• European bourses are posting modest gains, Euro Stoxx 50 +0.6%, though volumes are lighter given UK Spring Bank Holiday
• Stateside, futures are firmer across the board, ES +0.5%, with action similarly contained ahead of a busy PM docket featuring ADP and Fed's Mester
• DXY has pulled back to sub-102.50 status amid a broader, initial post-inflation CHF lead, bounce with GBP jubilant on the Jubilee
• EGBs continue to drift with associated yields higher and curves mixed/flatter, USTs directionally in-fitting but somewhat contained pre-PM events
• Crude remains curtailed after FT reports re. additional Saudi supply if Russian output declines going into today’s OPEC+ gathering
• Looking ahead, highlights include ADP, IJC & Factory Orders, JMMC & OPEC+ meetings, Speeches from Fed's Mester & NY Fed's Logan. UK Spring Bank Holiday

As of 11:15BST/06:15ET

LOOKING AHEAD

• ADP, IJC & Factory Orders, JMMC & OPEC+ meetings, Speeches from Fed's Mester & NY Fed's Logan. UK Spring Bank Holiday.
• Click here for the Week Ahead preview

GEOPOLITICS

RUSSIA-UKRAINE

• White House said offensive cyber activity against Russia does not violate the policy of avoiding direct military conflict with Russia, according to Reuters.
• Head of Russian delegation to Vienna talks on security issues says "Deployment of U.S. missiles on Danish island unacceptable escalation", via Al Jazeera.
• Russia's Kremlin says Russia will achieve its goals in Ukraine; western weapons brought into Ukraine does not change parameters of military operations but will cause more suffering in Ukraine, via Reuters; adding, it will not sell oil at a loss; if demand falls in one area then flows will be redirected.

OPEC

• Click here for the latest newsquawk preview.
• Saudi Arabia is reportedly ready to pump more oil if Russian output declines, according to FT.
• Russian compensation could be approved gradually, according to OPEC+ sources via Reuters; no guarantee it will be approved in full on Thursday; additionally, a decision on Russian compensation is highly possible at the Thursday meeting, according to Gulf OPEC sources via Reuters. Follows Reuters reports that Russia could agree to OPEC+ compensating its current drop in oil production, due to sanctions.

EUROPEAN TRADE

CENTRAL BANKS

• BoJ's Adachi says attempting to stem a weak JPY by tightening monetary policy would squeeze corporate funding; if a Fed hike cools the US economy, then there is a risk it could reverse the current trend of a weak-JPY, via Reuters.
• ECB's Villeroy says inflation is too high and too broad.
• PBoC Vice Governor says they will use various policy tools to increase liquidity injections to maintain ample liquidity, monetary policy will stabilise economic growth, employment and prices. Will require financial institutions to maintain prudence in operations and control risks.

EQUITIES

• European bourses are posting modest gains, Euro Stoxx 50 +0.6%, though volumes are lighter given UK Spring Bank Holiday.
• Stateside, futures are firmer across the board, ES +0.5%, with action similarly contained ahead of a busy PM docket featuring ADP and Fed's Mester.
• Click here for more detail.

FX

• Pound pounces on Dollar downturn to reclaim 1.2500 handle as UK prepares for Platinum Jubilee celebrations.
• DXY sub-102.500 amidst broad bounce in index components led by Franc initially; USD/CHF reverses around 0.9600 axis in wake of Swiss inflation data showing bigger overshoot vs SNB targets.
• Euro eyes 1.0700, but capped by hefty option expiry interest from round number up to 1.0740.
• Kiwi and Aussie boosted by recovery in risk sentiment, but Loonie lags as WTI sags on reports of Saudi Arabia standing ready to cover any shortfall in Russian oil output; NZD/USD probes 0.6500, AUD/USD approaches 0.7200 and Usd/Cad 1.2650+
• Yen retrieves some losses as Greenback retreats and US Treasury yields slip from peaks ahead of busy pm agenda, USD/JPY circa 129.70 compared to 130.24 overnight peak.
• Click here for more detail.

Notable FX Expiries, NY Cut:

• EUR/USD: 1.0550-55 (920M), 1.0575-85 (432M), 1.0600 (242M), 1.0625 (300M), 1.0650 (886M), 1.0660 (300M), 1.0700 (1.0BN), 1.0710-15 (552M), 1.0725-30 (2.26BN), 1.0735-40 (1.78BN), 1.0745-50 (993M)
• Click here for more detail.

