• European bourses are firmer by around 1% and overall little moved from opening levels; stateside, futures show a similar pattern
• Crude futures are currently subdued but have been choppy throughout the session with WTI alternating between positive & negative territory
• US Senate approved the new USD 480bln coronavirus relief bill as expected by unanimous consent, which the House is set to vote on this Thursday
• US Treasury Secretary Mnuchin said he think this will be last tranche of money for small business although more can be added in the future
• Iraq Energy Minister said OPEC+ could take additional steps to absorb the oil surplus; IEA’s Birol has suggested producers consider further cuts
• Looking ahead, highlights include CBRT Rate Decision, Canadian CPI, EZ Consumer Confidence, DoEs, earnings from Delta Airlines, AT&T, Kimberly-Clark

CORONAVIRUS UPDATE

US Senate approved the new USD 480bln coronavirus relief bill as expected by unanimous consent, which the House is set to vote on this Thursday. This follows earlier reports of a bipartisan deal to expand virus aid which includes USD 250bln+ for the Payment Protection Program, USD 60bln more for small lenders, USD 60bln in disaster relief loans, USD 75bln for hospitals and USD 25bln for testing. (Newswires) US Senate Majority Leader McConnell said the next coronavirus relief debate should take place when full Senate is in session considering the nation's debt burden and House Speaker Pelosi commented the next coronavirus bill will happen very soon. (Newswires)

US President Trump said 20 states are moving along pretty quickly towards reopening and that the country wants to return to work. (Newswires)

US Treasury Secretary Mnuchin said he think this will be last tranche of money for small business although more can be added in the future, while he also stated that broadband and infrastructure is important for phase 4 relief and that it is premature to say how much phase 4 of relief will cost. (Newswires)

Spain's coronavirus cases stand at 208,389 (Prev. 204,178), according to the Health Ministry; deaths rise by 435 to 21,717 (Prev. 21,282). Spanish PM Sanchez says the goal is to de-escalate lockdown measures in the second half of May. (Newswires)

German Federal Institute for Vaccines says that a clinical test of a COVID-19 vaccine in Germany has gained approval; 4th such approved test in the world. (Newswires)

Japanese Economy Minister states that there has been no concrete talks with experts regarding lifting the State of Emergency. (Newswires)

Roche (ROG SW) CEO states he is afraid the most likely scenario is that there would not be a COVID-19 vaccine available before the end of next year, finds the 12-18 month timeline ambitious. (Newswires)

ASIA

Asian equity markets initially extended on losses as the subdued tone rolled over once again from Wall St where sentiment was pressured by the continued oil market rout, but initially finished relatively mixed. Price action included the WTI June contract prices briefly slipping to single digits and with underperformance in tech amid President Trump’s plans for an immigration ban given the sector’s reliance on foreign talent. ASX 200 (U/C) and Nikkei 225 (-0.7%) were weaker with Australia dragged lower by the mining related sectors and as corporate updates trickled in with Beach Energy also suffering from softer quarterly production, while the Japanese benchmark briefly fell below 19k as the recent detrimental currency flows reverberated across exporter names. Hang Seng (+0.4%) and Shanghai Comp. (+0.6%) conformed to the subdued global risk tone but with losses in the mainland limited by anticipation of further support after Chinese President Xi pledged stronger macro policy tools to soften the epidemic fallout and the State Council noted that China will boost targeted assistance to those in need, as well as small businesses. Finally, 10yr JGBs advanced as the took advantage of the weakness in stocks and amid the BoJ’s presence in the market today for JPY 710bln of JGBs heavily concentrated in 3yr-10yr maturities.

PBoC skipped open market operations and are net neutral on the day. (Newswires) PBoC set USD/CNY mid-point at 7.0903 vs. Exp. 7.0840 (Prev. 7.0752)

Chinese President Xi said China will use stronger macro policy tools to soften the epidemic fallout while making sure the epidemic will not rebound. (Newswires)

China's Government is reportedly considering late-May for the National People's Congress, following the forced delay of this. (Newswires)

HKMA is to introduce a temporary USD liquidity facility to make available USD liquidity assistance for licensed banks. (Newswires)

US

US President Trump reiterated he will issue a temporary suspension of immigration and stated the measure will be in effect for 60 days then will be evaluated after, while he added it will apply to those seeking permanent residency and that the executive order on immigration will probably be signed today. (Newswires)

UK/EU

BoE Governor Bailey said Britain should be cautious about lifting lockdown too early and suggested lifting lockdown then slamming on brakes again would damage the economy even more. (Daily Mail)

