• European bourses & US futures are somewhat mixed but largely contained, Euro Stoxx 50 -0.1%/ES +0.1%, with fresh fundamental drivers sparse
• The USD has been choppy throughout the morning extending to both fresh session highs and lows; currently, major peers are mixed while antipodeans continue to underperform
• European Medicines Agency expects to hold its AstraZeneca (AZN LN) press briefing at 15:00BST/10:00EDT
• Crude has been volatile throughout European hours, but within recent session ranges, seemingly without fresh fundamental catalysts
• Looking ahead, highlights include US final services & composite PMIs, ECB asset purchases & bi-monthly PEPP summary, DoEs, FOMC minutes, Fed's Evans, Kaplan, Barkin, Daly

CORONAVIRUS UPDATE

US COVID-19 cases +62,878 (prev. +40,680), deaths +353 (prev. +385), vaccines administered 169mln (prev. 167mln), those fully vaccinated 63mln (prev. 62.4mln). (Newswires)

European Medicines Agency expects to hold its AstraZeneca (AZN LN) press briefing at 15:00BST/10:00EDT. (Newswires)

US President Biden reportedly seeks all adults to be offered a COVID vaccine by April 19th and stated that the US is on course to surpass the target of 200mln vaccine shots in his first 100 days in office but added that new virus variants are spreading and moving quickly with cases increasing. (Newswires/CNN)

US CDC says cruises could restart with restrictions by the middle of Summer. (Newswires)

Moderna (MRNA) COVID-19 vaccine rollout in the UK is to begin with people in Wales to receive the vaccine from today. (Newswires) Elsewhere, a senior UK government adviser has suggested that the vaccine rollout for younger people should be paused until regulators have issued safety guidance for the AstraZeneca (AZN LN) vaccine. (Telegraph)

EU drug regulator is to commence an investigation into the Sputnik V COVID-19 vaccine around whether it adhered to ethical and scientific standards of ‘good clinical practice’ during the trial, amid reports that this is not the case, according to sources. (FT)

South Korea's COVID-19 daily infections increased by the most in 3 months with 668 new cases and the government stated there is an increasing possibility of a 4th wave of the virus. Elsewhere, Japan's Osaka prefecture is set to report a record high of more than 800 new daily infections. (Yonhap/Kyodo)

ASIA

Asian equity markets traded mixed following on from the flat performance on Wall St where most major indices consolidated after recently hitting fresh record highs and with a lack of solid macro drivers, as well as the looming FOMC Minutes ensuring a non-committal tone. ASX 200 (+0.6%) was positive as outperformance in real estate, gold miners and tech kept the index afloat but with gains limited by pressure in industrials and the largest-weighted financials sector, while Nikkei 225 (+0.1%) briefly gave back its early gains as the index succumbed to the JPY strength although there was also plenty of focus on Toshiba shares which were so far untraded with a glut of buy orders after reports of a USD 20bln buyout proposal from CVC Capital. KOSPI (+0.3%) remained positive following preliminary earnings from Samsung Electronics which reported Q1 operating profit rose 44% Y/Y to KRW 9.3tln as expected and with LG Electronics topping forecasts for its preliminary quarterly operating profit and revenue. However, the gains were only marginal as concerns of a 4th wave of the pandemic were stoked after daily infections increased by the most in three months and with by-elections taking place in Seoul and Busan which are a bellwether for next year’s Presidential Elections. Hang Seng (-0.9%) and Shanghai Comp. (-0.1%) were subdued after continued PBoC liquidity inaction and with the former suffering from holiday blues on return from the extended weekend as it gets its first opportunity to digest the recent reports of the PBoC instructing banks to curtail lending. Finally, 10yr JGBs were flat as they took a breather from yesterday’s gains but with prices kept afloat by the flimsy picture in Japanese stocks and with the BoJ also present in the market for JPY 710bln of JGBs with the majority in the belly, while it also offered to buy JPY 125bln of corporate bonds with 1yr-3yr maturities from April 12th.

