• European bourses are somewhat mixed after dipping post-open while US futures are firmer with the NQ +1.8% outperforming
• FX features a subdued USD to the benefit of major peers while UST 10yr yields dip below 1.50% but EZ counterparts are now largely unchanged retracing earlier action
• Danish Health Authority has temporarily halted the use of the AstraZeneca (AZN LN) COVID-19 vaccine due to serious cases of blood clots
• Looking ahead, highlights include the ECB policy announcement, US IJC, OPEC MOMR (13:30GMT/08:30EST), supply from the US

CORONAVIRUS UPDATE

Danish Health Authority has temporarily halted the use of the AstraZeneca (AZN LN) COVID-19 vaccine due to serious cases of blood clots. (Newswires) Note, this Follows two similar events being reported in Austria; however, since then the European Medicines Agency has remarked that there is no evidence linking the AstraZeneca vaccine to the illness developed by the two Austrian individuals

South Korea approved AstraZeneca's (AZN LN) COVID-19 vaccine for those aged 65 and over. (Newswires)

French European Affairs Minister expects the Johnson & Johnson (JNJ) COVID-19 vaccine to receive European approval today. (Newswires)

EU is said to be ready to adopt an extension of COVID-19 vaccine export control to the end of June, sources state. (Newswires)

ASIA

Asia-Pac bourses traded mostly positive as the region built upon the somewhat mixed performance stateside where the DJIA posted fresh record highs whilst tech suffered from a continued rotation into value. ASX 200 (Unch.) opened higher with strength seen in airlines and tourism-related stocks after Australia’s government unveiled a AUD 1.2bln stimulus package focused on tourism including subsidized airfares for 800k domestic flights, although the gains in the index were later pared amid underperformance in tech and losses in the top-weighted financials sector as yields eased. Nikkei 225 (+0.6%) traded positive with exporters underpinned by a predominantly weaker currency and the KOSPI (+1.9%) was among the outperformers after strong early trade figures for this month which showed exports rose 25.2% Y/Y and imports increased by 31.4% Y/Y during the first 10 days in March. Hang Seng (+1.7%) and Shanghai Comp. (+2.4%) were also lifted after US and Chinese officials agreed to conduct a 2-day summit next week in Alaska where Secretary of State Blinken and White House National Security Advisor Sullivan will meet with Chinese Foreign Minister Wang Yi and Director of the Central Foreign Affairs Commission Yang Jiechu in what will be the first in-person meeting between US and Chinese senior representatives under the Biden administration, while the latest data releases from China also provided encouragement in which both New Yuan Loans and Aggregate Financing topped estimates. Finally, 10yr JGBs were initially subdued amid gains in stocks and with T-notes pulling back in the aftermath of a lacklustre 10yr government bond auction in US, although 10yr JGBs later gained on return from the lunch and following mixed results at the 20yr JGB auction which printed a higher b/c but weaker accepted prices.

PBoC injected CNY 10bln via 7-day reverse repos with the rate kept at 2.20% for a net neutral daily position. (Newswires) PBoC is expected to set USD/CNY mid-point at 6.5025 (prev. 6.5106)

US Secretary of State Blinken said the US will take steps against "egregious violations" of human rights in Hong Kong. (Newswires)

US and China semiconductor associations are to set up a work team and will communicate on export curbs, according to the China Semiconductor Industry Association. (Newswires)

South Korea March 1st-10th Exports rose 25.2% Y/Y, Imports rose 31.4% Y/Y and Trade Balance was at a deficit of USD 1.1bln. (Newswires)

US-China Alaska meeting to take place on March 18th-19th. (Newswires)

Chinese Premier Li says that employment pressure in China is still big in 2021; China's growth target of over 6% is not low and aims to guide expectations; will guide financial institutions to surrender profits. China and US should conduct dialogue on multiple levels. (Newswires)

BoJ could tweak its three-tier deposit system at its upcoming meeting to exempt a larger portion of reserves from negative rates, according to sources; debate whether the 10yr JGB yield should be allowed to move around the 0% target, though the near-term focus will be to keep yields stably low. (Newswires)

US

The initial USD 1.5bln US infrastructure and climate proposal (initially rejected by Mitch McConnell) will probably be the “starting point” for the House’s infrastructure package this year — and then go higher from there, according to a House source; Biden campaigned on a USD 2tln infrastructure-climate plan, but already there’s talk among Democrats about going as high as USD 4tln. The bigger the number, the harder it will be to garner GOP support. (Politico)

