• European bourses are firmer across the board, Euro Stoxx 50 +0.6%, in a continuation of APAC trade with fresh developments somewhat limited ex-earnings.
• Stateside, futures are little changed overall ahead of data/Fed speak.
• DXY has come under some modest pressure throughout the morning in what is more of a consolidation than any sustained bout of pressure, with peers modestly firmer.
• GBP leads amid further reports of an impending N. Ireland Protocol deal while PLN lags after the ECJ's ruling.
• EGBs ran out of recovery momentum and are now flat, USTs modestly firmer with yields lower.
• Commodities rangebound amid limited specific fundamentals news aside from geopolitical developments re. Nord Stream and China.
• Looking ahead, highlights include US Building Permits/Housing Starts, Philly Fed, PPI, IJC, Speeches from Fed's Bullard, Cook & Mester, ECB's Lane & de Guindos, BoE's Pill, Earnings from Paramount & Dropbox.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer across the board, Euro Stoxx 50 +0.6%, in a continuation of APAC trade with fresh developments somewhat limited ex-earnings.
• Sectors are mostly in the green with Media outperforming post-RELX, Telecoms bolstered by Orange & Vodafone, Banking by Commerzbank and Standard Chartered; for reference, heavyweight Nestle is lower as its headline metrics missed slightly.
• Stateside, futures are little changed overall after ending Wednesday's session firmer after initial data-induced weakness, ES U/C, ahead of numerous Central Bank speakers.
• Sony (6758 JT) Chip unit head sees limited impact from chip export curbs to China by US, Japan, and the Netherlands, expects global smartphone demand to recover in H2 this year, inventory levels a concern.
• Click here for more detail.

FX

• DXY has come under some modest pressure throughout the morning in what is more of a consolidation than any sustained bout of pressure, index to the lower-end of 103.52-103.89 session bounds.
• Amidst this, G10 peers are firmer across the board though again magnitudes are relatively slim with specific newsflow in-line with expectations and relatively incrementally.
• Though, this does come with the modest exception of GBP among G10s amid reports that the DUP could see the text of the N.Ireland Protocol deal on Monday, Cable at 1.2074 highs vs 1.2015 trough.
• Outside of G10s, the PLN has garnered interest after the ECJ opinion ruled in-favour of mortgage holders (i.e. against domestic banks), with EUR/PLN up to 4.7775 following the announcement.
• Elsewhere, peers are little changed/modestly firmer ex-USD, with the EUR and CAD await numerous Central Bank speakers.
• PBoC set USD/CNY mid-point at 6.8519 vs exp. 6.8524 (prev. 6.8183)
• Click here for more detail.

FIXED INCOME

• Gilts and Bunds have run out of recovery momentum and are now essentially unchanged as Bunds failed to breach the 135.12 Fib of Wednesday's action with specific developments limited.
• In the periphery, a hefty amount of supply from France, Spain and Italian 2053 syndication have been digested with limited impact thus far, though BTPs are a handful of ticks lower than their core peers.
• Stateside, USTs are in the green though they are currently beneath their overnight peak in 112.11+ to 111.29+ parameters ahead of numerous data points and Fed speakers.
• Click here for more detail.

COMMODITIES

• Crude benchmarks are softer/flat on the session and towards the lower-end of circa USD 1.50/bbl parameters with fresh developments somewhat limited for the complex.
• Gas markets diverge with US Henry Hub futures are firmer above USD 2.50/MMBtu whilst Dutch TTF sees losses but remains above EUR 50/MWh.
• Spot gold is essentially unchanged as participants await fresh catalysts while base metals are mixed overall and relatively rangebound themselves.
• Click here for more detail.

NOTABLE HEADLINES

• ECB's Panetta says the ECB should not unconditionally pre-commit to future policy moves, the extent and duration of monetary policy restriction matters now that rates are in restrictive territory. Headline inflation could fall below 3% towards the end of the year. Core inflation cannot turn on a dime and will eventually follow headline inflation. Wages are an upside risk and accelerating wage growth raises the spectre of a wage-price spiral.
• EU Top Court Advocate General in the Polish FX Mortgage case says Banks may not demand remuneration for use of capital in contracts rendered invalid; the possibility of demanding remuneration from banks by consumers should be based on Polish law and decision is up to Polish courts.
• UK PM Sunak and EU's von der Leyen are to speak before the end of the week with the text of the Northern Ireland protocol deal to go before the DUP on Monday, according to The Times; the text will be presented to the DUP on Monday before the cabinet gets to view it on Tuesday. Government sources are confident the deal with satisfy unionist tests for backing a deal.

