• Asian equities traded with a mild positive bias following on from the S&P 500 and Nasdaq 100 notching fresh record highs
• White House COVID Coordinator Zients said the US has more than enough Pfizer and Moderna vaccines to maintain the current pace of vaccinations
• In FX, the DXY remains subdued beneath 92.00, EUR/USD and GBP/USD maintain 1.19 and 1.37 status respectively
• The RBNZ kept the OCR at 0.25%, LSAP at NZD 100bln and maintained the FLP as expected
• Looking ahead, highlights include Swedish CPI, IEA MOMR, US import/export prices, DoEs, ECB's de Guindos, Panetta, Lagarde, Schnabel, Fed's Kaplan, Powell, Williams, Clarida, Bostic, BoE's Haskel, supply from the UK & Germany, earnings from JP Morgan, Wells Fargo and Goldman Sachs

CORONAVIRUS UPDATE

US COVID-19 cases +61,526 (prev. +49,409), deaths +569 (prev. +328), first vaccine dose administered 192mln (prev. 190mln), those fully vaccinated 75.32mln (prev. 74mln). (Newswires)

White House COVID Coordinator Zients said the US has more than enough Pfizer (PFE) and Moderna (MRNA) vaccines to maintain the current pace of vaccinations and that people are already being rescheduled from JNJ to other vaccines, while NIH's Fauci stated the pause of the J&J COVID vaccine is to enable FDA and CDC time to investigate and notify doctors and that it appears pause of JNJ vaccine will last days to weeks rather than weeks to months. (Newswires)

Johnson & Johnson said it made a decision to proactively delay the rollout of its COVID-19 vaccine in Europe and will pause vaccinations in all Janssen COVID-19 clinical trials in Europe while it updates guidance for investigators and participants. (Newswires)

Moderna (MRNA) said new pre-clinical data demonstrated variant-specific booster vaccine candidates raised neutralizing titers against variants of concern, while cases from its Phase 3 study showed strong efficacy of more than 90% after 6 months from the 2nd dose. (Newswires)

Pfizer (PFE) CEO stated the Co. increased production of its COVID-19 vaccine and can deliver 10% more doses to the US by end-May than previously agreed, while the CEO added the Co. will supply the complete 300mln vaccines to the US by end-July which is two weeks early. Furthermore, Pfizer later stated that it found no evidence of a risk of arterial or venous thromboembolic events from the use of its vaccine. (Newswires)

Turkish President Erdogan said he has to impose stricter coronavirus measures with cases and deaths rising, while they are going for a partial closure over COVID cases and will have to take much stricter measures if the current measures do not work. Furthermore, Turkey will impose intercity travel restrictions and lockdowns from 7pm-5am every weekday. (Newswires)

ASIA

Asian equity markets traded with a mild positive bias following the similar performance stateside where the S&P 500 and Nasdaq 100 notched fresh record highs although the DJIA and financials lagged alongside a decline in yields as participants digested firmer but not runaway inflation. Furthermore, the early pressure from the JNJ vaccine pause due to rare blood clots, gradually dissipated in late Wall St trade after White House COVID Coordinator Zients noted the US has more than enough Pfizer and Moderna vaccines to maintain the current pace of vaccinations and the FDA also suggested the pause is only expected to be a matter of days. ASX 200 (+0.6%) reclaimed the 7,000 level with gold miners front-running the advances after a rebound in the precious metal towards the USD 1750/oz level and with tech inspired by strength in US counterparts, while strong data added to the constructive tone after Westpac Consumer Confidence rose to its highest in more than a decade. Nikkei 225 (-0.3%) was negative with sentiment dampened by a firmer currency and after a surprise contraction in Machinery Orders which declined by the fastest pace M/M since April last year, although Toshiba shares continued to rally in Japan on interest from private equity with KKR reportedly planning to outbid CVC’s JPY 5,000 offer and Brookfield is also said to be eyeing making a formal approach for the Co. Hang Seng (+1.4%) and Shanghai Comp. (+0.2%) were positive amid strength in the blue chip tech names following the recent talks with China’s market regulator whereby internet platform companies pledged to avoid anti-competitive behaviour, while Geely Auto was the biggest gainer in the Hang Seng as it explores several SPAC deals to float EV maker Polestar and is said to be considering raising USD 1bln to help expand its Lotus Cars into China’s EV market. Finally, 10yr JGBs were higher as they tracked the upside in T-notes and with the Japanese benchmark yields slightly lower, while weak Machinery Orders data and the BoJ presence in the market for nearly JPY 1.4tln in 1yr-10yr maturities contributed to the tailwinds for JGB prices.

