• European bourses are mostly in the green continuing the positive APAC handover on their return to the market with newsflow otherwise limited.
• Stateside, futures are steady with a slight positive bias ahead of Fed speak before Wednesday's key events.
• DXY has lost payroll momentum to the benefit of peers particularly the CHF & EUR after initial AUD outperformance.
• EGBs slip in catch-up play but have lifted off of worst and USTs remain slightly elevated.
• Commodities derive support from the softer USD and improving tone between Australia and China.
• Looking ahead, highlights include EIA STEO, IMF WEO, speeches from Fed's Goolsbee (voter), Harker (voter), and supply from the US.

EUROPEAN TRADE

EQUITIES

• European bourses are mostly in the green, Euro Stoxx 50 +0.7%, continuing the positive APAC handover on their return to the market with newsflow otherwise limited.
• Sectors are similar and feature outperformance in Basic Resources while Food, Beverage and Tobacco names lag.
• Stateside, futures are steady with a slight positive bias, ES +0.3%, with action elsewhere playing catch-up to the late-Monday US upside.
• China Vehicle sales (Mar): 9.7% YY (prev. 13.5% in February), via Industry Association; NEVs +34.8% YY
• Click here for more detail.

FX

• Dollar loses post-payrolls momentum to the benefit of major peers, as DXY drifts down towards 102.000 from just over 102.500.
• Franc probes 0.9050 after defending 0.9100, Euro probes 1.0900, Sterling back on the 1.2400 handle and Yen eyes 133.00 following breaches of the 100 and 50 DMAs.
• Aussie outperforms down under on the back of encouraging improvements in business and consumer confidence alongside a resolution on WTO disputes with China.
• PBoC sets USD/CNY mid-point at 6.8882 vs exp. 6.8884 (prev. 6.8764)
• HKMA bought HKD 3.81bln after the currency reached the weak end of the trading band, according to Reuters.
• Russian President Putin to discuss the "situation on currency market" with CBR's Nabiullina and Fin Min Siluanov later on Tuesday. Follows the CBR saying the share of USD and EUR deposits in Russian banks are still high and significantly higher than CNY; FX deposits abroad exceeded FX deposits in Russia in 2022.
• Click here for more detail.

FIXED INCOME

• EGBs remain pressured, in catch-up to the post-NFP hawkish trade, but have bounced markedly off initial lows with USTs positive throughout but directionally in-fitting.
• Specifically, Bunds retested the overnight Eurex peak after initially dipping to a 136.12 trough while more recently Gilts climbed to a 103.83 high before easing off best.
• Stateside, action has been more contained with USTs in a circa. 10 tick range and the yield curve under modest but broad-based pressure with the docket thin until Fed speak/3yr supply.
• Click here for more detail.

COMMODITIES

• Crude benchmarks retain an underlying positive bias from the supportive APAC tone, with fresh developments and price action since limited amid a thin docket for the session
• Currently, WTI and Brent have been back above USD 80/bbl and USD 85/bbl respectively at best, albeit the latter has slipped incrementally back below the figure.
• Spot gold is firmer and holding just above the USD 2k/oz mark around USD 10/oz above the 10-DMA at USD 1991/oz while base metals also derive support from the improving tone between Australia and China.
• Click here for more detail.

NOTABLE HEADLINES

• UK PM Sunak plans on calling for general elections in the autumn of 2024, according to The Telegraph.
• Italy upgrades 2023 GDP growth forecast to 1% (prev. 0.6% set in Nov) but downgrades 2024 forecast to 1.4% (prev. 1.9%), according to government officials cited by Reuters.

DATA RECAP

• Norwegian Consumer Price Index YY (Mar) 6.5% vs. Exp. 6.1% (Prev. 6.3%); Core Inflation YY (Mar) 6.2% vs. Exp. 6.1% (Prev. 5.9%)
• UK BRC Retail Sales YY (Mar) 4.9% (Exp. 4.2%, Prev. 4.9%)
• EU Sentix Index (Apr) -8.7 vs. Exp. -9.9 (Prev. -11.1)
• EU Retail Sales YY (Feb) -3.0% vs. Exp. -3.5% (Prev. -2.3%, Rev. -1.8%); MM (Feb) -0.8% vs. Exp. -0.8% (Prev. 0.3%, Rev. 0.8%)

NOTABLE US HEADLINES

• Fed's Williams (voter, neutral) said it is important to understand inflation dynamics are complicated; sees inflation this year at around 3.75% and expects to get to 2% inflation by 2025. He expects growth this year to be under 1% and said there is a lot of uncertainty around the inflation outlook. He said the stability of unemployment has been a striking development, and he expects to see the unemployment rate rise gradually to 4-4.5% (prev. saw the unemployment rate tick up to around 4.5% in late March). He sees rent-related price pressures coming down sharply. Williams said market policy expectations are tricky to measure, and he does not worry if the market's view on rates differs from the Fed's view. He is happy to see market rate expectations are reactive to data and said Fed rate hikes weren't the driver of trouble at banks sparking the latest stresses. He hasn't seen clear signs of credit tightening, via Reuters.
• Chinese Commerce Minister said that in a meeting with the Intel (INTC) CEO in Beijing on April 11th, views were exchanged on maintaining the security and stability of the global semiconductor industry chain.
• Click here for the US Early Morning Note.

