• European bourses have been erring higher after a contained open, Euro Stoxx 50 +0.9%, with upside occurring as crude and bonds slipped further.
• US futures are in-fitting directionally but magnitudes more contained, a slew of speakers ahead.
• Crude benchmarks are pressured, but off lows, amid China COVID and EU energy price cap updates.
• DXY remains underpinned after an initial pullback from 99.00, while JPY lags with USD/JPY testing 121.00.
• Core debt continues to reel with yields steeper post-Powell and as corporate issuance factors once more.
• Looking ahead, highlights include NBH Policy Announcement, Speeches from Fed's Williams, Daly & Mester, ECB's Lagarde, Lane & Panetta.

As of 10:30GMT/06:30EDT

LOOKING AHEAD

• NBH Policy Announcement, Speeches from Fed's Williams, Daly & Mester, ECB's Lagarde, Lane & Panetta.
• 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

RUSSIA-UKRAINE

DISCUSSIONS/NEGOTIATIONS

• Ukrainian President Zelenskiy said a meeting with Russian President Putin is vital to determine Russia's position on ending the war, according to Interfax. President Zelensky also said that he’s prepared to discuss a commitment from Ukraine not to seek NATO membership in exchange for a ceasefire, withdrawal of Russian troops and a guarantee of Ukraine’s security, according to AP.
• UN General Assembly's special session on Ukraine will resume on Wednesday after a relevant request, according to Sputnik.
• Adviser to the Ukrainian President says there are many contentious issues with the Russians, most notably the integrity of our territory and security guarantees, according to Al Jazeera.
• Russian Deputy Foreign Minister says the Ukrainian side has no desire to take our demands into account, via AJA Breaking.

ENERGY/ECONOMIC UPDATES

• French Foreign Minister Le Drian and US Secretary of State Blinken agreed to continue strengthening sanctions against Russia and on the need to enhance the security of Ukraine's nuclear facilities.
• Russia's coupon payment on sovereign bonds maturing in 2029 was processed by JPMorgan which worked with the US Treasury Department on necessary approvals, according to Reuters sources.
• Russian Finance Ministry has channelled USD 65.63mln for the coupon payout on 2029 Eurobond to Russia's national settlement depository, fully met liabilities.
• S&P said it will withdraw ratings on all Russian entities.
• Eurasia Groups Rahman understands that work on a SURE-style instrument, for the Russian war in Ukraine, has been put on hold, as EU Commission President von der Leyen was "spooked" by Germany's opposition to common borrowing.

DEFENCE/MILITARY

• US President Biden said Ukraine is fighting valiantly and using equipment from the US, while he added Russian President Putin's back is against the wall and he is talking about new false flags such as biological weapons. President Biden also suggested this is a clear sign that President Putin is considering both biological and chemical weapons, while he added that Russia may be planning a cyber attack against the US.
• UK Ministry of Defence said Russia claimed it fired a number of hypersonic missiles against Ukrainian targets and that its claims of using the developmental Kinzhal are highly likely intended to detract from lack of progress on the ground campaign.
• Ukrainian forces announced the recapture of the Makarev area west of Kyiv, according to Sky News Arabia.

EUROPEAN TRADE

EQUITIES

• European bourses have been erring higher after a contained open, Euro Stoxx 50 +0.9%, with upside occurring as crude and bonds slipped further.
• US futures are in-fitting directionally but magnitudes more contained, ES +0.2%, with a slew of Central Bank speakers ahead.
• Sectors features defensive names as the current underperformers while Consumer Products is bolstered post-Nike earnings.
• China is to hold a press conference on Tuesday night regarding the latest updates of the crashed China Eastern Jet, according to State Media.
• EU leaders could endorse taxing windfall profits of energy firms, according to a draft summit statement.
• China's securities regulator asked some US listed Chinese firms, including Alibaba (BABA), Baidu (BIDU), and JD.com (JD), to prepare for more audit disclosures and asked to prepare audit documents for FY21, according to Reuters sources.

Click here for more detail.

FX

• Dollar extends gains as Fed chair Powell delivers hawkish speech at NABE, underlining 50bps hikes at one or more meetings, a potentially higher terminal rate and QT kicking off in May perhaps/
• DXY gets to within a whisker of 99.000 before waning.
• Yen extends slump as BoJ Governor Kuroda says any exit from ultra accommodation would be premature, USD/JPY now testing 121.00 after breaching a key Fib just over 119.50 and 120.00 with little resistance.
• Kiwi and Aussie bounce as risk appetite picks up, former back above 0.6900 and latter on the 0.7400 handle again. Loonie lags as oil prices retreat, USD/CAD over 1.2600.
• Pound and Euro derive some traction from corrective gains in Gilt and EGB yields; Cable close to 1.3200 and EUR/USD tests 1.1000 where 1.35bln option expiries start and end at 1.1010.

