• European bourses are lower across the board, Euro Stoxx 50 -1.5%, as contagion fears from SVB dents risk sentiment and weighs heavily on banks, SX7P -4.0%.
• Stateside, futures remain under pressure with the ES around 3900 while the NQ is the relative outperformer, and little changed overall, with yields lower.
• USD has failed to benefit from the risk tone while JPY lags as hawkish bets unwind post-BoJ and GBP outperforms after data and aided by EUR/GBP technicals.
• Core and periphery EGBs are benefiting from the glum risk tone; though, the benchmarks have eased from initial extremes as newsflow slows pre-NFP.
• Crude and base metals are dented by the deterioration in risk sentiment, with spot gold gleaning some modest upside from this.
• Looking ahead, highlights include US & Canadian Labor Market Reports and ECB's Lagarde (Note, the ECB is in its quiet period).

EUROPEAN TRADE

EQUITIES

• European bourses are lower across the board, Euro Stoxx 50 -1.5%, as contagion fears from SVB dents risk sentiment and weighs heavily on banks, SX7P -4.0%.
• As such, the Banking sector is underperforming with the exception of Utilities; aside from the above, pertinent movers on the upside are limited to Leonardo and Vodafone.
• Stateside, futures remain under pressure with the ES around 3900 while the NQ is the relative outperformer, and little changed overall, with yields lower amid haven action and as participants prepare for NFP.
• Click here for analysis on Silicon Valley Bank "SVB" (SIVB).
• Mediatek (2454 TT) February sales -24.3% Y/Y at TWD 30.3bln.
• Click here for more detail.

FX

• The USD has failed to benefit from the broader risk tone, with the DXY underpressure though yet to test the 105.00 mark to the downside within 105.07-36 parameters.
• JPY is the standout laggard, with USD/JPY testing 137.00 from a 135.82 base as hawkish positioning unwound following Kuroda's last BoJ, where policy parameters were maintained.
• At the other end of the spectrum is GBP, with firmer-than-expected headline GDP data and technicals via EUR/GBP assisting to lift Cable above 1.20; specifically, EUR/GBP moved below the 21- & 50-DMA's of 0.8849 and 0.8838 in relatively quick succession.
• Elsewhere, the CHF benefits on haven-flows while peers ex-JPY are generally firmer against the USD pre-NFP; CAD, ahead of its own jobs report, is litle changed in narrow 1.3823-3861 parameters.
• Click here for more detail.

FIXED INCOME

• Core and periphery EGBs are benefiting from the glum risk tone; though, the benchmarks have eased from initial extremes as newsflow slows pre-NFP.
• Specifically, Bunds are now below 133.00 within 132.37-133.82 ranges; Gilts back towards 101.16 vs 102.00+ best and USTs at 112.00 despite being 13 ticks above the mark earlier.
• Amidst this, yields are lower across the curve with action in US yields most pronounced in the belly.
• Click here for more detail.

COMMODITIES

• Crude and base metals are dented by the deterioration in risk sentiment, with spot gold gleaning some modest upside from this.
• Currently, WTI and Brent are just off initial lows within ranges of circa. USD 1/bbl while base metals are, broadly speaking, softer across the board with LME nickel particularly afflicted.
• For gold specifically, the yellow metal briefly surmounted its 21-DMA and yesterday's best at USD 1834/oz and USD 1835/oz respectively, but remains only modestly firmer overall.
• Saudi Aramco is to supply full contract volumes of oil to at least four north Asian refiners in April.
• Chevron's (CVX) 240k BPD Richmond California plant reports malfunctioning flaring equipment.
• Click here for more detail.

NOTABLE HEADLINES

• US President Biden and European Commission President von der Leyen have agreed to launch talks on critical mineral and subsidies, according to a senior US official; expects to discuss strengthening cooperation on Russian sanctions.
• UK PM Sunak is to unveil up to GBP 5bln additional cash for defence, according to The Times.
• Reuters poll showed all 60 economists surveyed unanimously forecast the ECB to hike the Deposit Rate by 50bps to 3.00% at its meeting next week, while expectations are for the Deposit Rate to peak at 3.75% in Q3 vs prev. forecast of a peak at 3.25% in Q2.
• 5.6 magnitude earthquake occurs in northern Colombia, via EMSC.

DATA RECAP

• UK GDP Estimate MM (Jan) 0.3% vs. Exp. 0.1% (Prev. -0.5%); 3M/3M (Jan) 0.0% vs. Exp. 0.0% (Prev. 0.0%); YY (Jan) 0.0% vs. Exp. -0.1% (Prev. -0.1%)
• ONS "Monthly GDP is now estimated to be 0.2% below its pre-coronavirus levels (February 2020)."