GEOPOLITICS

• Taiwan Defence Ministry said as of late Tuesday morning, they have spotted 26 Chinese military planes and nine Chinese ships around Taiwan, according to Reuters.
• Egypt secretly planned to supply rockets to Russia, according to a leaked US document cited by the Washington Post. Egypt's president in February planned to produce 40,000 rockets for Russia and instructed officials to keep production & shipment secret "to avoid problems with the West".
• North Korea does not respond to the inter-Korean liaison office for a fifth straight day, according to Yonhap.
• US, Japan, and South Korea to discuss North Korea in defence talks on April 14th, according to Bloomberg.
• Australia is to suspend its WTO dispute against China on barley after reaching an agreement with China for the resolution of the dispute; China agreed to undertake a review of duties imposed on Australian barley, according to Reuters. Subsequently, China's Foreign Ministry says it is willing to work with Australia to return relations to the right track.
• Brazilian President Lula said he is going to invite Chinese President Xi to Brazil, according to Reuters.
• Japanese Finance Minister Suzuki said they are to hold the G7 meeting on April 12th and will discuss the economy, supply chain, and the Ukraine crisis, according to Reuters.

CRYPTO

• Bitcoin has surpassed the USD 30k mark, lifting to a USD 30.43k intraday high before paring modestly back towards the figure.

APAC TRADE

• APAC stocks traded mostly higher following the recovery seen on Wall Street and as some major markets returned from the long weekend.
• ASX 200 saw its first session of the week propped up by mining names after Newmont upped its offer for Newcrest Mining.
• Nikkei 225 reclaimed 28k+ status with the index underpinned by the recent Yen weakness.
• Hang Seng and Shanghai Comp were mixed with Hong Kong playing catch-up, whilst the latter overlooked cooling inflation data and traded subdued throughout the session amid heightened tensions over Taiwan.

NOTABLE ASIA-PAC HEADLINES

• China could make cash injections via MLF at an unchanged rate, according to China Daily.
• PBoC said some Chinese banks cut deposit rates in April as part of normal interest rate self-discipline mechanism, according to Bloomberg.
• PBoC injected CNY 5bln via 7-day reverse repos with the rate at 2.00% for a CNY 3bln net injection.
• BoK maintained its base rate at 3.50%, as expected. BoK Governor Rhee said the decision was unanimous, and five board members wanted to keep the door open for one more possible rate hike. He said several board members see the need to give a warning against an early rate cut expectations, and added the BoK does not target an FX level, according to Reuters. BoK said economic growth is seen slower than previously expected, inflation to slow to 3% range after Q2 - in line with prior expectations, and the tightening stance to remain in place for a considerable period.
• Australian Treasurer Chalmers says global economic conditions are getting worse, according to Bloomberg.
• Japanese Finance Minister Suzuki said specific monetary policy is up to the BoJ to decide, according to Reuters.
• Japan's Labour Confederation Chief does not think a one-off wage hike for the year is adequate, and will seek further increases next year and the year after.
• Warren Buffet said he intends to add more investments in Japanese stocks, according to Nikkei.

DATA RECAP

• Chinese CPI YY (Mar) 0.7% vs. Exp. 1.0% (Prev. 1.0%); MM (Mar) -0.3% (Prev. -0.5%)
• Chinese PPI YY (Mar) -2.5% vs. Exp. -2.5% (Prev. -1.4%)
• China (Mar) Money Supply Data (CNY): M2 12.7% (exp. 12.7%); New Yuan Loans 3.89tln (exp. 3.30tln), Aggregate Financing 5.38tln (exp. 4.50tln)
• Australian Consumer Sentiment (Apr) 9.4% (Exp. 1.5%, Prev. 0.0%)
• Australian NAB Business Confidence (Mar) -1 (Prev. -4.0); Conditions (Mar) 16 (Prev. 17.0)
• South Korean Trade Balance (Apr 1-10) USD -3.4bln; Exports -8.6% Y/Y; Imports -7.3% Y/Y, according to the customs agency cited by Reuters.