• European bourses are firmer across the board, Euro Stoxx 50 +0.7%, taking advantage of the Wall St. close and shrugging off indecisive APAC trade.
• Stateside, futures are in modest negative territory paring some of the post-Powell upside ahead of key speakers incl. Fed's Williams.
• The USD continues to ease post-Powell though the DXY has lifted comfortably above 103.00 after briefly matching Tuesday's 102.99 trough.
• EGBs remain under pressure but have lifted off of initial 135.62 and 104.53 lows in Bunds and Gilts, perhaps following the morning's supply which was soft, though not as poor as the US 3yr.
• Crude benchmarks climb higher as Tuesday's upside continues with multiple supportive factors for the complex; currently, the benchmarks are firmer by over 1.0%.
• Looking ahead, highlights include BoC Minutes, Speeches from Fed's Williams, Cook, Barr, Bostic, Kashkari & Waller, Supply from the US, Earnings from CVS Health, Disney, Uber & Goodyear Tire.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer across the board, Euro Stoxx 50 +0.7%, taking advantage of the firmer Wall St. close and shrugging off indecisive APAC trade.
• Sectors are similarly bid with Energy outperforming given benchmark activity and post-Equinor, though upside is capped by TotalEnergies.
• Stateside, futures are in modest negative territory paring some of the post-Powell upside ahead of key speakers incl. Fed's Williams.
• BIS' Carstens says a re-think is needed on regulating big tech activities in the financial sector. Adding, it is time to consider tangible operations for direct regulation.
• Tesla (TSLA) China January deliveries 66.05k, +18% MM, via CPCA; adding, China sold 1.3mln passenger vehicles, -37.9% YY.
• Click here for more detail.

FX

• The USD continues to ease post-Powell though the DXY has lifted comfortably above 103.00 after briefly matching Tuesday's 102.99 trough.
• Amidst this, G10 peers are firmer across the board with GBP outperforming slightly and Cable incrementally above 1.21 courtesy of EUR/GBP action amid slightly tamer action for the single currency.
• AUD is seemingly experiencing a modest second-wind post-RBA and ahead of Friday's SOMP; AUD/USD tested 0.70 and NZD/USD at the upper-end of 0.6310-0.6348 parameters.
• SEK is relatively contained despite mixed data ahead of the Riksbank while EUR/NOK has tested 11.00 to the downside at best.
• PBoC set USD/CNY mid-point at 6.7752 vs exp. 6.7758 (prev. 6.7967)
• BoC Governor Macklem flagged the debt load in explaining the early rate pause and said that rate hikes have hit homeowners hard, while the BoC needs time to gauge how households and businesses adapt to higher rates before making further moves. Macklem also commented that they cannot put it on a calendar and do not know how long the duration of the rate pause will be, according to Bloomberg.
• Click here for more detail.

FIXED INCOME

• EGBs remain underpressure but have lifted off of earlier 135.62 and 104.53 troughs in Bunds and Gilts, perhaps following the morning's supply which was soft, though not as poor as the US 3yr.
• Stateside, USTs have recuperated somewhat from Tuesday's pressure ahead of numerous Fed speakers and a USD 35bln 10yr sale; yields are slightly softer with action much more pronounced at the short end.
• Click here for more detail.

COMMODITIES

• Crude benchmarks climb higher as Tuesday's upside continues with multiple supportive factors for the complex; currently, the benchmarks are firmer by over 1.0%.
• Nat gas futures diverge once again while TotalEnergies writes that "The tensions on European gas prices seen in 2022 are expected to continue into 2023, as the limited growth in global LNG production is supposed to meet both higher European LNG demand to replace Russian gas received in 2022 and higher Chinese LNG demand.”.
• US Energy Inventory Data (bbls): Crude -2.2mln (exp. +2.5mln), Gasoline +5.3mln (exp. +1.3mln), Distillate +1.1mln (exp. +0.1mln), Cushing +0.2mln.
• UK's Unite union announced that a 48-hour strike is underway at BP (BP/ LN) Petrofac installations involving around 80 workers, according to Reuters.
• Iranian official says OPEC is moving in the correct direction, sees oil prices increasing this year to circa. USD 100/bbl in H2 2023; OPEC+ likely to continue existing policy at the next gathering.
• India's Oil Minister says the OPEC SecGen has invited India to the next OPEC+ meeting.
• Qatar set March Marine Crude OSP at +0.40/bbl vs Oman/Dubai; sets Land crude at +1.10/bbl vs Oman/Dubai, according to a document cited by Reuters; Iraq sets March Basrah Medium crude price to Asia at -1.10/bbl vs Oman/Dubai average; Europe OSP -6.95/bbl vs dated Brent, according to SOMO.
• Activity at Peru's major copper mines are at or near normal levels in spite of social unrest, according to data reviewed by Reuters; MMG's Las Bambas mine elevated after last-minute supplies to avert the expected halt, but could still face production halt in the coming days as inputs are running out.
• Spot gold is firmer, though off best levels as the DXY picks up from session lows below 103.00 and as such gold remains circa. USD 15/oz from USD 1900/oz at best.
• LME aluminium lags and eyes USD 2,500/t to the downside following an exceptionally large warehouse build of 105.6k (vs prev. -2k).
• Click here for more detail.