PBoC injected CNY10bln via 7-day reverse repos with the rate at 2.20% for a net neutral daily position. (Newswires) PBoC set USD/CNY mid-point at 6.5384 vs exp. 6.5383 (prev. 6.5527)

Japanese chief government spokesman who stated that there are no talks between Japan and US about boycotting the Beijing Winter Olympics. (Newswires)

RBI kept rates unchanged with the Repurchase Rate kept at 4.00% and Reverse Repo Rate kept at 3.35% as expected, while the MPC maintained its accommodative stance which it will keep for as long as necessary to boost growth on a durable basis. RBI Governor Das noted that the inflation trajectory is subject to both upward and downward pressure and that COVID places uncertainty on the growth outlook in which lockdowns could delay a return to normal. Furthermore, he stated that fiscal and monetary authorities stand prepared to act in a coordinated manner and stated that the RBI will support the market through adequate liquidity with measures available in the tool kit and will put in place a secondary market G-Sec acquisition programme, as well as will commit to a fixed amount of open market operations. (Newswires)

US

Fed's Barkin (voter) said more jobs will return as the US economy reopens and that he expects a strong spring and summer. (Newswires)

Fed's Kaplan (non-voter) says it is not the time for the central bank to pull back on its support of the economy, but paring stimulus when the economy meets the Fed's goals will be important to keep recovery on track, all things equal, he is going to be much more willing to be accommodative or highly accommodative in the months and years ahead in order to achieve our goals. Upbeat on the economy. (Newswires)

US President Biden said the Fed is independent and he will not do the types of things that were done in the last administration in relation to the Fed. (Newswires)

G20 finance leaders want FX rates to reflect underlying economic fundamentals and note that FX flexibility can facilitate adjustment of economies; leaders warned of premature withdrawal of stimulus, according to a draft. Commit to deal on global rules for taxing Cos, namely tech giants, by mid-year. (Newswires)

UK/EU

ECB's Knot (hawk) says that if the ECB's baseline forecast holds up, the Bank can begin phasing out PEPP as of Q3 and conclude purchases in March 2022, has been an increase in short-terms growth risks but there is good reason to expect a robust recovery in H2. Comfortable with nominal yield increases if driven by better inflation and growth prospects and does not see need for modifying the likes of forward guidance or APP. (Newswires)

EU Markit Composite Final PMI (Mar) 53.2 vs. Exp. 52.5 (Prev. 52.5); Services Final PMI (Mar) 49.6 vs. Exp. 48.8 (Prev. 48.8) UK Markit/CIPS Services PMI Final (Mar) 56.3 vs. Exp. 56.8 (Prev. 56.8); Composite PMI Final (Mar) 56.4 vs. Exp. 56.6 (Prev. 56.6)

GEOPOLITICAL

Turkish Opposition Leader Klitschko has called on Turkish President Erdogan to hold early elections, via Al Arabiya. (Twitter)

Russia's Kremlin says RUB stability does not affect the overall economic stability; Kremlin says it will keep military forces and hardware near border with Ukraine as long as it sees fit. (Newswires)

