• Equities have picked-up most recently after a relatively contained European morning with fresh drivers light
• GBP leads the G10-FX space to the USD's detriment, while AUD lags post-RBA despite downside being initially capped
• Fixed income is pressured with concession perhaps factoring while the 2.30% and 3.50% yield levels proving sticky
• Crude remains underpinned by the weekend's OPEC adjustment; focus otherwise on Iraq exports and geopols
• Looking ahead, highlights include US Factory Orders, JOLTS, Speeches from Fed's Cook, Collins & Mester and BoE's Pill.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer across the board, Euro Stoxx 50 +0.6%, as the complex picks up to fresh highs most recently after a relatively contained European morning.
• Specific updates/drivers have been sparse ahead of the US docket; Stateside, futures are marginally firmer after initially languishing somewhat.
• In Europe, sectors are bolstered given the above action but again individual movers are light in limited newsflow.
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FX

• GBP leads the G10 pack and has incrementally surpassed 1.25 from a 1.2396 base, with the move seemingly sparked by the triggering of stops.
• Action which weighs on the DXY and has sent EUR/GBP spiralling lower; though, the single currency has managed to make headway vs USD to a 1.0937 peak.
• Specifically, the DXY is at the lower-end of a 101.78-102.27 range and below Monday's 101.96 trough ahead of February data and a trio of Fed speak with specific fundamentals light in European hours.
• AUD is the current laggard as the RBA kept the Cash Rate Target at 3.60% and despite the intial downside being stemmed by the board expecting some further tightening may be needed; currently, AUD/USD is holding just above 0.6750 in 0.6736-0.6793 boundaries.
• In close proximity is the JPY though action has been comparably more steady as USD/JPY encountered resistance at the 133.00/133.03 psychological mark and 50-DMA respectively as touted APAC demand waned alongside a pick up in global yields.
• 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.
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FIXED INCOME

• Core benchmarks are pressured, despite the Bund initially nearing Monday's best, with concession perhaps factoring initially ahead of Central Bank speak from the BoE and Fed.
• Specifically, Bunds and Gilts have seemingly found a base near their 135.81 and 103.63 lows post-supply with respective 2.30% and 3.50% 10yr yield figures proving sticky.
• Stateside, the action is directionally in-fitting though the magnitude is more modest and firmly within familiar levels with voters Cook and Mester due and intersected by non-voter Collins.
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COMMODITIES

• Crude remains underpinned by the OPEC+ announcement after settling higher by circa. USD 5/bbl on Monday; as above, catalysts are light aside from reaction to the output cut and geopolitics.
• Specifically, WTI and Brent are holding around USD 81/bbl and USD 85.50/bbl respectively.
• Spot gold is essentially unchanged in a tight USD 10/oz range, though is at the top-end of this given the USD's negative bias; base metals are similarly mixed/indecisive.
• 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.
• Iraq Federal Gov't (Baghdad) and Kurdistan Regional Gov't (Erbil) are to announce a final deal to resume oil exports, via Reuters citing sources; Iraq's northern oil exports are expected to recommence on Tuesday.
• Shanghai Futures Exchange lowers margin requirements and trading limits for copper, aluminium, zinc, lead, nickel and stainless steel; effective April 6th.
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NOTABLE HEADLINES

• BoE's Tenreyro (Dove) says she thinks a looser stance is needed to meet the inflation target as the Bank Rate moves closer to restrictive; a looser stance can be achieved by either lowering the rate today or through a lower rate in the future. She judges inflation as likely to fall below target. Expects lower price inertia from second-round effects via wage growth, given a lower rate of headline inflation.
• ECB Consumer Expectations Survey (Feb): Inflation Expectations: 4.6% 12-months ahead (Jan 4.9%), 3yr ahead 2.4% (Jan 2.5%)
• Several people were reportedly injured after a passenger train and cargo train collided in the southern Netherlands, according to ANP News.

DATA RECAP

• German Trade Balance, EUR, SA (Feb) 16.0B vs. Exp. 17.0B (Prev. 16.7B)
• EU Producer Prices YY (Feb) 13.2% vs. Exp. 13.3% (Prev. 15.0%, Rev. 15.1%); MM (Feb) -0.5% vs. Exp. -0.3% (Prev. -2.8%)

NOTABLE US 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.

GEOPOLITICS

• 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.
• Belarus announces the start of training its soldiers on the use of tactical nuclear munitions in Russia, Al Arabiya reports; Russia's Defence Minister says some Belarusian jets are now capable of carrying nuclear warheads, according to Ria; Finland's NATO accession creates the risk of significant expansion of conflict
• 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 Foreign Minister Borrell will travel to China next week.

CRYPTO

• South Korean authorities seized over USD 160mln in assets related to the collapse of Terraform Labs.

APAC TRADE

• 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.
• Interbank market dealers' association has conducted self-regulatory investigations on ICBC (601398 CH); pricing of several issues of debt financing instruments underwritten by ICBC seriously deviated from reasonable market levels.

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%); YY (Mar) 4.2% vs. Exp. 4.3% (Prev. 4.8%)