• European bourses are firmer as the rebound from Thursday's selloff continues, Euro Stoxx 50 +1.3%; US futures similarly bolstered, ES +1.0%
• Elon Musk says the Twitter (TWTR) deal is temporarily on hold, pending details; TWTR -20% in pre-market
• DXY is off YTD highs but has regained a firmer footing on the session; JPY slips as sentiment recovers
• Core debt has bounced back to unchanged for EGBs after conceding ground on the risk recovery; US yield curve steepening
• Fed's Powell reiterated it would be appropriate for there to be additional 50bps rate hikes at the next two meetings
• Looking ahead, highlights include US Export/Imports Prices, Uni. of Michigan (Prelim.), Speeches from ECB's Schnabel & Fed's Kashkari.

As of 11:15BST/06:15ET

LOOKING AHEAD

• US Export/Imports Prices, Uni. of Michigan (Prelim.), Speeches from ECB's Schnabel & Fed's Kashkari.
• Click here for the Week Ahead preview

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.
• 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.
• Subsequently, Russia's Kremlin says that Gazprom is a reliable gas supplier and reports in Finnish press that Gazprom could cut supplies to Finland today are likely false, via Reuters.
• Gazprom says it continues shipping gas to Europe via Ukraine, Friday's volume is 61.97MCM;

OTHER

• South Korean Presidential office says North Korea appears ready for a nuclear test, via Yonhap.
• EU's Foreign Representative Borrell believes that after the trip to Iran by EU negotiator Mora that nuclear discussions are unblocked. Subsequently, a source cited by WSJ's Norman is not too optimistic on Iranian Nuclear talks.

EUROPEAN TRADE

CENTRAL BANKS

• ECB's de Guindos says a large amount of current inflation is as a result of the pandemic and Ukraine war; a July hike will depend on the June projections but will not offer an opinion. Second-round effects will be key but this has not happened yet.
• ECB's Centeno says they should end active purchase program in the first weeks of Q3 and raise rates "some time after".
• Czech National Bank's (CNB) Holub says the rate hike on May 5th was probably not the last one; does not have a specific FX level in mind.

EQUITIES

• European bourses are firmer as the rebound from Thursday's selloff continues, Euro Stoxx 50 +1.3%
• US futures are similarly bolstered across the board, NQ outpacing peers modestly as Tech recoups, ES +0.9%.
• Samsung (005930 KS) is reportedly in talks to hike chipmaking prices by up to 20%, according to Bloomberg sources.
• Elon Musk says the Twitter (TWTR) deal is temporarily on hold, pending details supporting the calculation that spam/fake accounts represent less than 5% of users. Pressure in TWTR subsequent extended to -13% in the pre-market; extending to -19% after five-minutes.

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FX

• Dollar and Yen shed some safe haven gains as risk sentiment recovers ahead of the weekend; DXY slips from fresh 2022 peak at 104.920, though still positive, and USD/JPY up near 129.00 vs new retracement low circa 127.50.
• Aussie takes advantage of pickup in risk appetite and Yuan bounce amidst verbal intervention; AUD/USD hovering under 0.6900 from sub-0.6850 yesterday, USD/CNH and USD/CNY around 6.8000 vs 6.8370 and 6.8110.
• Euro, Pound and Franc regroup, but remain vulnerable around psychological levels; 1.0400, 1.2200 and parity in EUR/USD, Cable and USD/CHF respectively.
• Loonie off recent lows post hawkish BoC comments and pre Q1 Loans Survey, USD/CAD close to 1.3000 and 1.1bln option expiry interest between 1.2990 and the round number.
• Peso underpinned after 50 bp Banxico hike as 1 of the 5 voters dissented for 75 bp.
• Czech Koruna caught between CNB minutes underlining dovish leaning of new head and Holub opining that May’s hike may not be the final one.

Click here for more detail.

Notable FX Expiries, NY Cut:

• USD/CAD: 1.2990-00 (1.1BN), 1.3040 (425M), 1.3045-50 (980M), 1.3060 (240M) Click here for more detail.

FIXED INCOME

• Bonds bounce after conceding ground to recovering risk assets.
• Bunds find support just ahead of 154.00, Gilts in the low 120.00 zone and 10 year T-note at 119-07.
• Curves re-steepen after decent US 30 year sale completes the Quarterly Refunding remit and attention turns to 20 year and 10 year TIPS auctions next week.

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COMMODITIES

• WTI and Brent are firmer moving with the broad rebound in risk-assets, however, upside is capped amid the EU considering omitting the proposed Russia oil embargo from the 6th sanctions round.
• WTI resides around USD 107/bbl (106.29-108.13 intraday range) and Brent trades just under USD 109/bbl (107.79-109.79 intraday range).
• Spot gold is contained around USD 1820/oz, though it is coming under modest pressure as the DXY picks up most recently.

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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.
• Click here for the US Early Morning note.

NOTABLE EUROPEAN HEADLINES

• UK PM Johnson is considering as many as 90k job cuts in civil service, according to ITV.

CRYPTO

• Binance says that withdrawals for Lunar and UST will open when the market becomes more stable, will suspend spot trading for LUNA/BUSD and UST/BUSD at 09:30BST, May 13th.

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.

NOTABLE APAC 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.
• China Banking and Insurance Regulatory Commission says the Yuan's weakening is not sustainable, adding do not bet on the unilateral devaluation and appreciation or you could face unnecessary losses; retreat in the Yuan was normal market reaction..
• 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.