• APAC stocks traded mostly positive but with gains limited following the indecisive mood stateside.
• RBA kept rates unchanged at 3.60%, as expected; board expects some further tightening may well be needed.
• European equity futures are indicative of a marginally higher open with the Euro Stoxx 50 +0.3% after the cash market closed up 0.1% on Monday.
• DXY is a touch firmer and holding above 102, EUR/USD lingers below 1.09, AUD marginally lags post-RBA.
• Looking ahead, highlights include US Factory Orders, JOLTS, Speeches from Fed's Cook, Mester & BoE's Pill, Supply from Netherlands & UK.

US TRADE

EQUITIES

• US stocks finished mixed in what was a choppy session with initial gains at the open after the miss in US ISM Manufacturing data which showed softening inflation and employment metrics. The initial gains were then unwound before stock markets later retested highs again heading into the close. The tech sector and NDX underperformed in a reversal of some of the outperformance seen into month-end with the NDX weighed on by losses in Tesla (TSLA) after quarterly deliveries missed expectations, while the session was heavily characterised by technical factors, specifically, the hangover from month- and quarter-end rebalancing, in addition to new money being put to work.
• SPX +0.37% at 4,124, NDX -0.25% at 13,148, DJIA +0.98% at 33,600, RUT -0.01% at 1,802.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Cook (voter) said the US has very low unemployment and high inflation so are focused on inflation right now and noted the disinflationary process is happening but they are not there yet, while she stated that the labour market is still tight and still sees inflation from that, according to Reuters.
• US Treasury Secretary Yellen said deposit outflows from small and medium-sized banks are diminishing and the actions that they took have certainly helped. Yellen said the US banking situation is stabilising and they are watching it very closely, while they are not willing to allow contagious runs to develop in the US banking system.
• FDIC announced the framework of a marketing process for the approximately USD 60bln loan portfolio retained in receivership following the failure of Signature Bank and expects to begin marketing it in summer, according to Reuters.

APAC TRADE

EQUITIES

• APAC stocks traded mostly positive but with gains limited following the indecisive mood stateside amid higher oil prices and weak ISM data, while participants in the region also turned their focus to the central bank updates.
• ASX 200 eventually eked mild gains after the RBA paused on rates but kept the door open for future hikes.
• Nikkei 225 gained but with upside capped in the absence of pertinent macro drivers and key data from Japan.
• KOSPI was underpinned by softer inflation as March CPI Y/Y decelerated to its slowest pace in a year.
• Hang Seng and Shanghai Comp. were mixed ahead of tomorrow’s holiday closures across the Greater China region for Tomb Sweeping Day and following another substantial liquidity drain by the PBoC, with underperformance seen in Hong Kong amid notable weakness in tech stocks.
• US equity futures (ES -0.1%) were uneventful and remained tentative after the prior day's flimsy performance.
• European equity futures are indicative of a marginally higher open with the Euro Stoxx 50 +0.3% after the cash market closed up 0.1% on Monday.

FX

• DXY found some mild reprieve from the recent selling pressure and a brief dip beneath the 102.00 level although the rebound was only modest in comparison to yesterday’s losses which coincided with dovish data releases from the US as ISM Manufacturing showed a sharper contraction in March and cooler prices.
• EUR/USD eased off the prior day’s highs and gave back the 1.0900 status in a slight overnight pullback.
• GBP/USD took a breather from Monday’s surge which had coincided with the strength in cyclical currencies.
• USD/JPY nursed some of the recent losses as the greenback steadily regained some of its composure.
• Antipodeans were mixed with AUD/USD mildly pressured after the RBA paused for the first time in 11 meetings, but with downside stemmed as the RBA reiterated expectations that some further policy tightening may well be needed.
• PBoC set USD/CNY mid-point at 6.8699 vs exp. 6.8724 (prev. 6.8805)
• SNB's Schlegel said they will continue to raise interest rates if necessary with current rates not particularly high and are no danger to financial stability. Schlegel also stated they will do everything they can to get inflation down to their target range and the central bank will continue market intervention and sell forex if necessary, according to Reuters.

