• European bourses are firmer across the board, Euro Stoxx 50 +1.7%, taking impetus from and extending on a positive APAC handover as the region's COVID situation improves
• US futures posting similar performance, ES +1.8%, ahead of Retail Sales and multiple Fed speakers including Powell
• EUR lifted and Bunds dented in wake of ECB's hawk-Knot mentioning a 50bp move should not be excluded if data warrants it
• A remark which lifted EUR/USD above 1.05, sent DXY to fresh session lows and the Bund below 153.00; USTs drifting in sympathy
• GBP remains the standout FX performer post labour data, though, participants await Truss' Brexit announcement to the Commons shortly
• WTI and Brent are firmer in-fitting with broader risk appetite and the aforementioned China COVID improvement; posting gains of circa USD 0.60/bbl
• Looking ahead, highlights include US Retail Sales, Industrial Production & Business Inventories, Speakers from Fed’s Powell, Bullard, Harker, Mester, Evans, Kashkari & ECB’s Lagarde

As of 11:25BST/06:25ET

LOOKING AHEAD

• US Retail Sales, Industrial Production & Business Inventories, Speakers from Fed’s Powell, Bullard, Harker, Mester, Evans, Kashkari & ECB’s Lagarde.
• Click here for the Week Ahead preview

GEOPOLITICS

RUSSIA-UKRAINE

• Russian Foreign Ministry says that there are no talks in any form going on with Ukraine, according to Interfax
• Ukraine's Deputy Defence Minister said an operation was launched to rescue trapped soldiers at the Azovstal steel plant in which 53 seriously wounded soldiers were evacuated to Novoazovsk and 211 were taken to Olenivka, according to Sky News Breaking.
• German Finance Minister Lindner says he is politically open to the concept of seizing foreign assets of the CBR, via Handelsblatt; G7 and EU are already discussing appropriate proposals.
• Engie (ENGI FP) CEO says paying in Euros for Russian gas; says should be able to get through this winter in France with enough gas supplies.
• Finland gas operator Gasum will take dispute with Russia's Gazprom Export to arbitration proceedings; Gasum says it will not pay for Russian gas in Roubles, via Reuters.

OTHER

• US will take steps to revise Cuba policy including relaxing some travel, migration and remittances restrictions, according to administration officials cited by Reuters.
• Clashes have reportedly occurred in the Libyan capital following the arrival of the new PM, according to Sky News Arabia; subsequently, The Libyan Ministry of Defense says "the military and security services dealt firmly and professionally to prevent chaos and restore stability to the capital.
• US and Japanese gov'ts have begun coordinating on a joint statement, according to the Nikkei; will clearly state a cooperation policy to deter and respond to China's Indo-Pacific activities.

EUROPEAN TRADE

CENTRAL BANKS

• ECB's Knot says a 25bp hike in July is realistic; says a 50bp rate hike should not be excluded if data in the next few months suggests that inflation is broadening and accumulating.
• NBH's Virag says they will increase rates further, via Reuters citing slides.
• NBP's Kotecki says that interest rates will continue to move higher but it is currently difficult to define their target level.

EQUITIES

• European bourses are firmer across the board, Euro Stoxx 50 +1.7%, taking impetus from and extending on a positive APAC handover as the regions COVID situation improves.
• Stateside, futures are firmer across the board, ES +1.8%, following yesterday's relatively lacklustre session with participants awaiting numerous Fed speak, including Chair Powell.
• Twitter (TWTR) prospective purchaser Musk says that his offer was based on the Co.'s SEC filing being accurate, however, yesterday the CEO refused to show proof of less than 5% of fake/spam accounts; deal cannot move forward until this has been disclosed. -3.5% in the pre-market
• Home Depot Inc (HD) Q1 2023 (USD): EPS 4.09 (exp. 3.67/3.67 GAAP), Revenue 38.9bln (exp. 36.71bln); Raises Fiscal 2022 Guidance. +2.5% in the pre-market

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FX

• Pound the standout G10 performer in wake of outstanding UK labour report; Cable clears string of resistance levels on the way towards 1.2500 and EUR/GBP probes 0.8400 after breaching technical supports .
• Kiwi and Aussie relish renewed risk appetite and latter also helped by hawkish RBA minutes; NZD/USD above 0.6350 and 1.3bln option expiries at 0.6300, AUD/USD back on 0.7000 handle.
• Greenback concedes ground ahead of top tier US data and raft of Fed speakers including chair Powell, DXY down to 103.470 vs 104.320 at best; latest session low in wake of ECB's Knot.
• Franc, Euro and Loonie all up at the expense of the Buck but latter also fuelled by WTI topping USD 115/bbl; USD/CHF sub-parity, EUR/USD surpassing 1.05 in wake of hawk-Knot and USD/CAD near 1.2800.
• Yen lags as risk sentiment improves and yields outside of Japan rebound firmly; USD/JPY rebounds through 129.00 and just over 129.50.
• Norwegian Crown boosted by Brent in stark contrast to crude import dependent Turkish Lira and Indian Rupee; EUR/NOK under 10.1500, USD/TRY touches 15.8850 and USD/INR crosses 78.0000 to set fresh ATH

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Notable FX Expiries, NY Cut:

• NZD/USD: 0.6300 (1.3BN) Click here for more detail.

