• APAC stocks followed suit to the mixed performance on Wall St amid a lack of fresh macro drivers.
• Kyiv is ready to hold a special round of negotiations in Mariupol without conditions, according to Reuters.
• European equity futures are indicative of a slightly higher open with Eurostoxx 50 +0.3% after the cash market closed higher by 1.7% yesterday.
• DXY sits just below 100.50, USD/JPY is back on a 128 handle, NZD is softer post-CPI.
• Looking ahead, highlights include EZ CPI (Final), US IJC & Philadelphia Fed, EZ Consumer Confidence (Flash), Speeches from Fed's Powell, ECB's Lagarde, BoE's Bailey & Mann, Supply from France & Spain, Earnings from Meggitt, Nestle, American Airlines, AT&T and Phillip Morris.

US TRADE

• SPX -0.05% at 4,459, NDX -1.49% at 13,998, DJIA +0.72% at 35,160, R2K +0.38% at 2,038.
• US stocks were mixed in which the SPX Equal-Weight (RSP) was up 70bps but the traditional index was flat, while Nasdaq suffered as Netflix (NFLX) shares dropped 35% after a woeful quarterly report.

Click here for a detailed summary.

NOTABLE US HEADLINES

• Fed's Daly (2024 voter) said the case for a 50bps rate hike in May is now complete and that they can make an announcement on reducing the balance sheet as soon as May, while she added that increasing rates to 2.5% this year is not abrupt or surprising and there is a wide understanding it is appropriate, according to Reuters.
• Fed's Beige Book stated that inflationary pressures remained strong since the last report, with firms continuing to pass swiftly rising input costs through to customers.

GEOPOLITICS

RUSSIA-UKRAINE

NEGOTIATIONS/TALKS

• Ukrainian negotiator Podolyak said Kyiv is ready to hold a special round of negotiations in Mariupol without conditions, according to Reuters.

DEFENCE/MILITARY

• Russian Republic of Chechnya head Kadyrov said Russian forces will have complete control of Mariupol's Azovstal Steel Works on Thursday, according to Interfax.
• UK PM Johnson said Russian President Putin made it clear that he wants to take more territory in Ukraine and could launch another assault on Kyiv, while he added the best way world leaders can respond is by continuing to arm Ukraine. UK PM Johnson reportedly compared Russian President Putin to a crocodile and said that a negotiated peace deal between Russia and Ukraine will be very hard, according to Reuters.

SANCTIONS/ENERGY

• US imposed further Russia related sanctions including on Russian commercial bank Transkapitalbank and Russia-based units of virtual currency mining firm Bitriver, according to Reuters.
• G7 Finance Ministers said they regret participation by Russia in international forums including G20, IMF and World Bank meetings this week, while they are strongly committed to not conducting government-to-government financial transactions with Russia, according to Reuters.

FUND/DIPLOMATIC/OTHER

• White House is resisting growing calls from US lawmakers, former diplomats and others to reopen the US Embassy in Kyiv, Ukraine, according to Politico.
• Russia's VTB Bank paid a coupon on its subordinated Dollar-denominated Eurobond in roubles and plans to pay other denominated Eurobonds in roubles, according to Interfax.

OTHER

• Pentagon said Russia notified the US ahead of its recent intercontinental ballistic missile test launch and the test was seen as routine with the launch handled according to procedures, according to Reuters. It was also reported that Russia’s space chief said the country's armed forces will begin taking delivery of the new Sarmat ICBM later this year, according to Interfax.

APAC TRADE

EQUITIES

• APAC stocks followed suit to the mixed performance on Wall St amid a lack of fresh macro drivers and with focus turning to earnings season and quarterly activity updates.
• ASX 200 traded higher but with upside limited by losses in tech following underperformance in the Nasdaq, while miners were also subdued after BHP reported flat quarterly iron ore production and lower petroleum output.
• Nikkei 225 outperformed amid the BoJ's consecutive efforts to cap yields and with Japan's government preparing relief measures.
• Hang Seng and Shanghai Comp were lacklustre as big tech suffered in Hong Kong and with sentiment dampened by COVID lockdowns, while attention was also on CNOOC's A-shares which surged as much as 44% in its Shanghai debut before being halted.
• US equity futures were kept afloat as after-hours earnings from Tesla provided some solace from the recent woeful Netflix report.
• European equity futures are indicative of a slightly higher open with Eurostoxx 50 +0.3% after the cash market closed higher by 1.7% yesterday.

