• European bourses are almost entirely firmer, Euro Stoxx 50 +0.3%, with catalysts ex-earnings lights and the Stoxx 600 on track to see the week out with gains of circa. 1.5%.
• Stateside futures are tentative with a negative bias ahead of bank earnings; UNH +1.5% post-earnings.
• DXY remains below 101 but has eased off worst to the modest detriment of peers with action capped near peaks/big figures
• Fixed income spent the morning contained, but has picked up a touch after Fed's Bostic said after one more hike, can pause to assess.
• Commodities once again relatively contained and in familiar levels, geopols in focus.
• Looking ahead, highlights include US Retail Sales, US Industrial Production, US University of Michigan Prelim. Survey, speeches from Fed's Waller, Goolsbee, BoE's Tenreyro, Bailey & US Treasury Secretary Yellen. Earnings from JPMorgan, Wells Fargo, Citigroup.

EUROPEAN TRADE

EQUITIES

• European bourses are almost entirely firmer, Euro Stoxx 50 +0.3%, with catalysts ex-earnings lights and the Stoxx 600 on track to see the week out with gains of circa. 1.5%.
• Earnings from Hermes initially bolstered Consumer Products & Services, though now off best, with Real Estate leading while Energy and Insurance names lag.
• Stateside, futures are modestly in the red with action tentative ahead of US bank earnings and retail sales thereafter, ES -0.3%.
• UnitedHealth Group Inc (UNH) Q1 2023 (USD): EPS 6.26 (exp. 6.13), Revenue 91.9bln (exp. 89.78bln) +1.5% in pre-market trade
• BlackRock Inc (BLK) Q1 2023 (USD): Adj. EPS 7.93 (exp. 7.76), Revenue 4.24bln (exp. 4.24bln)
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FX

• DXY dangling off minor new 2023 low within 101.010-100.780 range ahead of US retail sales, ip, UoM survey and dove/hawk Fed speakers.
• Majors narrowly mixed vs Greenback, but near peaks and big figure levels.
• Yen capped by decent option expiry interest at 132.00, Aussie and Kiwi straddle 100 DMAs at 0.6800 and 0.6302.
• PBoC sets USD/CNY mid-point at 6.8606 vs exp. 6.8614 (prev. 6.8658)
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FIXED INCOME

• USTs flat-line awaiting busy agenda, as 10 year yield holds below 3.5% and T-note drift within 115-20+/114+ range.
• Bunds and Gilts underperform after brief bounces above 135.00 and towards 103.00, as w-t-d lows remain magnetic.
• Modest bounce in the space following Fed's Bostic (2024 Voter), who said after one more interest rate hike the Fed can pause to assess.
• Berkshire Hathaway (BRK/B) has established the terms of five yen-denominated bonds, amounting to JPY 164.4bln, according to dealwatch.
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COMMODITIES

• Once again, a fairly contained session for the commodity space with crude little changed overall and metals just off Thursday’s best in limited newsflow.
• Crude specifically has been slightly choppy but is yet to meaningfully stray for the neutral mark with parameters particularly thin. Amidst this, the complex is on track to see the week out with upside just shy of USD 2.0/bbl.
• Angola expects its oil production to temporarily increase next year on the back of recent private investments, but will remain under 1.5mln BPD (vs current 1.12mln BPD); the budget assumes oil at USD 75/bbl; oil under USD 70/bbl becomes uncomfortable, according to Reuters.
• The Biden admin reportedly approved LNG exports from the proposed Alaska LNG project, according to a document cited by Reuters.
• IEA Monthly Oil Market Report: oil demand is set to increase by 2mln BPD in 2023 to a record of 101.9mln BPD (vs. March view of 101.9mln BPD)
• Chilean mining minister expects the current production slump in the local copper industry to rebound in the coming years; sees no large variation in copper price from Cochilco forecast of USD 3.85/lb this year; dialogue with industry is helping ease concerns, according to Reuters.
• Yellow metal has dipped by around USD 10/oz from the overnight USD 2047oz peak, which is around USD 1/oz shy of the WTD best; base metals firmer, though off best as the USD attempts to recover.
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NOTABLE HEADLINES

• ECB's Kazaks said the risk of recession is non-trivial and rates will need to go up more to tame inflation, according to CNBC. He added the key issue is still very high inflation, and he wouldn't exclude a 50bps hike in May.
• ECB's Holzmann said that a 50bps rate hike is in the ballpark for May, according to CNBC.
• ECB's Nagel said he doesn't expect a recession, according to Reuters.
• ECB's Wunsch says ECB could fully stop APP reinvestments this year; market pricing of terminal rate reasonable, but no quick rate cut likely thereafter.
• Spain's Economy Minister Calviño said GDP at the start of the year has been very strong, according to Reuters.
• German Economy Ministry: Q1 GDP growth likely to have increased slightly QQ, as such a technical recession can be avoided.
• UK Chancellor Hunt said the latest GDP numbers show there's absolutely no room for complacency. He noted confidence in the resilience of the UK economy among global finance officials, according to Reuters.
• UK Chancellor Hunt to "look at" raising deposit guarantees in wake of SVB collapse after recent turmoil showed banks could fail more rapidly than in the 2008 crisis, according to FT.
• US Treasury Secretary Yellen is to meet with BoE Governor Bailey at 15:30EDT/20:30BST, according to Bloomberg.

