• European bourses are firmer across the board and were resilient to softer than expected ZEW numbers with earnings in full-focus.
• Stateside, futures are in the green with the NQ outperforming a touch as yields ease off highs while the broader focus is firmly on upcoming bank earnings.
• DXY pulls back below 102.00 with the AUD, after hawkish RBA minutes, leading broad USD-induced downside.
• USTs and EGBs feature a modest upward skew while Gilts lag after UK wage data and associated hawkish movement in BoE pricing.
• Crude benchmarks are subdued despite the downbeat USD, firmer tilt to stocks and Chinese GDP data, metals in contrast are underpinned.
• Looking ahead, highlights include US Housing Starts/Building Permits, Canadian CPI, Fed Discount Rate Minutes, Speech from Fed's Bowman. Earnings from United Airlines, JNJ, Netflix, Goldman Sachs & Bank of America.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer across the board and were resilient to softer than expected ZEW numbers with earnings in full-focus, Euro Stoxx 50 +0.6%.
• Sectors have a positive tilt, with Banks, Basic Resources and Travel/Leisure outperforming with the latter assisted by a well-received H1 update from easyJet while Telecoms lag on Ericsson's downside as they expect to remain cautious.
• Stateside, futures are in the green with the NQ +0.6% outperforming a touch as yields ease off highs while the broader focus is firmly on upcoming bank earnings.
• Airbus (AIR FP) has informed airlines of delivery delays for the A320neo-family jets slated for delivery in 2024, according to Reuters sources; several hundred jets are set to be postponed by around three months.
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FX

• Buck backs off after making a solid start to the week, with the DXY losing grip of 102.000 and sight of 21 DMA at 102.210.
• Aussie outpaces fellow G10s in wake of hawkish RBA minutes, as AUD/USD eyes 200 DMA at 0.6750.
• Kiwi up in slipstream and back on a 0.6200 handle against Greenback pre-NZ CPI.
• Pound perks up on the eve of UK CPI as hot wages put Cable back above 1.24.
• Euro shrugs off weak ZEW metrics amidst a broad Dollar downturn but is facing more decent option expiries at 1.10000.
• PBoC set USD/CNY mid-point at 6.8814 vs exp. 6.8828 (prev. 6.8679)
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FIXED INCOME

• Bunds bounce firmly within 133.49-86 range as the 10-year yield holds around 2.5% and the latest German ZEW survey disappoints in terms of sentiment and expectations.
• Gilts pare some declines between 101.11-56 parameters as the 2053 DMO sale is covered 2.5x.
• T-note idles inside a 114-13/08 band ahead of US housing data, Fed Discount Rate meeting minutes and Bowman.
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COMMODITIES

• Crude benchmarks are subdued despite the downbeat USD, firmer tilt to stocks and Chinese data; desks highlight the progress between Iraqi and Kurdish governments in negotiations may be capping any upside.
• Nat Gas prices are contained after the marked rally seen stateside yesterday amid forecasts for colder-than-usual weather.
• Metals remain underpinned by the waning USD with Spot Gold holding at USD 2k/oz, while industrial metals benefit from Chinese GDP though LME Copper is struggling to retain the USD 9k handle.
• Brazil's March oil and gas production fell 11.95% M/M, according to oil regulator ANP cited by Reuters.
• Committee of ministers in Chile approved an environmental permit for Anglo American's (AAL LN) Los Bronces project.
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NOTABLE HEADLINES

• EU Commission President von der Leyen says they must be more assertive on trade defense tools, now discussing outbound investment screening.
• French Finance Minister says France will accelerate debt-cutting plans.

DATA RECAP

• UK ILO Unemployment Rate (Feb) 3.8% vs. Exp. 3.7% (Prev. 3.7%); Employment Change (Feb) 169k vs. Exp. 50k (Prev. 65k); Claimant Count Unemployment Change (Mar) 28.2k (Prev. -11.2k, Rev. -18.8k)
• UK Average Week Earnings 3M YY (Feb) 5.9% vs. Exp. 5.1% (Prev. 5.7%, Rev. 5.9%); Ex-Bonus (Feb) 6.6% vs. Exp. 6.2% (Prev. 6.5%, Rev. 6.6%)
• ONS: "Early estimates for March 2023 indicate that median monthly pay increased by 6.3% compared with March 2022, and increased by 18.7% when compared with February 2020."
• German ZEW Economic Sentiment (Apr) 4.1 vs. Exp. 15.3 (Prev. 13.0); Current Conditions (Apr) -32.5 vs. Exp. -40.0 (Prev. -46.5)
• ZEW: Still high inflation rates and the internationally restrictive monetary policy is weighing on the economy, expects banks to be more cautious in granting loans. Earnings expectations for banks and insurance companies have improved vs the prior month and are once again clearing in positive territory

NOTABLE US HEADLINES

• US House GOP Scalise said the GOP debt ceiling plan is coming on Tuesday.
• Chinese Regulators are reportedly expected to lower the fine on Ant Group to around USD 700mln (prev. USD 1bln initially planned), according to Reuters sources; Regulators expected to soften the wording against Ant Group.
• Click here for the US Early Morning Note.

