• Asian stocks traded subdued after the momentum from yesterday’s intraday rebound and fresh record highs on Wall Street waned
• The APAC region was tentative at month-end and as participants digested an influx of earnings and mixed data releases
• Chinese official Manufacturing PMI and Non-Manufacturing PMI disappointed but remained in expansionary territory
• In FX, the DXY consolidated slightly north of 90.50, EUR/USD holds on to 1.21 and GBP/USD remains on a 1.39 handle
• Amazon earnings beat on top and bottom lines after reporting a 44% increase in sales; +2.4% after-hours
• Looking ahead, highlights include German GDP (Flash), EZ CPI (Flash) & GDP (Prelim), US PCE & Chicago PMI, Fed's Kaplan
• Earnings from Exxon, Chevron, Phillips 66, AbbVie, Colgate-Palmolive, AstraZeneca, Barclays, BBVA, BNP, Eni

CORONAVIRUS UPDATE

US COVID-19 cases +52,528 (prev. +50,513), deaths +876 (prev. +555), total vaccines administered 237.36mln (prev. 237.05mln), those fully vaccinated 99.688mln (prev. 99.457mln). In relevant news, there were comments from New York Governor Cuomo that he would like NYC to fully reopen earlier than July. (Newswires)

AstraZeneca (AZN LN) executives reportedly struggled to pull together the full data necessary to apply for US approval of its COVID jab further delaying its efforts to secure FDA approval and recently told US officials it might need until mid-May to finish its application for an FDA review, according to a WSJ report citing sources. (WSJ)

UK PM Johnson is to be told next week that social distancing for large events can be scrapped as of June 21st after initial results from a pilot scheme found no spike in Covid cases among attendees. (Telegraph)

Mesoblast (MSB AT) announced 60-day results from its randomized controlled trial of REMESTEMCEL-L in ventilator dependent COVID patients which it stated reduced mortality through day 60 by 46% in patients below the age of 65yrs old with moderate/severe ARDS but not in those aged 65yrs and above. (Newswires)

France's Health Ministry announced they detected their first cases of the Indian COVID-19 variant, while there were separate reports on Thursday that China also detected cases of the Indian variant in some Chinese cities. (Newswires)

Japanese cabinet approved the use of JPY 500bln in reserve funds to support business impacted by pandemic and curbs, while Finance Minister Aso stated that the central government will disburse aid to regional governments. (Newswires)

Brazilian Senate approved a measure to suspend patent protection for vaccines, tests and medications during the COVID-19 pandemic. (Newswires)

ASIA

Asian stocks traded subdued after the momentum from yesterday’s intraday rebound and fresh record highs on Wall Street waned, with the region tentative on month-end and as participants digested an influx of earnings and mixed data releases, while an extended weekend for key markets in which Japan and China will remain closed through to Wednesday also contributed to the paring of risk. ASX 200 (-0.8%) declined with broad early pressure across all sectors. In addition, the recent pullback in copper from a decade high and announcement by ANZ Bank of a substantial impact to its H1 net also added to the sombre mood. Nikkei 225 (-0.7%) was dragged lower by currency inflows and amid an overload of recent earnings releases ahead of its 5-day closure but with losses stemmed following stronger than expected Industrial Production data and after the Japanese cabinet approved the use of JPY 500bln in reserve funds to support businesses impacted by pandemic and curbs. Hang Seng (-1.7%) and Shanghai Comp. (-0.5%) weakened heading into the Labor Day holidays for the mainland and amid a deluge of corporate results including the largest banks which were pressured after relatively tepid earnings growth amongst China’s big four banks although PetroChina was bolstered following a jump in earnings. There were also concerns regarding a crackdown on the tech sector after Chinese regulators warned of tighter oversight for its tech giants and ordered 13 firms to adhere to tighter regulation of data and lending practices, while markets also reflected on the latest Chinese PMI data in which official Manufacturing and Non-Manufacturing PMI disappointed but remained in expansionary territory and Caixin Manufacturing PMI topped estimates. Finally, 10yr JGBs were steady after the indecisiveness in T-notes and amid the lack of BoJ purchases in the market today, while the central bank also recently announced its bond buying intentions for May whereby it maintained the amounts and frequency of JGB purchases across all maturities.

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 6.4672 vs exp. 6.4651 (prev. 6.4715)

• Chinese Manufacturing PMI (Apr) 51.1 vs. Exp. 51.7 (Prev. 51.9)
• Chinese Non-Manufacturing PMI (Apr) 54.9 vs. Exp. 56.1 (Prev. 56.3)
• Chinese Composite PMI (Apr) 53.8 (Prev. 55.3)
• Chinese Caixin Manufacturing PMI (Apr) 51.9 vs. Exp. 50.8 (Prev. 50.6)
• Japanese Industrial Production (Mar P) M/M 2.2% vs. Exp. -2.0% (Prev. -1.3%)
• Japanese Industrial Production (Mar P) Y/Y 4.0% vs. -0.6% (Prev. -2.0%)
• Tokyo CPI (Apr) Y/Y -0.6% vs. Exp. -0.2% (Prev. -0.2%)
• Tokyo CPI Ex. Fresh Food (Apr) Y/Y -0.2% vs. Exp. 0.0% (Prev. -0.1%)
• Tokyo CPI Ex. Fresh Food & Energy (Apr) Y/Y 0.0% vs. Exp. 0.3% (Prev. 0.2%)

UK/EU

Ireland Deputy PM Varadkar said we may need to consider free travel between UK and Ireland prior to opening up to wider international travel. (Newswires)

Italy’s Cabinet has approved the recovery plan, while other reports also noted that Spain is set to submit its EU recovery fund spending plans. (Ansa/FT)

• UK Lloyds Business Barometer (Apr) 29 (Prev. 15)

FX

In FX markets, the DXY consolidated slightly north of the 90.50 level after having recouped some of its post-FOMC losses and following the recent mixed data releases stateside. EUR/USD was steady at the 1.2100 handle with the single currency kept afloat after French President Macron unveiled plans for the gradual reopening of the country and with recent optimism from ECB officials as ECB's Lane and de Guindos both noted expectations for a strong activity increase in H2, while GBP/USD traded choppy in which price action continued to oscillate around 1.3950. USD/JPY and JPY-crosses were constrained by the subdued risk appetite which coupled with the mixed Chinese PMI data, resulted in a non-committal tone across antipodean currencies.