FIXED INCOME

• Bunds and Eurozone peers extend recent losing streak to set deeper cycle lows in futures/high yields, without Liffe support and despite steady US Treasuries.
• 10 year German benchmark down to 150.29 and 1.21%+ in cash terms.
• Multi-tranche Spanish and French issuance draw mixed covers irrespective of concession.
• T-note holds around par within 118-30+/18+ range awaiting slew of US data and more Fed speakers.
• Click here for more detail.

COMMODITIES

• WTI and Brent remain pressured after overnight FT reports re. Saudi being prepared to pump more oil if Russian output declines.
• Though, the benchmarks have lifted around USD 1/bbl off of their respective overnight troughs at best; however, this has marginally pulled back.
• Reminder, the JMMC commences from 13:00BST/08:00ET with the OPEC+ event following ~30-minutes later.
• US Private Energy Inventory Data (bbls): Crude -1.2mln (exp. -1.4mln), Gasoline -0.3mln (exp. +0.5mln), Distillate +0.9mln (exp. +1.0mln), Cushing +0.2mln.
• Norway's Hammerfest liquefied natural gas plant has restarted LNG production following a fire 20 months ago, according to Equinor (EQNR NO).
• Spot gold is bid but has failed to gain much additional traction after breaching USD 1850/oz and the 10-DMA at USD 1851.3/oz; base metals are bid ahead of the long Chinese weekend for Dragon Boat Festival.
• Click here for more detail.

NOTABLE EUROPEAN HEADLINES

• UK PM Johnson has reportedly delayed plans to conduct a Cabinet reshuffle as he battles increasing revolt from within the Tory party, according to The Telegraph.

DATA RECAP

• Swiss CPI YY (May) 2.9% vs. Exp. 2.6% (Prev. 2.5%); MM (May) 0.7% vs. Exp. 0.3% (Prev. 0.4%). Click here for analysis/reaction
• EU Producer Prices YY (Apr) 37.2% vs. Exp. 38.5% (Prev. 36.8%, Rev. 36.9%); MM (Apr) 1.2% vs. Exp. 2.3% (Prev. 5.3%)

NOTABLE US HEADLINES

• US Department of Education will discharge all remaining federal student loans used to attend now-closed Corinthian Colleges which will result in USD 5.8bln of full loan discharges for 560k borrowers, while it is investigating other cases that could lead to further loan discharges for students cheated by their colleges, according to Reuters.
• Click here for the US Early Morning note.

CRYPTO

• Bitcoin is back below the USD 30k mark, though it has staged an incremental recovery from an initial USD 29.5k trough.

APAC TRADE

EQUITIES

• APAC stocks followed suit to the subdued performance seen in global peers after the recent upside in yields and hawkish central bank rhetoric.
• ASX 200 was dragged lower by underperformance in tech and weakness in financials, with sentiment also not helped by frictions with China.
• Nikkei 225 lacked firm direction with automakers indecisive following sharp declines in their US sales last month.
• Hang Seng and Shanghai Comp traded mixed ahead of the Dragon Boast Festival tomorrow and with Hong Kong suffering from notable losses in property names and tech, while losses in the mainland were pared amid COVID-related optimism and after the latest support efforts in which Beijing announced CNY 800bln of increased credit quotas for state-owned policy banks to fund the construction of infrastructure projects.
• Meituan (3690 HK) Q1 (CNY): revenue 46.27bln vs. exp. 45.29bln.

NOTABLE APAC HEADLINES

• China's Ambassador to Australia said that Beijing is prepared to talk with Australia without preconditions but added that trade sanctions on Australia will not be removed until there is an improvement in the political relationship, according to AFR.
• China's Global Times tweeted that Chinese Coast Guard vessels patrolled the territorial waters off the Diaoyu Islands (Senkaku Islands) on Thursday, which is a disputed territory with Japan.
• Japan's Chief Cabinet Secretary Matsuno confirmed that the government wants to increase the average minimum wage to JPY 1000, according to Reuters.
• China's Commerce Ministry, on the US considering adding additional firms to the blacklist, says they will adopt measures to protect Chinese firms.
• A group of nations are to make a request for an international labour organisation mission to China to probe alleged violation in Xinjiang at a meeting today, according to Reuters sources.

NOTABLE APAC DATA

• Australian Trade Balance (AUD) (Apr) 10.5B vs. Exp. 9.3B (Prev. 9.3B)
• Australian Goods/Services Exports (Apr) 1% (Prev. 0%); Imports (Apr) -1% (Prev. -5%)