• Equities in Europe continue to gain heading into month-end, with overall sentiment across stocks bolstered
• US equity futures are firmer across the board, with the NQ clearly outpacing its peers; Meta +17% pre-market
• BoJ maintained policy settings and forward guidance, will conduct fixed-rate JGB buying operations on every working day
• EU energy groups are reportedly preparing to meet Russian President Putin's terms for gas, according to the FT
• DXY has extended its advances above 103.50, JPY lags post-BoJ, EUR/USD remain depressed near 1.0500 
• Looking ahead, highlights include US GDP, PCE Advance, IJC, US Supply, earnings from Amazon, Apple, Intel, Twitter, Mastercard & McDonalds

28th April 2022

SNAPSHOT

LOOKING AHEAD

US GDP, PCE Advance, IJC, US Supply.

Earnings from Amazon, Apple, Intel, Twitter, Mastercard & McDonalds.

Click here for the Week Ahead preview

GEOPOLITICS

RUSSIA-UKRAINE

NEGOTIATIONS/TALKS

• Russian Foreign Ministry says Russia has not yet received a response from Ukraine on its proposals for a potential agreement, via Ifx

DEFENCE/MILITARY

• Russia will hold an informal UNSC meeting on May 6th regarding the situation on the ground in Ukraine, according to Sputnik.

ENERGY/ECONOMIC SANCTIONS & UPDATES

• EU energy groups are reportedly preparing to meet Russian President Putin's terms for gas with Uniper and OMV planning rouble accounts, according to FT.

OTHER

• UK Foreign Secretary Truss said NATO's open-door policy is sacrosanct and if Sweden and Finland join NATO, they must be integrated as soon as possible. Truss stated that China needs trade with G7 and needs to play by the rules, while she said Russian sanctions show economic access to countries that do not play by the rules is no longer given, according to Reuters.
• Chinese and US trade teams are maintaining normal communication, according to Global Times.
• Chinese Commerce Ministry says US is considering lowering tariffs on Chinese goods and consumers, in the interest of US firms and consumers; China is willing to work with the EU to keep supply chains stable.

CENTRAL BANKS

• BoJ kept policy settings unchanged as expected with rates at -0.10% and 10yr JGB yield target at 0%, while it is to conduct fixed-rate JGB buying operations on every working day aside from when bidding is not expected. BoJ left forward guidance on interest rates unchanged in which it expects short- and long-term policy rates to remain at present or lower levels and reiterated it will ease policy without hesitation as needed with an eye on the pandemic impact, while striving to sustain market stability and support corporate funding, according to Reuters.
• BoJ Governor Kuroda press conference: said it is desirable for currencies to move stably, reflecting economic fundamentals; 2% inflation will not be sustained as energy price hikes fade, more time needed to achieve 2% goal; watching FX moves carefully. Click here for the headlines.
• Riksbank hikes its Rate by 25bps in an unexpected move to 0.25% (exp. 0.00%); Repo Forecast: will be raised further two to three times this year (prev. indicates that it will be raised in the second half of 2024)Click here for the headlines.
• ECB's de Guindos has not yet seen any signs of wage dynamics, says wage increases are quite prudent, and are compatible with the ECB's target, the Bank has not discussed in detail a spread-fighting instrument. via Reuters
• ECB'S Visco said a Q3 rate hike could happen, via CNBC.
• Hungary Central Bank increases the one-week deposit rate by 30bps to 6.45%,via Reuters
• CBRT Governor says developments show rate cuts were the correct decision

EUROPEAN TRADE

EQUITIES

• Equities in Europe continue to gain heading into month-end, with overall sentiment across stocks bolstered by Meta (+17% pre-market) earnings yesterday.
• All sectors are in the green to varying degrees and clearly portray an anti-defensive bias – with the exception of Basic Resources, which sits at the bottom of the bunch after heavily outperforming yesterday
• Stateside, US equity futures are firmer across the board, with the NQ clearly outpacing its peers.

Click here for more detail.

FX

• The Buck’s bull run continues, with DXY up to 103.700, Euro losing 1.0500+ status and Sterling testing sub-1.2500 Fib before retracements.
• Swedish Krona soars after surprise Riksbank rate hike, higher repo path and slowdown in QE.
• Japanese Yen extends losing streak following no change from ultra accommodative BoJ policy before partial recovery on extreme concern from Japan’s MOF.
• Japanese MOF official says excess FX volatility is undesirable, recent FX moves are "extremely worrying"; will take appropriate action if needed, communicating closely with the BoJ and foreign currency authorities, via Reuters .
• Yuan is weaker again as China increases efforts to contain covid and PBoC sets another softer onshore reference rate.
• Forint underpinned by NBH lifting 1 week deposit rate 30 bp, but CBRT leaves Lira in limbo after upgrading Turkish inflation forecasts and contending that time tells that rate cuts were the right course of action.