FX

• DXY nursed losses and traded around 100.50 amid higher yields and after the latest Fed commentary.
• EUR/USD retraced some of its recent gains that had been aided by the pullback in the dollar.
• GBP/USD was rangebound with the pair oscillating around the 1.3050 mark.
• USD/JPY rebounded overnight and reclaimed the 128.00 handle after the BoJ’s yield curve control efforts.
• Antipodeans were lacklustre with NZD/USD pressured after softer than expected CPI data for Q1 despite the data showing the fastest pace of increase to inflation in 32 years, while CNY remained pressured after a weaker reference rate setting.
• China Securities Times noted the Yuan has room to decline due to weaker exports, possible fund outflows from EM and faster rate increases by the Fed.

FIXED INCOME

• 10yr UST futures declined amid higher yields and a suggestion by Fed’s Daly that the case for a 50bps hike in May was complete.
• Bunds continued to pull back after yesterday’s advance was stalled by resistance at the 155.00 level.
• 10yr JGBs were kept afloat amid the BoJ’s special operation for an unlimited amount of 10yr JGBs which it will conduct consecutively through to Tuesday.

COMMODITIES

• Crude futures gained after Brent and WTI crude recently rebounded off support at USD 105/bbl and USD 100/bbl, respectively.
• Brazilian Oil Minister discussed raising oil output with the US amid the Ukraine crisis, while Brazil is willing to meet India's oil needs and wants Indian investment. Furthermore, the oil minister hopes oil prices stabilise below USD 100/bbl and said a high oil price is not good for producers and consumers, according to Reuters.
• Spot gold was lacklustre around the USD 1950/oz level as the greenback firmed overnight.
• Copper was rangebound with price action hampered amid the mixed risk tone and underperformance in China.
• Peru is to declare a state of emergency to restore copper output at the Cuajone mine which was halted by protests in late February, according to Reuters.

CRYPTO

• Bitcoin prices were marginally higher and traded back above the 41,500 level.

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 6.4098 vs exp. 6.4134 (prev. 6.3996)
• Chinese President Xi said the global economic recovery is still weak and that they should guard against spillover effects from policy shifts in some countries. Xi said countries should abandon a Cold War mentality and avoid confrontation, while he opposes one-sided sanctions and long-arm jurisdiction. Xi added that decoupling, cutting off supply and pressure tactics by any country will not work, according to Reuters.
• White House Economic Adviser Deese said they are focusing on concerns with China's state-sponsored approach and have done a rethink on China policy, according to Reuters.
• Nomura lowered its China 2022 GDP growth forecast to 3.9% from 4.3%, according to Bloomberg.
• Japan's ruling coalition parties are set to agree on compiling a fresh extra budget to fund relief measures, according to Kyodo.
• Japanese Finance Minister Suzuki says he explained to the G7 the recent and rather rapid moves in JPY. Added that rapid FX moves are undesirable and FX stability is important.

DATA RECAP

• New Zealand CPI QQ (Q1) 1.8% vs. Exp. 2.0% (Prev. 1.4%)
• New Zealand CPI YY (Q1) 6.9% vs. Exp. 7.1% (Prev. 5.9%)
• RBNZ Sectoral Factor Model Inflation Index YY (Q1) 4.2% (Prev. 3.2%, Rev 3.8%)

UK/EU

NOTABLE HEADLINES

• UK PM Johnson said he will fight the next election amid calls for him to step down due to the lockdown parties scandal and said he cannot think of any circumstances where he will resign, according to Reuters.
• UK Minister for Brexit Opportunities and Government Efficiency Rees-Mogg warned that the UK government is prepared to take unilateral action if the EU does not reform the Northern Ireland protocol, according to FT.
• French President Macron was viewed as more convincing in the TV debate by 59% of those surveyed, according to a BFM poll.
• ECB's Wunsch says policy rates could turn positive this year, ready to consider a deposit rate hike in July. Would react to unwarranted market fragmentation, via Bloomberg