• APAC stocks were lacklustre in the absence of any major positive macro drivers and following the flat handover from Wall St.
• European equity futures are indicative of a contained open with Euro Stoxx 50 future +0.1% after the cash market closed +0.6% yesterday.
• FX markets are steady, DXY remains sub-1.02, EUR/USD and Cable sit on 1.09 and 1.24 handles respectively.
• Netflix beat on the bottom line but missed on subscriber additions and Q2 guidance; pared initial after-hours losses to trade flat.
• Looking ahead, highlights include UK CPI, EZ HICP (Final), New Zealand CPI, Speeches from ECB's Lane & Schnabel, Fed's Goolsbee, BoE's Mann, Supply from Germany, UK & US, Earnings from ASML, Heineken, Just Eat, American Airlines, IBM, Tesla, Morgan Stanley.

US TRADE

EQUITIES

• US stocks ultimately closed little changed with slight underperformance in the Russell 2k after all index futures pared their pre-market gains shortly after the open as participants digested mixed data releases and varied earnings results from the likes of Goldman Sachs and Bank of America, while Fed rhetoric remained hawkish.
• SPX +0.09% at 4,154, NDX +0.03% at 13,091, DJIA -0.03% at 33,987, RUT -0.40% at 1,795.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed Discount Rate Minutes stated that Directors at Cleveland, St Louis and Minneapolis wanted a 50bps increase in the discount rate, while Richmond, Dallas and Atlanta opted for no change and Philadelphia, Chicago, Kansas City, Boston, New York and San Francisco voted for a 25bp hike.
• Fed's Bowman (voter) said they are watching very closely for potential signs of more bank stress.
• US President Biden and Democratic congressional leaders Schumer and Jeffries agreed in a call that they won't negotiate on the debt limit, while Biden said he was ready to separately negotiate regarding the budget once Republicans present their plan, according to the White House cited by Reuters.
• US House Republicans are reportedly considering repealing the Inflation Reduction Act (IRA) as part of their debt limit package, according to Punchbowl. It was also reported that Freedom Caucus Chair Perry said the bill must repeal the Inflation Reduction Act to pass the House, according to Bloomberg's Wasson.

APAC TRADE

EQUITIES

• APAC stocks were lacklustre in the absence of any major positive macro drivers and following the flat handover from Wall St where risk sentiment was clouded amid mixed data releases and earnings results.
• ASX 200 was kept afloat amid outperformance in the mining and materials sectors although gains were limited by weakness in energy and consumer stocks, as well as uninspiring data with Westpac Leading Index flat.
• Nikkei 225 declined after the latest Reuters Tankan survey for April showed Japanese manufacturers remained glum with the Large Manufacturing Index stuck in negative territory.
• Hang Seng and Shanghai Comp were subdued with underperformance in Hong Kong amid losses in autos, property and tech, while the mainland was also cautious ahead of US Treasury Secretary Yellen’s major speech on Thursday regarding US-China Economic ties where she will outline US economic priorities on China.
• US equity futures were slightly lower (ES -0.1%) after varied earnings updates including a mixed report from Netflix which beat on the bottom line but missed on subscriber additions and Q2 guidance, resulting in an initial double-digit percentage drop in its shares. However, its shares then fully recovered after the dust settled with the Co. planning to accelerate share repurchases and as some suggested the weak Q2 outlook was due to the decision to push back the broad launch of the paid-sharing plan from Q1 to Q2 which points to a timing lag rather than a demand issue.
• European equity futures are indicative of a contained open with Euro Stoxx 50 future +0.1% after the cash market closed +0.6% yesterday.

FX

• DXY attempted to nurse some of the prior day’s losses but with the recovery limited after slipping beneath the 102.00 level.
• EUR/USD traded rangebound and held on to most of its recent gains after having benefitted from the softer dollar.
• GBP/USD price action was uneventful at the 1.2400 handle as the focus shifts to incoming UK CPI data.
• USD/JPY edged slightly higher after support around the 134.00 level provided a platform overnight.
• Antipodeans were indecisive owing to the cautious mood and after flat Westpac Leading Index data.
• PBoC set USD/CNY mid-point at 6.8731 vs exp. 6.8728 (prev. 6.8814)
• BoC Governor Macklem said the central bank cannot rule out another rate hike to curb inflation. Macklem also commented that they see further declines ahead after inflation fell to 4.3% in March and expect it will take until the end of 2024 to get inflation back to the 2% target.

