• Equities are under pressure as sentiment has slipped modestly throughout the European morning, ES -0.2%.
• The DXY is similarly weighed on and is below Wednesday's trough to the benefit of FX across the board; JPY outpaces pre-BoJ.
• Core fixed income is back within tighter ranges after an initial decline in the early European morning; long-end yields bid.
• Commodities are generally rangebound with catalysts somewhat limited and focus on geopols currently.
• Chinese CPI for February printed markedly softer-than-expected, PPI also edged lower.
• Looking ahead, highlights include US IJC, Challenger Layoffs, New Zealand Manufacturing PMI, Speech from Fed's Barr, Supply from the US.

EUROPEAN TRADE

EQUITIES

• European bourses are under pressure, Euro Stoxx 50 -0.5%, with sentiment gradually deteriorating amid numerous geopolitical updates ahead of Friday's NFP report.
• Beforehand, we do have Fed's voter Barr and IJC scheduled before a 30yr auction, going into this US futures are lower across the board with the NQ -0.6% lagging as yields pickup.
• Bank of America (BAC) CEO sees a slight US recession in Q3; says what the Federal Reserve intended to do is happening. Says consumer spending growth is accelerating, consumer account balances are still growing, BofA had to stop hiring last Autumn.
• JD.com (JD) Q4 net revenues USD 42.8bln (exp. 43.61bln)
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FX

• The DXY is underpressure and has moved below yesterday's 105.35 trough to 105.28 at worst with the 100-DMA in proximity ahead of US IJC, Fed speak and more pertinently Friday's NFP.
• Amidst this, the JPY is the standout outperformer with USD/JPY within 10 pips of 136.00 at best vs 137.37 initial high ahead of Kuroda's final BoJ where the straddle premium indicates 230 pip breakeven across the BoJ and NFP events.
• Antipodeans and the CHF are taking advantage of the USD's pullback, firmly below 0.94 and above 0.66 and 0.61 for CHF, AUD & NZD vs USD.
• Next-best are the EUR and GBP, with fresh drivers limited as we enter the ECB's quiet period, though with action very much at the whim of broader risk sentiment before next week's UK/EZ specific events; Cable testing 1.19 and EUR/USD holding above 1.0550.
• SEK shrugged off conflicting macro data though gleaned incremental upside from Riksbank's Bunge's hawkish remarks and a fresh call from SEB, who now look for a 25bp in June after April's 50bp.
• PBoC set USD/CNY mid-point at 6.9666 vs exp. 6.9668 (prev. 6.9525)
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FIXED INCOME

• Bonds back within tighter ranges as dust settles on Fed Chair Powell's testimonies and attention turns to Friday's US jobs data with BoJ prequel.
• Bunds meander between 131.77-07, Gilts roam from 100.50 to 100.06 and T-note sits just shy of parity within 110-31+/23+ band.
• Next on the agenda Challenger layoffs, jobless claims and last long bond refunding leg.
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COMMODITIES

• Commodities, generally speaking, reside within fairly contained ranges with price action choppy thus far amid a lack of scheduled catalysts aside from geopolitical developments.
• WTI and Brent currently reside around USD 76.50/bbl mark (USD 76.16-76.85 range) and USD 82.50/bbl (USD 82.17-82.89/bbl range) respectively.
• EU Energy Commissioner says we will propose to extend EU gas price cap to other gas hubs, to propose EU extends the voluntary target to cut gas demand by 15%.
• Russian Foreign Minister Lavrov says it is important to continue the Russian-Saudi coordination on all levels, according to Sky News Arabia. Alongside this, the Saudi Foreign Minister stresses close coordination between themselves and Russia within the energy market and the commitment to OPEC+.
• Russian Foreign Minister Lavrov says Russia and Saudi "discussed exporting Ukraine's grain across the Black Sea and removing restrictions on our exports of grain and fertilizers", via Al Jazeera.
• Spot gold remains above USD 1800/oz and by extension within Wednesday parameters and technically between the 10- & 100-DMAs at USD 1827/oz and USD 1808/oz.
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NOTABLE HEADLINES

• US President Biden and European Commission President von der Leyen are expected to agree on Friday to work towards a trade deal that would give the EU free-trade agreement-like status, according to Reuters sources. It was separately reported that the US and the EU are to start trade negotiations on minerals, according to WSJ.
• German Economy Ministry says they will be setting up a system of social subsidies so low/medium-income households can afford the energy transition; double-digit billion EUR sum is planned to help the industry cope with the climate transition.
• Riksbank's Bunge says it is important for inflation to fall significantly this year. Inflation is far too high, prices are rising broadly. Underlying inflation has not shown clear signs of falling, will take time for mon pol to have full impact. Adds, the economy is still faring relatively well; still sees a 25bp or 50bp hike in April.