Click here for more detail.

FIXED INCOME

• EU debt rattled to a degree by Riksbank decision to taper QE and US Treasuries to a lesser extent
• Bunds nearer 155.00 than 156.00, Gilts towards base of 119.68-08 range and 10 year T-note under 120-00 within a 120-01/119-19 band
• BTPs outperform on the eve of month end auctions after breaching, but unable to retain 133.00+ status
• Treasury curve flat ahead of 7 year issuance that normally entices foreign buyers even when the Dollar is not so elevated

Click here for more detail.

COMMODITIES

• WTI June and Brent July post modest intraday gains, but in the grander scheme, prices are consolidating.
• Spot gold briefly dipped under its 100 DMA (USD 1,877.50/oz) to a current low of around USD 1,871/oz as the Buck was rampant at the time.
• Base metals markets are relatively mixed with some underperformance seen in LME nickel.
• China is to grant zero-tariff on coal imports from May 1 2022 to March 31 2023 to increase supply.

Click here for more detail.

NOTABLE EUROPEAN HEADLINES

• UK Chancellor Sunak hinted he could perform a U-turn and introduce a windfall tax on UK oil and gas companies unless they boost investment in new energy projects, according to FT

NOTABLE EUROPEAN DATA

• German State CPIs were generally mixed, whilst expectations for the mainland sees downticks in both the Y/Y and M/M.

NOTABLE US HEADLINES

• US senior administration official said US GDP data is expected to show smaller growth in Q1 than in Q4 and slower inventory growth is likely an issue after a large jump in the prior quarter, but added the data is anticipated to show very strong household balance sheets, household consumption and business investment. The official also noted that the data will also show "economic conditions are still very, very strong" and that Friday's personal consumption expenditure price index data is expected to reflect quite elevated headline inflation but core inflation is likely to be flatlined or lower, according to Reuters.
• The White House is said to be making a “last-ditch” effort to pass elements of the Build Back Better package, according to officials cited by the FT.
• Meta Platforms Inc (FB) - Q1 2022 (USD): EPS 2.72 (exp. 2.55), Revenue 27.9bln (exp. 28.20bln).Daily active users (DAUs) 1.96bln (exp. 1.94bln). Facebook monthly active users (MAUs) 2.94bln (exp. 2.95bln). Advertising rev. USD 27.00bln (exp. 27.48bln). Shares rose 18.3% after market

CRYPTO

• Bitcoin trades sideways under 40k.

APAC TRADE

EQUITIES

• APAC stocks were higher across the board amid a slew of earnings updates and a dovish BoJ.
• ASX 200 gained with mining stocks mostly underpinned following production updates.
• Nikkei 225 benefitted as the BoJ reaffirmed its dovishness and kept its ultra-loose policy.
• Hang Seng and Shanghai Comp are both higher but with gains capped in the mainland due to ongoing lockdown fears with Hangzhou city to conduct mass testing and after China's Qinhuangdao city in the Hebei province locked down its district due to COVID.

NOTABLE APAC HEADLINES

• PBoC injected CNY 10bln via 7-day reverse repos with the rate at 2.10% for a net neutral position.
• PBoC set USD/CNY mid-point at 6.5628 vs exp. 6.5614 (prev. 6.5598)
• China's Qinhuangdao city locked down its district due to COVID-19, according to Bloomberg.
• S&P affirms Japan's A+/A-1 rating; outlook stable.

DATA RECAP

• Japanese Industrial Production MM (Mar P) 0.3% vs. Exp. 0.5% (Prev. 2.0%)
• Japanese Retail Sales YY (Mar) 0.9% vs. Exp. 0.4% (Prev. -0.8%, Rev. -0.9%)
• New Zealand Business Confidence (Apr) -42.0% (Prev. -41.9%)
• New Zealand Activity Outlook (Apr) 8.0% (Prev. 3.3%)
• New Zealand Trade Balance (Mar) -392M (Prev. -385M, Rev. -691M)
• New Zealand Exports (Mar) 6.7B (Prev. 5.5B, Rev. 5.2B)
• New Zealand Imports (Mar) 7.1B (Prev. 5.9B, Rev. 5.9B)