• European bourses are subdued across the board, Euro Stoxx 50 -1.1%, reacting to the late-doors pressure in Wall St.
• Currently, US futures are modestly softer but relatively tentative overall going into the NFP release and subsequent Fed speak.
• EUR bid post hawkish commentary from ECB's Villeroy amid multiple other Central Bank speakers
• As such, EGBs have dropped dragging USTs down with them sending respective 10yr yields to 1.08% and 3.07% respectively.
• WTI and Brent are bid in an exacerbation of APAC price action; focus has primarily been on the EU oil embargo and opposition
• Looking ahead, highlights include US & Canadian Labour Market Reports. Speeches from Fed's Williams, Waller, Bostic, Bullard, Daly & Kashkari; BoE's Pill & Tenreyro.

As of 11:25BST/06:25ET

LOOKING AHEAD

• US & Canadian Labour Market Reports. Speeches from Fed's Williams, Waller, Bostic, Bullard, Daly & Kashkari; BoE's Pill & Tenreyro.
• Click here for the Week Ahead preview

GEOPOLITICS

RUSSIA-UKRAINE

NEGOTIATIONS/TALKS

• White House said it is working to finalise a call among G7 leaders regarding Ukraine which is likely in the approaching days, according to Reuters.
• Russian Kremlin says there is hostile rhetoric coming from Poland, could be a source of threat, via Reuters

DEFENCE/MILITARY

• Ukrainian President Zelensky said evacuations of civilians from Mariupol continued on Thursday and said that Russians are continuing to storm and shell the Azovstal plant, while he added that they are doing everything to find a solution to save Ukrainian military defenders in Mariupol, according to Reuters.
• US officials said intel shared by the US helped Ukraine sink Russia's flagship Moskva on April 14th, according to NBC News.
• Unconfirmed reports from Odessa saying that a Russian Krivak-class frigate is on fire in the Black Sea after being hit by Ukraine; US is conducting surveillance in the region, according to a Kyiv Independent Journalist.

ENERGY/ECONOMIC SANCTIONS & UPDATES

• EU is reportedly considering sanctions against Russian President Putin's alleged girlfriend Alina Kabaeva, according to Business Insider.
• EU's Borrell said EU members are almost there on an agreement on a new package of sanctions against Russia, according to Reuters.
• Hungarian PM Orban says they are waiting for a new EU proposal re. oil sanctions, does not want conflicts with the EU and want to cooperate, made clear that there would be a red line in sanctions.
• EU is looking for a ban on Russian oil shipping services in three-months, proposes an oil ban exemption for Hungary and Slovakia through 2024 and Czech until June 2024, via Bloomberg. Subsequently, an EU official echoed this report re. a 2024 exemption.
• Hungarian PM Orban wants a five-year exemption with regards to the ban on Russian oil, according to Hirado
• EU Foreign Policy Representative Borrell says they are considering giving more time/money to Hungary to adopt an embargo on Russian oil, after talks became stuck, via FT; EU Ambassadors are to be given the weekend to achieve a deal.

OTHER

• White House said US President Biden will meet with counterparts from South Korea and Japan during his Asia trip and will also meet quad nation leaders in Tokyo, while North Korea will be a topic during the trip and they will also discuss holding Russia accountable for actions in Ukraine, according to Reuters.
• White House said it is optimistic it can find ways to address any concerns Sweden or Finland may have as they consider NATO membership, according to Reuters.

EUROPEAN TRADE

EQUITIES

• European bourses are subdued across the board, Euro Stoxx 50 -1.1%, reacting to the late-doors pressure in Wall St.
• Currently, US futures are modestly softer but relatively tentative overall going into the NFP release and subsequent Fed speak.
• US regulatory officials have arrived in China for "late-stage" audit deal talks, according to Reuters sources.
• China's auto sales in April are estimated to have plunged 48.1% y-o-y to 1.17 million units, data from CAAM revealed. The recent Omicron outbreak has disrupted the auto sector, in particular in the Yangtze River Delta region, according to Global Times.

Click here for more detail.

CENTRAL BANKS

• ECB's Villeroy says too weak EUR would go against ECB inflation target; inflation is not only higher but broader; core inflation is firmly above target. Case for APP beyond June is not obvious. Adds, it is possible to raise rates into positive territory (i.e. above zero) by year-end.
• ECB's Nagel says current inflation too high, confident it can get back to 2% target in the medium-term; adds, window to act is closing. Is optimistic re. a 2022 move. Does not buy the argument that policy should hold back because of the economy right now, via FAZ.
• ECB's Holzmann said the ECB is planning to raise rates which they will discuss and probably do at the June meeting, while he added that rates will rise this year, by how much and when, will be discussed intensively in June, according to Reuters.
• ECB's Vasle says appropriate timing to start ECB hikes is "before summer"; inflation is becoming broad-based, cannot claim that monetary policy cannot curb inflation.
• BoE's Pill: says the BoE does not have a forex target or objective; when questioned on what would cause them to pause (re. hikes), says more evidence of factors becoming more consistent with target(s). If we don't see this, will have to act further.
• Riksbank Minutes (April); overall, numerous views expressed around the repo path which was lifted to 2-3 further increases in 2022. Click here for more detail.

