• European bourses/US futures are posting marginal losses in a relatively slow start to a packed week.
• DXY has slipped towards 101.50 with CHF & EUR outperforming while AUD & JPY lag though overall action is limited.
• Gilts are flat and leading a modest retreat in EGBs with Bunds pressured by Ifo while USTs remain near APAC peak.
• Crude and base metals are softer, in-line with broader sentiment, while spot gold is essentially unchanged.
• Fed's Cook inflation pressures abating, core remains stick; US' McCarthy is confident he has enough House votes to pass his debt limit bill.
• Looking ahead, highlights include speeches from ECB’s Panetta, Vujcic & de Guindos. Earnings from Coca-Cola.

EUROPEAN TRADE

EQUITIES

• European bourses are posting marginal losses in a relatively slow start to the European weak, with mixed Ifo data somewhat overlooked, Euro Stoxx 50 -0.2%.
• Sectors are mixed and feature outperformance in Financial Services on the back of UBS while Phillips leads the Stoxx 600 after a strong Q1 update.
• Stateside, futures are pressured but the magnitude of the downside has eased slightly throughout the morning going into a particularly busy US week for earnings and data, ES -0.2%.
• Click here for more detail.

FX

• The Dollar has slipped towards the 101.50 mark from earlier 101.91 best to the mixed fortune of peers.
• CHF outperforms with safe-haven demand factoring amid the general risk tone and as attention on the US debt limit increases, USD/CHF at the lower-end of 0.8883-0.8928 parameters.
• EUR derived marginal and ultimately fleeting upside on the mixed German Ifo release and is now holding comfortably above the 1.10 mark but with ranges thin thus far while several ECB speakers have not impacted.
• Next best is the Kiwi, which is deriving support from AUD/NZD tailwinds rather than the lower RBNZ risk weighting for business growth; NZD above 0.6150 while AUD languishes below 0.67.
• PBoC set USD/CNY mid-point at 6.8835 vs exp. 6.8826 (prev. 6.8752)
• Click here for more detail.
• Click here for the notable FX expiries for today's NY cut.

FIXED INCOME

• Gilts lead a broad retreat in debt ahead of UK public finance data as the 10-year bond retreats through 101.00 within a 101.24-100.70 range.
• Bunds off best levels between 134.21-133.68 parameters after a mixed German Ifo survey.
• T-note holds firm near 114-24+ overnight peak vs 114-14+ trough ahead of low-key agenda.
• GGBs have been lagging periphery peers somewhat, despite the outlook revision to positive at S&P as the rating was maintained as expected but disappointing some outside calls for an upgrade.
• Click here for more detail.

COMMODITIES

• WTI and Brent are off worst levels but remain softer overall in-line with broader risk sentiment; specifically, WTI is back in proximity to USD 78/bbl while Brent has reclaimed USD 81.50/bbl.
• Iran sets the May Iranian light crude price to Asia at Oman/Dubai +USD 2.80bbl (vs. prev. USD 2.50bbl), according to a Reuters source.
• Central banks reportedly loaded up on gold amid geopolitical tensions whereby reserve managers’ purchases rose 152% last year, while an annual poll of 83 central banks found that more than two-thirds thought their peers would increase gold holdings this year, according to FT.
• Head of Russian Grain Union says the Black Sea grain deal has not brought anything good to Russia so far; Russia could export around 60mln tonnes of grain (inc. 50mln tonnes of wheat) this season.
• Spot gold trades horizontally after finding some resistance around USD 1,985/oz overnight, with the yellow metal sandwiched to a USD 10/oz parameter amid a lack of clear catalysts.
• Base metals are mostly lower, although LME copper remains cushioned despite the broader subdued mood across markets; ING cites disruption to Codelco's copper operations.
• Click here for more detail.