DATA RECAP

• UK RICS Housing Survey (Feb) -48 vs. Exp. -49.0 (Prev. -47.0, Rev. -46)

NOTABLE US HEADLINES

• Northwestern University Professor Janice Eberly is reportedly the frontrunner in the White House's search for Brainard's successor as Fed Vice Chair, according to sources cited by Bloomberg.
• US President Biden proposes tax on income over USD 400k at 39.6% in the budget and raising corporation tax to 28% from 21%, while he urges a 25% minimum tax on billionaires and the budget plan would nearly double capital gains tax for investment to 39.6% from 20%, according to Reuters. President Biden's budget will eliminate tax subsidies for oil and gas and will also eliminate 'like-kind exchange' subsidy for real estate, as well as eliminate tax subsidies for crypto transactions, limit retirement benefits for high earners and end carried interest 'loophole'. Furthermore, a US official said President Biden's budget plan aims to cut deficits by nearly USD 3tln over 10 years, according to AP.

GEOPOLITICS

• Twitter sources noted a major Russian air attack was underway in Ukraine, while regional officials said strikes hit many Ukrainian regions including Kharkiv and Odesa with power cuts in some places, while explosions were also heard in Kyiv and Dnipro.
• Russian missiles struck 10 regions across Ukraine, according to Russian President Zelensky cited by AFP.
• US Justice Department said the US obtained a warrant for the seizure of an aeroplane owned by a Russian oil company valued at more than USD 25mln, according to Reuters.
• North Korea fired short-ranged ballistic missile towards the Yellow Sea, according to Yonhap.

CRYPTO

• Silvergate Capital (SI) announced its intent to wind down operations and voluntarily liquidate the bank. Coinbase (COIN) later stated it has no client or corporate cash at Silvergate and that client funds continue to be safe, accessible and available.

APAC TRADE

• APAC stocks traded mostly rangebound after the choppy performance in the US where Fed Chair Powell reaffirmed his hawkish view but clarified that the Fed has not yet made a decision, while the region also digested weak data including softer-than-expected Chinese inflation.
• ASX 200 was kept afloat amid outperformance in tech and energy albeit with upside limited by weakness in the mining and materials industries, while sentiment is also clouded following confirmation of a substantial drop in building approvals.
• Nikkei 225 rose to its highest level since August after downward revisions to Q4 GDP added to the case for a slower exit from the BoJ’s ultra-easy policy and as the central bank kick-started the final 2-day policy meeting before the end of the Kuroda era.
• Hang Seng and Shanghai Comp. were indecisive as participants reflected on the soft inflation data from China which showed consumer price growth was at its slowest pace in a year.

NOTABLE ASIA-PAC HEADLINES

• Australia will end COVID testing for travellers from China, while Australia's Trade Minister separately noted that progress is being made on almost all instances of trade blockages with China.
• Japan's lower house approved the appointment of Kazuo Ueda as the next BoJ Governor, while it approved the appointment of Shinichi Uchida and Ryozo Himino as the next Deputy Governors, which was as expected and with the upper house set to vote on the nominations tomorrow.
• South Korean President Yoon is to visit Japan on March 16-17th, according to Yonhap.

DATA RECAP

• Chinese CPI MM (Feb) -0.5% vs. Exp. 0.2% (Prev. 0.8%); YY (Feb) 1.0% vs. Exp. 1.9% (Prev. 2.1%)
• Chinese PPI YY (Feb) -1.4% vs. Exp. -1.3% (Prev. -0.8%)
• Japanese GDP Revised QQ (Q4) 0.0% vs. Exp. 0.2% (Prev. 0.2%); QQ Annualised (Q4) 0.1% vs. Exp. 0.8% (Prev. 0.6%)