• APAC stocks mostly suffered firm losses amid the global risk-aversion which saw the S&P 500 close lower by 3.1%.
• BoJ kept policy settings unchanged as expected and will keep offering to buy 10yr JGBs at 0.25%.
• DXY has reclaimed 104 status, JPY is the clear laggard in G10 FX, EUR/USD sits on a 1.05 handle. 
• European equity futures are indicative of a positive open with Eurostoxx 50 +0.8% after the cash market closed lower by 3.0% yesterday.
• Looking ahead, highlights include EZ CPI (Final), Quad Witching & Speech from Fed Chair Powell.

US TRADE

• US stocks slumped amid a broad global risk-averse tone with selling pressures exacerbated after the surprise 50bps hike from the SNB, while the BoE also hiked rates by 25bps with hawkish dissent.
• SPX -3.14% at 3,671, NDX -4.02% at 11,127, DJIA -2.41% at 29,929, RUT -4.57% at 1,653.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US President Biden said a recession is not inevitable, according to AP.
• US Treasury Secretary Yellen said Congress must take action on digital asset regulation, according to Reuters.

GEOPOLITICS

RUSSIA-UKRAINE

• Ukrainian top official dismissed Russia’s latest claim about being ready to resume peace talks and said Kyiv will definitely return to negotiations with Russia but only at the right time and with a strong negotiating position, according to Reuters.
• Russia is discussing ways to allow foreign investors to sell their Russian stocks and bonds by year-end and is mulling using crypto in international trade if Russian law recognises digital assets as property, according to the Finance Ministry.
• European Commission spokesperson said Gazprom's latest gas supply cuts are further examples of Russia using energy as an 'instrument of blackmail' but added there are no indications of the latest Russian gas cuts causing an 'immediate security of supply risk'.
• Italian PM Draghi believes Russia is lying when it blames "technical issues" for the disruption of gas supplies, according to Bloomberg.
• South Korea President Yoon said the UN Security Council should respond in a united way to North Korean missile provocations, according to Reuters.

OTHER

• Ukraine and Moldova will reportedly get the initial nod from the EU on their path to membership, according to Bloomberg.
• Israel reportedly secretly coordinated with the US on many of the airstrikes it carries out in Syria as the allies face a battlefield crowded with militant groups, Iranian-backed militias and foreign militaries, according to WSJ citing sources.

APAC TRADE

EQUITIES

• APAC stocks mostly suffered firm losses amid the global risk-aversion after the recent flurry of central bank rate increases and with weak data in the US stoking recession fears.
• ASX 200 was led lower by underperformance in tech and the commodity-related sectors, although gold miners have weathered the storm after the recent upside in the precious metal.
• Nikkei 225 was pressured and failed to benefit from the BoJ decision to keep policy settings unchanged.
• Hang Seng and Shanghai Comp. pared opening losses amid virus-related optimism after Beijing reported zero cases outside of quarantine and with US-China defence meetings showing signs of cooling tensions.
• US equity futures nursed some of yesterday's losses after the BoJ bucked the trend among central banks; ES +0.9%.
• European equity futures are indicative of a positive open with Eurostoxx 50 +0.8% after the cash market closed lower by 3.0% yesterday.

FX

• DXY climbed above 104.00 as its nursed the losses that coincided with a drop in yields and weak data.
• EUR/USD continued to fade recent advances after hitting resistance at the 1.0600 level.
• GBP/USD pulled back from this week's peak and gave back some of the post-BoE gains. Sits on a 1.23 handle.
• USD/JPY strengthened after the BoJ stuck to its ultra-easy policy settings, as expected. Hovers around the 134 mark.
• Antipodeans gave ground to the firmer dollar as commodity prices eased overnight.

FIXED INCOME

• 10yr UST futures were kept afloat after the recent decline in yields and with weak data stoking recession fears.
• Bunds languished around 144.00 with prices unmoved as further details of the fragmentation tool emerged.
• 10yr JGBs remained afloat as the BoJ stuck with its dovish policy and conducted an additional fixed-rate operation.

COMMODITIES

• Crude futures were softer amid a lack of significant catalysts and with WTI capped by resistance at USD 118/bbl.
• US Energy Secretary called an emergency meeting with oil refiners next week to discuss steps companies can take to increase refining capacity and output, according to Reuters citing a DoE spokesperson.
• White House is reportedly considering fuel export limits as pump prices surge and options such as waiving anti-smog rules are also being discussed, according to Bloomberg.
• Qatar Energy set August Al-Shaheen crude term price at a premium of USD 9.24/bbl above Dubai quotes which is the highest in 3 months, according to traders cited by Reuters.
• Brazil's Petrobras is to announce a fuel price increase today, according to Reuters citing local press.
• Spot gold retraced some of its recent advances with price action largely influenced by the greenback
• Copper prices were subdued amid the cautious mood and rebound in the dollar.
• Workers at Chile's Codelco will start a strike if the board does not meet demands over the smelter on Friday, according to the union.

CRYPTO

• Bitcoin notched mild gains but failed to reclaim the 21,000 level.

NOTABLE APAC HEADLINES

• BoJ kept policy settings unchanged as expected with rates at -0.10% and QQE with yield curve control maintained to target 10yr JGB yields at around 0% with the decision on YCC made via an 8-1 vote as Kataoka dissented. BoJ repeated its April guidance that it will offer to buy 10yr JGBs at 0.25% every business day unless it is highly likely that no bids will be submitted and it also reiterated guidance on policy bias that it will take additional easing steps without hesitation as needed with an eye on the pandemic's impact on the economy. Furthermore, the BoJ said the economy is picking up as a trend though some weakness has been seen and they must carefully watch the impact of FX moves on Japan's economy and prices.

DATA RECAP

• Singapore Non-Oil Exports MM (May) 3.2% vs. Exp. 1.4% (Prev. -3.3%)
• Singapore Non-Oil Exports YY (May) 12.4% vs. Exp. 7.6% (Prev. 6.4%)

EU/UK

NOTABLE HEADLINES

• UK is to set out new data rules which diverge from the EU on Friday as it seeks to ease pressure on businesses, while it believes the new rules will maintain free flow of data from Europe and does not expect the EU to object to its data reforms, according to Reuters.
• ECB President Lagarde told EZ Finance Ministers that the goal of anti-fragmentation is not to close spreads but to normalise spreads, according to Reuters sources. This followed earlier reports that Lagarde told ministers the ECB plans to put a limit on bond spreads, while the tool would kick in if spreads go too far and too fast, according to Bloomberg.
• German Finance Minister Lindner told ECB President Lagarde that the ECB's talk regarding fragmentation threatens to dent confidence, according to FT.