• European bourses are firmer, extending on overnight futures performance, shrugging off a downbeat APAC handover amid COVID concerns.
• Stateside, futures are contained/marginally softer ahead of a quiet schedule and after a mixed close on Friday; NQ, -0.3%, modestly lags amid yield action.
• Russian Kremlin said face-to-face talks in Turkey with Ukraine are unlikely to commence on Monday, may start on Tuesday.
• AAPL intends to make ~20% less iPhone SE's next quarter than was originally planned, via Nikkei; while TSLA is seeking a stock split.
• DXY surpasses 99.00 while JPY lags amid BoJ JBG intervention, core-debt pulls back with curves flatter or more inverted pre-supply.
• WTI and Brent are clipped amid COVID measures from China and progress on the JCPOA; currently, off lows of USD 108.28/bbl and USD 115.32/bbl respectively.
• Looking ahead, highlights include the ASEAN summit, US Auctions & a speech from BoE Governor Bailey.

As of 11:15BST/06:15EDT

LOOKING AHEAD

• ASEAN summit, US Auctions & a speech from BoE Governor Bailey.
• Click here for the Week Ahead preview.

GEOPOLITICS

RUSSIA-UKRAINE

NEGOTIATIONS/TALKS

• Ukrainian President Zelensky said he would like an all for all prisoner exchange with Russia and that they have handed over a list to Russia. Zelensky added that they will not sit down for talks with Russia if discussions are about "demilitarisation and some kind of denazification". Zelensky stated that Ukraine is ready to discuss neutrality and non-nuclear status if backed by security guarantees, while he added that a deal is only possible with a troop withdrawal and that he wants a compromise with Russia regarding Donbass.
• Ukrainian Interior Ministry Advisor says he expects no major breakthrough at peace discussions.
• Turkish President Erdogan told Russian President Putin in a call that there needs to be a quick ceasefire with Ukraine and that they need to improve the humanitarian situation in the region, while it was also reported that the next round of face-to-face talks between Russia and Ukraine will be held in Turkey on March 28th-30th.
• Senior Turkish official says that talks between Ukrainian and Russian negotiators will begin in Istanbul later today. However, the Russian Kremlin said talks are unlikely to commence on Monday, may start on Tuesday. No substantial achievements/breakthroughs in talks, no progress re. a potential Putin-Zelensky meeting.
• Russian Foreign Minister Lavrov says President Putin never refuses to meet with Ukrainian President Zelensky, but since meetings must be well prepared, a (presidential) meeting to exchange views at this time would be counter-productive.
• Ukraine's Deputy PM says that no humanitarian corridors will be opened today as intelligence suggested potential Russian provocations on corridor routes.

OTHER OFFICIALS

• US President Biden said NATO is a defensive alliance and it has never sought Russia’s demise and that “swift and punishing” costs are the only things that will influence Russia to change course. Biden added that US forces are in Europe to defend NATO allies, not to engage with Russian forces and stated that Russian President Putin cannot remain in power, although Biden later said that he was not calling for a regime change in Russia.
• White House official said President Biden was not calling for a change of regime in Russia and the US envoy to NATO also commented that the US does not have a policy of regime change in Russia. In relevant news, a Kremlin spokesman responded that it is not for US President Biden to decide and said the President of Russia is elected by Russians.
• German Chancellor Scholz said a regime change in Russia is not NATO’s goal. Furthermore, Scholz said that Germany is considering purchasing a missile shield.
• US Secretary of State Blinken said Israeli efforts to mediate on Ukraine-Russia are important and closely coordinated with the US.

DEFENCE/MILITARY

• Russia launched 70 missiles on targets in Ukraine on Saturday which was the largest daily amount since the war began, although reports added only 8 of the 70 missiles reached the target, according to Pravda with most shot down by Ukrainian defence.
• UK Ministry of Defence said Russia is maintaining a distant blockade of Ukraine’s Black Sea coast and effectively isolating Ukraine from maritime trade, while it noted that Russian naval forces are continuing their sporadic missile strikes against targets throughout Ukraine. UK Defence Ministry also said Russia is stepping up attempts to encircle Ukrainian forces directly facing the separatist regions in the east, advancing from the direction of Kharkiv in the north and Mariupol in the south, according to Bloomberg.
• US is to provide an additional USD 100mln in civilian security assistance to Ukraine, according to the State Department.
• Ukraine's Deputy Defence Minister said that Russian forces are regrouping but not able to advance anywhere within Ukraine, via Reuters. Subsequently, reports suggest that Russia is attacking to the east and northwest of Kyiv, trying to take key roads and settlements, according to a war reporter based in Ukraine

ENERGY/ECONOMIC SANCTIONS

• US is to sanction companies providing technology for Russian military and intelligence services, according to a WSJ report late on Friday.
• Japanese Finance Minister Suzuki said the government cannot confiscate foreign central banks' reserves parked with the BoJ under current laws, while Chief Cabinet Secretary Matsuno said they will revise FX control laws swiftly to strengthen sanctions against Russia and hope to submit a bill at the current parliamentary session.
• Russian Kremlin says President Putin has instructed the CBR and Gazprom to use the RUB in gas sale transactions to unfriendly nations by March 31st, via AJA Breaking.

