• European bourses are lower across the board, continuing the APAC tone with regional earnings impacting Industrial & Tech.
• Stateside, futures are mixed with pronounced NQ outperformance with GOOGL +1.1% & MSFT +7.9% in pre-market trade.
• SEK crushed after dovish 50bp Riksbank hike, DXY further below 101.50 with EUR & GBP extending while AUD lags.
• Fixed benchmarks are contained but diverging slightly with EGBs slightly firmer while USTs slip before supply.
• Crude trimmed APAC upside in choppy trade with spot gold indecisive and base metals mostly firmer.
• Looking ahead, highlights include US Durable Goods & Retail Inventories, BoC Minutes, Speech from ECB's de Guindos, Supply from the US. Earnings from Meta, Boeing, Thermo Fisher, ADP & American Tower.

EUROPEAN TRADE

EQUITIES

• European bourses are lower across the board, Euro Stoxx 50 -0.6%, with pressure emanating from the softer APAC handover which itself was impacted by FRC-induced banking concern with European names impacted. More recently, earnings from heavyweights Safran and ASM International are weighing on the Industrial Goods and Tech sectors respectively.
• For reference, after the European cash open broader sentiment slipped to fresh lows with bourses posting downside in excess of 1.0%; though, this magnitude was somewhat shortlived and occurred without a fresh catalyst at the time.
• Stateside, US futures are somewhat mixed with ES marginally firmer but relatively contained while the NQ +1.3% is the standout outperformer after well-received Big Tech after-market updates ahead of the likes of Meta and Boeing on Wednesday.
• Alphabet Inc (GOOGL) - Top- and bottom-line beats, Q1 EPS 1.17 (exp. 1.07), Q1 Revenue 69.8bln (exp. 68.9bln), a USD 70bln share buyback, and decent ad revenue saw GOOG rise over 1.5% in afterhours trading. +1.1% in pre-market trade
• Microsoft Corp (MSFT) - Rose over 8% in afterhours trading following top and bottom-line beats on cloud growth. Q3 EPS 2.45 (exp. 2.23), Q3 revenue USD 52.9bln (exp. 51.02bln), Q3 Cloud revenue 28.5bln (exp. 28.19bln). +7.9% in pre-market trade
• *Visa Inc (V) *Q1 2023 (USD): EPS 2.09 (exp. 1.99), Revenue 7.99bln (exp. 7.79bln)
• Click here for more detail.

FX

• Swedish Krona crushed after 'dovish' 50bp Riksbank hike as 2 doves dissent, guidance suggests 1/4 point rise next time and repo path shows cut by Q2 2026, EUR/SEK eyes April high near 11.4500.
• DXY recoils within 101.890-320 range to the benefit of Euro and Pound especially, EUR/USD tops 1.1050 and pulls away from multiple option expiries, Cable reclaims 21 DMA on the way to towards 1.2500.
• Aussie continues to underperform as mostly softer than consensus inflation data underscores the probability of another RBA pause, AUD/USD probes 0.6600.
• Yen extends recovery rally vs Buck on spot month end amidst broad risk aversion and pre-BoJ positioning, USD/JPY towards the base of a 133.40-86 range.
• PBoC set USD/CNY mid-point at 6.9237 vs exp. 6.9250 (prev. 6.8847)
• Click here for more detail.
• Click here for the notable FX expiries for today's NY cut.

FIXED INCOME

• Core benchmarks are mixed and in relative proximity to the unchanged mark, though retain an upward bias, as Bunds/Gilts faded from their initial 135.75 and 102.12 respective peaks.
• The morning's dual-issuance via Germany sparked little reaction given the pullback from above best by around 40 ticks to near neutral had already occurred.
• Stateside, USTs are similarly contained though the benchmark contrasts slightly in being softer on the session in limited 115.18-25 parameters ahead of supply and data, with yields big as such and action as has been the case recently more evident at the short-end of the curve.
• Click here for more detail.

COMMODITIES

• WTI and Brent June futures eked mild gains overnight but trimmed those gains in early European hours in what has been a choppy morning for the complex.
• Spot gold continues to trade indecisively as the yellow metal balances a softer Dollar with the deteriorating risk profile across the market.
• Base metals meanwhile are mostly firmer, benefiting from the pullback in the Dollar, but with upside capped as the risk tone remains cautious.
• Russian Deputy PM Novak says total balance of oil supply and demand has not changed; says OPEC+ is effective, there are risks to energy security without OPEC+; says OPEC+ are not regulating prices.
• US Energy Inventory Data (bbls): Crude -6.1mln (exp. -1.5mln), Gasoline -1.9mln (exp. -0.9mln), Distillate 1.7mln (exp. -0.8mln), Cushing 0.5mln.
• European Commission VP Sefcovic said 80 companies signed up to the EU's platform for joint natgas purchases that launched on Tuesday, according to FT.
• Click here for more detail.

