• APAC stocks were mostly subdued amid the soft Wall St handover, albeit with the downside stemmed by Chinese Caixin Services PMI.
• RBI kept the Repurchase Rate unchanged at 6.50% (exp. 25bps hike) via unanimous decision.
• European equity futures are indicative of a flat open with the Euro Stoxx 50 unchanged after the cash market closed down 0.4% on Wednesday.
• DXY sits just above 102, EUR/USD is back on a 1.08 handle, antipodeans lags across the majors.
• Looking ahead, highlights include Swiss Unemployment Rate, US IJC, Canadian Labour Market Report, Speech from Fed's Bullard, Supply from France. Note: Desk will close at 21:30BST, given Friday's market holidays

US TRADE

EQUITIES

• US stocks were predominantly lower and havens generally bid as a risk off-tone ensued post-US data which saw a cooler-than-expected ADP jobs number and ISM Services also disappointed although the prices paid index did see a notable deceleration with the component falling to its lowest since July 2020.
• SPX -0.25% at 4,090, NDX -1.01% at 12,967, DJIA +0.24% at 33,482, RUT -0.99% at 1,752.
• Click here for a detailed summary.

NOTABLE HEADLINES

• FDIC retained its financial advisor to assist in the liquidation of securities of former Signature Bank (SBNY) and Silicon Valley Bank (SIVB) with Blackrock Financial Advisory to conduct portfolio sales, according to Reuters.

APAC TRADE

EQUITIES

• APAC stocks were mostly subdued amid headwinds from further US weak data releases and with risk appetite also restricted as global markets approached the Easter holiday period, albeit with the downside stemmed as participants digested Chinese Caixin Services PMI data which showed a firm acceleration in services activity.
• ASX 200 was marginally lower as weakness in the tech and real estate sectors just about overshadowed the resilience in defensives and with trade data showing a monthly drop in both imports and exports.
• Nikkei 225 resumed the prior day’s underperformance amid some speculation of a potential policy shift by the BoJ soon as the Kuroda era comes to an end this week and with former BoJ Director Momma suggesting the recent drop in global bond yields has created favourable conditions for the BoJ to scrap its YCC this month.
• Hang Seng and Shanghai Comp were lacklustre after a substantial liquidity drain by the PBoC and amid frictions related to Taiwan President Tsai’s meeting in the US with members of Congress including House Speaker McCarthy although losses were kept to a minimum following the strong Chinese Caixin Services and Composite PMI data.
• US equity futures (ES -0.3%) were softer amid ongoing growth concerns and the cautious mood across Asia.
• European equity futures are indicative of a flat open with the Euro Stoxx 50 unchanged after the cash market closed down 0.4% on Wednesday.

FX

• DXY was firmer and sits just above the 102.00 mark after having recently benefitted from a flight to safety due to the latest bout of soft data releases stateside including the miss on ISM Services and ADP jobs.
• EUR/USD remained lacklustre in which the single currency trickled lower to beneath the 1.0900 handle.
• GBP/USD languished near the prior day’s lows with price action hampered after recent cyclical pressure.
• USD/JPY was rangebound and briefly declined to below the 131.00 level amid early haven flows.
• Antipodeans were pressured by the subdued risk tone and after NZD/USD wiped out its entire post-RBNZ gains.
• PBoC set USD/CNY mid-point at 6.8747 vs exp. 6.8765 (prev. 6.8699)

FIXED INCOME

• 10yr UST futures slightly pulled back after yesterday’s advances which were spurred by soft ADP Employment and ISM Services data, as well as the notable deceleration in the prices paid index to its lowest since July 2020.
• Bund futures were off this week’s highs but held on to most of their recent gains and remained above 137.00.
• 10yr JGB futures were kept afloat in rangebound trade and following mixed results at the 30yr JGB auction.

COMMODITIES

• Crude futures were pressured with WTI back below USD 80/bbl amid the recent growth concerns.
• Saudi Aramco set May Arab light oil OSP to the US at plus USD 6.65/bbl vs. ASCI (up 10c vs April) and set May OSP to N.W. Europe at plus USD 1.00 vs. ICE Brent (unchanged M/M).
• White House's Kirby said the US will be watching the impact of OPEC+ production cuts closely.
• Spot gold mildly faded some of its recent advances as the dollar remained steadfast.
• Copper futures were marginally higher in an extension of the prior day's intraday rebound.

CRYPTO

• Bitcoin prices were choppy throughout the session and oscillated around the USD 28,000 level.

