• European bourses are contained in relative proximity to the unchanged mark while US futures are faring better with Nasdaq and Russell 2000 the outperformers, +0.7%
• DXY is under pressure but has picked up from lows with antipodeans & JPY benefitting while other peers are essentially unchanged
• US government completed its intelligence review of the alleged misconduct by Russia related to the SolarWinds hack and election interference, while the US may announce retaliatory measures in the near future
• Looking ahead, highlights include ECB minutes, US IJC, BoE's Haldane, Fed's Bullard, Powell, Kashkari

CORONAVIRUS UPDATE

US COVID-19 cases +61,258 (prev. +62,878), deaths +781 (prev. +353), vaccines administered 171mln (prev. 169mln), those fully vaccinated 64.423mln (prev. 63mln), while US CDC Director Walensky commented that vaccinations could be expanded to those aged 12 and above by May. (Newswires)

Furthermore, reports stated that EU members could adopt a joint AstraZeneca recommendation and Italy is preparing to recommend the vaccine for use in people over the age of 60, while Spain is to only give the AstraZeneca vaccine to people over the age of 60. (Newswires)

Moderna (MRNA) highlights the publication of its antibody persistence data in which it stated that antibodies elicited by its COVID-19 vaccine persisted through six months after the second dose and studies monitoring immune responses beyond six months are ongoing, while it is also pursuing a clinical development strategy against emerging variants. (Newswires)

UK is reportedly expected to surpass the COVID-19 herd immunity threshold on Monday, according to Telegraph citing dynamic modelling by University College London. (Telegraph) Separately, The Telegraph reports that the potential use of COVID passports could have "sunset" clauses in order to reassure Tory rebels that such a move would be temporary. (Telegraph)

Japan is considering stronger COVID-19 controls in Tokyo and other cities. (Sankei)

Australian PM Morrison says they no longer have a timetable for when all Australian's will be vaccinated. (Newswires) Original plan was for this to occur by October

ASIA

Asia-Pac bourses traded mixed-to-positive as the region took its cue from Wall Street where the major indices finished relatively flat after having meandered near their record levels following an anticlimactic FOMC Minutes release, although US equity futures gradually made headway after-hours. ASX 200 (+1.0%) advanced with resilience seen across all industries led by strength in the blue-chip miners and big 4 banks to lift the index briefly above the 7,000-milestone. Nikkei 225 (-0.1%) was subdued amid reports Japan is considering stronger COVID-19 controls in Tokyo and other cities but with losses cushioned by recent M&A news including the buyout offer for Toshiba and with Hitachi said to be in discussions with Bain regarding a potential sale of Hitachi Metals which boosted shares in the latter by nearly 5.0%, while the KOSPI (-0.1%) lacked direction as participants reflected on the stunning defeat by South Korea’s ruling Democratic party at the Seoul and Busan mayoral elections and as domestic COVID-19 cases continued to increase. Hang Seng (+1.2%) and Shanghai Comp. (+0.1%) were varied with sentiment in the mainland clouded by ongoing tensions in the South China Sea after the US warned China of its increasingly aggressive moves, while Hong Kong was underpinned by strength in the tech sector aside from industry heavyweight Tencent which was pressured on reports its largest shareholder plans to offload around USD 15bln of Co. shares. Finally, 10yr JGBs were lacklustre after the indecisive trade seen in USTs and as support from the firmer demand at the 5yr JGB auction dwindled, while Australian yields were slightly softer in the belly amid the RBA operation for AUD 2bln of government bonds.

PBoC injected CNY 10bln 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 6.5463 vs exp. 6.5497 (prev. 6.5384)

US Senate Commerce Committee is set to announce the first hearing on the "endless frontier act" dealing with China for April 14th, according to a notice. (Newswires)

US

US Senate Republican Leader McConnell said there could be a way forward on an infrastructure bill targeted at roads and bridges without revisiting 2017 tax cuts. (Newswires)

US Democrat Senator Manchin said he would not vote to eliminate or weaken the filibuster and he does not believe the reconciliation process should replace the regular order in the Senate. (Newswires)