NOTABLE HEADLINES

• Riksbank hikes its Rate by 50bps to 3.50% as expected; Dissent from Bremen and Floden (3-2 vote split); forecast indicates a 25bps hike in June or September; peak rate seen at 3.65% (prev. 3.33%), Q2-2026 average 3.35%; reiterates language on SEK.. Click here for details, reaction and newsquawk analysis.
• ECB's Vujcic commented that there is no choice but to raise rates further, according to Delo.
• German Economy Ministry says industrial electricity pricing concept is to be introduced next week.
• EU Commission proposes that countries with a budget gap larger than 3% of GDP will have to cut the deficit by at least 0.5% of GDP annually, until they are below the 3% ceiling. In-fitting with earlier FT reports.

DATA RECAP

• German GfK Consumer Sentiment (May) -25.7 vs. Exp. -27.9 (Prev. -29.5, Rev. -29.3)
• UK CBI Distributive Trades (Apr) 5 (Prev. 1.0)

NOTABLE US HEADLINES

• "House Republicans have changed the nettlesome parts of their debt limit bill.", according to Punchbowl's Sherman; " GOP leadership said they wouldn't make these changes", but they have. Changes to: Biofuel tax credits - Work requirements for social safety net programs - IRA funding for a host of Democratic priorities.
• Click here for the US Early Morning Note.

GEOPOLITICS

• Russia said two of its strategic missile carrier bombers flew over the Barents and Norwegian seas, according to Reuters.
• Drone reportedly fell on the grounds of Moscow City court, according to Izvestia newspaper; drone did not carry any objects.
• China and Russia signed a memorandum of understanding on maritime law enforcement cooperation, according to Chinese state media.
• China's Defence Ministry says they are willing to work with the Pakistani military to further deepen and expand practical cooperation.
• China Maritime Administration said China will conduct live firing drills in the East China Sea today, according to Reuters.
• China Taiwan Affairs Office commented on a recent media report that an EU diplomat called for EU navy patrols in the Taiwan Strait in which it stated that authorities will be prepared and they will be on high alert for possible harm to China's national sovereignty and territory, according to Reuters.
• Turkish President Erdogan cancelled election campaign rallies on Wednesday on his Doctors suggestion amid an unexpected health issue.

CRYPTO

• Bitcoin is firmer and has lifted back towards the USD 29k mark, but is yet to mount a convincing test of the figure with the high thus far circa. USD 100 shy; action which keeps BTC comfortably above last-week's parameters but shy of the USD 30k+ seen earlier in April.

APAC TRADE

• APAC stocks were mostly lower after the losses on Wall St where banking sector fears resurfaced as First Republic Bank shares fell by 50% due to an exodus of deposits and with the lender considering up to USD 100bln in asset sales, although US equity futures found some reprieve overnight from the big tech earnings.
• ASX 200 was lacklustre but with downside stemmed as participants digested somewhat mixed inflation data in which the headline CPI readings for Q1 topped forecasts, but all other components were softer than expected and supported the view that the economy has passed peak inflation.
• Nikkei 225 declined amid pressure in the banking sector and disappointment in Japan after the failed lunar module landing which resulted in a glut of sell orders for ispace shares.
• Hang Seng and Shanghai Comp were mixed with early weakness in tech after US Republican senators urged for US government measures to address Chinese cloud companies including placing sanctions on Huawei Cloud and adding Alibaba Cloud to the export control list, although it was also reported that China's State Council pledged to expand the export and import scale of key products and will properly respond to unreasonable foreign trade restrictions.

NOTABLE ASIA-PAC HEADLINES

• RBNZ proposed to ease LVR restriction from June 1st and it assessed that risks to financial stability from high-LVR lending have reduced to a level where current restriction may be unnecessarily reducing efficiency, according to Reuters.
• Japanese panel is reportedly reviewing utility prices to look for a lower hike, according to NTV.

DATA RECAP

• Australian CPI QQ (Q1) 1.4% vs. Exp. 1.3% (Prev. 1.9%); YY (Q1) 7.0% vs. Exp. 6.9% (Prev. 7.8%)
• Australian RBA Trimmed Mean CPI QQ (Q1) 1.2% vs. Exp. 1.4% (Prev. 1.7%); YY (Q1) 6.6% vs. Exp. 6.7% (Prev. 6.9%)
• Australian RBA Weighted Median CPI QQ (Q1) 1.2% vs. Exp. 1.3% (Prev. 1.6%); YY (Q1) 5.8% vs. Exp. 5.9% (Prev. 5.8%)
• Australian CPI YY (Mar) 6.3% vs Exp. 6.5% (Prev. 6.8%)
• New Zealand Trade Balance (Mar) -1273M (Prev. -714.0M, Rev. -796M)
• New Zealand Exports (Mar) 6.51B (Prev. 5.23B, Rev. 5.06B); Imports (Mar) 7.78B (Prev. 5.95B, Rev. 5.86B)