• APAC stocks eventually traded mostly positive following on from Wall St's best 3-day gain since 2020.
• BoJ kept monetary policy settings unchanged as expected; will take additional easing steps as necessary.
• US President Biden's administration reportedly hardened its stance towards China ahead of the Biden-Xi call.
• European equity futures are indicative of a slightly firmer open with the Euro Stoxx 50 future up 0.1% after the cash market closed lower by 0.1% yesterday.
• In FX, the DXY reclaimed 98.00 status, EUR/USD failed to hold 1.11 and JPY lags post BoJ.
• Looking ahead, highlights include US Existing Home Sales, CBR Policy Announcements, Quad Witching, Speeches from Fed's Barkin, Bowman & Evans. Call between US President Biden and Chinese President Xi.

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US TRADE

• US stocks were positive in an extension of post-FOMC gains in which the S&P 500 notched its best 3-day performance since 2020, despite pessimism regarding Russia-Ukraine diplomacy, while a chunky opex on Friday was also on participants' minds.
• S&P 500 +1.2% at 4,410, Nasdaq 100 +1.2% at 14,118, Dow Jones +1.2% at 34,480, Russell 2000 +2.0% at 2,061.

GEOPOLITICS

RUSSIA-UKRAINE

NEGOTIATIONS/TALKS

• Ukrainian President Zelenskiy said he spoke with French President Macron and paid special attention to continuing peaceful dialogue. There were separate comments from Ukrainian presidential office adviser Podolyak that Ukraine's main demand is a ceasefire and troop withdrawal, according to Kyiv Independent.
• US President Biden will speak with Chinese President Xi at 09:00EDT/13:00GMT on Friday, while it was separately reported that President Biden called Russian President Putin a murderous dictator and pure thug.
• US Secretary of State Blinken warned that China will be held responsible for actions supporting Russia and said China is refusing to condemn Russian aggression and is seeking to portray itself as a neutral arbiter, while he added the US will not hesitate to impose costs on China. Blinken also said that US President Biden is to make it clear to Chinese President Xi that China will bear responsibility for any actions it takes to support Russia's aggression.
• US President Biden's administration reportedly hardened its stance towards China ahead of Biden-Xi call on Friday, while officials believe Russia is moving closer to supporting the Kremlin.
• China's envoy to the UN said they are deeply worried about the situation in Ukraine and called for maximum restraint in the Ukraine war, while China denied it is supporting the invasion and said it is promoting diplomacy.

DEFENCE/MILITARY

• US Secretary of State Blinken said he personally agrees that war crimes have been committed in Ukraine and said Russia may be planning a chemical weapon attack. Blinken also said he is not seeing any meaningful efforts by Russia to bring the war to a conclusion through diplomacy and that Russian President Putin's remarks on Wednesday suggest he is moving in the opposite direction from diplomacy.
• White House warned Russia could use unsupported claims about biological and chemical weapons in Ukraine as a cover for escalating the war, according to Axios.
• US official said Russian President Putin is likely to make nuclear threats if the war drags and that Russia may ‘rely on its nuclear deterrent' to signal strength. US official said Russia has moved artillery closer to Ukraine's capital of Kyiv in a possible effort to conduct a siege, according to Foreign Policy,
• US official said Russia moved artillery closer to Ukraine's capital of Kyiv in a possible effort to conduct a siege, according to Foreign Policy.
• US Pentagon said intelligence provided to Ukraine is making a difference against Russia, according to Sputnik.
• UK Ministry of Defence said logistical problems continue to beset Russia's faltering invasion of Ukraine.
• US National Guard denied Russian state media claims that Tennessee National Guard members were killed in Ukraine and said the report is patently false.
• Russia has set up a no-fly zone over the Donbass region of Ukraine, via Ifx citing a Donetsk separatist official

ENERGY/ECONOMIC SANCTIONS

• Russian Deputy PM Novak said energy supplies from Russia will remain stable despite the tense geopolitical situation, according to Interfax.
• Australian government placed sanctions on the Russian national wealth fund and Ministry of Finance. Australia added that new sanctions were imposed on 11 banks and individuals and that a majority of Russia's banking assets are now covered by sanctions along with all entities that handle Russia's sovereign debt.
• Japan imposed new sanctions against 15 Russian individuals and 9 Russian groups in which the targets of the new asset freeze sanctions included a defence official and two lawmakers.

OTHER THIRD-PARTY REMARKS/NEWS

• Russia is requesting a UN Security Council meeting on Friday regarding US biolabs in Ukraine, according to Sputnik citing the envoy. Furthermore, Russia's UN envoy said they will not put Russia's draft UN Security Council Resolution on Ukraine to a vote on Friday, while an ambassador noted that Moscow cancelled the vote on its "humanitarian" resolution after it failed to secure co-sponsorship of the draft text from China and India.