US Treasury Secretary Yellen said it was a pivotal day for the US economy and we are now charting a very different course out of the crisis, while she added that this law will help clear away the immediate crisis in front of us and expects the US could reach full employment by as soon as next year. Furthermore, Yellen stated that the Treasury team will be doing everything it can to accelerate the recovery and it was also reported that the Treasury and IRS are working to get stimulus payments sent out this month, while White House Press Secretary Psaki later commented that Americans should receive stimulus checks this month and that President Biden wants the increase in child tax credit to be permanent. (Newswires)

US, Japan, Australia, India 'Quad nations' are to cooperate on rare earth metals procurement, according to Nikkei; to be discussed and expected to be confirmed during a meeting on Friday, could also see agreements on COVID-19 vaccines as well. (Nikkei)

UK/EU

UK RICS Housing Survey (Feb) 52 vs. Exp. 45.0 (Prev. 50.0, Rev. 49)

Over a third of UK manufacturers are said to have lost revenue since the UK left the EU and 74% of businesses are facing delays with exports and imports, according to a survey of over 200 leading industrial companies by manufacturing trade body Make UK. (FT/Guardian)

UK Economic Secretary Glen says the UK is planning a sweeping review of financial markets post-Brexit. (Newswires)

ECB's PEPP is said to be the target of another suit at a top court in Germany; suit was filed by 16 individuals on March 8th. (Newswires)

The Polish government has requested the CJEU examine the rule of law conditionality stating that "The EU has no competence to define what the rule of law is and to examine how Member States respect that concept". (Newswires)

EQUITIES

Stocks in Europe see more of a mixed picture (Euro Stoxx 50 +0.2%) following a broadly positive open amid a similar APAC handover and in the run-up to the ECB confab (full preview available in the Research Suite). US equity futures meanwhile see more pronounced gains with the tech-laden NQ (+1.6%) outpacing the ES (+0.7%), RTY (+0.6%) and YM (+0.3%) as yields ease, with the US 10yr sub-1.50% at the time of writing. One potential reason for the firmer State-side performance could be the stimulus expected to be injected into the economy soon as the House unsurprisingly passed the relief bill last night. On that note, a recent Deutsche Bank survey of 430 retail investors found that on average, they plan to put 37% of stimulus checks into equities - with this package's checks amounting to USD 400bln in direct payments of USD 1,400 per person. Back to Europe, sectors are mixed with Banks lagging as they bear the brunt of the pullback in yields, closely followed by Auto names. On the flip side, Tech, Basic Resources and Travel & Leisure reside at the top of the pile, with the former in-fitting with the outperformance in the NQ future with some tailwinds potentially emanating from reports that the US and China semiconductor associations are to set up a work team and will communicate on export curbs - which lifted chip names in the overnight session. Overall, sectors do not provide much of a risk bias. Onto individual movers, SAP (+0.4%) has conformed to the broad rise in tech after being initially dented by Oracle (-4.5% premkt.) whose shares slumped post-earnings. AstraZeneca (-2.1%) meanwhile has been grinding lower following reports that the Danish Health Authority has temporarily halted the use of the AstraZeneca COVID-19 vaccine due to serious cases of blood clots - following two similar events reported in Austria. Credit Suisse (-2.4%) is pressured after Bronte Capital Management said it has placed a ‘reasonably sized’ short against the Co., due to expectations of potential client compensation relating to Greensil funds and the substantial losses experienced. While EDF (+6.0%) is bolstered as sources stated that French and EU authorities are continuing their discussion over the Co’s restructuring which are to enter a ‘make or break’ period shortly and look to complete by end-March. Finally onto earnings, Rolls Royce (+2.6%) trades firmer despite the detrimental COVID impact on earnings, as the group highlighted abundant liquidity and a more constructive outlook. Other earnings-related movers include Pirelli (-1.0), Traton (+0.2%), and K+S (+2.4%).

EU regulators are reportedly struggling to gather enough evidence to bring forward antitrust charges against Amazon (AMZN) in-spite of two-years work on the case; due to issues with understanding how the Co’s algorithm functions. (FT)

FX

DXY - The Dollar’s demise may not have been quite as quick or dramatic as its recent resurgence, but from a technical standpoint the loss of support for the index at 91.740 could be telling as the DXY eyes 91.500 to the downside having topped 92.500 just 2 days ago. However, salvation may come from the latest IJC updates and/or externally if the ECB manages to talk down yields with enough dovish intent or policy guidance, assuming no actual measures designed to maintain favourable financing conditions. Barring that, the Greenback may have to rely on option expiries for respite unless US Treasuries revert to bear-steepening before the long bond auction that follows details of next week’s 20 year and 10 year TIPS issuance.

