• European bourses, Euro Stoxx 50 +2.2%, are firmer across the board in a continuation of the APAC/US handover as Russian-Ukraine talks begin.
• Risk-on that was exacerbated by Ukrainian negotiator Podoliak noted that a ceasefire is being discussed with Russia adding a press conference is to be expected later.
• Updates which further sapped geopolitical premia from crude benchmarks.
• DXY is softer, with EUR elevated amid pronounced yield upside as Bund 10yr nears 70bp; USD/JPY sub-124.00.
• Stateside, US equity futures are firmer but magnitudes more contained with Fed speak/supply ahead.
• Looking ahead, highlights include Speeches from Fed's Williams, Bostic & Harker & supply from the US.

As of 11:15BST/06:15ET

LOOKING AHEAD

• Speeches from Fed's Williams, Bostic & Harker & supply from the US.
• Click here for the Week Ahead preview.

GEOPOLITICS

RUSSIA-UKRAINE

NEGOTIATIONS/TALKS

• Ukraine and Russia peace discussions in Turkey have begun, according to Ukrainian TV. (08:27BST/03:37ET).
• Top Russian Negotiator Medinsky says a statement following Russian-Ukraine talks will occur in several hours, via Reuters citing Tass. Subsequently, Russia's Kremlin says we will know today or tomorrow if peace talks are promising; says dialogue between US and Russia is still needed; relations cannot be unaffected by personal insults.
• Ukraine negotiator Podoliak says that a ceasefire is being discussed, main issue is security guarantees followed by humanitarian issues.
• Russian Defence Minister Shoigu says the main task of their Ukraine military operation is the liberation of Donbass, via Ifx. Main task of the first phase is complete.
• Turkish President Erdogan says we have entered a phase where Ukraine/Russia discussions need to yield concrete results. Progress at the Istanbul meeting will pave the way for a Presidential meeting, which Turkey could also host.
• Ukraine Deputy PM says they are aiming to open three humanitarian corridors on Tuesday, including for private vehicles from Mariupol.
• France President Macron will speak with Russian President Putin later today; no time confirmed.

DEFENCE/MILITARY

• Kremlin spokesman Peskov said Russia would use nuclear weapons only when there is a threat to the existence of the state, while Peskov added that comments by US President Biden on Russian President Putin remaining in power were quite alarming and a personal insult. Furthermore, Peskov said Russia will not send gas without payment and that Russian troops are only shelling military installations, not houses and apartments.
• UK Ministry of Defence tweeted that Russian private military organisation the Wagner Group has deployed to eastern Ukraine with the group expected to deploy more than 1,000 mercenaries including senior leaders of the group for combat operations.

ENERGY/ECONOMIC SANCTIONS

• Russian Kremlin reiterated that gas payments must be made in Roubles, Russia will not export gas for free.
• Australia announced sanctions and travel bans on 14 Russians, while it was separately reported that Australia imposed sanctions on 39 Russians linked to the Magnitsky case, according to Sputnik.
  • Japan widened the scope of Russian sanctions to include luxury items such as premium cars and precious stones, according to Reuters.
  • Russian Finance Ministry says it has fully met the liability on servicing the 2035 Eurobond, made a USD 102mln coupon payment.

EUROPEAN TRADE

EQUITIES

• European bourses, Euro Stoxx 50 +2.2%, are firmer across the board in a continuation of the APAC/US handover as Russian-Ukraine talks begin.
• Upside that has been exacerbated by remarks from both Ukraine and Russian officials.
• US futures are firmer across the board, ES +0.4%, though magnitudes more contained with Fed speak and supply ahead.

Click here for more detail.

FX

• Euro elevated as EGB yields ramp up again and hopes rise regarding a Russia-Ukraine peace resolution, EUR/USD above 1.1000 and a series of decent option expiries stretching between 1.0950 and the round number.
• Buck caught amidst buoyant risk sentiment and hawkish Fed vibe, DXY sub-99.000 after narrowly missing test of 2022 peak on Monday.
• Yen maintains recovery momentum amidst more MoF verbal intervention and demand for month/fy end, USD/JPY under 124.00 vs 125.00+ peak yesterday.
• Franc flounders as SNB ponders direct repo indexing to main policy rate, USD/CHF around 0.9360 and EUR/CHF over 1.0300.
• Aussie gets retail therapy before fiscal reality via revised budget and Sterling unsettled by mixed BoE consumer credit, mortgage lending and approvals; AUD/USD straddles 0.7500 and Cable losing sight of 1.3100.
• Australian 2022-23 Federal Budget: Forecasts AUD 78bln budget deficit vs. AUD 98.9bln projected in December. Click here for more detail.

