• European bourses are hampered across the board, Euro Stoxx 50 -2.3%, as geopolitics continue to dominate; US futures are also pressured, ES -1.7%, but faring marginally better
• WTI and Brent surge amid multiple bullish-factors re. US possibly banning Russian oil, Iran-nuclear delays and China growth ambitions; thus, benchmarks reached highs of USD 130.50/bbl and USD 139.13/bbl respectively.
• Russian & Ukraine Foreign Ministers are to meet in Antalya, Turkey, according to the Turkish Foreign Minister; the meeting will occur on Thursday.
• USD remains bid though Petro/Commodity FX derives support while EUR/CHF lost parity briefly overnight and RUB hits fresh record lows
• Debt unwinds some haven premium as oil upside stokes inflationary pressures.
• Looking ahead, Ukrainian Russian talks at 14:00GMT/09:00EST (previously set for 12:00GMT/07:00EST)

As of 11:25GMT/06:25EST

LOOKING AHEAD

• Ukrainian-Russia Talks (Time TBC).
• Click here for the Week Ahead preview.

GEOPOLITICS

RUSSIA-UKRAINE

ENERGY/ECONOMIC UPDATES

• US Secretary of State Blinken said the US and allies are in active discussions regarding a Russian oil import ban and reports later stated the US is weighing acting without allies on a ban of Russian oil imports, although the timing and scope of any ban is still fluid, according to Bloomberg.
• US House Speaker Pelosi said the House is exploring legislation to ban the import of Russian oil.
• Japan is in talks with the US and Europe regarding a Russian oil embargo, according to Kyodo.
• Russian Kremlin spokesman Peskov said there will be a reaction to the economic banditry they are seeing and that a ban on Russian oil risks the most serious market impact, while Peskov added that NATO is aware it cannot get directly involved in Ukraine. Kremlin also stated that companies will return to Russia and invest one day.
• Russia said it is to service and pay Russian bonds fully on time but stated that payments on debts to foreign residents will depend on limits imposed by foreign states.
• American Express (AXP) suspends operations in Russia and Belarus which is due to the Russian attack on the people of Ukraine. Visa (V) and Mastercard (MA) are also to suspend operations in Russia in which Visa noted that all transactions initiated with Visa cards issued in Russia will no longer work outside the country and Mastercard said cards issued by Russian banks will no longer be supported by its network. However, Russia’s largest lender Sberbank noted that the Visa and Mastercards it issued will continue to work in Russia, according to Tass.
• Banks in Russia are rapidly trying to move to the Chinese UnionPay's system and its own Mir network after Visa and Mastercard suspended operations in Russia
• VTB Bank is preparing to pull out of Europe, according to FT.
• PwC is to separate its Russian firm from the rest of its global network which affects 3,700 partners and staff in the country.
• TikTok limited services in Russia due to the 'Fake News' law and Netflix (NFLX) also decided to suspend its service in Russia.
• Moody’s downgraded Russia’s sovereign ratings from B3 to CA; Outlook Negative, while it cut Ukraine’s sovereign rating two notches from B3 to Caa2.
• Ukraine introduced export licences for key agricultural commodities including wheat, corn and sunflower oil.

DISCUSSIONS/NEGOTIATIONS

• Russia-Ukraine discussions to commence at 12:00GMT/07:00EST on Monday, according to Russian State TV citing Belta; Russian delegation has arrived for the discussions; subsequently, Ukraine Presidential Adviser says new talks with Russia will start at 14:00GMT/09:00EST.
• Russian & Ukraine Foreign Ministers are to meet in Antalya, Turkey, according to the Turkish Foreign Minister; meeting will occur on Thursday.
• Ukrainian Foreign Minister Kuleba said he doesn’t see progress in peace talks with Russia but have to continue talking, while he talked to US Secretary of State Blinken about providing more weapons to Ukrainian fighters and implementing more sanctions against Russia. Furthermore, US Secretary of State Blinken said unprecedented pressure on Russia will increase until the war with Ukraine is brought to an end, according to Reuters.
• Russian President Putin warned that they would consider any third-party declaration of a no-fly zone over Ukraine as participation in the armed conflict and said western sanctions are akin to a declaration of war, while he added there is no reason to declare martial law in Russia.
• Russian President Putin held a call with Turkish President Erdogan in which Putin said Russia is ready for dialogue with Ukraine and foreign partners, while he added that the military operation in Ukraine is going according to plan and any attempt to draw out the negotiation process will fail.
• Russian President Putin and French President Macron held a call on Sunday in which Putin told Macron that he agreed to talks between the IAEA, Ukraine and Russia to ensure security at nuclear sites.
• Russian Defence Ministry said the use of airfields of other countries by Ukraine airforce may be considered as participation of those countries in the conflict, according to Interfax.
• Russian Foreign Ministry said Britain has chosen to move towards open confrontation with Russia and that Russia will respond which will undoubtedly undermine British interests in Russia.