US President Biden is reportedly to unveil executive action regarding guns on Thursday and the DoJ is to propose a rule on 'ghost guns' as part of package of executive actions on firearms. (Newswires)

UK/EU

ECB's Lane reiterated that favourable financing conditions must be maintained and that monetary policy must get us closer to the inflation target. While, Knot echoed remarked he provided yesterday which were reiterated by Holzmann shortly after before Rehn spokes on being prepared to recalibrate (PEPP) as is necessary but that it is better to be safe than sorry. Finally, Lagarde release remarks ahead of an appearance at the IMF, in which she reiterated the March meeting and calling for fiscal & monetary to continue to complement each other. (Newswires/CNBC)

UK Markit/CIPS Construction PMI (Mar) 61.7 vs. Exp. 54.6 (Prev. 53.3)

• UK RICS Housing Survey (Mar) 59 vs. Exp. 55.0 (Prev. 52.0)

EU IHS Markit Construction PMI (Mar) 50.1 (Prev. 45); German Construction PMI (Mar) 47.5 (Prev. 41)

GEOPOLITICAL

US government completed its intelligence review of the alleged misconduct by Russia related to the SolarWinds hack and election interference, while the US may announce retaliatory measures in the near future. (Newswires/Politico)

Russia's Kremlin, when asked about possible US sanctions, says they have to be ready for a potential worst case scenario given the hostile policy from the US; partners in Nord Stream 2 gas pipeline are still aiming to complete the project. (Newswires)

Saudi-led coalition intercepted an explosives-laden drone launched by the Houthis towards Khamis Mushait. (Newswires)

Explosions were reported over Damascus, Syria and Syrian air defences were launched to confront Israeli aggression. (Newswires)

EQUITIES

Stocks in Europe trade mostly higher, but with mild gains and off the best levels seen at the cash open (Euro Stoxx 50 +0.2%) as the region mimics a similar sentiment seen overnight and during US hours yesterday. US equity futures meanwhile see more of an advance with the NQ (+1.0%) and RTY (+0.8%) leading the gains. Fresh catalysts during European hours have been light, with a number of ECB speakers sticking to the script ahead of the ECB March accounts later today, whilst Fed Chair Powell is also poised to make an appearance at the IMF panel. European bourses see mostly broad-based gains with the exception of the IBEX (-0.1%) - weighed on by its exposure to Banks and Travel & Leisure, which reside as sectoral laggards in the region alongside Oil & Gas and Insurance. Meanwhile, some of the more defensive sectors are faring better - with Healthcare, Consumer Staples and Utilities posting relatively stronger performances thus far. The tech sector in Europe is also supported amid the low yield environment and following the Tech performance on Wall Street yesterday, whilst participants for now shrug off source reports that Apple (+0.6% pre-mkt) has postponed some production of some MacBooks and iPads due to the global component shortage. Source added that a a portion of the component orders for the two devices have been pushed back to H2-2021 from H1. In terms of individual movers, KPN (+3%) holds onto gains amid reports that PE firms EQT and Stonepeak are said to be mulling a joint USD 15bln bid for KPN, reportedly at over EUR 3/shr. Elsewhere, Johnson Matthey's (+3.4%) trading updates bolstered the stock to the top of the Stoxx 600.

FX

USD - The Buck is softer vs most G10 rivals in wake of the latest FOMC policy meeting minutes that added little new in terms of insight or guidance, but reaffirmed the message that there is some way to go before inflation and jobs hit target. Hence, the focus turns swiftly to Fed chair Powell at the IMF for his more up-to-date assessment of developments and the economic recovery outlook, especially given last Friday’s big US headline payrolls beat and a record high services ISM. On that note, the upcoming IJC release will provide an even more timely snapshot of the labour market ahead of his speech and comments from Bullard. Looking at the DXY, 92.500-000 continues to encapsulate trade following the break down from month end and earlier April highs in the index and Greenback overall, with underlying support forged from still relatively firm Treasury yields and a steeper curve in contrast to bullish-buoyant risk sentiment that is keeping the Dollar capped.

JPY - Having repelled more selling pressure and another attempt to fill bids into 110.00, the Yen is now trying to breach half round number resistance at 109.50 convincingly before setting sights on more levels to fill gaps left behind following the sharp spike in Usd/Jpy that hit 110.97 on March 31.

