• European bourses are pressured across the board, though US peers are faring better and positive post-CPI as earnings season begins, ES +0.3%
• DXY remains above the 100.00 mark posting a 100.52 high, while NZD lags in-spite of a 50bp RBNZ move
• Core debt is pressured, but has staged a modest recovery from lows, yields elevate but off highs as such; USD/JPY continues to climb amid rate differentials
• WTI and Brent are bid and have eclipsed relatively contained parameters that have been in-play throughout the morning, spot gold supported but shy of Tuesday’s best
• Ukraine-Russia newsflow continues and Ukraine’s Zelensky claims he has evidence of chemical weapons use while Iran’s IRGC issues punchy language re. Soleimani
• Looking ahead, highlights include US PPI, New Zealand Manufacturing PMI, BoC Policy Announcement, Supply from the US. Earnings incl. JPMorgan.

As of 11:20BST/06:20ET

LOOKING AHEAD

• US PPI, New Zealand Manufacturing PMI, BoC Policy Announcement, Supply from the US. Earnings incl. JPMorgan.
• Click here for the Week Ahead preview.

GEOPOLITICS

RUSSIA-UKRAINE

NEGOTIATIONS/TALKS

• Ukrainian President Zelensky proposed swapping pro-Russian politician Medvedchuk for Ukrainian prisoners of war, according to Reuters.
• Ukrainian Deputy PM says it is not possible to open humanitarian corridors on Wednesday; occupying forces have violated the ceasefire, via Reuters.
• Sweden's largest party Social Democrats favour applying to NATO at the June meeting in Spain, according to SvD.

DEFENCE/MILITARY

• US President Biden said it will be up to lawyers to determine if Russia's actions in Ukraine qualify as genocide but added it seems like genocide to him and that the evidence is mounting, according to Reuters.
• US President Biden's administration is expected to announce at least USD 750mln in additional weapons for Ukraine and deliberations continue on a mix of weapons, which could evolve, according to Reuters.
• Ukrainian President Zelensky said it is not possible to draw 100% firm conclusions about whether Russia used chemical weapons in Mariupol and that it is not possible to conduct a full investigation in a besieged city, according to Reuters.
• Chechen leader Kadyrov said over 1,000 Ukrainian marines surrendered in Mariupol, according to Sputnik.

ENERGY/ECONOMIC SANCTIONS & UPDATES

• US President Biden said Americans' ability to pay for gasoline should not hinge on whether a dictator declares war and "commits genocide" halfway across the world. President Biden also proposed a sustainable aviation fuel tax, while he noted they need to address the challenge of rising prices in the US and he is doing everything in his power to reduce costs, according to Reuters.
• Russian Energy Minister said Moscow is ready to sell oil and oil products to friendly countries in any price range and that oil prices in the range of USD 80-150/bbl are in principle possible, while he added the task is not to guess how much prices will be but to ensure industry functions, according to Interfax citing Izvestia.
• Russian President Putin says unfriendly nations have destroyed supply chains within the Arctic, some nations are not fulfilling contracted obligations, can increase local oil, gas consumption, via Reuters.
• Top oil merchant Vitol said it will stop trading Russian crude, according to Bloomberg.
• US Treasury Secretary Yellen says US will work with partners to isolate Russia until the war ends; US and allies will not be indifferent to actions by countries and firms that undermine sanctions against Russia, via Reuters.

OTHER

• Iran's IRGC Ground Force Commander Pakpour says even if all American leaders are killed, this would not be enough to avenge the death of Soleimani, via Reuters

EUROPEAN TRADE

EQUITIES

• European bourses are pressured across the board, Euro Stoxx 50 -0.7%, in what has been a somewhat choppy European morning with limited fresh macro drivers emerging.
• Sectors are similar to their initial cash open performance, as Energy and Basic Resources outperform while Travel, Retail and Personal Goods lag.
• US futures are firmer across the board, ES +0.3%, and while they have been directionally moving with Europe magnitudes are more limited; support following yesterday's CPI but ahead of PPI and JPM earnings.
• BlackRock Inc (BLK) Q1 2022 (USD): EPS 9.52 (exp. 8.95), Revenue 4.699bln (exp. 4.74bln). +0.3% in the pre-market
• Blackrock (BLK) intends to launch the first China onshore ETF in Q4-2022, according to Reuters sources.
• Click here for more detail.