EQUITIES

European equities have maintained the mixed picture portrayed at the cash open (Euro Stoxx 50 -0.1%) following the similar performance seen in APAC markets. US equity futures meanwhile remain contained in sideways trade with the RTY narrowly lagging peers, although the depth of the price action is shallow as participants await upcoming catalysts. Back to Europe, a snapshot of the bourses' performances sees the core markets faring better than the periphery, with the UK's FTSE 100 (+0.8%) outpacing peers with the early aid of a softer sterling, whilst heavyweight BP (+2.7%) and mining giants continue to underpin the index. The SMI meanwhile resides in the red as pharma behemoths Novartis (-1%) and Roche (-0.8%) keep upside capped - with the former weighed on by a cancer research deal with Artios whereby the Co. will pay as much as USD 20mln initially but this could rise to a ceiling of USD 1.3bln. Subsequently, the downside in the Cos is exerting pressure on the broader healthcare sector which stands as the underperformer thus far. Sectors, in general, are mixed with no clear cyclical/defensive bias. Tech stands as the laggard despite favourable yield play and light news flow, with potential follow-through emanating from earning updates via Samsung Electronics and LG Electronics which saw both companies weaker in the aftermath. Elsewhere, the Real Estate sector is propped up as UK housing names are faring well - with Persimmon (+3%), Taylor Wimpey (+2.9%), and Barratt Developments (+2.0%) all towards the top of the UK benchmark. Travel & Leisure meanwhile continues to bear the brunt of lockdown woes, albeit Carnival (+4.3%) bucks the trend ahead of results despite extending its pause in cruises from US ports. In terms of individual movers, EDF (+8.5%) is bolstered by reports that the French state (cited by union sources) reportedly said the buyback of shares in EDF, held by minority shareholders, is seen at EUR 10bln in restructuring project. On the flip side Flutter Entertainment (-3.0%) trades at the foot of the Stoxx 600 as Fox filed an arbitration claim against the Co. as part of a dispute over the FanDuel platform. Shell (+0.5%) sees some modest gains following its Q1 update, whereby the giant said Adjusted Earnings are expected to be positive in Q1, but the Texas deep freeze and adverse currency effects are seen knocking off some USD 240mln from earnings. Finally, Credit Suisse (-0.6%) is back under pressure as sources close to Credit Suisse said the group not ruling out further management alterations as a result of the Archegos situation, Furthermore, reports state that the Co. could report losses related to Greensill of some CHF 1.4bln.

Japan's FSA and BoJ are said to investigate domestic financial institutions following the situation with Archegos Capital Management. (Nikkei)

FX

GBP - Not necessarily the biggest G10 mover or even net loser, but the Pound has been in the spotlight again and under pressure as Cable retreated through 1.3800 amidst what looked like further short covering and technical retracement in Eur/Gbp rather than anything negative or bearish for Sterling specifically. Indeed, the cross extended its rebound to circa 150 pips from Monday’s low before petering out around 0.8624 and ahead of several recent tops from late March below 0.8650 that could be pivotal in terms of the overall bear trend that has seen Eur/Gbp decline from 0.9085 on January 6 having already fallen sharply from 0.9230 less than a month before that (December 11 to be precise). Meanwhile, Cable met some underlying bids into 1.3770 and above a pivot point at 1.3760 that is guarding 1.3750 ahead of the April 1 base just below, and is back on the 1.3800 handle irrespective of minor downward tweaks to the final UK services and composite PMIs.

AUD/CAD/NZD/DXY - The non-US Dollars are bearing the brunt of relative stability in the Greenback and some other factors, like a worrying 3rd COVID-19 wave spreading across Canada and wavering risk sentiment amidst ongoing uncertainty over the AZN vaccine, but with the Aussie also unwinding some of its gains vs the Kiwi and Loonie treading cautiously into trade data plus Ivey PMIs. Aud/Usd and Nzd/Usd are both still pivoting half round numbers at 0.7650 and 0.7050 respectively, but Aud/Nzd has lost a bit of momentum after reaching 1.0875 and Usd/Cad is probing 1.2600 following no breach of the big figure below since March 22. However, the Buck remains mixed overall and the index is capped below 92.500 awaiting US data, FOMC minutes and Fed speakers within a 92.413-246 range that also incorporates potentially key chart levels in the form of 200 and 21 DMAs (at 92.380 and 92.304).