GEOPOLITICS

• G7 Foreign Ministers communique said they condemn in the strongest possible terms Russia's war of aggression against Ukraine which constitutes a serious violation of international law including the UN Charter, while it noted that Russia's irresponsible nuclear rhetoric and threats to deploy nuclear weapons in Belarus are unacceptable. The communique also stated there is no legal basis for China's expansive maritime claims in the South China Sea and they oppose China's militarisation activities in the region, according to Reuters.
• Taiwan is to buy 400 US anti-ship missiles intended to repel China in a deal which is Taiwan's first for land-launched harpoon missiles, according to Bloomberg.
• Russian Defence Ministry said two Russian strategic bombers carried out routine flights over the Okhotsk and Bering Sea, according to Tass.
• Russian Defence Ministry says Russia-Chinese cooperation serves to stabilise the global situation, should help each other in military issues. Remarks which were subsequently echoed by China.
• Russian Kremlin says President visited Kherson and Luhansk regions on Monday; is not aware of any peace plan for Ukraine proposed by France.
• Japan's Defence Ministry has scrambled jet fighters to Russian reconnaissance aircraft over the Seas of Japan.

CRYPTO

• Bitcoin is firmer and at the top-end of the sessions parameters, but is yet to regain the USD 30k mark after eclipsing it and subsequently losing the figure last week.

APAC TRADE

• APAC stocks traded mostly subdued and failed to benefit from the slew of data from China including stronger GDP growth with the mood tentative across global markets ahead of upcoming earnings releases stateside.
• ASX 200 was dragged lower by underperformance in energy and consumer stocks, while the RBA Minutes reaffirmed the potential for future rate increases as the central bank noted it is important to be clear that policy may be tightened again to curb inflation in a timely manner and that inflation is still too high.
• Nikkei 225 was kept afloat following reports that the BoJ is mulling CPI projections for FY25 of between 1.6%-1.9% which would remain below the 2% price goal and support the case for a delayed exit from easy policy.
• Hang Seng and Shanghai Comp were contained as participants reflected on the somewhat varied data releases from China in which GDP Q/Q matched estimates and Y/Y growth topped forecasts, while Industrial Production and Fixed Asset Investments printed below expectations, but Retail Sales surged by a double-digit percentage.

NOTABLE ASIA-PAC HEADLINES

• Chinese Finance Ministry official said there are positive changes in the property market but the market is still recovering gradually, while they will accelerate issuance and use of special local government bonds in H2.
• China stats bureau said the international environment is still complex and growth of external demand remains uncertain, while it added that constraints of domestic market demand and insufficient demand still exist but noted that demand for production has basically rebounded, according to Reuters.
• Chinese officers are accused of interfering with dissidents' meetings on US technology platforms
• Citigroup raises its China 2023 GDP forecast to 6.1% (prev. 5.7%).
• RBA Minutes from the April Meeting stated that the board considered a rate hike at the April meeting before deciding to pause, while it agreed there was a stronger case to pause and reassess the need for tightening at future meetings. RBA said it is assessing data on inflation, jobs, consumer spending and business conditions, as well as noted that updated RBA forecasts in May will help assess when and how much more tightening is needed. Furthermore, RBA said it is important to be clear that policy may be tightened again to curb inflation in a timely manner and noted that inflation is still too high.
• BoJ's Ueda says there is no immediate need to review the 2013 joint statement with the government, positive signs are emerging in prices and wage growth. Will achieve inflation target, although it may take time.
• India is weighing a revamp of income tax with a focus on capital gains, according to Bloomberg; could streamline capital gains and income tax rules with law changes in 2024.

DATA RECAP

• Chinese GDP QQ (Q1) 2.2% vs. Exp. 2.2% (Prev. 0.0%, Rev. 0.6%); YY (Q1) 4.5% vs. Exp. 4.0% (Prev. 2.9%)
• Chinese 2023 GDP Forecasts: Citi 6.1% (prev. 5.7%); JPMorgan 6.4% (prev. 6.0%); Goldman 6.0% (prev. 6.0%).
• Chinese Industrial Production YY (Mar) 3.9% vs. Exp. 4.0% (Prev. 2.4%)
• Chinese Retail Sales YY (Mar) 10.6% vs. Exp. 7.4% (Prev. 3.5%)
• Chinese Urban Investment YY YTD (Mar) 5.1% vs. Exp. 5.7% (Prev. 5.5%)