FX

• Kiwi knee jerks higher after bigger than generally expected 50 bp RBNZ hike before retreating abruptly on reflection of unchanged OCR outlook; NZD/USD sub-0.6800 vs peak just over big figure above.
• Yen flogged yet again as Japanese officials continue to fret about speed rather than size of moves and core machinery orders miss consensus; USD/JPY knocks down barriers at 126.00 to reach 126.31 and breach 2015 peak.
• DXY extends advance above 100.000 before waning ahead of May 2020 peak just over 100.500.
• Aussie retains 0.7400+ status vs Greenback before jobs data, but with assistance from sharp reversal in AUD/NZD cross flows - from circa 1.0833 to 1.0950.
• Euro keeps its head above 2022 low against Dollar, narrowly, and Pound rebounds after minor boost from strong UK inflation prints, EUR/USD down to 1.0811 or so vs 1.0806, Cable revisits 1.3000 vs 1.2972 at worst.
• Loonie immersed in technical levels awaiting BoC and guidance to accompany a widely forecast half point rate rise; USD/CAD near 1.2650 and flanked by 200, 100 and 50 DMAs.
• Click here for more detail.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.0800 (214M), 1.0865-70 (1.03BN), 1.0900 (1.34BN), 1.0960 (288M), 1.0980 (331M), 1.0995-05 (3.0BN), 1.1005-15 (1.1BN)
• Click here for more detail

FIXED INCOME

• Bonds bounce ahead of Tuesday's new lows, but recovery remains feline rather than firm as Bunds hover above 155.00, Gilts just under 119.00 and T-note midway between 119-31/120-17 extremes.
• Lacklustre 10-year Bund auction in keeping with T-note sale last night, and with long bond supply still to come.
• Italy sees decent demand for multi-tranche offerings after recent heavier concession.
• Click here for more detail.

COMMODITIES

• WTI and Brent are firmer in a continuation of the consolidation from the upside seen in yesterday's session amid geopolitical tensions.
• Most recently, the benchmarks have eclipsed a circa. USD 2/bbl range that had been holding throughout the morning; current bests, USD 102.13/bbl and USD 106.45/bbl respectively.
• US Private Energy Inventory Data (bbls): Crude +7.8mln (exp. +0.9mln), Cushing +0.4mln, Gasoline -5.1mln (exp. -0.4mln), Distillate -5.0mln (exp. -0.5mln).
• IEA OMR: Lowers 2022 global oil demand estimate by 260k BPD on COVID in China and lower OECD demand. February global stocks 714mln/bbl below the end-2020 level, OECD accounts for 70% of the decline. Russian oil supply is expected to fall by 1.5mln BPD in April and by around 3mln BPD from May.
• CNOOC (883 HK) is said to be considering exiting operations in Britain, US and Canada amid tensions with the West, according to Reuters sources.
• Spot gold and silver are bid this morning, though the yellow metal is still shy of yesterday's USD 1978.21/oz peak.
• LME Zinc outperforms piggybacking the performance of its Shanghai peer overnight.
• Click here for more detail.