FIXED INCOME

• Bonds make way for risk revival and brace for US data amidst a raft of global Central Bank speakers.
• Bunds down to 152.74, Gilts hit 119.25 and 10 year T-note as low as 119-08 before paring some heavy declines
• UK DMO gets welcome reception for 2015 issuance, but new German Schatz receives cold shoulder even before hawkish comments from ECB's Knot not ruling out a 50 bp July hike if data warrants more than 25 bp
• China's main bond trading platform is said to have stopped the reporting of bond trades by foreigners following the market downside, according to Bloomberg.

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COMMODITIES

• WTI and Brent are firmer in-fitting with broader risk appetite and the aforementioned China COVID improvement; posting gains of circa USD 0.80/bbl.
• However, upside remains capped amid the ongoing standoff between the EU and Hungary over a Russian import embargo.
• Iran set June Iranian light crude price to Asia at Oman/Dubai + USD 4.25/bbl, according to a Reuters source
• OPEC+ production was 2.6mln below quotas in April, according to a report cited by Reuters; Russian production 1.28mln below the required level in April, sources add.
• Spot gold is firmer, taking impetus from the USD pressure; though, the yellow metal is yet to move out of earlier ranges.
• Base metals are bid on risk while Wheat declined amid reports that India is easing some of its export restrictions.

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NOTABLE US HEADLINES

• US is reportedly to extend the COVID public health emergency beyond July, according to Bloomberg.
• US Treasury Secretary and USTR Tai are reportedly divided in their stances on Chinese tariffs and as such, President Biden will need to make a decision on whether to reduce taxes on Chinese goods by the middle of Summer, according to Reuters
• Click here for the US Early Morning note.

NOTABLE EUROPEAN HEADLINES

• UK Foreign Secretary Truss is to declare her intention to bring forward legislation that rips up parts of the post-Brexit trade deal on Northern Ireland, according to LBC. Expected around 12:30BST/07:30ET
• Irish Foreign Minister Coveney says he spoke with UK Foreign Minister Truss on Monday, notes the EU and UK sides haven't met since February and says it is "time to get back to the table"
• Click here for more detail/analysis on the Brexit developments.
• ECB is expected to raise the deposit rate in July according to 39 out of 39 respondents in a Reuters survey, while 26 out of 48 economists see the deposit rate at 0% in Q3 and 21 out of 48 see the deposit rate at 0.25% in Q4.

NOTABLE DATA

• UK Average Weekly Earnings 3M YY (Mar) 7.0% vs. Exp. 5.4% (Prev. 5.4%); (Ex-Bonus) (Mar) 4.2% vs. Exp. 4.1% (Prev. 4.0%)
• UK ILO Unemployment Rate (Mar) 3.7% vs. Exp. 3.8% (Prev. 3.8%); Employment Change (Mar) 83k vs. Exp. 5k (Prev. 10k)

CRYPTO

• Bitcoin is firmer and has reclaimed the USD 30k mark in a continuation of the relative stabilisation from last week's pressure

APAC TRADE

EQUITIES

• APAC stocks were positive but with gains capped after the uninspiring lead from Wall St and growth concerns.
• ASX 200 was kept afloat by strength in the commodity-related sectors after recent gains in underlying prices.
• Nikkei 225 traded marginally higher with Japan seeking to pass an extra budget by month-end and will begin permitting entry to a small number of tourists.
• Hang Seng and Shanghai Comp were both firmer with tech spearheading the outperformance in Hong Kong amid hopes of an easing of the crackdown on the sector, while the mainland lagged amid economic concerns and despite Shanghai reporting no cases outside of quarantine for a 3rd consecutive day.

NOTABLE APAC HEADLINES

• China's state planner said China's economy faces increasing downward pressure, while it will step up support for manufacturing companies, contact-intensive services, small companies and home businesses, according to Reuters.
• Senior Chinese officials are to meet with tech industry chiefs today amid talk of crackdown easing, according to Nikkei. It was later reported that China's top political consultative body began a conference on promoting the sustainable and healthy development of the digital economy, according to state media.
• Hong Kong Chief Executive Carrie Lam said they will proceed with the planned COVID curbs easing on May 19th, according to Bloomberg.
• BoJ Deputy Governor Amamiya said it is important to continue current powerful easing to firmly support the economy and that long-term interest rates have been stable since the adoption of fixed-rate operations, while he added that if monetary easing is reduced now, it would make the 2% price goal an even more distant target, according to Reuters.
• Japan is to permit small groups of tourists to visit this month as a trial ahead of its border reopening, according to Japan Times.
• RBA May meeting minutes stated the board considered three options for the size of the rate increase which were 15bps, 25bps and 40bps in which a 15bps hike was not the preferred option as policy was very stimulatory and it was highly probable that further rate increases would be required, while 15bps would have been inconsistent with the historical practice of changing the Cash Rate in 25bps increments. The minutes also stated that an argument for a 40bps hike could be made given the upside risks to inflation and the very low level of interest rates, while they would have the opportunity to review the setting of rates again within a relatively short period of time and members agreed further rate hikes would likely be required to ensure inflation returns to the target.

NOTABLE DATA

• Singapore Non-Oil Exports MM (Apr) -3.3% vs. Exp. -1.3% (Prev. -2.3%); YY (Apr) 6.4% vs. Exp. 6.7% (Prev. 7.7%)