CHF/EUR/JPY - All narrowly mixed vs the Dollar, but the Franc marginally outperforming either side of 0.9300 as the Euro tests technical resistance at 1.1889 (200 DMA) in wake of broadly firmer than forecast and/or flash Eurozone services and composite PMIs plus hawkish-leaning PEPP talk from ECB’s Knot, and the Yen slips back after running out of steam into 109.50. At this stage, decent option expiry interest in Eur/Usd and Usd/Jpy looks too far from spot to influence direction, but for the record 1.1 bn rolls off at the 1.1850 strike, 1.2 bn between 1.1835-30 and 1.4 bn at 109.00.

EM - No respite for the Rub via latest RIA reports quoting the Foreign Ministry stating that Russia and the US are in talks about the former taking part in a climate summit, while the Try remains weak despite a dip in oil prices after Turkey’s opposition leader urged President Erdogan to call a snap election, according to Al Arabiya, and regardless of the latter expressing a determination to get CPI back down to sub-10%. Elsewhere, the Inr emerged softer following the RBI’s anticipated on hold rate verdicts as it also maintained an accommodative stance and extended its on tap TLTRO by a further 6 months and provided an extra Inr 500 bn in liquidity to all domestic financial institutions for new loans.

Turkish President Erdogan reiterates his determination to bring inflation to single digits and says 'God willing interest rates will fall to single digits'. (Newswires)

FIXED

Interestingly, 5 year German and UK issuance both managed to arouse enough sponsorship to keep auction covers the same or a tad higher than previous sales of the same tenor even though yields were mixed and less attractive in outright terms than they have been of late. Meanwhile, demand is clearly there for Italian syndications given tighter guidance compared to initial price indications and the fact that BTPs remain comfortably above 149.00. However, Bunds and Gilts are hovering below intraday peaks along with US Treasuries as attention switches to more DMO supply (Gbp 2 bn 2046 tap), US data, Fed speakers and the FOMC minutes.

COMMODITIES

WTI and Brent front month futures have seen a choppy session thus far after giving up APAC gains and some more in early European hours before reversing ahead of the US entrance, with the benchmarks currently firmer to the tune of 0.7% apiece at the time of writing at around USD 59.75/bbl (vs low 58.80/bbl) and USD 63.20/bbl (vs high 62.20/bbl). There have not been any specific headlines to drive price action although participants continue to weigh the recent fundamental drivers; namely, OPEC and COVID among others. Aside from the ongoing COVID-related demand risks, the supply-side sees uncertainty on the Iranian front as nuclear deal talks are underway this week following the first round of talks yesterday - which seemed to be sanguine, although Iran sticks to its stance that key sanctions need to be lifted for any developments. Talks are poised to resume on Friday with eyes on any potential rollback of Iranian sanctions, namely oil-related - although this is not expected. Moving on, the EIA STEO yesterday raised its 2021 world oil demand growth forecast by 180k BPD and cut the 2022 world oil demand growth forecast by 180k BPD, whilst also cutting US production forecasts for both years. Yesterday also saw the release of the weekly Private Inventory data, which showed a larger-than-expected draw in the headline figure, however, refined products saw large builds - traders will be eyeing the DoE's today with the headline forecasting a draw of 1.436mln bbls. Elsewhere, spot gold and silver are uneventful within recent ranges around USD 1,740/oz and USD 25/oz respectively as Dollar action is tracked. Turning to base metals, LME copper is softer and back below USD 9,000/t with traders citing rising inventories alongside softening demand in China. Dalian iron ore meanwhile closed the session higher by almost 2% with follow-through from record steel prices cited as a factor despite the recent curbs in China's top steel-making city of Tangshan. On this front, the city's government has asked domestic steel mills to conduct environmental assessments related to the production and processes, and mills who are unable to do so may face production halts or fines.

US Private Inventory Data (w/e April 2nd): Crude -2.6mln (exp. -1.4mln), Cushing -0.8mln, Gasoline +4.6mln (exp. -0.2mln), Distillate +2.8mln (exp. +0.5mln). (Newswires)

Kazakhstan Energy Ministry stated that March oil production was at 1.475mln bpd and that they will offset OPEC+ overproduction in the summer. (Newswires)