NOTABLE HEADLINES

• UK PM Sunak will hold talks with major UK firms and investors on Monday under the new "Business Connect" forum as the government seeks to fill the void following the scandal and implosion of the CBI business lobby, according to Bloomberg and FT.
• UK government is set to introduce legislation in the approaching days to set up a new regulator to police the increasing dominance of the large technology platforms, according to FT.
• ECB's Wunsch said they are waiting for wage growth and core inflation to decline, along with headline inflation, before they can arrive at the point where they can pause on rates, according to FT.
• German Interior Minister said public workers agreed on a wage deal with employers, according to Reuters.
• Germany's Bundesbank says the economy grew in Q1 above expectations, after a rebound in industrial conditions.
• S&P affirmed the UK at AA; Outlook Revised to Stable from Negative, while it affirmed Greece at BB+; Outlook Revised to Positive from Stable and affirmed Italy at BBB; Outlook Stable.

DATA RECAP

• German Ifo Business Climate New (Apr) 93.6 vs. Exp. 94.0 (Prev. 93.3, Rev. 93.2); Ifo says the proportion of German Cos that want to increase prices has fallen again.
• German Ifo Current Conditions New (Apr) 95.0 vs. Exp. 96.1 (Prev. 95.4); Expectations New (Apr) 92.2 vs. Exp. 91.6 (Prev. 91.2, Rev. 91.0)
• UK Rightmove House Prices MM (Apr) 0.2% (Prev. 0.8%); YY (Apr) 1.7% (Prev. 3.0%)

NOTABLE US HEADLINES

• Fed's Cook (voter) said on Friday that monetary policy is moving into a more uncertain phase and banking sector headwinds could weigh on the rate rise outlook, while she added that March PCE inflation is likely to moderate to 4% and inflation pressures have been abating but core prices remain sticky, according to Reuters.
• US House Speaker McCarthy said he is confident he has the votes to pass his debt limit bill in the House during the week ahead, according to a Fox News interview.
• US regulators proposed new rules on Friday to speed up the assessment of financial stability risks and make it easier to designate non-banking institutions as systemically important which would subject them to Fed supervision, according to Reuters.
• US banks are said to be increasingly concerned regarding falling commercial property valuations and the risk they pose to lenders’ balance sheets, according to FT citing senior executives.
• Click here for the US Early Morning Note.

GEOPOLITICS

• EU is set to propose banning many goods from transiting through Russia which would be part of the EU’s eleventh sanctions package, according to Bloomberg.
• Russian Security Council Deputy Chairman Medvedev warned that Moscow will terminate the grain deal if the G7 moved to ban exports to Russia, according to Reuters.
• Russia-installed head of Crimea said air defences had been activated on Saturday although there were no reports of damages or casualties, according to Reuters.
• Germany expelled over 20 Russian diplomats, while Moscow called Berlin's actions "hostile" and will expel at least 20 German diplomats in a tit-for-tat response, according to Russian state news RIA-Novosti.
• Baltic states were angered by China’s ambassador to France who questioned the legitimacy of countries formerly in the Soviet Union and are planning to summon Chinese diplomats to complain about the remarks, according to FT.
• Chinese Vice Foreign Minister Sun lodged solemn representations with the South Korean ambassador to China about South Korean President Yoon’s ‘erroneous’ Taiwan remarks, according to the Chinese Foreign Ministry cited by Reuters.
• China reportedly lashed out against the US-Philippines alliance with the decision by the Philippines to grant the US access to four military bases near Taiwan said to anger Beijing, according to FT. However, it was separately reported that Chinese Foreign Minister Qin Gang said China is ready to work with the Philippines to implement a consensus between the two countries and the Philippines’ Foreign Minister commented that differences in the South China Sea are not the sum total of relations between the two countries, according to Reuters.
• US senior administration official said North Korea’s human rights situation is likely to come up at next week's US-South Korea summit and North Korea is now in many ways much more closely aligned with China than it was before.
• US said it is deeply concerned by Azerbaijan establishing a checkpoint on the only land route to the contested Nagorno-Karabakh region, according to Reuters.
• US Secretary of State Blinken said US personnel and their dependents were safely evacuated from the embassy in Sudan. Furthermore, UK PM Sunak said British armed forces completed a rapid evacuation of British diplomats and their families, while the German military also conducted an evacuation of German citizens from Sudan.
• Turkey's Defence Minister is planning to meet his Russian, Syrian and Iranian counterparts in Moscow on April 25th, via Anadolu news.
• Japan says jet fighters/helicopters took off and landed on the Shandon Chinese carrier within the Pacific Ocean around 280 times between April 17th-23rd.
• EU Council President Michel says EU-China policy will be on the June European Council agenda. Earlier in the session, EU Foreign Representative Borrell says they will discuss how to recalibrate China relations.