NOTABLE HEADLINES

• NIESR cut 2023 UK GDP growth forecast to 0.2% from 0.7% and 2024 GDP to 1.0% from 1.7%, while it sees CPI averaging 8.3% in 2023 and 4.2% in 2024 vs. prev. forecast of 8.0% and 3.9%, respectively.
• ECB says it will keep capital requirements steady this year. Click here for more detail. ECB's Enria (supervisory board) says there is no generalised dissatisfaction with internal models, issues with some individual banks. Launched an initiative to simplify internal modes landscape

NOTABLE US HEADLINES

• US President Biden said he is announcing new standards to require all construction materials used in federal infrastructure projects to be made in America and said the tax system is unfair, while he called for Congress to pass a minimum billionaire tax and proposed to quadruple the tax on corporate stock buybacks. President Biden noted he is committed to working with China where it can advance American interests and benefit the world but if China threatens US sovereignty, the US will act to protect the country and also said the US is in the strongest position in decades to compete.
• Click here for the US Early Morning note.

CRYPTO

• Bitcoin is little changed overall and resides towards the mid-point of a narrow sub-400 band with fresh developments limited.

GEOPOLITICS

• US Pentagon said China declined a US request for a phone call between the Pentagon chief and China's defence minister, according to Reuters.
• Russia says it is not satisfied with the progress of unblocking Russian exports as part of the Ukrainian grain deal and the EU is not fulfilling its promises on this, via Tass citing a diplomat.
• Russian Deputy PM Novak says Russia will decide countermeasures to the EU sanctions by March 1; Russian oil output in February has been in line with January levels; January production stood at 9.8-9.9mln BPD.
• Russia Foreign Ministry says US demands to restart nuclear arms treaty inspections are cynical because it is assisting Kyiv in striking Russian targets; adds, the US' actions, in respect to Russia, are fraught with real risk of direct confrontation between the two nuclear states, according to Ria
• UK PM Sunak says he will offer to provide Ukraine with longer-range capabilities. Note, Ukrainian President Zelensky is visiting the UK today and will be meeting with PM Sunak.

APAC TRADE

• APAC stocks were indecisive and failed to sustain the momentum from Wall St where markets whipsawed as attention centred on Fed Chair Powell before the major US indices eventually closed at session highs as Powell’s two-sided comments proved not to be as hawkish as some feared.
• ASX 200 was underpinned by strength in financials and with the mining-related industries benefitting from the rebound in underlying commodity prices.
• Nikkei 225 underperformed with sentiment in Japan pressured by weak earnings reports from the likes of SoftBank, Sharp and Nintendo.
• Hang Seng and Shanghai Comp. were indecisive amid lingering tensions from the spy balloon incident and after China denied a US request for a phone call between defence officials.

NOTABLE ASIA-PAC HEADLINES

• Japan is arranging to relax border control measures for visitors from China as soon as this month and will end blanket testing for all travellers from China upon arrival, but will continue requiring a COVID test before departure from China, according to FNN.
• New Zealand PM Hipkins said policy is to be focused on the cost of living and announced that the minimum wage will increase in line with CPI from April.
• RBI hiked the Repurchase Rate by 25bps to 6.50% as expected through a 4-2 vote (prev. 5-1) and the MPC kept the policy stance of remaining focused on the withdrawal of accommodation through a 4-2 vote (prev. 4-2). RBI Governor Das stated further calibrated monetary policy action is warranted and that the situation remains fluid and uncertain, while he added that the stickiness of core inflation is a matter of concern and they need to see a decisive fall in inflation.
• Beijing has asked students to wear masks at primary and middle schools, according to Bloomberg.
• Japan may opt for milder chip-equipment curbs on China than the US despite agreeing on export curbs, according to a Japanese ruling party lawmaker cited by Reuters.