• European bourses are pressured across the board in a broader risk-off move after yesterday's Wall St. sell-off
• Europe not supported by the brief APAC respite on Shanghai's reopening updates, Euro Stoxx 50 -2.3%; ES -1.2%
• DXY is pressured as havens and antipodeans are bid on risk and fiscal/fundamental factors respectively
• Debt resumes its haven rally, with Bunds eclipsing 154.00 and USTs near 120.00
• Crude curtailed on this price action, but, off worst amid reports that China is considering buying Russian crude
• Looking ahead, highlights include US IJC, Philadelphia Fed, New Zealand Trade Balance, ECB Minutes, SARB Policy Announcement, Speeches from Fed's Kashkari & ECB's de Guindos.

As of 11:20BST/06:20ET

LOOKING AHEAD

• US IJC, Philadelphia Fed, New Zealand Trade Balance, ECB Minutes, SARB Policy Announcement, Speeches from Fed's Kashkari & ECB's de Guindos.
• Click here for the Week Ahead preview

GEOPOLITICS

RUSSIA-UKRAINE

• Reports of a death and injuries in Russia in an attack near the Ukraine border, via AFP citing a governor.
• Gazprom continues gas shipments through Ukraine, Thursday's volume is 63.3MCM.
• Russian Deputy PM Novak says Europe cannot just turn off Russian gas in one go, via Reuters.

OTHER

• North Korean nuclear test preparations are complete, according to Yonhap citing South Korean lawmakers briefed by the spy agency.

EUROPEAN TRADE

CENTRAL BANKS

• BoJ buys JPY 70.1bln in ETF, according to a central bank disclosure cited by Reuters.
• CNB's Nidetzky says maybe we are near the peak in rates, but are dealing with large uncertainties and risks, via Newstream.
• Hungarian Central Bank (NBH) maintains its One-Week Deposit rate unchanged at 6.45% as expected.
• Philippine Policy Interest Rate N/A 2.25% vs. Exp. 2.25% (Prev. 2.0%).

EQUITIES

• European bourses are pressured across the board in a broader risk-off moves after yesterday's Wall St. sell off, as European players look past the brief respite seen overnight on Shanghai's reopening; Euro Stoxx 50 -2.3%.
• Stateside, the magnitude of the downside is somewhat more contained given newsflow has been limited since Wednesday's downside commenced, ES -1.2%.

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FX

• Franc resurgence and re-emergence as a safe haven currency continues; USD/CHF touches 0.9750 vs 1.0060+ peak on Monday, EUR/CHF sub-1.0250 vs circa 1.0500 at one stage only yesterday.
• Dollar loses momentum as US Treasury yields retreat further and curve re-flattens amidst ongoing risk rout, DXY ducks under 103.500 after peaking just shy of 104.000 on Wednesday.
• Kiwi and Aussie find positives via fiscal and fundamental factors to evade aversion; NZD/USD back above 0.6300 after NZ budget and AUD/USD hovering around 0.7000 post- Aussie jobs data.
• Yen retains underlying bid irrespective of mixed Japanese data, USD/JPY below 128.00 again.
• Euro firmer beyond EUR/CHF cross ahead of ECB minutes and Sterling off UK inflation data lows awaiting retail sales on Friday, EUR/USD retains sight of 1.0500 and Cable near 1.2400.
• Rand meandering ahead of SARB in anticipation of 50 bp rate hike, USD/ZAR around 16.0000, irrespective of Gold taking firmer hold of USD 1800/oz handle.

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Notable FX Expiries, NY Cut:

• EUR/USD: 1.0400 (537M), 1.0415 (403M), 1.0435-45 (1.6BN), 1.0470 (309M), 1.0495-00 (340M), 1.0545-55 (830M), 1.0600 (358M), 1.0615 (280M)
• USD/JPY: 127.50-60 (697M), 128.00-05 (355M), 128.40-45 (290M), 128.50-55 (1.14BN) Click here for more detail.

FIXED INCOME

• Debt resumes safe-haven rally as market mood continues to sour.
• Bunds top 154.00, Gilts get close to 120.00 and 10 year T-note even nearer the same psychological level.
• BTPs lag amidst the ongoing aversion to risk, while OATs and Bonos reflect on somewhat mixed auction results.