AUD/EUR/JPY - All benefiting at the Buck’s expense, albeit to varying degrees, with the Aussie back up above 0.7750, and also drawing impetus from the CNH reclaiming 6.5000+ status in wake of a firmer PBoC midpoint fix overnight. Similarly, the Euro has rebounded through 1.1950 in advance of the ECB and the Yen is attempting to breach 108.50 again amidst yet another BoJ source report suggesting that more tolerance around the 0% central target for 10 year JGBs may be looked at in the upcoming policy review along with bigger reserve exemptions from negative rates. Meanwhile, hefty 1.2 bn option expiry interest at 108.50 may underpin Usd/Jpy, while Eur/Usd could be hampered by 1.1 bn rolling off between 1.1915-10 at the NY cut having faded into last Friday’s pre-NFP high (1.1977) and Aud/Usd will at least be aware of 1.1 bn spanning 0.7725-10 even though the spot price is considerably higher at present.

NZD/CHF - The Kiwi is looking much more comfortable on the 0.7200 handle vs its US counterpart in advance of NZ’s manufacturing PMI, and could derive additional impetus via any Aud/Nzd cross flows related to 2.2 bn option expiries at the 1.0730 strike given several attempts to the upside, but no decisive break above 1.0750. Elsewhere, the Franc has clawed back more losses to probe 0.9250 and bounce from around 1.1100 against the Euro after upgrades to Swiss SECO Government forecasts for 2021 and 2022 CPI.

CAD/GBP - Firmer crude prices have helped the Loonie breach 1.2600 vs its US rival as attention switches from a rather bland BoC event to the Economic Progress Report delivered by Deputy Governor Schembri, while Sterling has secured a firmer foothold above 1.3900 and is looking to extend through 1.3950 awaiting Friday’s raft of UK data.

EM - A wider than anticipated Turkish current account deficit and the Industry Minister not ruling out more deals to buy Russian jets have not prevented the Try from recouping more losses, in the same vein as the Zar that has rebounded through 15.0000 irrespective of mixed releases in the form a much bigger than expected fall in SA mining production vs wider than consensus current account surplus. Conversely, the Rub is underperforming despite Russia’s Finance Ministry estimating an extra Rouble 2+ tn budget revenue this year based on oil and the currency at current levels (Brent circa Usd 68.50/brl and Usd/Rub around 73.7700).

Notable FX Expiries, NY Cut:

• EUR/USD: 1.1800 (1.2BLN), 1.1900 (800M), 1.1910-15 (1.1BLN), 1.1995-1.2000 (630M)
• AUD/USD: 0.7600 (1.7BLN), 0.7710-25 (1.1BLN), 0.7950 (630M)
• AUD/NZD: 1.0730 (2.2BLN)
• USD/JPY: 107.75 (1.8BLN), 108.50 (1.2BLN)

FIXED

After forging fresh highs for the week and prodding or probing key levels, debt futures have lost momentum in similar fashion to the midweek pull-back approaching midday and potentially market-moving events, but this time just keeping heads above parity. Bunds are holding within a 171.30-77 range, while Gilts just got a little closer to parity at 128.82 (+1 tick vs +33 ticks at best) and the 10 year T-note is near the middle of 133-00+/132-14 extremes awaiting jobless claims and the 30 year sale that rival the ECB, OPEC MOMR and BoC EPR for headline billing.

COMMODITIES

OPEC MOMR to be released at 13:30GMT/08:30EST today. (Newswires)

WTI and Brent front month futures have seen somewhat of a choppy session thus far, whereby the complex traded firmer but off best after tracking sentiment and the softer Buck as news-flow for the complex remains light -with some positive overnight omens potentially emanating from the confirmation of the US-China meeting next week, which will set the tone for bilateral relations. However, prices have since given up some of those gains despite a lack of fresh catalysts. Newswires yesterday caused some confusion across the crude complex as Russian Deputy PM Novak's comments were misinterpreted whereby the original headline suggested a sudden substantial output hike in May, although newswires later clarified the comments which were in-line with the OPEC+ accord. WTI Apr and Brent May reside just under USD 65.00/bbl and 68.50/bbl respectively, awaiting the OPEC monthly oil market report (tbc) and the ECB policy meeting. Elsewhere, spot gold and silver inversely track the Buck amidst a slow news morning, with the yellow metal inching closer towards USD 1,750/oz (vs low USD 1,722/oz). In terms of base metals, copper is back on the grind higher amid the weaker Dollar, constructive risk tone and the US House passage of the US stimulus bill. Dalian iron ore meanwhile jumped over 5.5% follow two consecutive sessions of substantial losses as Australian shipments of the base metal fell to a two-year trough.

Qatar set April marine crude OSP at Oman/Dubai + USD 0.90/bbl and land crude OSP at Oman/Dubai + USD 0.75/bbl. (Newswires)