NOTABLE ASIA-PAC HEADLINES

• China is expected to cut the tax and fee burden by CNY 1.8tln for business entities this year and tax revenues are expected to show faster growth in Q2, according to a state taxation official cited by Reuters.
• China asked the WTO to investigate export restrictions on semiconductors by the US, Japan and the Netherlands.
• China approved the delayed Swap Connect scheme which clears the path for foreign investors to its USD 5tln swaps market, while the Swap Connect scheme is set to launch within months, according to FT.
• RBA Financial Stability Review stated that Australia is not immune to global financial shocks but Australian banks are well capitalised, profitable and highly liquid, while it noted that APRA has stepped up oversight of domestic institutions and is considering lessons for regulations. RBA also stated that global financial stability risks have increased and regulators will need to tighten rules, as well as protect against digital runs on banks.
• RBI kept the Repurchase Rate unchanged at 6.50% (exp. 25bps hike) via unanimous decision, while the MPC maintained its policy stance of remaining focused on the withdrawal of accommodation through a 5-1 vote. However, Governor Das said that the decision to pause is for this meeting only and they will not hesitate to take action if needed in future policy meetings with the MPC ready to act if warranted.

DATA RECAP

• Chinese Caixin Services PMI (Mar) 57.8 vs Exp. 55.0 (Prev. 55.0)
• Chinese Caixin Composite PMI (Mar) 54.5 (Prev. 54.2)
• Australian Trade Balance (AUD)(Feb) 13.9B vs. Exp. 11.1B (Prev. 11.7B)
• Australian Exports MM (Feb) -3% (Prev. 1%)
• Australian Imports MM (Feb) -9% (Prev. 5%)

GEOPOLITICAL

CHINA-TAIWAN

• US House Speaker McCarthy met Taiwanese President Tsai Ing-Wen in California to become the most senior figure to meet a Taiwanese leader on US soil since 1979, while McCarthy told Tsai that he is optimistic they will continue to find ways for the US and Taiwan to work together to promote freedom, democracy, peace and stability.
• US House Speaker McCarthy said the discussion with Taiwan's President was very productive and that they must continue arms sales to Taiwan, as well as strengthen economic cooperation, particularly with trade and technology. McCarthy stated that America's support for the people of Taiwan will remain resolute, unwavering and bipartisan, while he added that US arms sales to Taiwan must be delivered on a timely basis and that there is no need for retaliation from China for the meeting with Taiwan's President Tsai, according to Reuters.
• US Rep. Aguilar said they look forward to more meetings like this in the future, while Rep. Gallagher said they support Taiwan and will turn those words into action in this congress, according to Reuters.
• White House said channels of communication with China are open and the US has consistently urged China to show restraint, while it added that escalation is uncalled for.
• China's Foreign Ministry spokesperson said the US colluded with Taiwan authorities and connived at attempts by separatists seeking Taiwan independence to carry out political activities on US soil. China's Foreign Ministry spokesperson also said the US has breached the commitments it made and relentlessly challenges the bottom line, while it made provocations in matters like official interaction with Taiwan, as well as arms sales and military collusion with Taiwan. Furthermore, in response to the seriously erroneous acts of collusion, China will take resolute and effective measures to safeguard national sovereignty and territorial integrity, according to Reuters.
• China’s Fujian maritime safety administration launched a three-day special joint patrol and inspection operation in the central and northern parts of the Taiwan Strait which include moves to board ships, according to Reuters.
• Taiwan's Defence Minister said a China aircraft carrier was about 200 nautical miles off Taiwan's east coast and noted the carrier group is training but the timing is quite sensitive, according to Reuters.
• Global Times’s Hu Xijin said House Speaker McCarthy's meeting with Taiwan’s President is "the beginning of another game round in the grand process of the Taiwan Straits", while Hu personally believes the mainland will soon launch resolute actions and will ensure that the outcome of this round will frustrate Taiwan independence and its supporters.

OTHER

• Kyiv is reportedly willing to discuss the future of Crimea with Moscow if its forces reach the border of the Russian-occupied peninsula, according to FT citing a top adviser to President Zelensky.
• Canadian PM Trudeau stated that he spoke with US President Biden about Ukraine and called on Russia to release the detained WSJ reporter Evan Gershkovich immediately, according to a tweet.
• North Korean state media KCNA noted commentary from security analyst Choe Ju Hyon who warned that US and South Korean military drills are escalating tensions to the brink of nuclear war. It was separately reported that South Korea's Defence Minister said North Korea is ready to conduct a nuclear test at any time, according to Yonhap.