• European bourses are softer following the soured US sentiment though APAC indices managed to shrug this off, stateside futures are modestly firmer but contained
• USD has been pressured but is still holding above the 91.00 mark and as such yesterday's low for the DXY, to the modest benefit of major peers with little reaction seen on UK/EZ data this morning
• Flash PMIs beat across the board for the UK as the economy begins to reopen with EZ figures also strong and now all in expansionary territory
• Intel beat on top and bottom lines but are pressured with traders citing the falling profit margins and rising capital spending
• Japan's PM Suga has announced a state of emergency for Tokyo and three other areas
• Looking ahead, highlights include US flash PMIs, ECB's Lagarde. Earnings from Honeywell and American Express

CORONAVIRUS UPDATE

US COVID-19 cases +62,827 (prev. +61,229), deaths +875 (prev. 800), total vaccine doses administered 219mln (prev. 215.95mln), those fully vaccinated 89.246mln (prev. 87.59mln), while there also comments from US President Biden who said "we officially" reached the goal of 200mln vaccines. (Newswires)

WHO issued a statement of Strategic Advisory Group of Experts (SAGE) regarding immunization on continued review of emerging evidence regarding AstraZeneca (AZN LN) vaccines and stated it continues to support the conclusion that the benefits outweigh the costs, while further clarification of precautions and types of risk have been added. (Newswires)

Japan's PM Suga has announced a state of emergency for Tokyo and three other areas Prior to this, Economic Minister Nishimura said the government seeks a state of emergency for Tokyo, Osaka, Kyoto and Hyogo between April 25th-May 11th and wants to significantly cut the flow of people with stricter measures including asking certain businesses to close**. Nishimura added they will request establishments that serve alcohol to close during the emergency and big sporting events will be conducted without spectators, while they want to ask department stores bigger than 1,000 square metres to close. Furthermore, Nishimura said that experts approved the state of emergency plan and there were also comments from Finance Minister Aso that they are discussing support related to the state of emergency. (Newswires)

German Health Minister Spahn says that by early May, at least one in every four Germans will have received at least one COVID-19 vaccine, the emergency brake to combat COVID-19 will come into effect tomorrow. (Newswires)

Western Australia Premier says Perth will be moving into a 3-day lockdown from midnight. (Newswires)

ASIA

Asia-Pac stocks head into the weekend mixed after the region partially shrugged off the early headwinds from the US where sentiment was spooked by reports that President Biden plans to hike capital gains tax to as much as 43.4% from the current top rate of 23.8%, which pressured the major indices and dragged all sectors in the red. Asian bourses suffered from early spillover selling although losses in the ASX 200 (+0.1%) were stemmed as telecoms remained afloat following the outcome of the 5G spectrum auction in which the top 3 telcos spent over AUD 600mln and with the largest-weighted financials sector cushioned by gains in AMP on plans for a demerger and listing of AMP Capital's private markets investment management business. Nikkei 225 (-0.6%) underperformed due to recent currency inflows and as participants brace for a return to a state of emergency with the government seeking an emergency declaration for Tokyo, Osaka, Kyoto and Hyogo between April 25th-May 11th and wants to significantly reduce the flow of people with stricter measures such as asking certain businesses to close including establishments that serve alcohol. Hang Seng (+1.1%) and Shanghai Comp. (+0.3%) were positive amid strength in Chinese tech names and with focus shifting to earnings whereby Ping An Insurance benefitted from profit growth for Q1, while CNOOC was less decisive despite a 4.7% Y/Y increase in its Q1 total net production. Finally, 10yr JGBs mirrored the choppy price action in T-note futures despite the underperformance of Japanese stocks and with demand also hampered by the lack of BoJ purchases in the market today, while the Australian 2024 bond auction had little effect on the 3yr yield which was relatively flat although both Aussie and Kiwi 10yr yields edged higher by around 3bps.

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 reference rate at 6.4934 vs exp. 6.4918 (prev. 6.4902)

Chinese Embassy in UK said it urges the UK to have a correct understanding on Xinjiang issues and take concrete measures to respect China's core interests, while it also urges UK to immediately correct its wrong actions in response to the UK Parliament motion on Xinjiang. Furthermore, China's Global Times tweeted that UK Parliament declaring genocide against Uyghurs in Xinjiang is a flat-out lie which violates international law and is an outrageous smear with blatant interference which China strongly opposes, citing the Chinese Embassy. (Newswires/Twitter)

• Japanese National CPI (Mar) Y/Y -0.2% vs. Exp. -0.2% (Prev. -0.4%)
• Japanese National CPI Ex. Fresh Food (Mar) Y/Y -0.1% vs. Exp. -0.1% (Prev. -0.4%)
• Japanese National CPI Ex. Fresh Food & Energy (Mar) Y/Y 0.3% vs. Exp. 0.3% (Prev. 0.2%)

UK/EU

UK ministers reportedly asked company executives to set up an investment council that will advise the government on how to improve competitiveness and entice investment from abroad. (FT)