NOTABLE US HEADLINES

• White House released the fiscal 2024 budget proposal that projects USD 6.883tln in total spending, USD 5.036tln in revenues and projects annual deficits of over USD 1tln each year through 2033.
• Peter Thiel's Founders Fund advised companies to withdraw money from SVB (SIVB) and Y Combinator advised companies to limit SVB exposure, while Coatue Management, USV and Founder Collective also told companies to pull out funds from SVB, according to Bloomberg.
• Pershing Square's Ackman tweeted that a failure of SVB Financial (SIVB) could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash, while he added that if private capital can’t provide a solution, a highly dilutive government preferred bailout should be considered.
• US Commerce Secretary says US is keeping an eye on China getting access to US technology and using it in its military.

GEOPOLITICS

• North Korean leader Kim oversaw the fire assault drill on Thursday and the drill proved the capability to counter an actual war, while shells were aimed at simulated targets of enemy airport. Furthermore, North Korean leader Kim said the army should be ready to fight at any time citing 'frantic war preparation moves' by the enemy, according to KCNA.
• US is to hold an informal meeting of UN Security Council members next week regarding human rights abuses in North Korea, according to Reuters.
• Russian Deputy Foreign Minister Ryabkov says that Russia and the US remain in contact over the New START Treaty but progress is not expected from these contacts.

CRYPTO

• Bitcoin is under pressure as SVB, and the potential for contagion, continues to weigh on risk sentiment ahead of US NFP; currently, Bitcoin is at the lower-end of USD 19.7-20.4k parameters.

APAC TRADE

• APAC stocks declined amid headwinds from the banking sell-off in the US owing to contagion fears related to Silicon Valley Bank in which shares of the group dropped more than 60% during Wall St trade and resulted in the four biggest US banks shedding a total of more than USD 50bln in market cap, while SVB suffered another 20% drop after-hours as funds advised companies to pull out of the lender.
• ASX 200 was pressured by losses in its largest-weighted financial industry on spillover selling from stateside peers and with the index also hit by weakness in the commodity-related sectors.
• Nikkei 225 declined with risk sentiment dampened following mixed household spending data and with banking shares further hit after the BoJ maintained its ultra-loose policy settings.
• Hang Seng and Shanghai Comp. conformed to the downbeat mood with Hong Kong underperforming amid a tech rout as JD.com shares suffer a double-digit drop despite beating on the bottom line, while property stocks are also in focus as shares in developer Kaisa initially dropped around 40% post-earnings and on return from a 12-month trading halt.

NOTABLE ASIA-PAC HEADLINES

• China's parliament elected Chinese President Xi for a third term as President and as Central Military Commission Chairperson, while the NPC also elected Zhao Leji as NPC Standing Committee Chairperson and Han Zheng as China's Vice President.
• US is working to close a loophole in the export ban related to China's Inspur (000977 CH), while it was also reported that Senator Rubio introduced legislation seeking to block tax credits for batteries produced by the planned Ford (F) plant using Chinese technology.
• BoJ kept policy settings unchanged, as expected, with rates held at -0.10% and QQE with yield curve control maintained to target 10yr JGB yields at around 0%, while it kept the band around the yield target at +/-50bps with the decision on YCC made by unanimous vote. BoJ also maintained its forward guidance on interest rates and said Japan's economy is picking up with the economy expected to recover as the impact of the pandemic and supply constraints fade, while it stated that core consumer inflation is moving around 4% and inflation expectations are heightening.
• BoJ's Kuroda: premature to debate the specifics on the exit from monetary easing, policy rate and balance sheet the main things to consider when the debate begins; exit must be conducted only when 2% inflation is sustainably and stably achieved.
• Japan's upper house approved the appointment of Kazuo Ueda as the next BoJ Governor, while it approved the appointment of Shinichi Uchida and Ryozo Himino as Deputy Governors, as expected.

DATA RECAP

• Japanese All Household Spending MM (Jan) 2.7% vs. Exp. 1.4% (Prev. -2.1%); YY (Jan) -0.3% vs. Exp. -0.1% (Prev. -1.3%)
• Japanese Corp Goods Price MM (Feb) -0.4% vs. Exp. -0.3% (Prev. 0.0%); YY (Feb) 8.2% vs. Exp. 8.4% (Prev. 9.5%)