• European Equities remain subdued but well off lows as participants await US CPI, the easing of initial pressure has US futures unchanged
• DXY continue to grind higher printing a 100.23 high to the mixed fortune of peers as AUD & NZD remain resilient
• Core debt has bounced pre-CPI as Bunds/Gilts derive some impetus from solid auctions, US 10yr sale ahead
• WTI and Brent are continuing to recoup Monday’s lost ground amid multiple crude-related updates; Brent above USD 102/bbl
• Geopolitics has been focused on potential chemical weapons usage by Russian forces, though details are light
• Looking ahead, highlights include US CPI, Speeches from Fed's Barkin & Brainard, Supply from the US, Earnings from LVMH.

As of 11:15BST/06:15ET

LOOKING AHEAD

• US CPI, Speeches from Fed's Barkin & Brainard, Supply from the US, Earnings from LVMH.
• Click here for the Week Ahead preview.

GEOPOLITICS

RUSSIA-UKRAINE

NEGOTIATIONS/TALKS

• Ukrainian Deputy Minister says nine humanitarian corridors have been agreed for Tuesday, including from Mariupol via private vehicles, via Reuters.
• Russian President Putin says there is no doubt that the military operation in Ukraine will achieve its objectives.

DEFENCE/MILITARY

• Ukrainian President Zelensky said Russian forces could use chemical weapons and that Ukraine takes this threat seriously, while President Zelensky did not say chemical weapons have already been used in his nightly address, according to Reuters.
• US Pentagon Press Secretary Kirby said they are aware of social media reports which claim Russian forces deployed a potential chemical munition in Mariupol, but added they cannot confirm it at this time and will continue to monitor the situation closely, according to Politico.
• UK Foreign Secretary Truss tweeted "Reports that Russian forces may have used chemical agents in an attack on the people of Mariupol. We are working urgently with partners to verify details", while she added "Any use of such weapons would be a callous escalation in this conflict and we will hold Putin and his regime to account."
• pro-Russian separatists forces in Donetsk say they did not use chemical weapons in Mariupol, Ukraine, via Reuters citing Ifx.
• Governor of Ukraine's Luhansk region said Russia is moving military vehicles closer to front lines in apparent preparation for assault, according to Reuters.
• Sources say they expect the build up of Russian aircraft, equipment and forces on the eastern-front to continue for at least the next two-weeks, via Politico.
• Russian State Security notes of the arrest of a member of the Ukrainian Right Sector extremist organization, who was reportedly preparing an act of sabotage in Russia, according to Al Jazeera.

ENERGY/ECONOMIC SANCTIONS & UPDATES

• Eastward gas flows via the Yamal-Europe pipeline have increased, via Reuters citing Gascade data.
• India is planning USD 2bln of additional exports to Russia and replace exports which were originally supplied by nations which have now halted exports to Russia, via Bloomberg.
• German gas reserves would last until late summer or early fall should Russia stop supplies now, according to Die Zeit citing a network regulator; German households would have to give up on heating privileges in case of a gas supply emergency. Gazprom Germania's biggest gas storage facility has storage levels of under 1%, will need to be increased significantly by November.
• Russia's Energy Ministry has suspended the monthly publication of oil production and export data, according to Interfax citing a letter

OTHER

• US assesses that Russian President Putin may boost efforts to interfere with US elections, according to CNN.

EUROPEAN TRADE

EQUITIES

• European bourses are subdued, Euro Stoxx 50 -0.7%, but off lows as participants await the US CPI metrics for fresh insight into the inflation narrative and for any read across to ongoing yield upside.
• The breakdown features relatively broad-based losses as the CAC 40 is in-line after Monday's election inspired outperformance while Banking names lag initially in a pullback from that session’s strength while Energy & Tech fare better.
• Stateside, futures are attempting to move into positive territory, ES Unch., but are yet to find a robust foothold.
• Click here for more detail.

FX

• Greenback grinds higher before US CPI with White House officials upping the ante for a hot set of inflation data, DXY eclipses last Friday's peak within a firmer 100.230-99.923 range.
• Aussie resilient after increases in NAB business sentiment and conditions and Kiwi underpinned awaiting 25bp or 50bp from the RBNZ, overnight; AUD/USD bounces off 0.7400 and NZD/USD keeps grip of 0.6800 handle.
• Euro holds above recent low and 2022 trough with some traction from Germany’s ZEW survey showing not as bad as feared economic sentiment and current conditions, EUR/USD above 1.0850 vs 1.0836 last Friday and 1.0806 y-t-d base.
• Sterling treading water around 1.3000 after mixed UK jobs and earnings, Loonie looking for support via decent option expiry interest at 1.2650 or chart levels after dropping through 200 DMA before BoC on Wednesday.
• Yen and Franc yield to divergent dynamics; USD/JPY poised below 2015 peak and USD/CHF rebounds from low 0.9300 zone.
• Japanese Finance Minister Suzuki said FX stability is important but did not comment on FX levels, while he added they are watching closely with vigilance how FX moves could impact Japan's economy. Suzuki also noted that excess FX volatility and disorderly FX moves could have an adverse effect on Japan's economy, while they will respond to FX as appropriate while communicating with the US and other countries.
• NBP's Kotecki says that more interest rate increases are probable, according to PAP.
• Click here for more detail.