ECB's de Cos says PEPP purchases should be adjusted to counter the rise in rates if not accompanied by a return to medium-term inflation, point target of exactly 2% would be a good choice for inflation in the upcoming review, introducing temporary/moderate inflation overshoots in the strategy is likely to have a modest effect on inflation expectations. (Newswires)

EU Markit Composite Flash PMI (Apr) 53.7 vs. Exp. 52.8 (Prev. 53.2); Manufacturing Flash PMI (Apr) 63.3 vs. Exp. 62.0 (Prev. 62.5)

• Services Flash PMI (Apr) 50.3 vs. Exp. 49.1 (Prev. 49.6)

UK Flash Services PMI (Apr) 60.1 vs. Exp. 59.0 (Prev. 56.3); Composite PMI (Apr) 60.0 vs. Exp. 58.2 (Prev. 56.4)

• Manufacturing PMI (Apr) 60.7 vs. Exp. 59.0 (Prev. 58.9)

UK Retail Sales MM (Mar) 5.4% vs. Exp. 1.5% (Prev. 2.1%, Rev. 2.2%); YY (Mar) 7.2% vs. Exp. 3.5% (Prev. -3.7%, Rev. -3.6%)

• Ex-Fuel MM (Mar) 4.9% vs. Exp. 1.9% (Prev. 2.4%); Ex-Fuel YY* (Mar) 7.9% vs. Exp. 4.5% (Prev. -1.1%)
• UK GfK Consumer Confidence* (Apr) -15 vs. Exp. -12.0 (Prev. -16.0)

GEOPOLITICAL

Russia reportedly scrambled a fighter jet to escort a US spy plane over the Pacific, according to IFAX. Seperately, Russia has begun returning troops that took part in military drills in Crimea, according to Ifax.

Saudi-led coalition intercepted an explosives-laden drone launched by Houthis towards the southern region of the kingdom. (Newswires)

EQUITIES

A lacklustre Friday session thus far for European majors (Euro Stoxx 50 -0.3%) with downbeat vibes seeping from Wall Street’s tax-induced losses, and after an indecisive APAC Friday as fresh catalysts remain light. US equity futures meanwhile consolidate with modest gains, although the cyclically-driven RTY (+0.7%) outperforms. Back to Europe, broad-based losses are seen across the bourses with no particular standout performer. Sectors are mostly in negative territory with Basic Resources topping the charts as base metals continue to rise, whilst Real Estate and Oil & Gas reside as the laggards, albeit the breath remains relatively narrow. Overall the sectors do not portray a theme nor a risk bias. Autos are buoyed as Daimler (+1%) underpins the sector following its earnings, in which it noted that unit sales, revenue, and EBIT expected to be significantly higher in 2021 than in the previous year while it raised its FY21 margin targets due to the firm Q1 performance. That being said, the group expects some potential further impact on Q2 production from the global chip shortage. In terms of individual movers, Tod’s (+11%) is bolstered amid reports LVMH (-0.1%) upped its stake in the Co. to 10%. Meanwhile, earnings-related movers include: Vinci (+1%), Vivendi (+3%), Moncler (-6.5%) and Saab (+8%).

Intel (INTC) - Q1 2021 (USD): Adj. EPS 1.39 (exp. 1.15); Revenue 19.7bln (exp. 17.86bln). Client Computing Group: 10.6bln (exp. 10.09bln). Data Center Group (Dcg): 5.6bln (exp. 5.68bln). Internet Of Things Group: 914mln (exp. 994.33mln). Mobileye: 377mln (exp. 381.50mln). Non-Volatility Memory Solutions: 1.1bln (exp. 1.14bln). Programmable Solutions Group: 486mln (exp. 419.33mln). FY EPS view 4.60 (exp. 4.58), Revenue view 77.0bln (exp. 72.44bln). Sees Q2 EPS USD 1.05 (exp. USD 1.11), Q2 Revenue 18.9bln (exp. 17.6bln). Co. executive said it will take a couple of years to invest enough to ease chip supply constraints. Shares fell 2% after-hours with traders citing the falling profit margins and rising capital spending. Seperately, Taiwan's Economic Planner says there is potential room for TSMC (2330 TW) to cooperate with Intel. (Newswires)

Please see the Daily European Equity Opening News and the Additional European Equity News headlines for the morning's European earnings

FX

AUD/EUR/NZD/CAD/GBP - The Aussie may have received a boost from stronger preliminary PMIs overnight, but its firm rebound vs the Greenback seems more technical following yet another successful defence of 0.7700 or thereabouts. However, 0.7750 is proving tough to reclaim as Aud/Usd remains hampered by the ongoing rift with China over tariffs that has prompted Australia to cancel its Silk Road accord, while news of a 3-day lockdown in Perth may also offset some positivity surrounding constructive trade talks with the UK. However, the Aud/Nzd cross has bounced from around 1.0750 again as the Kiwi lags below 0.7200 against its US rival irrespective of a rebound in NZ credit card spending. Elsewhere, better than expected flash Eurozone PMIs, and especially from France appear to be keeping the Euro aloft after its sharp pull back in wake of a broadly uneventful ECB policy meeting to retest bids/support around 1.2000. Note also, Eur/Usd may be underpinned by decent option expiry interest just below the round number between 1.1990-80 (1.5 bn) as it holds just above 1.2050, while the Loonie should also be bolstered by expiries at the 1.2500 strike (1 bn) as it maintains post-BoC momentum, albeit after several wobbles and setbacks. Nevertheless, resistance looms at the new Usd/Cad 2021 low circa 1.2459 and then 1.2450 may be protected by 1.7 bn expiries extending to 1.2440. Meanwhile, Sterling continues to straddle 1.3850 vs the Buck following the loss of another big figure on Thursday and regardless of bumper UK retail sales data or better than anticipated preliminary PMIs, as Cable lags amidst renewed upside in Eur/Gbp towards 0.8700 on ongoing Oxford/Astra vaccine issues in part.