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COMMODITIES

• WTI and Brent are pressured in-fitting with broader sentiment as initial resilience on demand-side positives re. China/COVID were overpowered by the risk move.
• However, the benchmarks are around USD 1.00/bbl off lows of USD 104.36/bbl and USD 106.76/bbl respectively, following reports that China is discussing the purchase of Russian crude.
• China is said to be in talks with Russia to purchase oil for strategic reserves, according to Bloomberg sources; detailed on terms and volume reportedly not decided yet
• Qatar Energy was reportedly selling July Al-Shaheen crude at premiums of USD 5.80-6.40/bbl above Dubai quotes which is the highest in 2 months, according to Reuters sources.
• Spot gold is bid as it draws haven allure, with the yellow metal marginally surpassing USD 1830/oz.

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NOTABLE US HEADLINES

• Fed's Harker (2023 voter) expects 50 bps rate hikes in June and July, he then anticipates a sequence of 'measured' rate hikes afterwards until they are confident inflation is moving toward 2%, according to Reuters.
• US companies have reportedly boosted capital spending to address supply bottlenecks with investment by S&P companies higher by 20%, according to FT.
• Click here for the US Early Morning note.

NOTABLE EUROPEAN HEADLINES

• EU is reportedly considering a targeted trade war on troublesome Brexiteer MPs and Tory ministers to force UK PM Johnson to do a U-turn on the Northern Ireland protocol, according to The Telegraph.

CRYPTO

• Bitcoin is modestly softer in a relatively contained range that lies just shy of the USD 30k mark.
• Crypto exchange FTX to start rollout of new stock-trading service on Thursday, WSJ reports; will not accept payment for order flow on stock trades.

APAC TRADE

EQUITIES

• APAC stocks were pressured on spillover selling after the worst day on Wall St in almost two years.
• ASX 200 was led lower by consumer staples following the retailer woes stateside and mixed Australian jobs data.
• Nikkei 225 suffered firm losses amid reports the ruling coalition is considering increasing the corporate tax rate and after several data releases in which Machinery Orders topped estimates but Exports missed as China-bound exports declined by the fastest pace since March 2020.
• Hang Seng and Shanghai Comp initially weakened with the Hong Kong benchmark dragged lower by heavy losses in tech after Tencent’s profit declined by more than 50% and with the mainland pressured as Beijing conducts a fresh round of mass COVID testing, although the mainland bourse recovered most of its losses after Shanghai announced a further gradual easing of restrictions.
• Xiaomi (1810 HK) Q1 adj. net profit CNY 2.859bln (vs 6.069bln Y/Y), Q1 revenue CNY 73.4bln (vs. 76.9bln Y/Y); global smartphone shipments -10.5% Y/Y at 38.5mln units.

NOTABLE APAC HEADLINES

• Shanghai Vice Mayor said Shanghai port throughput recovered to around 90% of the levels a year ago and that Shanghai will expand work resumption in areas with no COVID risk in early June. Furthermore, Shanghai is to gradually restore inter-district public transport from May 22nd and will require residents to show negative PCR tests taken within 48 hours before using public transport, while an economy official said Shanghai will reduce rents for small and medium-sized enterprises by more than CNY 10bln and the city extended CNY 72.3bln of loans to over 10,000 firms since March, according to Reuters.
• Japanese MOF official said China's COVID curbs are among the factors that caused a decline in China-bound exports from Japan which fell by the fastest pace since March 2020, while Japan's April imports reached the largest amount on record, according to Reuters.
• Japan's ruling coalition is reportedly considering increasing the corporate tax rate, according to Jiji.
• New Zealand sees 2021/22 OBEGAL at NZD -18.98bln (prev. forecast -20.44bln), 2021/22 net debt at 36.9% of GDP (prev. forecast 37.6%) and Cash Balance at NZD -31.78bln (prev. forecast -34.10bln), while Finance Minister Robertson said the economy is expected to be robust in the near term and they see a return to OBEGAL surplus in 2024/25, according to Reuters.

NOTABLE DATA

• Japanese Machinery Orders MM (Mar) 7.1% vs. Exp. 3.7% (Prev. -9.8%); YY (Mar) 7.6% vs. Exp. 3.7% (Prev. 4.3%)
• Japanese Trade Balance Total Yen (Apr) -839.2B vs. Exp. -1150.0B (Prev. -414.1B)
• Japanese Exports YY (Apr) 12.5% vs. Exp. 13.8% (Prev. 14.7%); Imports YY (Apr) 28.2% vs. Exp. 35.0% (Prev. 31.2%)
• Australian Employment (Apr) 4.0k vs. Exp. 30.0k (Prev. 17.9k); Full-Time Employment (Apr) 92.4k (Prev. 20.5k)
• Australian Unemployment Rate (Apr) 3.9% vs. Exp. 3.9% (Prev. 4.0%)