• European bourses are firmer in a continuation of positive APAC/US trade, catalysts light thus far going into Thursday's US CPI
• US futures post broad-based gains in a continuation of yesterday's action awaiting Central Bank speak
• Greenback ground down, but off recent lows ahead of Fed speakers on the eve of US CPI; peers supported and high beta outpacing
• Bonds regroup after Tuesday's meltdown, with Bunds outpacing UK peers after remarks from Villeroy
• WTI and Brent are choppy and relatively rangebound awaiting fresh developments amid incremental geopolitical updates

As of 11:15GMT/06:15EST

LOOKING AHEAD

• Speeches from Fed's Bowman, Fed's Mester and BoE's Pill, Supply from the US, Earnings including Walt Disney & L'Oreal.

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EUROPEAN TRADE

EQUITIES

• European bourses are firmer in a continuation of positive APAC/US trade, catalysts light thus far going into Thursday's US CPI.
• Sectors are all in the green with Banking and Tech names lagging and outperforming respectively given the yield environment.
• US futures post broad-based gains in a continuation of yesterday's action awaiting Central Bank speak.

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FX

• Greenback ground down, but off recent lows ahead of Fed speakers on the eve of US CPI.
• High beta and cyclical currencies outperform on risk and relative rate or policy outlook dynamics.
• Yen underpinned by softer UST yields and protected by Fib resistance below decent option expiry interest.
• Euro retains grasp of 1.1400 handle irrespective of ECB’s Villeroy expressing the view that markets have reacted too hawkishly to policy pivot.
• Rouble remains optimistic about reaching a resolution to feud with Ukraine and the West
• Russian government and CBR have agreed on crypto regulation and Russia will recognise crypto assets as currencies, according to Kommersant.

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Notable FX Option Expiries, NY Cut:

• USD/JPY: 113.75-80 (575M), 114.00 (456M), 114.50-55 (850M), 115.00 (725M), 115.20-30 (600M), 115.34-35 (410M), 115.50 (491M), 115.60 (326M), 115.75-80 (1.4BN), 116.00 (292M), 116.50 (350M), 117.00 (491M)
• Full list available here

FIXED INCOME

• Bonds regroup after Tuesday's meltdown, but fade ahead of 10 year T-note supply and two Fed speakers.
• Spanish Bonos underpinned by strong demand and tight pricing for new 30 year benchmark.
• Bunds marginally outpace Gilts post-ECB's Villeroy questioning the hawkish reaction to revised guidance and pre-BoE's Pill.

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COMMODITIES

• WTI and Brent are choppy and relatively rangebound awaiting fresh developments amid incremental geopolitical updates.
• White House Economic Adviser Bernstein told CNN that releasing more oil reserves from the SPR is an option.
• Japan, at the request of the US government, has decided to secure necessary LNG stocks and accommodate some of this for Europe, via NHK citing sources; subsequently confirmed.
• Russian Permanent Representative to the EU Chizhov says that Russian can raise nat gas supplies to Europe once a request is made to do so, according to Sputnik News
• Spot gold/silver are steady and continue to reside around familiar levels and technical marks.
• Turkey will announce a scheme this weekend to encourage households to convert gold into Lira according to Reuters.
• Copper initially benefitted from the upbeat risk sentiment but then faltered in late trade and with China eyeing iron ore price stability measures.
• China's market regulator says will take further measures to ensure iron ore price stability, while it will strengthen market supervision and crackdown on price irregularities and hoarding.

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NOTABLE EUROPEAN HEADLINES

• ECB's Villeroy said the inflation hump should be temporary and French inflation is to gradually diminish within months, while he guarantees they will do what is needed for inflation to return to around 2% over time and said the market reaction to the ECB meeting may have been too strong, according to Reuters.
• ECB's Nagel forecasts German inflation significantly above 4% this year, according to Die Zeit; APP should be concluded before rates are raised - says rates could rise this year.
• French Q1 GDP growth seen at 0.3% (prev. 0.4%) and Q2 seen at 0.6% (prev. 0.5%), while inflation seen rising rising from 2.9% in January to 3.4% in June on higher oil prices, according to Insee.

DATA RECAP

• German Trade Balance, EUR, SA (Dec) 6.8B vs. Exp. 10.4B (Prev. 10.9B, Rev. 10.8B)

US-SPECIFIC HEADLINES

• Fed's Daly (2024 voter) said inflation could get worse before it gets better and doesn't expect to get to 2% inflation rate by year-end, while she favours a March hike but noted the Fed cannot be too aggressive with hikes, according to CNN.
• US House voted 272-162 to extend government funding through to March 11th and avert a shutdown next week, according to CNN.
• US Senate Majority Leader Schumer said he wants to pass a lawmaker stock trading ban, according to Punchbowl.
• SGH Macro says that under their understanding, Beijing will not ask Washington to reopen trade talks until the Biden administration decides to lift “punitive tariffs” on Chinese goods.
• Tesla (TSLA) has filed to recall 126.7k US vehicles, via NHTSA.

Click here for the US Early Morning note.

APAC TRADE

EQUITIES

• Asian stocks traded higher with earnings releases in focus and following the positive handover from Wall St where the major indices finished near the best levels of the day despite participants remaining in limbo ahead of US CPI.
• ASX 200 (+1.1%) was lifted by notable outperformance in the tech and financials sectors with the latter boosted by firm gains in Australia’s largest lender CBA which reported a 22% jump in H1 cash profit.
• Nikkei 225 (+1.1%) rose above 27,500 with biggest gaining stocks driven by earnings releases including IHI, AGC and Nissan, while Toyota reported a record 9-month profit and SoftBank was boosted after it began to pitch the ARM IPO.
• Hang Seng (+2.1%) and Shanghai Comp. (+0.8%) conformed to the constructive mood after reports yesterday that Chinese state funds stepped in to slow the market decline and with Hong Kong firmly boosted by a rebound in tech.

NOTABLE APAC HEADLINES

• PBoC injected CNY 20bln via 7-day reverse repos with the rate at 2.10% for a CNY 180bln net drain.
• PBoC set USD/CNY mid-point at 6.3653 vs exp. 6.3654 (prev. 6.3569)
• White House Press Secretary said China has not met its trade commitments of 2020 and 2021, according to Reuters.
• Evergrande (3333 HK) will not repay debt via asset sales amid low prices, according to a paper via Reuters

DATA RECAP

• Australian Westpac Consumer Sentiment Index (Feb) 100.8 (Prev. 102.2)
• Australian Consumer Sentiment MM (Feb) -1.3% (Prev. -2.0%)

GEOPOLITICS

• French Presidency said leaders of Germany, France and Poland expressed joint support for Ukrainian sovereignty and implementation of Minsk ceasefire agreement, according to Reuters.
• European and US regulators told banks to prepare for the threat of a Russian cyberattack, according to Reuters.
• Russian Deputy Foreign Minister calls reports of possible US THAAD missile systems being supplied to Ukraine as a provocation, via Reuters citing Ria.
• UK Foreign Minister Truss is set to fly to Moscow today to meet with Russian Foreign Minister Lavrov; PM Johnson will meet the Polish PM/President and NATO Secretary General on Thursday.
• Satellite images showed unusual activity at a North Korean shipyard, according to Yonhap citing a US think tank.
• Syrian air defences downed a number of missiles from Israeli aggression, while the Israeli military said a Syrian anti-aircraft missile fired towards Israel exploded in mid-air, according to Reuters.
• Iran has unveiled a missile with a range of 1450km, via Tasnim.