DXY/CHF/JPY - In keeping with several G10 counterparts, the Dollar may be drawing some comfort from the fact that dip buying has stemmed further depreciation, and in index terms the 91.000 level is becoming something of a line in the sand, although the Greenback remains under pressure and in bearish mode with the DXY easing into a lower 91.294-003 range ahead of Markit’s US PMIs and new home sales. Hence, fellow ‘safe-havens’ such as the Franc and Yen are taking advantage against the backdrop of consolidation in US Treasury and other global bond yields, as Usd/Chf and Usd/Jpy trade near the base of tight 0.9171-51 and 108.00-107.80 bands respectively. For the record, little reaction to in line Japanese CPI or broadly firmer PMIs as Tokyo and 3 other cities head back into emergency COVID-19 status.

EM - Risk sentiment has been rattled to an extent by US President Biden’s proposal to double the CGT rate, but most EM currencies are benefiting from ongoing Usd weakness, bar the Try for specific negative Turkish factors, but the Rub is also clawing back more of its heavy losses on perceptions that tensions between Russia and Ukraine are dissipating ahead of the upcoming CBR policy meeting which saw a larger than expected hike to 5.00% and further RUB upside.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.1980-90 (1.5BLN)
• USD/CAD: 1.2440-50 (1.7BLN), 1.2500 (1BLN), 1.2525-30 (400M), 1.2550 (420M), 1.2580 (1.1BLN)

FIXED

Although bonds remain off best levels, Bunds, Gilts and US Treasuries are all well off worst levels and the respective 10 year futures have clambered back above par within 171.08-170.67, 129.09-128.61 and 132-21/13+ extremes to suggest that the retreat following French PMIs may have been somewhat excessive and overdone if not quite a flash in the pan. Nonetheless, the ensuing German, pan Eurozone and UK surveys were not quite as upbeat and overall risk sentiment/appetite is still crimped by the prospect that US CGT could be jacked up to 43%+. Meanwhile, EZ debt will also be digesting comments from ECB’s de Cos ahead of the US PMIs and new home sales that are due before more comments from Lagarde, albeit at an event on the power of capital markets against climate change.

UK DMO has revised the 2021/22 gilt remit to GBP 252.6bln (prev. GBP 295.9bln), T-bill issuance GBP +1.8bln (prev. +1.8bln). Net financing requirement GBP -43.3bln vs prev. remit; reduction is a reflection of the Gov't net cash requirement coming in GBP 35.2bln below the budget. Revised remit show additional 1pp skew towards long-dated issuance. Intends to hold 83 gilt auctions in 2021/22 (prev. 93); 5 syndications (prev. 6). (Newswires)

COMMODITIES

WTI and Brent front month futures are yet again undergoing choppy trade with some recent pressure experienced in lockstep with a dip across stocks. As mentioned throughout the week, the supply/demand dynamics remain ever-so-fluid as OPEC+ gears up for its technical meeting next week. At this point, it is still unclear whether members will convene for a decision meeting ministerial meeting following the technical JMMC confab. The latest sources via EnergyIntel suggested both will go ahead on the 28th of April, although other reports put more emphasis on the “monitoring” aspect whilst playing down the likelihood of a tweak to the last set quotas through to July. For any changes to occur, the ministerial meeting will have to go ahead. Meanwhile, The latest move by Russia to withdraw troops following military drills, perceived as a de-escalation, alongside seemingly construction JCPOA discussion, have unwound some geopolitical premia baked into prices in recent days. WTI is now flat on the day around USD 61.50/bbl (vs high USD 62.10/bbl), while its Brent counterpart dipped below USD 65.60/bbl (vs high 65.96/bbl). Elsewhere, spot gold and silver are relatively uneventful around recent ranges above USD 1,775/oz and USD 26/oz respectively. In terms of base metals, LME copper eclipsed 9,500/t as it’s on track for its third straight week of gains amid a softer Buck and firm demand prospects. Dalian iron ore prices meanwhile were bolstered by a rise in steel prices with some citing strengthening global demand for the alloy.

CME raised crude oil futures NYMEX maintenance margins by 3.9% to USD 5,300/contract. (Newswires)

Nigeria's Bonny light crude stream to load 193k BPD in June vs 184k BPD in May, according to the loading programme; Qua Iboe to load 184k BPD vs 190k BPD. (Newswires)