3RD PARTY REMARKS

• UK Deputy PM Raab said sanctions are not a war crime and that talk of Russia using nuclear weapons is rhetoric and brinkmanship, while he added that China and India have to step up.
• UK parliament is to vote on sanction measures after the government put forward a series of amendments to the economic crime bill to crack down on corrupt elites and further ramp up pressure on Russian President Putin’s regime, according to Reuters.
• UK Chief of Defense Staff Admiral Radakin said Russian lead forces have been decimated and it is not inevitable that it will succeed in taking over Ukraine, according to the Times.
• New Zealand announced sanctions on Russian oligarchs and published a travel ban list of 100 people. PM Ardern said they will stop superyachts, ships and aircraft from entering New Zealand territory, while sanctions will prevent Russian people and companies from moving money and assets to New Zealand to avoid other sanctions.
• Russian ambassador to the IAEA says Russia is favourable to the suggestion from IAEA Chief Grossi of a three-way meeting on Ukraine.

DEFENSE/MILITARY RESPONSE

• Ukrainian President Zelensky said Russian forces are preparing to bombard Odessa city and that it will be a war crime; subsequently, Ukrainian staff suggest that Russian ships have struck Ukrainian troops' position in the Odessa region, according to Al Jazeera News.
• Russian military is to hold fire and open humanitarian corridors in several Ukrainian cities at 10:00 local time (07:00GMT/02:00EST) on Monday, while corridors from Kyiv, Mariupol, Kharkiv and Sumy will be opened at French President Macron's request, according to IFAX.
• Subsequently, the Ukraine Deputy PM says humanitarian corridors are still yet to open and they rejected the proposed corridors to Belarus.
• Russian Ministry of Defence said the Security Service of Ukraine and Azov neo-nazi militants are preparing a provocation with possible radioactive contamination of the area near the city of Kharkiv, according to Sputnik.
• IAEA said it was informed by Ukraine that the Zaporizhzhya nuclear plant management is under orders from the commander of Russian forces that took control of the site last week, while it stated that some mobile networks and internet was switched off by Russian forces at the site so that reliable information cannot be obtained through the normal channels.
• US is talking to Poland about a deal to send Soviet-era aircraft to Ukraine in return for American F16 jets.
• US officials said Russia is recruiting Syrians for urban combat in Ukraine, according to WSJ.
• UK PM Johnson spoke with Ukrainian President Zelensky and told him he would work with partners to provide further defensive equipment.

OTHER

• IAEA and Iran issued a joint statement regarding resolving outstanding questions raised by the IAEA regarding three nuclear sites in which Iran will provide written explanations including related supporting documents to questions raised by IAEA that have not been addressed by Iran on the three locations by March 20th. IAEA will then submit any questions regarding the information provided by Iran within two weeks after that and the sides will then meet within a week in Tehran following the IAEA's submission of any questions on such information.
• IAEA chief Grossi said the exchange with Iran was very fruitful and noted that they have several important matters they need to resolve together, while he added that it would be very difficult to imagine the 2015 nuclear deal would be revived if safeguard issues are not resolved. Furthermore, Iran’s nuclear chief said they are very optimistic about resolving nuclear issues with the IAEA and that the remaining issues will be resolved in 3-4 months.
• Iran’s government said Russia’s new demands for guarantees from the US are not constructive for nuclear deal talks after Russia recently placed new demands on the table for written guarantees from the US that sanctions on Moscow would not damage its cooperation with Iran.
• North Korea fired at least one projectile into the East Sea that was suspected to be a ballistic missile, while North Korea later confirmed that it tested a recon satellite on Saturday.
• IAEA Chief Grossi says, at N. Korea's Yongbyon site, they are observing the construction of an annex to the reported enrichment facility, purpose of this yet to be determined.

EUROPEAN TRADE

EQUITIES

• European bourses are hampered across the board, Euro Stoxx 50 -2.3%, as geopolitics continue to dominate.
• US futures are also pressured, ES -1.7%, but faring marginally better than European peers as participants remain cognisant of US CPI this week and the Fed next week.
• In Europe, the likes of the FTSE 100 are the relative outperformers given exposure to crude names as the associated Oil & Gas sector cheers benchmark pricing while Basis Resources are firmer.