FX

• ECB officials ramp up hawkish rhetoric to boost Euro; EUR/USD makes round trip to high 1.0580 area from sub-1.0500.
• Pound continues to flounder as UK election results spell trouble for already under pressure PM Johnson and Tory Party, Cable under 1.2300 at one stage and EUR/GBP cross over 0.8550.
• Buck reverses all and more post-Fed losses pre-payrolls before Euro rebound knocks DXY back below 104.000, index down to new 103.340 low vs 104.070 peak.
• Aussie slumps despite hawkish RBA SOMP, Yen weak regardless of firmer than forecast Tokyo inflation data and return of Japanese markets from Golden Week; AUD/USD under 0.7100 and USD/JPY over 130.00.
• Loonie cushioned by strong crude prices ahead of Canadian LFS, USD/CAD within 1.2814-67 range and close to 1.29bln option expiries between 1.2835-40.
• Swedish Krona rangy after Riksbank minutes highlighting divergent views; EUR/SEK straddling 10.5000.

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Notable FX Expiries, NY Cut: Click here for more detail.

FIXED INCOME

• EZ debt downed by latest hawkish ECB guidance, Bunds below 152.00 and periphery underperforming.
• Gilts hold up better on the 118-00 handle awaiting BoE commentary after super Thursday.
• US Treasuries dragged down by Eurozone bonds to an extent, as 10 year T-note pivots 118-00 ahead of NFP.

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COMMODITIES

• WTI and Brent are bid in an exacerbation of APAC price action although, specific bullish-drivers have been somewhat sparse.
• Much of the focus has been on the potential EU Russian oil import embargo, particularly Hungary's ongoing opposition and the EU's attempts to appease them.
• Brazilian President Bolsonaro said a fresh hike in fuel prices by Petrobras could bankrupt Brazil and urged Petrobras not to increase fuel prices again, according to Reuters.
• PetroChina (0857 HK) says they have no plans to buy discounted Russian oil or gas, according to an executive.
• China is to sell 341k tonnes of imported soybeans from state reserve on May 13, according to the trade centre.
• Spot gold is bid but has failed to derive much traction above the 100- and 10-DMAs at USD 1883.08/oz and USD 1885.1/oz respectively.

Click here for more detail.

NOTABLE US HEADLINES

• US President Biden announced Karine Jean-Pierre as the new White House Press Secretary with Jen Psaki to leave next week, according to Axios.
• Click here for the US Early Morning note.

UK LOCAL ELECATIONS

• The Labour Party has secured Wandsworth and are ready to call Westminster, according to BBC sources, as a Labour victory; two key Conservative councils which will be regarded as a Labour victory and Tory loss.
• More broadly, the performance is disappointing but not as disappointing as some projected for the Conservatives, with early estimates indicating a loss of circa. 1/5 seats they are defending.
• For Labour, they have attained other key seats including Southampton and are projected to have an overall lead in vote share, according to BBC analysis; but, they are securing only modest gains overall ex-London.
• Reminder, just shy of half of the councils involved did not begin vote counting overnight, due to start Friday morning including much of in-focus N. Ireland where Sinn Fein and the DUP are facing off. Note, historically governing parties don’t perform as well in mid-term local elections.

NOTABLE EUROPEAN HEADLINES

• UK launched new plans to regulate tech companies and impose large fines in which it will provide a new Digital Markets Unit watchdog with power to enforce competition rules, but didn't say how it will enforce the laws, according to Bloomberg.
• EU will take a very negative view of any move by the UK to disapply parts of the Northern Ireland Protocol, according to RTE News.
• German government rejected the proposal by the European rescue package ESM to create a new aid fund of EUR 250bln, according to Handelsblatt.

NOTABLE EUROPEAN DATA

• German Industrial Output MM (Mar) -3.9% vs. Exp. -1.0% (Prev. 0.2%, Rev. 0.1%)
• UK S&P Global/CIPS Construction PMI (Apr) 58.2 vs. Exp. 58.0 (Prev. 59.1)

CRYPTO

• Bitcoin is relatively contained after Thursday's pressured session, in-fitting with the broader

APAC TRADE

EQUITIES

• APAC stocks were mostly lower amid spillover selling from the sharp declines on Wall Street.
• ASX 200 was heavily pressured in which the losses in tech led the broad declines across all sectors.
• Nikkei 225 initially declined on return from the Golden Week holidays but then pared all its losses as currency weakness persisted with Japan also planning to introduce tax incentives, as well as ease border measures in June.
• Hang Seng and Shanghai Comp conformed to the downbeat mood with tech and property names dragging the Hong Kong benchmark lower, while China also remained steadfast in its "dynamic COVID clearance" policy.

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 6.6332 vs exp. 6.6402 (prev. 6.5672)
• China is instructing government agencies and state firms to replace foreign PCs, while it will order new computers and software within two years, according to Bloomberg.
• RBA Statement on Monetary Policy noted further increases in interest rates are needed to restrain inflation, while it sharply increased inflation forecasts and sees core inflation above the 2%-3% target until 2024.
• Chaoyang, Beijing is to launch mass COVID testing May 7th-9th

DATA RECAP

• Tokyo CPI YY (Apr) 2.5% vs. Exp. 2.3% (Prev. 1.3%)
• Tokyo CPI YY Ex. Fresh Food (Apr) 1.9% vs. Exp. 1.8% (Prev. 0.8%)
• Tokyo CPI YY Ex. Fresh Food & Energy (Apr) 0.8% vs. Exp. 0.6% (Prev. -0.4%)