CRYPTO

• Bitcoin is essentially unchanged on the session, towards the lower-end of USD 27.99-27.14k parameters with pertinent macro updates somewhat limited in the European morning.

APAC TRADE

• APAC stocks were mixed after the lack of macro drivers over the weekend and as participants brace for this week’s key events including big US tech earnings and the first BoJ meeting under Governor Ueda’s leadership.
• ASX 200 was lacklustre as gains in tech and defensives were offset by underperformance in the mining-related industries with notable losses in Fortescue Metals and South32 after weaker quarterly output updates.
• Nikkei 225 eked slight gains after source reports that the BoJ is likely to maintain ultra-loose monetary policy and dovish guidance, while it was also reported the BoJ is considering a comprehensive review of the impact of the monetary easing taken over the longer term and are planning to examine a quarter century of deflation.
• Hang Seng and Shanghai Comp were subdued despite the PBoC’s liquidity efforts and the announcement of policies to support trade by China’s Vice Commerce Minister who also noted that uncertainty in external demand remains the biggest restraint for China’s trade, while frictions lingered with the US reported to have urged South Korea not to fill China’s shortfalls if Beijing bans Micron chips.

NOTABLE ASIA-PAC HEADLINES

• PBoC injected CNY 89bln via 7-day reverse repos on Sunday with the rate kept at 2.00% and it injected CNY 115bln via 7-day reverse repos with the rate kept at 2.00% on Monday.
• PBoC official said China’s yuan has a solid foundation to remain stable and the PBoC will improve the floating exchange rate system based on market demand and supply, according to Reuters. One of China's "big four" banks plans to cut some personal and corporate rates next week, according to sources; products affected include "call deposits" and "agreement deposits". Sources said the mechanism asked for a roughly 10bps cut to weighted average term deposit rates in the quarter from a year earlier.
• China urges banks to cut deposit rates, according to Reuters sources; message from Chinese regulators is to cut size of structured deposit business, lower rates of "innovative" products;
• Chinese Vice Commerce Minister Wang said uncertainty in external demand remains the biggest restraint for China’s trade and said that China will actively satisfy funding demand from small and medium-sized exporters and importers, as well as support firms to explore diversified markets, according to Reuters.
• Chinese officials and analysts said deflation concerns are unnecessary despite the slower price growth since the start of the year and noted the economy is on a solid recovery track amid pro-growth policies, according to the State Council.
• US urges South Korea not to fill China shortfalls if Beijing bans Micron (MU) chips, according to FT.
• BoJ Governor Ueda said the BoJ must maintain monetary easing as trend inflation is still below 2% but added that if it can be foreseen that trend inflation will reach 2%, the BoJ must head towards policy normalisation. Ueda also said that how to revise YCC will depend on various factors such as economic conditions and the pace of inflation at the time and noted that he cannot say now how specifically the BoJ could tweak YCC.
• BoJ is considering conducting a comprehensive review of the impact of the monetary easing steps taken over the longer term with the central bank planning to examine a quarter century of deflation and could start discussions as early as this week’s policy meeting, according to a Sankei report which didn’t cite any sources.