NZD/AUD - Also taking advantage of their US peer’s indecision, with the Kiwi and Aussie both surviving more concerted efforts to test round number and psychological support overnight when the general risk tone was fragile to stabilise around the middle of 0.7044-04 and 0.7648-03 respective ranges. Note, Nzd/Usd also had another downbeat business survey to contend with as ANZ sentiment soured and the activity outlook dipped, while Aud/Usd will be looking to the RBA’s FSR for some independent direction after unchanged policy and guidance from the Board earlier this week.

CHF/EUR/GBP/CAD - The Franc and Euro have lost momentum vs the Dollar, though remain rangebound between 0.9302-0.9275 and 1.1893-1.1861 after fleeting or false upside forays on Wednesday, but Eur/Usd may now be reliant on ECB minutes for direction and also conscious that hefty option expiry interest lies just above the 200 DMA at the 1.1900 strike (1.9 bn), while not that much less resides between 1.1850-40 (1.5 bn to be precise). Elsewhere, the Pound seems to be at the whim of Eur/Gbp moves again, as Cable pivots 1.3750 and derives little impetus from a stronger than expected UK construction PMI, while bulls and bears tussle over the cross within a 0.8657-21 range. Conversely, Friday’s Canadian employment report should provide the Loonie with direction given Usd/Cad’s current containment around the 1.2600 axis eyeing crude/commodity prices and the unfolding wave of COVID-19.

SCANDI/EM - The Sek has unwound some of its underperformance after mixed Swedish data, but the Rub remains under pressure amidst more punchy rhetoric from Russia in response to the threat of further US sanctions.

Notable FX expiries, NY cut:

FIXED

A grinding if not quite reluctant bid has seen Bunds rebound further off a fractionally firmer Eurex base to 171.90, but falling short of yesterday’s best and not really triggering stops in the order one might imagine when breaching a 50% Fib levels. Hence, a more cautious advance awaiting ECB minutes and US jobless claims before Fed chair Powell talks at the IMF and gets an opportunity to provide some fresh guidance hot on the heels of rather stale FOMC minutes. Meanwhile, Gilts are trying to nudge above their 128.25 Liffe intraday high in wake of a near 3 times oversubscribed 10 year DMO auction, albeit belatedly and US Treasuries are essentially coasting with the curve as flat as it has been for some while.

COMMODITIES

WTI and Brent front month futures have been trading choppy as has been the case recently pre-US entrance. The contracts saw a bout of fleeting upside in-spite of a lack of relevant news flow, which took the WTI contract to a high of USD 59.82/bbl (vs low USD 59.05/bbl) and its Brent counterpart to USD 63.34/bbl at best (vs low. 62.52/bbl). Participants will continue to keep COVID developments on the radar as the re-imposition of lockdown measures hamper demand recovery - with India and Canada seeing more dire situations as of late, whilst low vaccine uptake has also been cited as an issue in some regions. On the supply side, markets are on standby to see the return of supply in the upcoming months - however the unknown remains with Iran. Nuclear Deal talks are set to resume tomorrow and the US has stated that it is ready to lift some sanctions in a bid to salvage the JCPOA. Elsewhere, spot gold and spot silver glean support from the softer Buck as the former meanders just under USD 1,750/oz (vs low USD 1,736/oz) and the latter north of USD 25/oz (vs low 24.97/oz). Base metals are also bolstered by the weaker Dollar and gains across US futures, albeit LME copper has failed to hold above USD 9,000/t thus far.

Russia is to halt less refining capacity in Q2 than has been the case for the prev. two-years; April, to halt 858k BPD and in May this will average 637k BPD. (Newswires)

New Zealand ANZ Activity Outlook (Apr P) 16.4 (Prev. 16.6)

New Zealand ANZ Business Confidence (Apr P) -8.4 (Prev. -4.1)

EUR/USD: 1.1690-1.1700 (2.1 BN), 1.1725 (1.5BN), 1.1755 (704M), 1.1800 (1.9BN), 1.1840-50 (1.5 BN), 1.1900 (1.9BN)