FUND/SOVEREIGN ACTION

• Russia is launching new, stricter controls on foreigners looking to trade Russian assets, ranging from securities to real estate, according to Reuters citing a client memo seen by Citi.
• S&P lowered Russia's credit rating from CCC- to CC; remains on Watch Negative, citing high vulnerability to debt non-payment.

OTHER

• Germany Foreign Minister Baerbock said Germany is to send more troops to NATO's eastern flank.

APAC TRADE

EQUITIES

• APAC stocks eventually traded mostly positive following on from Wall St's best 3-day gain since 2020.
• ASX 200 was underpinned by commodity-related sectors including energy after oil rallied over 9% yesterday.
• Nikkei 225 eked marginal gains amid the lack of fireworks at the BoJ policy announcement
• Hang Seng and Shanghai Comp. were mixed as tech stocks in Hong Kong faded their mid-week surges and with China said to weigh a Tencent overhaul by separating WeChat Pay from the core business and a new licence requirement. Conversely, the mainland was indecisive with downside cushioned amid further efforts by Chinese press to instill confidence in the equity market and with participants awaiting the Biden-Xi call.
• US equity futures were lacklustre overnight and faded some of Thursday's gains.
• European equity futures are indicative of a slightly firmer open with the Euro Stoxx 50 future up 0.1% after the cash market closed lower by 0.1% yesterday.

FX

• DXY found some respite from the extended post-FOMC selling pressure and reclaimed the 98.00 status.
• EUR/USD faded some of the recent advances after failing to sustain the 1.1100 handle.
• GBP/USD traded sideways after support at 1.3100 helped nurse some of the weakness from the dovish BoE hike.
• USD/JPY was rangebound and took a breather following recent brief incursions into 119.00 territory.
• Antipodeans were flat near this week’s best levels after the resurgence of oil prices.

FIXED INCOME

• 10yr USTs traded rangebound after recent curve steepening where the front-end was bid post-dovish BoE hike.
• Bunds were subdued with price action contained near the 161.00 focal point.
• 10yr JGBs lacked demand amid the mixed risk appetite and uneventful BoJ policy announcement.

COMMODITIES

• WTI and Brent remained underpinned after yesterday's 9% advances amid pessimism regarding Russia-Ukraine diplomacy.
• White House said too many oil and gas firms are increasing stock buybacks instead of increasing output.
• UK PM Johnson was unable to secure an agreement with Abu Dhabi and Saudi Arabia to boost oil output after a visit to the region although Downing Street claimed the trip was not about quick fixes, according to PoliticsHome.
• Spot gold continued its pullback from Thursday's peak near USD 1950/oz.
• Copper marginally extended on the prior day's gains.
• LME will increase the daily price limits for nickel to 12% from 10% from March 18th, while the daily price limits for all other base metal contracts are at 15%.

CRYPTO

• Bitcoin was lacklustre after recently slipping back beneath the USD 41,000 level.

NOTABLE APAC HEADLINES

• PBoC injected CNY 30bln via 7-day reverse repos with the rate at 2.10% for a CNY 20bln net daily injection.
• PBoC set USD/CNY mid-point at 6.3425 vs exp. 6.3339 (prev. 6.3406)
• Shanghai government suggested citizens work from home and reduce movement, while it will conduct a mass COVID-19 nucleic test in regions with low risk.
• BoJ kept monetary policy settings unchanged with rate at -0.10% and 10yr JGB yield target at 0%, as expected, with the decision on YCC made by 8-1 vote as Kataoka remained the lone dissenter. BoJ reiterated it will take additional easing steps as necessary with an eye on the impact of the COVID-19 pandemic and that Japan's economy is picking up as a trend, which will likely recover as the pandemic impact subsides, but downgraded its overall assessment of the economy as it noted exports and output are increasing as a trend although is being affected by supply constraints and the pick up in consumption is moderating. Furthermore, it stated that global markets are showing unstable moves amid the invasion of Ukraine and there is high uncertainty how developments in Ukraine impact Japan's economy and prices through markets, raw material prices and overseas economies.

DATA RECAP

• Japanese National CPI YY (Feb) 0.9% vs. Exp. 0.9% (Prev. 0.5%)
• Japanese National CPI Ex. Fresh Food YY (Feb) 0.6% vs. Exp. 0.6% (Prev. 0.2%)
• Japanese National CPI Ex. Fresh Food & Energy YY (Feb) -1.0% vs. Exp. -0.9% (Prev. -1.1%)

NOTABLE EUROPEAN HEADLINES

• UK Chancellor Sunak warned that an EU-wide ban on Russian oil and gas imports could send economic shockwaves throughout the continent and result in a GBP 70bln hit to the UK economy, according to FT.