• European bourses were relatively flat at the open but saw a bout of impetus amid above-forecast PMIs; however, this was shortlived with bourses now negative, Euro Stoxx 50 -0.6%.
• US futures are in-fitting directionally but diverging in terms of magnitudes, posting gains of circa. 0.4% ahead of multiple risk events.
• DXY is firmer and ever closer to 99.00, with NOK bolstered from post-Norges Bank commentary with CHF unphased by the SNB.
• EGBs initial test of yesterday's peaks fizzled and retraced in short-order, German 10yr yield now back above 50bp as such.
• WTI and Brent are modestly firmer but choppy in around UD 3.00/bbl ranges, ahead of multiple key meetings where energy will be a focal point.
• Looking ahead, highlights include US Flash PMIs, US IJC & Durable Goods, SARB Policy Announcement, Extraordinary NATO Summit & EU Council Meeting (1/2), Speeches from Fed's Waller, Evans, Bostic & Kashkari.

As of 10:35GMT/06:35EDT

LOOKING AHEAD

• US Flash PMIs, US IJC & Durable Goods, SARB Policy Announcement, Extraordinary NATO Summit & EU Council Meeting (1/2), Speeches from Fed's Waller, Evans, Bostic & Kashkari.
• 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

• Ukraine says seven humanitarian corridors agreed for Thursday, no mention of safe passage from Mariupol.
• EU's Foreign Representative Borrell says the Russian army has not reached its goals within Ukraine, Russia seeks to isolate Ukraine from the sea, has no interest in negotiating until then.
• NATO Chief Stoltenberg is set to prolong by one-year his term as Sec. Gen, according to TV2 Channel.
• Russian Kremlin says the fresh expulsion of US diplomats is a forced measure, asked why Defense Minister Shoigu has not appeared in public says it is not the correct time for media activity.

ENERGY/ECONOMIC UPDATES

• US Senator Cornyn met with Treasury Secretary Yellen to discuss Russian gold sanctions.
• Fitch announced it is to withdraw ratings on Russian entities.
• Austria says talks of imminent Russian energy boycott is wrong, via APA.

DEFENCE/MILITARY

• UK is to supply 6,000 missiles to Ukraine and GBP 25mln to help pay salaries of Ukrainian soldiers and pilots, while Sputnik found documents on the UK training Ukrainian soldiers for fighting in Donbass.
• Japan's government is considering announcing additional humanitarian aid of USD 100mln to Ukraine at the G7 and is considering doubling emergency loans to Ukraine to USD 200mln, while Japan is also looking into dispatching self-defence force medical officers to support Ukraine refugees, according to NHK.

OTHER NEWS/REMARKS

• US Embassy in Russia received a list of diplomats declared persona non grata from the Russian Foreign Ministry, while the US called on Russia to end the expulsion of US diplomats and staff.
• Australian PM Morrison said he raised concerns about the possibility of Russian President Putin attending the G20 meeting in Indonesia in November.
• Anonymous collective tweeted it hacked the Central Bank of Russia and that files will be released within 48 hours with secret agreements.

OTHER

• North Korea fired an unidentified projectile off the east coast, according to the South Korean military, while Japan's coast guard suggested it may be a ballistic missile. Subsequently, Japan's Chief Cabinet Secretary Matsuno says the apparent N. Korea missile fell within Japan's EEZ, was no prior notification which is a dangerous action.
• Japan's Vice-Defense Minister thinks the projectile launched from N. Korea may be a new type of inter-ballistic missile.
• South Korea has called a a security council meeting regarding the N. Korea missile launch.
• South Korea has test-fired multiple ballistic and guided missiles following the North Korean ICBM launch, according to the South Korean Military.
• "Sources now sound increasingly pessimistic about the chances of restoring the JCPOA.", according to Journalist Liechtenstein.

EUROPEAN TRADE

EQUITIES

• European bourses were relatively flat at the open but saw bout of impetus amid above-forecast PMIs; however, this was shortlived with bourses now negative, Euro Stoxx 50 -0.6%.
• US futures are in-fitting directionally but diverging in terms of magnitudes, posting gains of circa. 0.4% ahead of multiple risk events.
• Back to Europe, as the session progressing a defensive sectoral bias has become more pronounced.

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FX

• DXY nudges closer to 99.000 as risk tone remains tentative and Treasuries return to bear flattening mode.
• Yen slides through remaining 2016 lows to 121.75, breaching option barriers on the way at 121.50.
• Euro gets some support from above forecast PMIs in stark contrast to Sterling, EUR/USD limits losses under 1.1000, as Cable lets go of 1.3200 and EUR/GBP eyes 0.8350 to the upside.
• Norwegian Krona derives traction via hawkish Norges Bank rate path and commentary from the Governor, but Franc finds little new in latest SNB Quarterly Policy Review; EUR/NOK sub-9.5000, USD/CHF back over 0.9300 and EUR/CHF straddling 1.0250.

