• US President Biden will speak with Chinese President Xi at 09:00EDT/13:00GMT
• Biden's administration reportedly hardened its stance towards China ahead of the call
• US futures and European bourses are pressured, as sentiment has drifted following a contained European cash open
• Ukrainian Presidential aide Zhovkva says talks with Russia are progressing, but only slowly; Kremlin says that Kyiv is slowing talks
• USD grinds higher after eclipsing 98.00, JPY lags with no assistance from the BoJ while EUR loses 1.1100
• Bonds bounce firmly ahead of the weekend as risk sentiment sours, yields pulling back as such, though they remain elevated
• Looking ahead, US Existing Home Sales, Quad Witching, Speeches from Fed's Barkin, Bowman & Evans. US-China President's Call.

As of 10:30GMT/06:30EDT

LOOKING AHEAD

• US Existing Home Sales, Quad Witching, Speeches from Fed's Barkin, Bowman & Evans. US-China President's Call.
• Note; US Clocks Changed to EDT from EST on Sunday, March 13th. London to New York time gap is four-hours until the UK change on March 27th.
• Click here for the Week Ahead preview.

GEOPOLITICS

• Chinese aircraft carrier sailed through the Taiwan Strait on Friday, according to Reuters sources; Shandong carrier which was shadowed by a US destroyer. The timing of the Shandong's movements, being so close to the US-China President's call, was described as provocative by the source.
• Global Times, citing an official, writes China will never accept US threats/coercion, will urge the US to fulfil President Biden's commitment not seeking a new Cold War, changes in China's system, a stronger alliance against China.

RUSSIA-UKRAINE

DISCUSSIONS/NEGOTIATIONS

• 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 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.
• Ukraine Deputy PM says nine humanitarian corridors have been agreed for Friday.
• Ukrainian Presidential aide Zhovkva says talks with Russia are progressing, but only slowly; will not negotiate an inch of Ukrainian territory.
• Russian Foreign Minister Lavrov says Russia's goal is to remove threats to Russia on Ukrainian soil; any weapons cargo to Ukraine is considered as "fair game" for Russia. A number of countries including China, India, Brazil and Mexico "will not dance to the tune of the United States", via Sky News Arabia.
• Russian Kremlin says that the Russian delegation in peace talks has expressed a readiness to work faster but the Ukraine delegation has not shown a similar readiness, negotiations continue.
• Russian President Putin and French President Macron will speak on Friday.

ENERGY/ECONOMIC UPDATES

• 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.
• S&P lowered Russia's credit rating from CCC- to CC; remains on Watch Negative, citing high vulnerability to debt non-payment.
• Russian sovereign eurobond coupon payments due on Wednesday have been executed, according to Reuters sources. Subsequently, Russian Finance Ministry says it has fully met obligation on paying coupons on Eurobonds due, Citibank has received the USD 117mln.
• Senior EU officials have an incredibly dire assessment about likely trajectory of Russia's war of aggression in Ukraine over next few weeks, according to Eurasia's Rahman; "The threshold for energy import bans (by the EU) is very high."
• Ukraine Foreign Minister Kuleba spoke with EU Foreign Affairs Representative Borrell about preparing a 5th sanction package on Russia.

DEFENCE/MILITARY

• 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 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
• Russian Defence Ministry say Russian-backed separatists, with Russian assistance, are "tightening the noose" around Mariupol, fighting ongoing in the city centre, via Reuters citing Ria.

EUROPEAN TRADE

EQUITIES

• European bourses, Euro Stoxx 50 -0.6%, have become incrementally more pressure after a relatively contained cash open, all eyes on the US-China meeting and Fed speak.
• US futures are similarly pressured, ES -0.6%, but have been somewhat more contained thus far; reminder, today is Quad Witching.
• Sectors, were initially mixed in Europe but have been drifting lower and are all in negative territory with the exception of some mild support for Defensives.

Click here for more detail.

FX

• Dollar regains poise after post-FOMC demise with DXY pivoting 98.000.
• Yen still lagging following no change from ultra accommodating BoJ, USD/JPY just shy of 119.00.
• Euro loses grip of 1.1100 handle where decent option expiry interest starts and ends at 1.1110 (1.44bln).
• Pound pares some post-dovish BoE hike declines and Rouble was unphased by the CBR keeping rates unchanged after the significant intra-meeting hike; Cable straddles 1.3150 and USD/RUB firmly above 100.0000.

Click here for more detail.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.0945-50 (673M), 1.1000 (486M), 1.1100-10 (1.44BN), 1.1140-50 (487M), 1.1200 (627M)
• Click here for more detail.

FIXED INCOME

• Bonds bounce firmly ahead of the weekend as risk sentiment sours and stocks head into quad-witching on a weak footing.
• Curves continue to flatten following Fed and BoE tightening.
• Gilts extend outperformance and recovery gains on a dovish leaning MPC split and guidance.

Click here for more detail.

COMMODITIES

• WTI and Brent front-month futures are firmer but off best levels as the complex continues to nurse some of this week’s earlier losses.
• WTI Apr resides just above USD 104/bbl (vs weekly high 109.72/bbl) whilst Brent May trades hovers around USD 108.00 (vs weekly high 113.15.bbl).
• 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.
• LME says some trades have gone through below the Nickel limit, such trades will be cancelled; hit the adjusted limit down of -12%.
• Spot gold/silver are pressured as the USD retains an underlying bid, eyes on Biden-Xi call.

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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.

NOTABLE US HEADLINES

• Boeing (BA) is in discussions with Delta Airlines (DAL) for an order of possibly 100 737 Max jets, according to Reuters sources.

Click here for the US Early Morning Note

CRYPTO

• Bitcoin is little changed overall with the sessions parameters narrower than those over the last few sessions, remains above USD 40k.

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.

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.
• BoJ's Kuroda says there is no need to worry about stagflation in Japan, US and Europe; does not think it will occur in these areas. No need for Japan to increase rates at all. Have no need/right to try to affect FX rates

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%)