Notable FX Expiries, NY Cut:

• USD/CAD: 1.2500-10 (570M), 1.2585 (310M), 1.2650 (1.51BN)
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FIXED INCOME

• Bonds bounce after sliding once more and setting fresh yield highs; 10 year T-note, Bunds and Gilts off new 119-10+, 154.27 and 118.42 cycle lows.
• UK and German debt may be gleaning some comfort from solid covers at Schatz and 2032 DMO auctions.
• Treasuries await US CPI and 10 year supply.
• Click here for more detail.

COMMODITIES

• Crude benchmarks are continuing to regain composure after Monday's pressure, with WTI and Brent in proximity to highs of USD 97.72/bbl and USD 102.15/bbl respectively.
• European Commission official said the EU repeated its call during a meeting with OPEC for oil producers to look at whether they can increase deliveries, according to Reuters.
• US President Biden will on Tuesday lay out plans to extend the availability of higher biofuels-blended gasoline during the summer in a bit to control fuel costs, according to Reuters sources.
• Spot gold and silver are contained, particularly in the context of yesterday's price action, ahead of the key US events on the schedule.
• Click here for more detail.

NOTABLE EUROPEAN HEADLINES

• UK ministers were warned that gas and electricity bills are likely to increase by a further GBP 500 this autumn amid the Ukraine war, according to The Times.

NOTABLE DATA

• UK ILO Unemployment Rate (Feb) 3.8% vs. Exp. 3.8% (Prev. 3.9%); HMRC Payrolls Change (Mar) 35k (Prev. 275k, Rev. 174k)
• UK Average Earnings (Ex-Bonus) (Feb) 4.0% vs. Exp. 4.0% (Prev. 3.8%)
• German ZEW Economic Sentiment (Apr) -41.0 vs. Exp. -48.0 (Prev. -39.3); Survey Expectations (Apr) -43 (Prev. -38.7)
• UK BRC Retail Sales Like-For-Like YY (Mar) -0.4% (Prev. 2.7%)
• UK BRC Total Retail Sales rose YY (Mar) 3.1% (Prev. 6.7%)
• Barclaycard UK March Consumer Spending rose 17.7% compared to March 2019.

NOTABLE US HEADLINES

• Former US Treasury official Michael Barr has reportedly emerged as the frontrunner for President Biden's pick for Vice-Chair of Supervision at the Fed, according to Politico.

CRYPTO

• Bitcoin is firmer and is holding onto the USD 40k mark after pronounced pressure in yesterday's session saw a breach of the level and a subsequent fall to a USD 39.21k overnight low.

APAC TRADE

EQUITIES

• APAC stocks followed suit to the losses across global counterparts amid higher yields and inflationary concerns.
• ASX 200 was dragged lower by weakness across defensives and tech but with losses in the broader market somewhat contained amid the improvement in NAB Business Confidence and Conditions.
• Nikkei 225 declined despite recent currency depreciation and the ruling LDP seeking to provide cash handouts.
• Hang Seng and Shanghai Comp were indecisive with early support in the former as gaming and internet stocks were boosted by China’s resumption of videogame approvals following a 9-month suspension. However, the gains for the Hong Kong benchmark were later pared and the mainland bourse was also cautious amid ongoing COVID woes.

NOTABLE APAC HEADLINES

• PBoC injected CNY 20bln via 7-day reverse repos with the rate at 2.10% for a CNY 20bln net injection.
• PBoC set USD/CNY mid-point at 6.3795 vs exp. 6.3752 (prev. 6.3645)
• US State Department ordered all non-emergency US government employees and family members to leave Shanghai amid a surge in COVID-19 cases and the impact of restrictions from China's response, according to Reuters.
• Chinese Health Official says that COVID infections in Shanghai are yet to come under effective control; infections are likely to remain high over the coming days, via Reuters.
• Shenzhen Airport March Passenger ThroughPut -87.7% Y/Y, Mail and Cargo ThroughPut -12.2% Y/Y, via Reuters.
• Chinese Vice Finance Minister says China will speed up local government special bond issuance to spur investment.

NOTABLE APAC DATA

• Australian NAB Business Confidence (Mar) 16 (Prev. 13)
• Australian NAB Business Conditions (Mar) 18 (Prev. 9)
• New Zealand NZIER Business Confidence (Q1) -40% (Prev. -28%)