FIXED INCOME

• 10yr UST futures were softer after recent hawkish Fed rhetoric and mixed data releases stateside.
• Bund futures remained subdued following the return journey from a brief incursion above 134.00.
• 10yr JGB futures declined amid the absence of additional purchases by the BoJ which instead offered to supply dollar funds against pooled collateral for April 21st-28th.

COMMODITIES

• Crude futures were rangebound amid the cautious mood and largely ignored the bullish inventory data.
• US Energy Inventory Data (bbls): Crude -2.7mln (exp. -1.1mln), Gasoline -1mln (exp. -1.3mln), Distillate -1.9mln (exp. -0.9mln), Cushing -0.6mln.
• EU Energy Commissioner Simson said EU gas storages are over half full and they finished the heating season in a comfortable position, emphasising that the bloc has greater scope to cut imports of Russian LNG, according to FT.
• Spot gold traded sideways with price action stuck around support at the USD 2,000/oz level.
• Copper futures were subdued in tandem with the broadly cautious mood across the Asia-Pac region.
• China's NDRC said it will speed up the construction of iron ore projects and will firmly curb an irrational rise in iron ore prices, according to Reuters.

CRYPTO

• Bitcoin took a breather and marginally pulled back after the prior day's advances north of USD 30,000.
• US House Financial Services Committee will hold a hearing on stablecoin regulation on Wednesday, according to Cointelegraph.

NOTABLE ASIA-PAC HEADLINES

• China's NDRC said it is studying and drafting documents to recover and expand consumption, while it added that it will work hard to stabilise auto consumption, according to Reuters.
• US Treasury Secretary Yellen is to deliver remarks on US-China economic relationship on Thursday and will detail US economic priorities on China including securing national security interests and protecting human rights. Yellen will say that the US and China should cooperate on global issues such as climate change, debt distress in developing countries and macroeconomic communication, while she is to detail the US desire for a healthy and mutually beneficial economic competition with China based on a level playing field.
• US Commerce Secretary Raimondo said the US should have zero tolerance for China stealing intellectual property.

DATA RECAP

• Australian Westpac Leading Index MM (Mar) 0.0% (Prev. -0.1%)

GEOPOLITICAL

• US did not issue visas to all members of the Russian delegation going to the UN, according to RIA.
• UK government cyber defence agency warned of a threat to Western infrastructure from hackers sympathetic to Russia and its war on Ukraine, according to Reuters.
• Ukrainian First Deputy PM said the Black Sea grain deal is under threat of being halted. In relevant news, Polish Agricultural Minister Telus said Poland agreed with Ukraine that grain transits would be monitored and escorted by customs, while they will allow grain transit from Ukraine beginning Friday night.
• South Korean President Yoon said South Korea may consider providing military aid for Ukraine if a large attack on civilians occurs and it will take the most appropriate measures considering battlefield developments in Ukraine. Yoon also commented that he won't hold a summit with North Korean leader Kim for show but the door for dialogue to promote peace remains open, while South Korea is developing ultra-high performance and high-power weapons to respond to North Korea's emerging threats and is discussing extended deterrence plans with the US including information sharing, joint planning and joint execution, according to Reuters.
• North Korean leader Kim ordered the preparation to launch a military spy satellite as planned and ordered the deployment of a series of spy satellites to boost reconnaissance capabilities, according to KCNA.
• US House China Select Committee will be war-gaming a scenario of China invading Taiwan, according to Axios
• A leaked US military assessment stated that China's military could soon deploy a high-altitude supersonic spy drone unit, according to Washington Post.

EU/UK

• Central London property prices fell nearly 5% in the 12 months to March which is the largest annual decline since 2019, according to FT