• APAC stocks traded mixed with most of the major indices subdued amid the banking sector headwinds in the US and as participants digested a deluge of earnings releases.
• European equity futures are indicative of a weaker open with Euro Stoxx 50 future -0.3% after the cash market closed lower by 0.7% yesterday.
• DXY is lacking in direction, EUR/USD lingers around 1.1050, GBP/USD is back below 1.25, NZD outperforms peers.
• US House voted 217 vs 215 to narrowly pass the Republican debt ceiling bill; Biden has played down the chances of it becoming a law.
• Looking ahead, highlights include US GDP & PCE Prices Advance, CBRT Policy Announcement, ECB's Panetta, Supply from Italy & US
• Earnings from Delivery Hero, Hellofresh, STMicroelectronics, Deutsche Bank, TotalEnergies, Carlsberg, Sanofi, BASF, AstraZeneca, Unilever, LSE, Barclays, Amazon, AbbVie Exxon, Mastercard, Linde, Lilly, T-Mobile, Altria & Activision.

US TRADE

EQUITIES

• US stocks finished mixed albeit with the major indices mostly negative amid banking sector woes with First Republic Bank on the brink and deemed too small to survive, although the Nasdaq was kept afloat after recent big tech earnings which were also followed after-market by better-than-expected results from eBay and Meta.
• SPX -0.38% at 4,056, NDX +0.64% at 12,806, DJIA -0.68% at 33,301, RUT -0.89% at 1,730.
• Click here for a detailed summary.

NOTABLE HEADLINES

• White House said US President Biden has made it clear that the Republican bill has no chance of becoming law and he will never force middle-class and working families to bear the burden of tax cuts for the wealthiest. It was also earlier reported that President Biden said he is happy to meet with US House Speaker McCarthy but not on whether the debt limit gets extended which he said is not negotiable.
• US House voted 217 vs 215 to narrowly pass the Republican debt ceiling bill, which aims to spark negotiations with US President Biden on avoiding a default, according to Reuters.
• First Republic Bank (FRC) is reportedly facing a curb on Fed borrowings as the FDIC is considering lowering the bank's ratings if a deal is not reached in which the move would limit FRC's access to Fed facilities, according to Bloomberg.

EARNINGS RELEASES

• Meta (META) - Q1 2023 (USD): EPS 2.20 (exp. 2.03), Revenue 28.65bln (exp. 27.65bln). Advertising revenue 28.10bln (exp. 26.76bln), +4.1% Y/Y. Facebook DAUs 2.04bln (exp. 2.01bln), +4.1% Y/Y. Facebook MAUs 2.99bln (exp. 3bln). Q2 revenue view 29.5-32bln (exp. 29.48bln). Co. said AI recommendations have increased time spent on Instagram by 24%, and added they are no longer behind in AI infrastructure and the next milestone is the launch of next generation consumer virtual and mixed reality device later this year. Co. is seeing continued strong conversion growth for advertisers, and expects to evolve capital structure through periodically accessing debt markets to diversify funding. Co. said FY expenses will be between USD 86bln-90bln including USD 5bln of restructuring costs. Co. said it will resume hiring after layoffs complete in April and May. (Newswires) Meta shares rose 11.7% after-market; Amazon (AMZN) also rose 1.5% ahead of earnings on Thursday.

APAC TRADE

EQUITIES

• APAC stocks traded mixed with most of the major indices subdued amid the banking sector headwinds in the US and as participants digested a deluge of earnings releases and quarterly performance updates.
• ASX 200 declined with the index pressured in early trade by weakness in the mining-related industries after a recent decline in underlying commodity prices and with gold miners hit after lower output and sales by Newcrest Mining and Northern Star Resources.
• Nikkei 225 was cautious as headlines were dominated by earnings and as the BoJ began its 2-day meeting.
• KOSPI was indecisive after earnings from index heavyweight Samsung Electronics which topped the preliminary release but confirmed an over-95% drop in its operating profit.
• Hang Seng and Shanghai Comp were somewhat mixed during the session with the biggest movers in Hong Kong driven by earnings releases, while the mainland was mildly underpinned by support measures after China's State Council unveiled a plan to stabilise employment and will support financial institutions to offer loans to businesses for expanding and stabilising jobs.
• US equity futures edged mild gains as earnings releases from Meta and eBay hoisted futures after-hours; ES +0.3%.
• European equity futures are indicative of a weaker open with Euro Stoxx 50 future -0.3% after the cash market closed lower by 0.7% yesterday.