OTHER

• Iranian Foreign Minister said that France, Germany and UK agree on the text and that the US ‘accepts’ it must address some remaining issues, while he also stated that a deal hinges on the US removing the IRGC from the terror list, according to Bloomberg. Furthermore, Iran’s Foreign Minister said Tehran welcomes normalisation of ties with Saudi Arabia and is determined to expand cooperation with Syria, according to state TV.
• EU's Borrell said a nuclear agreement with Iran is very close.
• US Special Envoy for Iran Malley said he can’t be confident that a deal is imminent and said they also thought they were close a few months ago.
• US Secretary of State Blinken said a return to the JCPOA is the best way to put Iran’s nuclear program back in the box and that US commitment to the principle of Iran never acquiring a nuclear weapon is unwavering, while he added the US will continue to stand up to Iran if it threatens the US and its allies.
• Israeli PM Bennett said that he hopes the US will heed calls against the delisting of the IRGC from its terrorism blacklist, while Israel’s Foreign Minister said Israel and the US will continue working together to prevent a nuclear Iran.
• Two police officers were killed and four people were injured during a shooting attack in Israel's Hadera, which ISIS claimed responsibility for.
• North Korean leader Kim said North Korea will keep developing formidable striking capabilities and their self-defence force cannot be bartered nor be bought according to KCNA, while it was separately reported that North Korea is to accelerate the restoration of its demolished nuclear test site, according to South Korea press.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer, extending on the pre-open futures performance, shrugging off a downbeat APAC handover amid COVID concerns.
• Sectors are primarily in the green though Tech and Energy names lag amid Apple and crude benchmark action, respectively.
• Stateside, futures are contained/marginally softer ahead of a quiet schedule and after a mixed close on Friday; NQ, -0.3%, modestly lags amid yield action.
• Apple (AAPL) intends to make ~20% less iPhone SE's next quarter than was originally planned, via Nikkei; reducing iPhone and AirPods output amid Ukraine war uncertainty. -1.8% in pre-market
• Tesla (TSLA) is to ask shareholders to vote on more shares for a stock split, according to Bloomberg. +3.6% in pre-market

Click here for more detail.

FX

• BoJ intervenes to curb JGB yield but waves green light to further Yen weakness, USD/JPY breaches barriers from 123.50 all the way up through 125.00 before easing back.
• DXY tops 99.000 and mid-March high to expose Y-T-D peak as US Treasuries continue to sink and the curve flattens or inverts.
• Aussie maintains momentum on commodity related grounds, while Kiwi is hampered by less hawkish RBNZ outlook from Westpac; AUD/USD approaches 0.7550, NZD/USD hovers under 0.6950 and AUD/NZD tests 1.0850.
• Euro underpinned by EUR/JPY cross demand, EUR/USD recovers from sub-1.0950 to get close to 1.1000 at best.
• Loonie and Nokkie undermined by hefty retreat in WTI and Brent, USD/CAD circa 1.2485 and EUR/NOK around 9.4700.
• Franc softer after SNB President repeats that nominal value is not the same as real and inflation differentials are impacting moves, USD/CHF circa 0.9350 and EUR/CHF above 1.0250.
• SNB Chairman Jordan said Swiss inflation is high for Switzerland but low in international comparison, while they will make policy adjustments to keep inflation under control if needed and consider the inflation difference between Switzerland and other countries when deciding on currency interventions. SNB Chairman Jordan added that the nominal value of CHF is different to its real value and businesses can cope with a stronger nominal CHF due to higher inflation abroad. Furthermore, he added that CHF remains highly valued and that they are ready to intervene to prevent it from becoming too strong, while parity with EUR is symbolic but not economically important and they look at all currencies and inflation differences not just at the euro.
• Japanese Former currency diplomat Sakakibara (aka Mr Yen) says that the current weak JPY benefits the Japanese economy but further advances beyond 130 vs. the USD would cause issues, via Reuters.

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Notable FX Expiries, NY Cut:

• USD/CAD: 1.2545-55 (1.0BN), 1.2650 (336M)
• Click here for more detail.

