConocoPhillips’ announcement regarding 200k BPD to its North American output highlights somewhat meaningful unmandated cuts outside OPEC+. Analysts at ING note “instead, market forces will do the job, with the low-price environment forcing producers to cut back.” Looking ahead to next week, the Texas Railroad Commission (RRC) is expected to revisit the issue on mandated state cuts. Supporters at the prior meeting on the 14th April argued about sever storage shortages and potential record numbers of bankruptcies amid market conditions. The effectiveness of the OPEC+ deal was also downplayed whilst they added that the RRC must do its part. Adversaries contended that the least profitable wells are already being shut and that RRC actions will not solve the crude crisis. WTI June resides towards the bottom end of the its intraday range, having waned off USD 26.78/bbl highs, whilst its Brent counterpart similarly declined from highs near USD 29/bbl. Elsewhere, spot gold remains on the backfoot and trades on either side of USD 1700/oz as DXY reclaims 100.000 to the upside, and with market contacts earlier reporting stops through 1705-1700/oz. The yellow metal thus far printed an intraday base at USD ~1687/oz, albeit remains in the green for the week having opened at USD ~1660/oz on Monday. Copper meanwhile withstands the strength in the Buck and moves in tandem with stocks following a shallower than expected contractions in Chinese QQ Q1 GDP and March Industrial Production, but prices remain capped by resistance at ~USD 2.3675/lb.

Russia's Kremlin when asked on low oil prices: says the output deal is yet to be implemented, does expect it to have an effect though. (Newswires)

Saudi Aramco are to provide customers with 8.5mln BPD of crude oil as of May 1st, according to Tadawul. (Newswires)

CME raised crude oil NYMEX margins by 11.9% to USD 7500/contract from USD 6700/contract for May. (Newswires)