Click here for more detail.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.0900 (722M), 1.0950-60 (1.3BN), 1.0975-80 (1.33BN), 1.1000 (2.78BN), 1.1100 (956M)
• Click here for more detail.

FIXED INCOME

• Debt rout continues as markets perceive progress towards Russia/Ukraine truce from latest round of talks.
• US Treasuries also conceding more ground for the final leg of this week's auction remit via USD 47bln 7 year notes.
• Bunds breaching yet another round number to the downside at 157.00 as the benchmark German yield approaches 70 bp.

Click here for more detail.

COMMODITIES

• Crude benchmarks have experienced an erosion of earlier upside amid multiple, but generally constructive, updates from Ukraine and Russia.
• Specifically, Ukrainian negotiator Podoliak noted that a ceasefire is being discussed with Russia adding a press conference is to be expected later.
• Albeit, the morning's action has not been sufficient to spark a test of the overnight parameters for WTI and Brent.
• Spot gold/silver are pressured once more, generally speaking in-fitting with other havens, exacerbated by the aforementioned risk-on move.

Click here for more detail.

NOTABLE EUROPEAN HEADLINES

• UK is interested in creating joint first ministers in Northern Ireland as part of an effort to improve the functioning of the devolved government, according to FT.
• ECB's Lane has warned that Europe "may have to get used to higher prices". He also expressed "major concern" over declines in consumer and confidence sentiment indices, according to Politico.

DATA RECAP

• German GfK Consumer Sentiment (Apr) -15.5 vs. Exp. -14.0 (Prev. -8.1, Rev. -8.5)

NOTABLE US HEADLINES:

• US Economic Adviser Rouse said the US does not expect a food shortage and sees inflation to ease this year into next, according to Reuters.
• US Moderate Democrat Senator Manchin said he doesn't support taxing unrealised gains of the wealthy and opposes reversing fossil fuel tax benefits, according to Bloomberg.
• US Senate voted 68-28 to pass the USD 52bln chips subsidy bill which paves the way for talks in an attempt to reach a compromise with the House, according to Reuters.
• US DoJ backs legislation targeting big tech such as Amazon (AMZN), Google (GOOG) and Apple (AAPL), according to WSJ

Click here for the US Early Morning Note

CRYPTO

• Bitcoin is slightly softer overall, but remains well-within and towards the top-end of Monday's parameters.
• Environmental groups are pushing for a reduction in Bitcoin's energy use, according to WSJ.

APAC TRADE

EQUITIES

• APAC stocks traded mostly higher following the gains in the US where growth stocks spearheaded a recovery and with a decline in oil prices conducive for risk.
• ASX 200 was led by strength in tech and consumer stocks heading into the Budget announcement.
• Nikkei 225 gained with Japan to compile economic measures by the end of next month.
• Hang Seng and Shanghai Comp. traded mixed with the mainland index faltering amid the ongoing lockdown in Shanghai and despite the announcement of supportive measures by the local government.

NOTABLE APAC HEADLINES

• PBoC injected CNY 150bln via 7-day reverse repos with the rate at 2.10% for a CNY 130bln net injection
• PBoC set USD/CNY mid-point at 6.3640 vs exp. 6.3601 (prev. 6.3732)
• Shanghai will implement large-scale VAT credits and refunds, as well as reduce or exempt rents for SMEs. Shanghai also announced to strengthen financial guarantee support for SMEs and eligible companies, while it is to offer CNY 140bln in tax savings to corporations this year, according to Reuters and Global Times.
• Japanese PM Kishida said the government ordered a stimulus compilation by the end of April and Economic Minister Yamagiwa said they will first prioritise providing prompt support by utilising emergency reserves, according to Reuters.
• Japanese Chief Cabinet Secretary Matsuno said currency market stability is important and that they need to watch recent moves closely, while Finance Minister Suzuki said they will closely watch market moves to avoid negative JPY weakness, according to Reuters.
• Japan's Steel Industry Head says the plunging JPY vs USD poses serious challenge to domestic manufacturers, as some industries are yet to overcome deflation pressure, via Reuters.
• BoJ offered to buy an unlimited amount of 5yr-10yr JGBs at a fixed rate on two occasions today, according to Reuters.
• BoJ Summary of Opinions from the March meeting stated that rising inflation could pressure overseas economic growth and there were worries of the risk uncertainty regarding situation in Ukraine could weigh on Japan's economy. BoJ stated that CPI is likely to accelerate from April and may move around 2% for some time, while it also noted that they must maintain monetary easing as Japan is unlikely to see inflation continuously exceed 2%.

DATA RECAP

• Australian Retail Sales MM Final (Feb) 1.8% vs. Exp. 1.0% (Prev. 1.8%)