Click here for more detail.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.0870 (301M), 1.0990 (345M), 1.1000-10 (1.35BN), 1.1050-55 (821M), 1.1075-80 (757M), 1.1100 (300M), 1.1135-40 (665M), 1.1150 (572M), 1.1175 (345M)
• Click here for more detail.

FIXED INCOME

• Bear-steepening in US Treasuries continues after even more hawkish-leaning guidance from Fed chair Powell.
• EGBs and Gilts play catch-up, with Bunds testing 50bps in yield and 159.00 in futures.
• UK debt awaiting inflation data and Spring Budget before flash PMIs and retail sales round out busy week.

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COMMODITIES

• WTI and Brent are pressured, but off lows, as the benchmarks are hit amid China's COVID updates and reports of further support in the EU for an energy price cap.
• WTI and Brent May contracts have slipped from intraday highs of USD 113.30/bbl and USD 119.48/bbl to current lows of USD 107.10/bbl and USD 112.64/bbl, respectively.
• France and "several eastern EU countries" reportedly back the idea of energy price caps with Germany and the Netherlands left to be convinced, according to Journalist Keating; Germany/Netherlands argue that refusing to pay market price could mean suppliers go elsewhere.
• Subsequently, a Senior German official says that Berlin's opposition to energy sanctions is “unlikely to change” unless Russia uses “chemical or nuclear weapons”, according to Eurasia Group's Rahman. Adds, "One idea would see a “coalition of the willing” - member states with less Russian energy dependency, move first" - Note, it is unclear if this is the journalists' view or an official.
• Japanese government says power supply is tightening in the Tohoku region amid low temperatures.
• Spot gold/silver are pressured, though off lows, amid what appears to be a outflow from "havens" with core-debt and JPY pressured.
• LME CEO says price limits should prevent a repeat of the squeeze seen in Nickel, via Bloomberg. At the open, LME Nickel -12%, at USD 27,600/T.
• One global aluminium producer is seeking USD 195/t premiums in discussions with Japan, which would be up 10% from the current quarter, according to Reuters sources.
• China is to strictly control coal consumption in steel, chemical and cement industries in 2021-25.

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NOTABLE EUROPEAN HEADLINES

• ECB's Villeroy says the ECB must not overreact to energy price volatility, should focus on underlying and medium-term prices. Green transition could result in some inflation pressure.

NOTABLE US HEADLINES

• Goldman Sachs now expects the Fed to hike by 50bps at the May and June meetings, as well as announce the start of the balance sheet reduction in May, while it also sees four 25bps hikes in H2 but added that the Ukraine war and tight financial conditions are risks to the rate call.
• UK and the US to announce deal on Trump-era steel tariffs tonight, according to Politico's Casalicchio.

Click here for the US Early Morning Note

CRYPTO

• Bitcoin is bid, but off highs, having surpassed last week's peak of USD 42,392 in a short-lived foray above the USD 43k mark.

APAC TRADE

EQUITIES

• APAC stocks were mostly positive with the region shrugging off the higher yields and oil advances.
• ASX 200 was led higher by strength in the commodity-related sectors including energy after further gains in oil.
• Nikkei 225 gained as exporters benefitted from a weaker currency and amid stimulus speculation.
• Hang Seng and Shanghai Comp. traded higher with outperformance among the blue-chip tech stocks including Alibaba after it boosted its share buyback to USD 25bln from USD 15bln and with oil majors underpinned.

NOTABLE APAC HEADLINES

• PBoC injected CNY 20bln via 7-day reverse repos with the rate at 2.10% for a CNY 10bln net injection.
• PBoC set USD/CNY mid-point at 6.3664 vs exp. 6.3635 (prev. 6.3677)
• Japan was reported to be eyeing additional stimulus valued over JPY 10tln, according to Sankei, although Chief Cabinet Secretary Matsuno later stated they are not thinking about an economic stimulus package now. Subsequently, Japan's annual budget passed parliament; a move which should allow some discussion around additional stimulus to commence.
• Chinese Foreign Minister says, re. US visa restrictions on Chinese officials, that the US should immediately revoke sanctions, or China will response with reciprocal counter measures.
• China's COVID epidemiologist Wannian says that China's COVID curbs should be targeted and effective, sees rising COVID pressure from surrounding nations, such as Hong Kong

DATA RECAP

• New Zealand Westpac Consumer Confidence (Q1) 91.2 (Prev. 99.1)