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FX

• Dollar remains king, but not quite all conquering as commodity currencies outperform and Gold scales in around the 2k per ounce mark; DXY approaching 99.500 after clearer round number breach.
• Aussie hovers on 0.7400 handle as iron ore and copper soar.
• Euro slammed but off worst levels vs Franc after verbal SNB intervention; EUR/CHF back over parity, but EUR/USD dangling above 1.0800.
• Rouble slides to new record lows ahead of third attempt to strike ceasefire agreement between Russia and Ukraine - Usd/Rub over 135.00 at one stage.
• Norwegian Crown elevated as Brent remains bid alongside WTI on possible Russian export embargo; EUR/NOK sub-9.8000 vs EUR/SEK around 10.8800 for comparison.
• SNB says the CHF continues to be "Highly Valued", remains prepared to intervene in FX markets if needed. CHF appreciation reflects the inflation differentials between Switzerland and other nations, inflation abroad is significantly higher than in Switzerland.
• BoJ could lower its economic assessment at its policy meeting next week, according to Reuters sources

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FIXED INCOME

• Debt unwinds safe-haven premium as spikes in oil stoke inflation pressures.
• Curves steeper overall as short end holds up.
• Gilts underperform and Sonia strip weak ahead of potential commentary from BoE's Cunliffe.

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COMMODITIES

• WTI and Brent surge amid multiple bullish-factors re. US possibly banning Russian oil, Iran-nuclear delays and China growth ambitions; thus, benchmarks reached highs of USD 130.50/bbl and USD 139.13/bbl respectively.
• US officials held meetings in Venezuela amid a search for alternative oil supplies, according to FT. It was later reported that US and Venezuela discussed possible easing of oil sanctions although made little progress towards an agreement, according to sources cited by Reuters.
• US President Biden's advisers are mulling a Saudi Arabia trip to convince the kingdom to pump more oil, according to Axios.
• Canada's Alberta Province has some spare pipeline and rail capacity to export additional oil to the US, according to Alberta's Energy Minister.
• Libya NOC announced an armed group closed pump valves at the Sharara and el-Feel oil fields which reduced its daily production by 330k bbls.
• Goldman Sachs says a sustained USD 20/bbl increase in oil prices would reduce US GDP by 0.3% and Euro-area by 0.6%.
• Spot gold/silver are bid though the yellow metal is yet to embark on a substantial move above the USD 2000/oz mark.
• Copper strengthened to above USD 5/lb for the first time in history amid the broad upside across the commodities complex that saw LME nickel futures gain around 19%.

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CRYPTO

• Bitcoin remains subdued and sub-USD 40k after losing the handle towards the tail-end of last week.

DATA RECAP

• German Retail Sales YY Real (Jan) 10.3% vs. Exp. 9.8% (Rev. 0.8%); MM Real (Jan) 2.0% vs. Exp. 1.8% (Prev. -5.5%, Rev. -4.6%)

Click here for the US Early Morning Note

APAC TRADE

EQUITIES

• APAC stocks declined as geopolitical concerns lingered ahead of the third round of Ukraine-Russia talks and after evacuation attempts over the weekend in Mariupol were halted amid a ceasefire breach, while the US and allies are engaged in a “very active discussion” regarding a Russian oil embargo.
• ASX 200 weakened as tech led the declines across most industries aside from the commodity-related sectors which were boosted by a spike in oil and supply squeeze concerns across the metals complex.
• Nikkei 225 suffered a near-1000 point intraday loss with notable weakness in autos and airlines stocks.
• Hang Seng and Shanghai Comp. conformed to the risk aversion after China set its lowest growth target in 30 years at 'around 5.5%' and with mixed Chinese trade data also failing to inspire a turnaround.

NOTABLE APAC HEADLINES

• PBoC injected CNY 10bln via 7-day reverse repos with the rate at 2.10% for a CNY 290bln net drain.
• PBoC set USD/CNY mid-point at 6.3478 vs exp. 6.3442 (prev. 6.3288).
• China National People’s Congress set 2022 GDP growth target around 5.5% vs. a target of over 6% growth in 2021 and which is its lowest target in 30 years.
• Chinese Premier Li said they aim to keep the jobless rate within 5.5% and aim to create over 11mln urban jobs this year, while they will step up implementation strength of prudent monetary policy. Premier Li added monetary policy will provide forceful support to the real economy and that they will guide financial institutions to lower real lending rates, as well as appropriately front load policy and will implement new tax and fee cuts this year.
• Chinese Premier Li said they will maintain housing is for living not speculation and will explore development models for housing, as well as speed up the development of the rental housing market and affordable housing market.
• China said it is committed to resolving the Taiwan question in the new era and will advance the peaceful growth of relations across the Taiwan Strait and reunification of China.

DATA RECAP

• Chinese Trade Balance USD (Feb) 115.95B vs. Exp. 99.5B (Prev. 94.46B)
• Chinese Exports YY (Feb) 16.3% vs. Exp. 15.0% (Prev. 20.9%); Imports YY (Feb) 15.5% vs. Exp. 16.5% (Prev. 19.5%)