DATA RECAP

• UK ONS says spending indicators mostly recorded reduced activity when compared with the prior week; net 8% of businesses currently trading expect turnover to increase in March vs. 3% decrease in Feb.

NOTABLE US HEADLINES

• China's Commerce Ministry is to include Lockheed Martin (LMT) and Raytheon (RTX) on their unreliable entities list from today, banning the Cos from engaging in China-related trade activities; bans senior staff from entering China.
• Click here for the US Early Morning note.

GEOPOLITICS

• Russian embassy to the US said the destruction of Nord Stream pipelines was an act of international terrorism and the US should prove it was not involved, according to Reuters.
• US Senate passed a resolution condemning China over the spy balloon, according to Bloomberg. It was also reported that US officials said the downed Chinese spy balloon was aimed at US bases in Guam and Hawaii but was blown off course, according to NYT.
• Turkish Foreign Minister says will discuss bilateral relations, Ukraine war, Swedish and Finnish NATO with US Secretary of State Blinken next week; Turkey could evaluate Finland and Sweden's NATO applications separately.

CRYPTO

• Bitcoin is firmer on the session and at the top-end of parameters, though is yet to convincingly test the USD 25k mark to the upside.

APAC TRADE

• APAC stocks gained as the region took impetus from the US where participants digested a slew of data releases including stronger-than-expected retail sales and better-than-feared NY Fed Manufacturing.
• ASX 200 was firmer after several key earnings releases although gains were capped by disappointing jobs data which showed a surprise contraction in Employment Change and a higher Unemployment Rate.
• Nikkei 225 was led by strength in auto manufacturers including Toyota which plans to boost output next month, while data releases were varied as machinery orders disappointed but trade data was mixed.
• Hang Seng and Shanghai Comp. conformed to the improved risk tone with tech front running the outperformance in Hong Kong and with the mainland also underpinned by China's support pledges.

NOTABLE ASIA-PAC HEADLINES

• Chinese President Xi said China is willing to share ultra-large-scale markets, complete industrial systems and advanced technologies with central Asian countries, while he added they will promote high-quality regional economic development and build a closer China-central Asia community with a shared future, according to state media.
• China's NDRC said shortcomings and difficulties still exist in employment, education, medical care, childcare, elderly care, housing and ecological protection. NDRC added that it will boost the income of urban and rural residents, as well as improve the consumption capacity of low and middle-income residents. Furthermore, it will support improvement in spending on housing, NEVs and elderly care services, among other areas of consumption, according to Reuters.
• China's Industry Minister said China's industrial and information development is facing a more severe and complex external environment as the US escalates suppression of China's advanced manufacturing industry, according to Reuters.
• China's Politburo Standing Committee says the current COVID prevention situation in China is good overall, declares victory in COVID control.
• Japan's Banking Lobby Chief expects the BoJ to steer an exit from massive monetary easing at some point in the future, if it can forsee sustained and stable CPI and wage growth. Policy adj. could increase volatility in capital/financial markets.
• BoJ market operations for three on-the-run issues of 10yr JGBs. Click here for more.

DATA RECAP

• Chinese House Prices YY (Jan) -1.5% (Prev. -1.5%)
• Japanese Trade Balance (JPY)(Jan) -3.50T vs. Exp. -3.87T (Prev. -1.45T)
• Japanese Exports YY (Jan) 3.5% vs. Exp. 0.8% (Prev. 11.5%); Imports YY (Jan) 17.8% vs. Exp. 18.4% (Prev. 20.6%, Rev. 20.7%)
• Japanese Machinery Orders MM (Dec) 1.6% vs. Exp. 3.0% (Prev. -8.3%); YY (Dec) -6.6% vs. Exp. -6.0% (Prev. -3.7%)
• Australian Employment (Jan) -11.5k vs. Exp. 20.0k (Prev. -14.6k); Full-Time Employment (Jan) -43.3k (Prev. 17.6k)
• Australian Unemployment Rate (Jan) 3.7% vs. Exp. 3.5% (Prev. 3.5%)
• Australian Participation Rate (Jan) 66.5% vs. Exp. 66.6% (Prev. 66.6%)