FX

• DXY lacked direction after the prior day’s weakness amid headwinds from banking sector concerns which spurred some slight dovish rate bets as a potential failure of First Republic Bank would likely take away some of the impulse in the Fed's battle against inflation.
• EUR/USD calmed down from recent price swings and after resistance near 1.1100 tempered yesterday’s rally.
• GBP/USD traded rangebound and took a breather after returning from a brief foray at the 1.2500 handle.
• USD/JPY was uneventful as participants await the conclusion of the BoJ’s policy meeting tomorrow.
• Antipodeans were slightly higher and NZD marginally outperformed as AUD/NZD pulled back from 1.0800.
• BoC Minutes noted that the discussion ahead of the April 12th rate decision focused on whether monetary policy was restrictive enough, while the governing council discussed whether it was best to raise its policy rate or wait for more evidence.
• PBoC set USD/CNY mid-point at 6.9207 vs exp. 6.9197 (prev. 6.9237).

FIXED INCOME

• 10yr UST futures remained subdued after yesterday's bear-flattening and choppy performance as sentiment revolved around the ongoing First Republic Bank saga, while the focus for markets now turns to US GDP data.
• Bund futures were lacklustre after its recent dip beneath the 135.00 level and with the latest ECB rhetoric doing little to shift expectations ahead of next week’s policy meeting.
• 10yr JGB futures traded indecisively as the BoJ kick-started its 2-day policy meeting and despite the central bank's presence in the market for nearly JPY 1.5tln of JGBs on top of its daily fixed-rate operations.

COMMODITIES

• Crude futures were restricted after yesterday's losses as potential Iraq/Turkey supply progress, increased Russian refinery runs, US banking concerns and recessionary fears, overshadowed the large inventory draw.
• Russian Deputy PM Novak said the government is discussing changes to subsidies for oil refineries which will be submitted to DUMA soon.
• Spot gold gained overnight in a fresh attempt to reclaim the psychological USD 2,000/oz status.
• Copper futures languished at 3-month lows amid the ongoing banking jitters and growth concerns.

CRYPTO

• Bitcoin was firmer after reversing most of yesterday's late selling pressure with prices back near USD 29,000.
• Hong Kong Securities and Futures Commission chief said will issue crypto exchange guidelines in May.

NOTABLE ASIA-PAC HEADLINES

• Chinese Vice Human Resources Minister said China's employment situation is under pressure and employment pressure of college graduates remains very large, while they will strive to achieve the job creation target this year, according to Reuters.
• China's borrowing costs are seen to remain low in Q2 and banks are expected to lower interest rates for loans and deposits, according to China Securities Journal.
• US President Biden said his desire to increase manufacturing jobs in America is not about China and his policy is designed to preserve US access to semiconductors, not to hurt China.
• US Commerce Secretary Raimondo said the US must address AI privacy and rights issues urgently, while she added the US needs to continue to put Chinese cos. on the export control list.

DATA RECAP

• Chinese Industrial profit YTD (Mar) -21.4% (Prev. -22.9%)
• Chinese Industrial Profits YY (Mar) -19.2%
• New Zealand ANZ Business Outlook (Apr) -43.8% (Prev. -43.4%)
• New Zealand ANZ Own Activity (Apr) -7.6% (Prev. -8.5%)

GEOPOLITICAL

• Ukrainian President Zelensky said after the call with Chinese President Xi that there will be no peace at the expense of territorial compromises.
• US President Biden said the US and South Korea are standing against economic leverage being used in coercive ways and said that North Korean actions are blatant violation of sanctions, while they will continue to seek diplomacy with North Korea to bolster stability in the region and warned that a North Korean nuclear attack would result in the end of whatever regime took such an action. Furthermore, South Korean President Yoon said the US and South Korea have agreed on an unprecedented expansion and strengthening of deterrence policy on North Korea.

EU/UK

• The Confederation of British Industry is to be renamed as part of a reform following the scandal, according to the business group's new director general cited by FT.