COMMODITIES

WTI crude futures marginally extended on the retreat beneath the USD 65.00/bbl level although still held on to most of yesterday's gains where prices were inspired by a broader commodity rally. Nonetheless, the energy complex has stalled overnight amid ongoing COVID uncertainty with Turkey entering into a full lockdown through to May 17th and India continued to suffer record daily infections with its variant now detected in China and France. Gold prices were quiet in comparison to the prior day's whipsawing with the precious metal contained as the greenback consolidated during Asia trade, while copper flatlined amid the mixed Chinese PMI data and following the recent pullback from its brief incursion to a decade high above the USD 10k level in LME prices.

GEOPOLITICAL

US State Department Spokesperson Price said the US has made some progress in Iran discussions although later added that we are not on the cusp of a breakthrough on JCPOA talks, while there were separate comments from the State Department that the US needs to keep lines of communication open with Russia to achieve some stability. (Newswires/Sputnik) World Powers reportedly want to reach an agreement regarding the Iran deal by mid-May to ahead of the expiry of key monitoring deal, according to reports citing two unnamed European officials. (Newswires)

Iranian Foreign Minister said there are positive developments on the horizon such as the Persian Gulf and nuclear agreement, while the Iranian Foreign Ministry also stated that it welcomes Saudi Arabia's change of tone. (Newswires)

US

Treasuries were ultimately little changed as an earlier inflationary sell-off was reversed into the afternoon. By settlement, 2s +0.0bps at 0.166%, 3s +0.2bps at 0.341%, 5s +0.0bps at 0.865%, 7s +1.2bps at 1.325%, 10s +2.0bps at 1.640%, 20s +0.9bps at 2.194%, 30s +1.0bps at 2.310%; TYM1 volumes were decent. Inflation breakevens were led wider by the front-end as short TIPS yields fell hard, seeing 5yr BEI approach 2.70% at one point, before paring. SOFR unch. at 1bps. 1-month bills sold at par, while RRP op saw record demand again. Bonds edged lower overnight in quiet APAC trade, with today marking the start of Golden Week in Japan through to May 5th, alongside some other holidays in Asia. The selling caught traction however as Europe arrived, carrying through into the NY handover as copper prices breached above USD 10k, while commodities in general broadly made strong gains. EGBs saw pressure after higher than expected German CPI, and amid further reports of France's emergence from lockdown in May. US data was more mixed as the advanced GDP print underwhelmed some expectations, but still marked a decent jump, rising 6.4% (prev. +4.3%) - the latest weekly continued and initial jobless claims both came in slightly above expectations - although there was a muted market reaction at the time. There was much mention focused on the inflationary and pro-growth outlooks expressed by corporates, including industrial bellwether Caterpillar. As yields climbed higher into the NY cash equity open, IFR noted that real money had been active selling out to the long-end from cash 5s, while also dumping long-end futures, seeing cash 10s and 30s hit their daily peaks at 1.69% and 2.35%, respectively, still a while off their earlier cycle peaks of 1.77% and 2.52%. However, the rise in commodities and yields began to fade as NY equity trade opened, coming as the DXY rose off its lows. Volumes thinned out into the afternoon in UST futures while a good portion of the earlier losses were eventually pared as 10s failed to break above the 1.70% figure. It's possible that month-end flows supported the latter bond strength, where 0.09yr of duration extension is expected in USTs. T-note (H1) futures settled 3+ ticks lower at 131-31+.

White House said US President Biden had a warm conversation with Republican Senator Capito and that they may meet in person soon on infrastructure, while they reaffirmed commitment to work out a strategy. (Newswires)

US Democratic Senator Manchin raised concerns about Biden's push for a more expansive government and reportedly made it clear that the aggressive vision for the federal government that President Joe Biden laid out to the nation must first face scrutiny in Congress. (CNN)

Amazon (AMZN) - Q1 2021 (USD): EPS 15.79 (exp. 9.55), Revenue 108.50bln (exp. 104.46bln). Q2 2021 Revenue view 110-116bln (exp. 108.60bln). AWS 13.50bln (exp. 13.09bln). Online Store 52.9bln (exp. 50.63bln). Click here for the full announcement. (Business Wire) Shares rose 2% after-market

Twitter Inc (TWTR) - Q1 21 (USD): Adj. EPS 0.16 (exp. 0.14), Revenue 1.04bln (exp. 1.03bln). Advertising rev. USD 899mln (exp. USD 897mln). Monetizable DAU 199mln (exp. 198.8mln). Co.sees Q2 rev. USD 980mln-1.08bln (exp. USD 1.05B). Co.noted significant pandemic-related surge we saw last year creates challenging comps and may lead to MDAU growth rates in the low double digits on a year-over-year basis in Q2, Q3, and Q4, with the low point in terms of growth likely in Q2. Click here for the full announcement. (PR Newswire) Shares fell 11% after-market