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Notable FX Expiries, NY Cut:

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CENTRAL BANKS

• Swiss SNB Policy Rate (Q1) -0.75% vs. Exp. -0.75% (Prev. -0.75%); CHF classified as “Highly Valued”, willing to intervene in the foreign exchange market as necessary, in order to counter upward pressure on CHF. Click here for more detail & analysis.
• SNB's Jordan says looks at at inflation differentials and currencies when deciding on intervention. Echoing recent commentary from the SNB
• Norges Bank: Key Rate 0.75% (exp. 0.75%, prev. 0.50%); guides towards June-MPR for next hike. Four hikes implied for 2022, terminal rate at 2.52% (prev. 1.75%). Click here for more detail & analysis.
• Norges Bank Governor Bache says they may hike by 50bp if inflation increases by more than expected, could also hike at intermediate meetings if needed.
• ECB is to gradually phase out COVID collateral easing measures between July 2022 and March 2024; keeps waiver on Greek govt bonds.
• ECB's Elderson says their analysis confirms that the present circumstances present new headwinds to growth; not yet observing stronger-second round effects than projected. Would not exclude a rate lift-off for this year.

FIXED INCOME

• Bonds back under siege after short-lived Wednesday revival.
• US Treasuries resume bear-steepening trend following scant positive reaction to a well covered and stop-through 20-year note sale.
• Gilts hand back more post-DMO remit recovery gains.

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COMMODITIES

• WTI and Brent are modestly firmer but choppy in around UD 3.00/bbl ranges, ahead of multiple key meetings where energy will be a focal point.
• On this, Eurasia’s Rahman suggested, “The threshold for energy import bans is very high”, though the EU and US are reportedly close to a deal cutting Russian oil dependence.
• German coalition parties agreed all tax-paying employed people to receive on-off energy price allowance of EUR 300 as supplement to their homes, shut down of coal-fired power plants can be suspended, ideally continuing with a 2030 phase-out.
• Spot gold/silver are rangebound but picking up back towards overnight highs as broader equity performance continues to pull back.
• Finally, LME Nickel once again hit the 15% limit up mark following similar gains in China – with market contacts pointing to supply-disruption positioning.

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DATA RECAP

• EU Markit Manufacturing Flash PMI (Mar) 57.0 vs. Exp. 56.0 (Prev. 58.2); Services Flash PMI (Mar) 54.8 vs. Exp. 54.2 (Prev. 55.5)
• EU Composite Flash PMI (Mar) 54.5 vs. Exp. 53.9 (Prev. 55.5)
• German Markit Composite Flash PMI (Mar) 54.6 vs. Exp. 53.7 (Prev. 55.6); Manufacturing Flash PMI (Mar) 57.6 vs. Exp. 55.8 (Prev. 58.4)
• German Services Flash PMI (Mar) 55.0 vs. Exp. 53.8 (Prev. 55.8)
• UK Flash Services PMI (Mar) 61.0 vs. Exp. 58.0 (Prev. 60.5); Manufacturing PMI (Mar) 55.5 vs. Exp. 56.7 (Prev. 58.0)
• Composite PMI (Mar) 59.7 vs. Exp. 57.8 (Prev. 59.9)

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CRYPTO

• Bitcoin is firmer though off best levels after it briefly printed a new peak for the week at USD 43,488.

APAC TRADE

EQUITIES

• APAC stocks traded cautiously after the losses in global peers as rising oil prices stoked growth concerns and with sentiment not helped by further hawkish Fed rhetoric.
• ASX 200 recouped early losses as energy the sector and mining stocks cheered recent commodity gains.
• Nikkei 225 initially retreated below 28k but then saw a late rebound to keep its winning streak intact.
• Hang Seng and Shanghai Comp. conformed to the risk-averse mood after the PBoC drained liquidity and amid weakness in tech, with the worst-performing stocks in Hong Kong dragged lower by recent earnings.

NOTABLE APAC HEADLINES

• PBoC injected CNY 20bln via 7-day reverse repos with the rate at 2.10% for a CNY 60bln net drain
• PBoC set USD/CNY mid-point at 6.3640 vs exp. 6.3635 (prev. 6.3558)
• China's Commerce Ministry says supply chain for the trade industry has been affected by domestic COVID outbreaks, confident to keep FY trade operation within reasonable ranges.
• Singapore PM Lee announced to double group sizes to 10 and that wearing masks outdoors will now be optional, while they will lift most restrictions for fully vaccinated visitors entering Singapore and the Transport Minister said that all fully vaccinated travellers will be permitted to enter quarantine-free from April 1st.
• BoJ minutes from the January meeting noted that members said they will not hesitate to add easing if necessary and a member noted that easing was still needed as inflation expectations are not anchored yet.

DATA RECAP

• Japanese Manufacturing PMI (Mar P) 53.2 (Prev. 52.7)
• Japanese Services PMI (Mar P) 48.7 (Prev. 44.2)
• Japanese Composite PMI (Mar P) 49.3 (Prev. 45.8)
• Australian Manufacturing PMI Flash (Mar) 57.3 (Prev. 57.0)
• Australian Services PMI Flash (Mar) 57.9 (Prev. 57.4)
• Australian Composite PMI Flash (Mar) 57.1 (Prev. 56.6)