• APAC stocks were firmer as risk momentum picked up following on from the volatile session on Wall St.
• Fed Chair Powell said whether a soft landing can be executed or not may depend on factors that they cannot control.
• European equity futures are indicative of a higher open with Eurostoxx 50 +1.1% after the cash market closed down 0.9% yesterday.
• DXY has taken a breather from recent advances, EUR/USD remains sub-1.04, antipodeans attempt to claw back lost ground.
• Looking ahead, highlights include US Export/Imports Prices, Uni. of Michigan (Prelim.), Speeches from ECB's Schnabel, de Guindos & Fed's Kashkari.

US TRADE

• US stocks saw another volatile session whereby equities trended lower throughout most of the session and the S&P 500 briefly approached bear market territory near 3,855 where it found support. Furthermore, the largely red day almost fully reversed in the final hour of trade which took the Russell back into the green, while SPX, NDX and DJIA still finished negative but well off session lows.
• SPX -0.13% at 3,930, NDX -0.18% at 11,945, DJIA -0.33% at 31,730, RUT +1.38% at 1,739.
• Click here for a detailed summary.

NOTABLE US HEADLINES

• Fed Chair Powell said whether a soft landing can be executed or not may depend on factors that they cannot control but added they have tools to get inflation under control and that it will ultimately be more painful if high inflation is not dealt with and becomes entrenched. Powell reiterated they think it would be appropriate for there to be additional 50bps rate hikes at the next two meetings, while they are prepared to do less if things get better than expected and are also prepared to do more if it is worse. Furthermore, he noted that with perfect hindsight, it would have been better to have hiked rates sooner, according to Reuters.
• US Senate voted (80-19) to confirm Fed Chair Powell for a second term, as expected.
• Fed's Daly (2024 voter) said would like to see a continued tightening of financial conditions, while she added debate between 50bps and 75bps is not a primary consideration and there is no reason to alter the course for 50bps at the next two meetings, according to Bloomberg.

GEOPOLITICS

RUSSIA-UKRAINE

• White House said Ukraine will be on the agenda at the ASEAN summit but can't predict if final communique will mention Russia, while the White House added that it supports any application by Finland and Sweden for NATO membership, according to Reuters.
• European Council President Michel said during a visit to Japan's Hiroshima that global security is under threat as nuclear-armed state Russia is attacking the sovereign country of Ukraine, according to Reuters.
• German Foreign Minister said G7 counterparts are discussing how to end the blockade on Ukrainian grain to the world, according to Daily Express.
• Some EU nations are of the view that it could be time to consider delaying the push to ban Russian oil if it cannot persuade Hungary to back the embargo, according to EU diplomats.
• Finnish politicians were reportedly warned that Russia could cut off gas supplies to the country as early as Friday, as a countermeasure to Finland's entry into NATO, according to the Iltalehti newspaper.

OTHER

• White House said it thinks North Korea could be preparing a new test and it is considering whether President Biden will visit Korea's demilitarized zone, according to Reuters.

APAC TRADE

EQUITIES

• APAC stocks were firmer as risk momentum picked up following on from the volatile session on Wall St where the major indices finished mixed but almost wiped out all losses after a late ramp up heading into the close.
• ASX 200 traded with respectable gains and back above the 7,000 level with tech frontrunning the advances.
• Nikkei 225 outperformed as focus remained on earnings, while SoftBank surged amid buyback hopes and despite a record loss.
• Hang Seng and Shanghai Comp joined in on the elated mood with Hong Kong led by strength in tech, although the advances in the mainland were moderated by the mixed COVID headlines with Beijing to conduct the next round of mass COVID testing, while Shanghai aims to achieve zero community spread by the middle of this month and is considering expanding the scale of output resumption.
• US equity futures continued to edge higher and sustained the momentum from the late rebound heading into the Wall St close; ES +1%.
• European equity futures are indicative of a higher open with Eurostoxx 50 +1.1% after the cash market closed down 0.9% yesterday.

FX

• DXY took a breather from its advances after having printed a fresh YTD high just shy of 105.00.
• EUR/USD remained lacklustre at the 1.0300 handle after slipping to its lowest level in more than 5 years.
• GBP/USD nursed some of its recent declines to trade back above 1.2200 but with upside limited.
• USD/JPY continued to rebound from the lows seen during the prior session, while Governor Kuroda reaffirmed BoJ's dovishness.
• Antipodeans found some reprieve owing to the improved risk appetite.
• Banxico hiked by 50bps as expected to 7.00% in a 4-1 vote split, where the dissenter, Espinosa, voted to hike by 75bps. Banxico stated taking more forceful measures to attain the inflation target may be considered due to growing complexities in the environment for inflation and its expectations, according to Reuters.
• BoC's Deputy Governor Gravelle said the BoC will likely further lift its near term inflation forecasts given March CPI was above the bank's projections and stated that the current policy rate of 1% is too stimulative, especially when inflation is running significantly above the top of our control range, according to Reuters.

FIXED INCOME

• 10yr UST futures declined after pulling back from resistance at 120.00 amid higher yields and the improved risk tone.
• Bunds futures traded flat but are off the prior day’s highs and back beneath the 155.00 level.
• 10yr JGBs were kept afloat amid the presence of the BoJ in the market for JPY 1.45tln of JGBs with 1yr-10yr maturities, on top of its unlimited fixed-rate daily operations and with BoJ Governor Kuroda reiterating a dovish message.

COMMODITIES

• Crude futures extended on their mid-week rebound, helped by the risk tone and COVID optimism in Shanghai.
• Spot gold was subdued after its recent declines and amid an uneventful greenback.
• Copper prices were steady and largely ignored the constructive mood.

CRYPTO

• Bitcoin rebounded overnight from the recent crypto sell-off and reclaimed the 30,000 level to the upside.

NOTABLE HEADLINES

• Shanghai Vice Mayor said they aim to have no community spread of coronavirus by mid-May and are considering expanding the scale of production resumption, while they will aim to open up, ease traffic restrictions and open shops in an orderly manner, according to Reuters.
• Shanghai is to prioritise resuming classes for grades 9, 11 and 12, while supermarkets, convenience and department stores will resume offline operations in an orderly manner and other services such as hairdressing will open gradually, according to Global Times
• BoJ Governor Kuroda said Japan still hasn't achieved a situation where inflation is stably and sustainably at 2%, while the expected rise in inflation is driven mostly by energy costs and is lacking sustainability. Kuroda reiterated the BoJ must continue monetary easing to reach its price target and it is premature to debate an exit from ultra-easy policy, while he also said it is appropriate to maintain the current dovish forward guidance on interest rates, according to Reuters.
• North Korea said around 350k have shown fever symptoms of an 'unknown cause' and 187.8k are being treated in isolation, while it reported 18k COVID-19 cases and 6 died from a fever in which one was confirmed as a COVID death, according to KCNA and Yonhap.

UK/EU

NOTABLE HEADLINES

• UK PM Johnson is considering as many as 90k job cuts in civil service, according to ITV.
• ECB's Enria said they do not think there will be a need for relief measures at this time in response to a question about possible ECB response to the Ukraine war and said they are not planning any "one size fits all" restrictions of banks dividends, according to Reuters.