UK CPI YY (Mar) 1.5% vs. Exp. 1.5% (Prev. 1.7%); MM (Mar) 0.0% vs. Exp. 0.0% (Prev. 0.4%)

-        Core CPI YY (Mar) 1.6% vs. Exp. 1.6% (Prev. 1.7%); MM (Mar) 0.1% vs. Exp. 0.2% (Prev. 0.6%)

ECB President Lagarde says primary market purchase of gov't debt would undermine sound budgetary policy requirements in EU treaty; the Governing Council has not discussed the issue of helicopter money. (Newswires)

ECB's Rehn says the Governing Council will do everything necessary to ensure supportive financing conditions amid the pandemic; it is necessary to support the most severely hit countries; half of the IMF member have approached for emergency financing. (Newswires)

EU officials note of a large divide between member states on whether the virus Recover Fund should be only grants or only loans

-        Member states in the North and South must be reassured in the recovery discussion, adding that it will take time

-        North fears that their financial positions will be contaminated by debt mutualisation in the future due to decisions taken by the South

-        There is a misunderstanding that the South wants to use the coronavirus crisis to burden the North with old debt

-        Further clarity on the recovery fund could become greater in June/July but it would still not likely be the final decision

-        There is no agreement between member states on the needed size of the fund or how such money should be spent

Riksbank are to purchase municipal bonds for a nominal amount of SEK 15bln between 27th April and 30th June. (Newswires)

GEOPOLITICS

US President Trump said we don't know about North Korea Leader Kim's health and that nobody has confirmed if he is ill, while other reports noted that North Korea succession is thought to mean that if Leader Kim dies, his sister would be the custodian of power. (Newswires)

EQUITIES

Thermo Fisher Scientific Inc (TMO) Q1 20 (USD): EPS 2.94 (exp. 2.81), Revenue 6.23bln (exp. 6.18bln)

European equity futures see tailwinds from the turnaround in sentiment at the end of the APAC session (Euro Stoxx 50 +1.1%), with US equity futures also posting gains in excess of 1% in early trade. Sectors see broad-based gains, albeit energy lags as the complex remains under pressure from storage scarcity. In term of the breakdown, Tech names lead the gains following earnings from STMicroelectronics (+6.2%), whilst the sector also sees tailwinds from Texas Instruments (+3.0% pre-mkt), with the former, despite misses on its metrics, noted that Q1 was exited with stable net financial position, over USD 2.5bln in liquidity and available credit facilities above USD 1bln. Looking at other movers, Roche (+1.7%) is supported post earnings in which it topped estimates and pharma sales rose 7% YY. The Co. also stated that Clinical Phase III study to evaluate the safety and efficacy of Actemra/Roactemra in severe COVID-19 pneumonia is ongoing in several countries, with results expected in early summer, adding there is capacity for a rapid increase of production. On the flip side, Credit Suisse (+0.4%) is hampered vs. the region after it stated it is to take an additional EUR 900mln loan loss provisions in Q1. Finally, other earnings-related movers include Akzo Nobel (+7.9%), Ericsson (+6.4%) and Kering (-5.42), the latter reported a decline in Gucci sales of 23.2% YY.

FX

AUD/NZD/CAD - Another swing in broad risk sentiment amidst less pronounced pressure on oil and other commodities has aided the latest Aussie, Kiwi and Loonie recovery, but with the former also benefiting from a short squeeze in wake of a record rise in retail sales per preliminary data for March. Aud/Usd took some time to digest the release and acknowledge the fact that stock-piling for COVID-19 boosted consumption, but subsequently breached 0.6300 on the way to circa 0.6350 with stops tripped above 0.6325 and macro fund offers over 0.6340 absorbed along the way. Meanwhile, Nzd/Usd retested 0.6000, albeit with a lag as Aud/Nzd rebounded from sub-1.0550 to around 1.0580, and Usd/Cad has retreated between 1.4237-1.4139 parameters on the aforementioned relative stability in crude prices ahead of Canadian CPI.

GBP/SEK/NOK  - Sterling has unwound some of its recent underperformance on technical rather than fundamental grounds given Cable remaining above the 30 DMA (1.2257) and revisiting 1.2300+ levels, while Eur/Gbp has reversed towards 0.8800 as the DXY meanders within a tight band on the 100.000 handle and single currency continues to straddle 1.0850. Similarly, the Scandis are seeing some reprieve from oil and pandemic risk aversion, with Eur/Nok and Eur/Sek both off highs near 11.5950 and 10.9700 respectively and the Swedish Krona weighing up more unconventional Riksbank easing in the form of municipal QE in the run up to next week’s official policy meeting.