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 6.5362 vs exp. 6.5366 (prev. 6.5454)

PBoC is to conduct stress tests on more than 4,000 banks in China this year to prevent risks and will conduct stress tests on climate change-related financial risks at an appropriate time, according to a central bank publication. (Newswires)

US President Biden is to send a delegation of a former Senator and two former senior State Department officials to Taiwan to signal the US commitment to Taiwan and its democracy, while it was reported that the unofficial US delegation visiting Taiwan will meet with President Tsai. There were also comments from China's Taiwan Affairs Office which urged the US to adhere to the One China principle and properly handle the Taiwan issue, while China added that the US visit will only add to cross-strait tension and that Chinese military exercises in the Taiwan Strait are necessary to address the current situation and safeguard national security. (Newswires)

Monetary Authority of Singapore kept its FX-based policy settings unchanged as expected with 0% per annum rate of appreciation maintained, while the width and centre of the currency band was also unchanged. MAS assessed an accommodative policy stance remains appropriate as core inflation is expected to remain low this year but revised forecast for 2021 CPI all items to 0.5%-1.5% from -0.5%-0.5% and stated that GDP growth is likely to surpass the upper end of the official 4%-6% forecast. (Newswires)

• Singapore GDP (Q1) Q/Q 2.0% vs. Exp. 1.7% (Prev. 15.9%)
• Singapore GDP (Q1) Y/Y 0.2% vs. Exp. -0.2% (Prev. -0.4%)
• Japanese Machinery Orders (Feb) M/M -8.5% vs. Exp. 2.8% (Prev. -4.5%)
• Japanese Machinery Orders (Feb) Y/Y -7.1% vs. Exp. 2.3% (Prev. 1.5%)

UK/EU

UK PM Johnson’s European Adviser Lord Frost will travel to Brussels to meet with EU Commission VP Sefcovic following his invitation, while Sefcovic had earlier commented that the UK is engaging in NI Protocol talks "in good faith". (RTE)

FX

In FX markets, the DXY remained subdued after it recently slipped below the 92.00 level amid softer yields and in the wake of yesterday's CPI release. In addition, commentary from Fed officials remained dovish as Fed’s Harker viewed the recovery as a little fragile and stated that pulling back accommodation does not make sense right now, while Fed's Rosengren sees no urgency for the Fed to raise interest rates even with a positive economic outlook and implied that there is going to be some larger readings for inflation but suggested not to overreact to it. EUR/USD gained on the back of the USD weakness to test its 50DMA at 1.1962 despite recent soft ZEW data and GBP/USD also extended above 1.3750 as it picked itself up from yesterday’s tumultuous price action. USD/JPY was subdued owing to the USD woes and after giving up the 109.00 status, while antipodeans were firmer in which NZD/USD eventually outperformed despite the initial muted reaction to the RBNZ meeting where the central bank kept the OCR at 0.25%, LSAP at NZD 100bln and maintained the FLP as expected. Furthermore, the RBNZ reiterated it is prepared to lower the OCR if required and that the outlook remains highly uncertain but noted that the planned trans-Tasman bubble should support incomes and employment. SGD also gained against the greenback after the Monetary Authority of Singapore left its FX-based policy unchanged with a 0% per annum rate of appreciation as expected and which coincided with stronger than expected Q1 GDP data.

RBNZ maintained the OCR at 0.25%, LSAP at NZD 100bln and kept the Funding for Lending Programme unchanged as expected, while it reiterated it is prepared to lower the OCR if required and that it maintain current policy settings until it is confident inflation and employment targets are achieved. Furthermore, it noted that economic activity slowed over the summer months in New Zealand and that the outlook remains highly uncertain but stated that the planned trans-Tasman bubble should support incomes and employment. (Newswires)

Brazilian Central Bank Governor Campos Neto said the long end of the yield curve reflects fiscal risk although BCB focus is on inflation and they remain vigilant on sources of inflation expectations being contaminated. Furthermore, he stated that stimulative conditions are still required and that they need to move rates but will remain on stimulative ground, while he still sees a 75bps increase at the next meeting although nothing is written in stone. (Newswires)

• Australian Westpac Consumer Confidence Index (Apr) 118.8 (Prev. 111.8)
• Australian Westpac Consumer Confidence (Apr) 6.2% (Prev. 2.6%)

COMMODITIES

WTI crude futures mildly outperformed and rose above the USD 60.50/bbl level amid the mostly positive risk tone overnight and following a larger than expected draw for crude stockpiles in the private sector inventory report. Gold remained afloat due to the softer greenback and post-CPI data but with further upside capped by resistance ahead of the USD 1750/oz level, while copper prices were flat and largely ignored the positive tilt in risk appetite.