DATA RECAP

• Swedish CPIF Ex Energy YY (Mar) 8.9% vs. Exp. 9.1% (Prev. 9.3%); MM (Mar) 0.6% vs. Exp. 0.8% (Prev. 1.5%)

NOTABLE US HEADLINES

• Fed's Bostic (2024 Voter) says after one more interest rate hike, Fed can pause to assess; ongoing inflation still a product of pandemic distortions, can ease without recession or US unemployment above 4.0%, rate hikes over the last year only ow starting to take effect, full impact will take time
• Boeing (BA) said that a production issue with Spirit AeroSystems (SPR) where the supplier used a "non-standard" process in installing fuselage fittings on some narrow bodies has resulted in the possibility of it not complying with FAA specifications. Boeing said planes can safely operate. The issue will affect a "significant number" of undelivered Max craft and as such expect "lower near-term 737 Max deliveries". The issue is believed to date back to 2019, Boeing is still determining the number of affected craft. Federal Aviation Administration (FAA) agrees with Boeing that there is no immediate 737-Max safety issue involving two fittings on fuselage sections of some airplanes. (Boeing/Newswires) Boeing -5.2% in after-hours trade, Spirit AeroSystems -11.8%
• Federal Reserve Balance Sheet (USD, W/W): 8.665tln (prev. 8.682tln), Discount Window borrowing 67.6bln (prev. 69.7bln), BTFP 71.8bln (prev. 79bln), Foreign Repo Usage 30bln (prev. 40bln).
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GEOPOLITICS

• North Korean leader Kim guided Thursday's solid-fuel ICBM test, according to local media KCNA - the new ICBM called Hwasong-18.
• China carried out missile launch drills in the Xinjiang region, according to Chinese state media.
• Russian Defence Ministry says the Pacific Fleet has been put on high alert in a surprise inspection, via Tass.
• US and South Korea are to stage air drills involving US B-52 bomber, according to Yonhap.

CRYPTO

• London Stock Exchange is to offer leveraged bets on Bitcoin (BTC), according to The Times.

APAC TRADE

• APAC stocks traded with modest and cautious gains with upside momentum somewhat waning in what was a catalyst-light session.
• ASX 200 was indecisive and moved between gains and losses in early trade, with the heavy outperformance of gold miners cushioning losses for the index.
• Nikkei 225 outperformed and was propped up by almost all of its sectors at one point in the aftermath of Warren Buffett’s bullish comments on Japanese stocks earlier this week, whilst Fast Retailing shares gained over 8% post-earnings after upping its earnings forecasts
• Hang Seng and Shanghai Comp saw mild gains for most of the session, but ranges were contained with traders cautious ahead of next week’s key economic data including GDP, whilst PBoC Governor Yi Gang said he expects China's 2023 GDP growth at "around 5%" - in line with the government target.

NOTABLE ASIA-PAC HEADLINES

• PBoC Governor Yi Gang and Fed Chair Powell discussed the economic and financial situations of the US and China on Tuesday, according to Bloomberg.
• PBoC Governor Yi Gang expects China's 2023 GDP growth at around 5% (in line with the government target), and China's economy is stabilising and rebounding, according to the statement from the G20 meeting. He said China's inflation stays at low levels and China's property market is showing positive changes.
• China's top banks reportedly plan USD 5.8bln of bond sales to plug the capital hole, according to Bloomberg.
• "The scale of [Chinese] special bond issuance in the second quarter may continue to remain high. If the subsequent economic recovery falls short of expectations", according to Securities Times.
• BoJ Governor Ueda said the BoJ will maintain current monetary easing; Japan's core CPI, which is now above 3%, will likely slow back below 2% towards the latter half of this FY. He added they expect wages in Japan to continue rising, based on their view that the global economy will recover, according to Reuters.
• RBNZ Finance Minister Robertson says New Zealand has headroom on the balance sheet with borrowing below 20% of GDP, and the inflation impact from rebuild may be less than feared, according to Reuters.
• BoK Governor Rhee says not worried about a specific USD/KRW rate, according to Reuters.
• The Monetary Authority of Singapore (MAS) maintains the slope, width, and centre of the currency band; and said core inflation is expected to ease materially by end-2023.
• Taiwan's leading tech companies suffered the biggest drop in revenue in at least a decade last month, according to Nikkei data.
• China's Commerce Ministry says it is reviewing anti-dumping/anti-subsidy tariff on Australian barley.

DATA RECAP

• New Zealand Manufacturing PMI (Mar) 48.1 (Prev. 52.0)
• Singapore GDP Flash Q/Q Q1: -0.7% (Exp. -0.2%, Prev. -0.3%); Advance Y/Y Q1: 0.1% (Exp. 0.6%, Prev. 2.1%).