JPY/EUR/CHF - All sticking to pretty narrow and well trodden recent confines vs the Dollar, as the Yen flits from 107.86 to 107.52, Euro hovers below 1.0900 and above 1.0800 amidst decent option expiry interest at the former (1.5 bn) and 1.0825 (1 bn), and Franc pivots 0.9700.

EM - Softer than expected SA CPI has not hindered the Rand amidst the overall upturn in risk appetite, but the Lira is treading more cautiously into the CBRT even though the Central Bank has already lifted FX swap limit transactions to 30% from 20% in what may be an effort to keep Usd/Try under 7.0000 in the event that rates are cut again, as widely expected, but perhaps more than the -50 bp consensus. On that note, the Mexican Peso seems to have taken Banxico’s emergency ½ point ease in stride or at least lubricated by the less fractious state of trade in crude markets.

Australian Retail Sales (Mar P) 8.2% (Prev. 0.5%); largest increase on record. ABS said the March sales data indicated unprecedented demand for food retailing industry. (Newswires)

FIXED

Core bonds have settled down somewhat after steeper retracement to 172.36, 136.63 and 139-05 lows for Bunds, Gilts and 10 year US T-notes respectively amidst an upturn in risk sentiment and semblance of stability in crude prices. However, Spanish Bonos are now encountering the same kind of issuance pressure that Italian BTPs suffered yesterday ahead of the 2030 syndicated pricing and final terms even though investor demand has exceeded previous record levels.

COMMODITIES

WTI and Brent front month futures remain choppy, but ultimately mixed this morning, with WTI swinging between gains and losses whilst Brent remained in the red for the entirety of the session thus far. Yesterday, OPEC Delegates discussed the oil market crisis within a conference call; although the call was reportedly not designed to make a new oil decision and they were said to consider a May 10th meeting for further production cuts. Furthermore, Saudi, UAE, and Kuwait did not take part in the call and a delegate noted that OPEC+ members will be unable to start production cuts earlier because April's oil production is already committed for export contracts. Meanwhile, the Iraq Energy Minister said OPEC+ could take additional steps to absorb the oil surplus but added that taking further measures by producer countries depends on global market development and compliance by other OPEC+ and other non-member producers with the oil cut deal. Russia again downplayed the gravitas of the oil market situation. Elsewhere, the fallout from the Texas Railroad Commission meeting saw two out of three Texas Oil and Gas regulators stated they are not ready to vote on oil output cuts today and they are to revisit the issue on May 5th. Sticking with North America, sources stated that producers in Alberta, Canada have reportedly already voluntarily cut 400k-700k BPD, according to Energy Intel. The contracts saw further downside as EU trade got underway, with WTI June resided under USD 11/bbl whilst Brent held onto losses of over 10% and eyed USD 17/bbl to the downside; however, since then we have recovered somewhat in what has been choppy trade for the complex but, ultimately, are in proximity to the lows – particularly for WTI, which ekes mild gains at the time of writing. Looking at the metals market, spot gold benefits from the Dollar pullback and reclaimed its USD 1700/oz handle. While copper trades subdued around USD 2.25/bbl, with miner Antofagasta stating that Q1 copper production rose almost 5% YY.

US Private Inventory Crude Stocks +13.2mln vs. Exp. +15.2mln (Prev. +13.1mln). (Newswires)

CME will permit listing of negative oil options from today. CME also announced to raise crude oil NYMEX margins by 13.3% to USD 8500/contract from USD 7500/contract and raised NY Harbor Heating Oil margins by 16.3% to USD 5350/contract from USD 4600/contract for May, while it raised natgas Henry Hub futures margins by 6.1% to USD 1750/contract from USD 1650/contract and raised RBOB gasoline futures margins by 14.1% to USD 8,100/contract from USD 7,100/contract. (Newswires)

Iraq Energy Minister said OPEC+ could take additional steps to absorb the oil surplus but added that taking further measures by producer countries depends on global market development and compliance by other OPEC+ and other non-member producers with the oil cut deal. (Newswires)

Australia Energy Minister said they are to establish a strategic fuel reserve with initial allocation of AUD 94mln and want to take advantage of low fuel prices, while the government is working with industry to establish local storage and signed a deal with US to access fuel reserves. (Newswires)

The collapse of Singapore oil trader Hin Leong which filed for bankruptcy protection and is under investigation for hundreds of millions of undisclosed losses, risks a severe liquidity crunch for Singapore’s commodities sector. (FT)

Nigeria is to reduce oil output amid a lack of storage, according to Premium Times.

Energy Intelligence's Research & Advisory service estimates "that the world still has 500 million to 600 million barrels of free storage space, but not all of it is readily accessible and storage capacity could effectively be filled by June". (Twitter)