US Private Inventory Data (w/e April 9th): Crude -3.6mln (exp. -2.9mln), Cushing +0.9mln, Gasoline +5.6mln (exp. +0.8mln), Distillate -3.0mln (exp. +1.0mln)

GEOPOLITICAL

US President Biden is to announce a withdrawal of US troops from Afghanistan by September 11th, while Britain is also reportedly to remove almost all troops from Afghanistan. (Newswires/Times)

White House said it expects the US relationship with Russia to remain a challenge but hopes it can become stable and predictable, while it also hopes the US and Russia could work in unison on the Iran nuclear deal. Furthermore, the White House stated the US takes Iran's announcement to begin enriching uranium seriously and it is definitely concerned about Iran's 'provocative' announcement but expects negotiations to continue. (Newswires)

White House National Security adviser reaffirmed US commitment to Israel's security and ensuring Iran will never obtain a nuclear weapon in a meeting of the US-Israel consultative group, while he invited his counterpart to US for follow-up talks. (Newswires)

US

Treasuries were bid across the board, with the belly leading the charge - as swiftly as it recently led losses - while the solid bond auction added tailwinds for duration. At pixel time, in wake of the NY Fed purchase schedule announcement, 2s -1bps at 16.1bps, 5s -5.2bps at 0.840%, 10s -5.1bps at 1.625%, 20s -3.7bps at 2.204%, and 30s -3.9bps at 2.309%; TYM1 volumes were average. Inflation breakevens were little changed. SOFR unch. at 1bps. NY Fed RRP op demand at USD 37.543bln across 16 bidders (prev. 30.221bln across 15 bidders). US sold USD 24bln in 30-year bonds: Stop Through 1.8bps. Bonds were soft overnight, with a heavy slate of EGB issuance adding spillover pressure from the continent. However, the announcement of J&J vaccine pause, and a firm, but not runaway US CPI print saw Treasuries well bid in the NY morning, with desks noting a heavy short unwind. Furthermore, an USD 8bln World Bank issuance in belly tenures, which was expected to swap, saw heavy receiving flows in the intermediate swap space that filtered into Treasury buys, according to IFR. The solid 30-year bond auction provided additional strength across the TPLEX too amid supply indigestion concerns taking a knock: tailing the WI by nearly 2bps (vs average on the screws), covering more than average, and a rise in participation from the non-dealer community which is a positive. Some of the bid was likely part anticipation for the NY Fed's latest purchase schedule, but that ultimately saw no tweaks - against some expectations for more allocation to the relatively weak 20yr maturity - and duration saw some marginal downside in wake of the copy-paste job from the NY Fed, with the 20s hardest hit, unsurprisingly. T-note (M1) futures settled 14+ ticks higher at 132-02+.

Fed Discount Rate Minutes stated that Directors of all 12 regional Fed districts sought no discount rate move and that overall, Federal Reserve Bank Directors reported that the economic recovery had gained some momentum over recent weeks due largely to vaccine developments and the prospect of additional fiscal support, while several directors observed that the housing market remained strong and noted increases in mortgage originations and residential construction. Furthermore, a pickup in consumer spending occurred in certain Districts, with some directors noting gains in apparel sales as well as an uptick in openings of discount stores and activity in other sectors, including dining and hospitality, remained weak. (Newswires)

Fed's Harker (non-voter) said the velocity of inflation matters not just the level and that there are lots of reasons that are keeping prices down including technology and globalisation. Harker thinks the recovery is a little fragile and that pulling back accommodation does not make sense right now, while the Fed has time to move because inflation is not running out of control. Harker also suggested the news on the JNJ vaccine could fuel more vaccine hesitancy and stated that if we do not get herd immunity, we are not going to get the economy fully back. (Newswires)

Fed's Rosengren (non-voter) said he sees no urgency for the Fed to raise interest rates even with a positive economic outlook and that as long as inflation is in the 2.0%-2.5% range, he would not be particularly concerned, while he reiterated that there is going to be some larger readings but does not think we should overreact to that. (WSJ)

US Senate Republican Leader McConnell said he doesn’t think there will be any support among Senate Republicans to undo the 2017 tax law as Biden seeks a corporate tax hike to help pay for the huge infrastructure package. (Newswires)