FIXED INCOME

• Bonds buckle again as the bear trend continues
• Curves flatter or more inverted amidst a front-loaded and shorter-dated supply schedule
• JGBs hold up a bit better as BoJ offers to buy unlimited amounts in defence of its YCT through to month/fy-end

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COMMODITIES

• WTI and Brent are clipped amid COVID measures from China and progress on the JCPOA; currently, off lows of USD 108.28/bbl and USD 115.32/bbl respectively.
• Saudi-led coalition said it began an operation to neutralise the targeting of oil facilities with the goal to protect global energy sources from hostile attacks and ensure supply chains, while it carried out airstrikes against sources of threats in Yemeni cities of Sanaa and Hodeidah, according to Al Arabiya.
• SGH Macro Advisers noted on Friday that Russia is in active talks with Asian partners about the possibility of sending further oil supplies to the Asian market, while SGH Macro understands that China will import at least 10mln tons of Russian oil on top of its original import plan for this year and Beijing sources said the price that Russia offered is equivalent to about USD 70/bbl which is to be settled directly in CNY and RUB.
• Qatar’s Foreign Minister said the conflict in Ukraine and its geopolitical ramifications, is spurring some countries to explore new ways of pricing oil outside of the dollar, according to CNBC.
• UAE Energy Minister says everyone is saying to raise production, but financial institutions are hesitant to finance many oil/gas projects globally.
• US, UK and Japanese banks are considering jointly extending USD 1bln in loans to Kuwait Petroleum Corp to help in increasing oil production, according to Nikkei.
• Spot gold/silver are hampered amid broader price action and as other havens, particularly JPY and core-debt, experience marked weakness.

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NOTABLE EUROPEAN HEADLINES

• UK PM Johnson is expected to hold discussions with senior cabinet ministers this week regarding plans to address rising bills and bolster the country’s energy security, according to The Observer.
• UK Chancellor Sunak is considering proposals for a new council tax rebate after his Spring statement failed to ease panic in Downing Street regarding the spiralling cost of living crisis, according to Sunday Times.
• German Chancellor Scholz said the ruling coalition has an agreement on debt brake and tax hikes, while he added that all parties will stick with them.
• ECB President Lagarde said euro area growth could be as low as 2.4% this year in a severe scenario due to the war and that inflation is expected to decrease and settle at levels around the 2% target in 2024 in all their scenarios, while she also commented that they stand ready to revise the schedule for net asset purchases in terms of size and duration.

NOTABLE US HEADLINES:

• White House Principal Deputy Press Secretary Karine Jean-Pierre tested positive for COVID-19 and last saw President Biden in a socially-distanced meeting on Saturday, but added that the President is not considered a close contact.

Click here for the US Early Morning Note

CRYPTO

• Exxon is reportedly utilising excess natural gas to mine Bitcoin.
• Florida Governor DeSantis said the state should allow businesses to pay tax in crypto.
• UK is to disclose cryptocurrency regulations proposals in the coming weeks, according to CNBC.

APAC TRADE

EQUITIES

• APAC stocks traded mostly lower with the region cautious heading into month-end and this week's various risk events, while higher yields and a lockdown in Shanghai contributed to the headwinds for risk sentiment.
• ASX 200 shrugged off weak business confidence and was kept afloat by strength in mining stocks and financials.
• Nikkei 225 is set to snap its 9-day win streak and tested the 28,000 level to the downside.
• Hang Seng and Shanghai Comp. were mixed with early weakness in the mainland amid a two-stage lockdown in Shanghai after asymptomatic cases in the city rose to a record high and with data also showing a slowdown in Industrial Profits for February YTD. However, the PBoC’s liquidity boost eventually helped stem some of the losses in China, while the Hong Kong benchmark recovered into the green with advances led by Meituan Dianping and Sinopec post-earnings.

NOTABLE APAC HEADLINES

• PBoC injected CNY 150bln via 7-day reverse repos with the rate at 2.10% for a CNY 120bln net injection.
• PBoC set USD/CNY mid-point at 6.3732 vs exp. 6.3719 (prev. 6.3739)
• Shanghai announced a four-day lockdown of its financial district and nine other areas, in which it is to lockdown each half of the city in turns for mass COVID testing beginning on Monday after the city reported a new record high of asymptomatic COVID-19 cases.
• US FCC designated China Telecom Corp and China Mobile International USA as a threat to national security.
• BoJ offered to buy an unlimited amount of 5yr-10yr JGBs at a fixed rate of 25bps although no one took up the central bank's offer for unlimited 5yr-10yr JGBs. BoJ said it made the offer in light of recent moves in long-term rates and that they need to guide 10yr yield around 0%, while it later announced a second similar operation.
• BoJ is to conduct bond buying operations for consecutive days; March 29th to 31st, to conduct unlimited fixed-rate purchase operations for 10yr JGBs at a yield of 0.25%.

DATA RECAP

• Chinese Industrial Profits YTD YY (Feb) 5.0% (Prev. 34.3%)
• Australian NAB Quarterly Business Confidence (Q1) 9 (Prev. 18, Rev. 14)