FIXED INCOME

• 10yr UST futures were uneventful overnight but held on to the prior day’s gains after having surged in the aftermath of the soft US ISM Manufacturing data which included cooling inflation and employment metrics.
• Bund futures took a breather after recent gains with prices stuck around the 136.50 level.
• 10yr JGB futures were subdued with further pressure seen after weaker demand at the 10yr JGB auction.

COMMODITIES

• Crude futures notched mild gains as prices remained underpinned by the OPEC+ surprise cuts.
• OPEC+ wants to make oil speculators think twice with the shock cut, according to Bloomberg.
• US President Biden said it is not as bad as you think regarding the OPEC+ oil output cut, according to Reuters.
• US Treasury Secretary Yellen said the OPEC+ production cut is a very unconstructive act and clearly not positive for global growth, while she added that lower gasoline prices have helped with holding down inflation and the OPEC+ move will not help. Yellen also stated the OPEC+ move adds to the uncertainty and burdens on consumers at a time when inflation is already high and she does not see OPEC+ as having an impact on the appropriate level of the western price cap on Russian crude, according to Reuters.
• Spot gold marginally eased off its highs as the greenback attempted to regain some of its poise.
• Copper futures lacked firm direction amid the somewhat tentative mood during Asia-Pac trade.

CRYPTO

• Bitcoin was rangebound with prices contained after the recent retreat back below the USD 28,000 level.
• South Korean authorities seized over USD 160mln in assets related to the collapse of Terraform Labs.

NOTABLE ASIA-PAC HEADLINES

• China's Vice Commerce Minister met with Australia's Department of Foreign Affairs and Trade Deputy Secretary General in Beijing on Monday and the Chinese side said the countries should expand cooperation in energy and others, while China hopes Australia will objectively and fairly handle such cases regarding the tightening review of Chinese enterprises' investment and operations in Australia.
• Chinese Consulate in Los Angeles spokesperson said China firmly opposes the Taiwan leader's transit in the US and no matter what capacity House Speaker McCarthy meets with President Tsai, it is another serious violation of the One-China principle and the meeting is not conducive to regional peace, security and stability, according to Reuters.
• Global Times’s Hu Xijin stated that mainland China will "definitely react" when House Speaker McCarthy meets Taiwanese President Tsai and Taiwan will "lose much more than what they can gain from this meeting".
• Asian Development Bank raised Developing Asia's 2023 growth forecast to 4.8% from 4.6% and sees Developing Asia's 2024 growth at 4.8%, while it raised China's 2023 growth forecast to 5.0% from 4.3% and sees China's 2024 growth at 4.5%, according to Reuters.
• RBA kept the Cash Rate Target unchanged at 3.60%, as expected, while the Board expects that some further tightening of monetary policy may well be needed and remains resolute in its determination to return inflation to target and will do what is necessary to achieve that. Furthermore, the Board took the decision to hold interest rates steady this month to provide additional time to assess the impact of the increase in interest rates to date and the economic outlook.

DATA RECAP

• South Korean CPI MM (Mar) 0.2% vs. Exp. 0.2% (Prev. 0.3%)
• South Korean CPI YY (Mar) 4.2% vs. Exp. 4.3% (Prev. 4.8%)

GEOPOLITICAL

• Russian Foreign Minister Lavrov said the West is trying to put a wedge between Russia and China's friendship, while he added that Moscow and Beijing are ready to stand shoulder to shoulder to defend each other's interests. Lavrov also commented that the EU has "lost" Russia and that Moscow will deal with Europe in a tough fashion if need be, according to Reuters.
• Russian Foreign Minister Lavrov said "We are ready to make contacts with the West to improve the situation in Europe and reduce nuclear risks but on an equal basis and with the need to take Russia's interests into account", according to Al Jazzera.
• US President Biden’s administration reportedly discussed with its EU and Israeli partners a proposal for an interim agreement with Iran that would include some sanctions relief in exchange for Tehran freezing parts of its nuclear program, according to Axios. However, Iranian officials are said to have rejected the new approach so far which they said didn't work before and they don't want a deal that includes anything less than the 2015 nuclear agreement, according to three Israeli officials and western diplomats.
• US Central Command forces conducted a unilateral strike in Syria killing an ISIS senior leader responsible for planning attacks into Europe, according to Reuters.

EU/UK

• Several people were reportedly injured after a passenger train and cargo train collided in the southern Netherlands, according to ANP News.