NOTABLE DATA

• UK CPI YY (Mar) 7.0% vs. Exp. 6.7% (Prev. 6.2%); MM (Mar) 1.1% vs. Exp. 0.7% (Prev. 0.8%)
• UK Core CPI YY (Mar) 5.7% vs. Exp. 5.4% (Prev. 5.2%); MM (Mar) 0.9% vs. Exp. 0.5% (Prev. 0.8%)

NOTABLE US HEADLINES

• Fed's Bullard (2022 voter) said it is fantasy to think that modest rate hikes will tame inflation and that the Fed must put the brakes on economic activity to address surging prices, according to FT.
• Fed's Barkin (2024 voter) said the Fed will do what it must to address high inflation and the extent the Fed will need to hike won't be clear until they get closer to the destination, while he added that they should move rates rapidly to neutral then tighten further if needed and thinks hiking rates beyond neutral will be part of the process.
• Click here for the US Early Morning Note.

CRYPTO

• Bitcoin is modestly firmer, retaining the USD 40k mark but modestly shy of the USD 40.27k peak.

APAC TRADE

EQUITIES

• APAC stocks mostly shrugged off the weak lead from the US and rebounded from a two-day losing streak.
• ASX 200 was kept afloat by the commodity-related sectors including energy after WTI crude futures climbed back above USD 100/bbl landmark and with Australia's government providing funding for domestic refiners.
• Nikkei 225 outperformed currency weakness and with the index unfazed by disappointing Machinery Orders.
• Hang Seng and Shanghai Comp lagged on COVID woes despite China testing an easing of quarantine rules in eight cities, as infections continued to spread with a fresh record of daily cases in Shanghai, while Sunac's missed coupon payment, further inclusions to the US HFCAA list and mixed trade data added to the cautious mood.

NOTABLE APAC HEADLINES

• PBoC injected CNY 10bln via 7-day reverse repos with the rate at 2.10% for a net neutral daily position.
• PBoC set USD/CNY mid-point at 6.3752 vs exp. 6.3748 (prev. 6.3795)
• China government advisor says China should cut RRR and interest rates to cushion the slowdown, via Reuters.
• China is testing an easing of quarantine rules for eight cities including Shanghai and Guangzhou, according to Caixin.
• RBNZ hiked the OCR by 50bps to 1.50% (exp. 25bps increase) and said it will remain focused on ensuring that current high consumer price inflation does not become embedded into longer-term inflation expectations. RBNZ said it remains comfortable with the outlook on the OCR as outlined in the February MPS and that moving the OCR to a more neutral stance sooner reduces the risk of rising inflation expectations, while the Committee agreed that their policy 'path of least regrets' is to increase the OCR by more now rather than later and noted that further increases in the OCR are needed in order to meet their mandate, according to Reuters.
• BoJ's Kuroda says the domestic economy is showing some weakness, but picking up as a trend. Consumer inflation hovering at 0.5% is likely to clearly accelerate for the time being.
• Japan's Economy Minister Yamagiwa gives no comment on FX levels, stability is important. Sharp FX moves are undesirable, via Reuters.Note, multiple Japanese officials have provided similar commentary in today's session

NOTABLE APAC DATA

• Chinese Trade Balance USD (Mar) 47.38B vs. Exp. 22.4B (Prev. 115.95B)
• Chinese Exports YY (Mar) 14.7% vs. Exp. 13.0% (Prev. 16.3%); Imports YY (Mar) -0.1% vs. Exp. 8.0% (Prev. 15.5%)
• Chinese Trade Balance (CNY)(Mar) 300.6B (Prev. 194.4B)
• Chinese Exports YY (CNY)(Mar) 12.9% vs. Exp. 12.4% (Prev. 4.1%); Imports YY (CNY)(Mar) -1.7% vs. Exp. 6.3% (Prev. 8.3%)
• Chinese rare-earth exports in Q1 rose 6.5% Y/Y to 12,680 tons, slowing down from the 10.9% growth recorded in January and February, according to customs data.
• Japanese Machinery Orders MM (Feb) -9.8% vs. Exp. -1.5% (Prev. -2.0%); YY (Feb) 4.3% vs. Exp. 14.5% (Prev. 5.1%)
• Australian Westpac Consumer Sentiment Index (Apr) 95.8 (Prev. 96.6); MM (Apr) -0.9% (Prev. -4.2%)