• European bourses relatively contained but with an underlying positive skew after a deluge of earnings.
• NQ outperforms post-META (+11% pre-market) with AMZN, among others, ahead.
• DXY edges above 101.50 with antipodeans outperforming while JPY and CHF are undermined by yields.
• EGBs remain subdued but have bounced off initial lows post-supply, USTs in-fitting pre-7yr/GDP
• Crude consolidates with metals mixed overall given the contained European tone and USD upside.
• Looking ahead, highlights include US GDP & PCE Prices Advance, CBRT Policy Announcement, Speech from ECB's Panetta, Supply from the US. Earnings from Amazon, AbbVie Exxon, Mastercard, Linde, Lilly, T-Mobile, and Altria.

EUROPEAN TRADE

EQUITIES

• European bourses are relatively contained but with an underlying positive skew, Euro Stoxx 50 +0.3%, with broader macro developments light and focus largely on earnings.
• On this, sectors are somewhat mixed with Autos/Parts outperforming after Michelin, Continental and Hella updates; Personal Care, Drug & Grocery is firmer following Unilever while Media names lag given poorly received UMG and WPP metrics.
• Stateside, futures are in the green with the NQ +0.9% once again leading after Meta's Q1 report with numerous heavyweights due on today's docket including AMZN.
• Meta (META) - Q1 2023 (USD): EPS 2.20 (exp. 2.03), Revenue 28.65bln (exp. 27.65bln). AI recommendations have increased time spent on Instagram by 24%, and added they are no longer behind in AI infrastructure. +11% in pre-market trade
• Click here and here for the European earnings, highlights include: AstraZeneca, Barclays, Unilever, TotalEnergies, Deutsche Bank, BASF, STMicroelectronics, Evolution, UMG and many more.
• Click here for more detail.

FX

• Greenback grinds higher ahead of US GDP and IJC, DXY on a firmer footing between 101.280-510 parameters after the 101.00 test yesterday.
• Kiwi and Aussie outperform as NZD/USD probes 0.6150 and AUD/USD defends 0.6600 again.
• Euro pivots 1.1050 amidst more decent option expiry interest, but capped ahead of the new 2023 high just shy of 1.1100.
• Yen and Franc undermined by higher UST yields as USD/JPY eyes 134.00 beyond 50 DMA and USD/CHF hovers above 0.8900.
• PBoC set USD/CNY mid-point at 6.9207 vs exp. 6.9197 (prev. 6.9237).
• Click here for more detail.
• Click here for the notable FX expiries for today's NY cut.

FIXED INCOME

• EGBs bounce off deeper lows as BTPs breathe a sigh of relief after Italian auctions and Bunds take on board mostly weaker EZ sentiment indicators.
• 10 year benchmarks just shy of 114.00 and above 134.50 respectively vs 134.19 and 113.57 at worst.
• Gilts pare losses within 101.05-44 range amidst lengthy month-end duration.
• T-note nearer 115-06+ overnight low vs 115-17+ high ahead of US GDP, IJC and 7 year supply.
• Click here for more detail.

COMMODITIES

• WTI and Brent June futures consolidate following yesterday’s losses, with WTI on either side of USD 74.50/bbl and Brent oscillating around USD 78/bbl.
• Spot gold sees modest gains and largely mirrors Dollar action, but the yellow metal remains underpinned by banking woes.
• Base metals are mixed amid the overall cautious tone and a lack of catalysts in the European morning.
• Russian Deputy PM Novak says OPEC+ sees no need for further output reductions despite lower than expected Chinese demand.
• OPEC Secretary General says OPEC and OPEC+ are not targeting oil prices; IEA should be very careful about "further undermining" oil industry investments.
• China is to increase energy and agriculture imports, according to China's MOFCOM.
• Click here for more detail.

DATA RECAP

• EU Consumer Confidence. Final (Apr) -17.5 vs. Exp. -17.5 (Prev. -17.5, Rev. -19.1)
• EU Consumer Inflation Expectations (Apr) 15.1 (Prev. 18.9, Rev. 18.8); Selling Price Expectations (Apr) 12.0 (Prev. 18.7, Rev. 18.1)

NOTABLE US 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.
• Click here for the US Early Morning Note.

GEOPOLITICS

• 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 a 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.
• China's Defence Minister General Li Shangfu has landed in Delhi to attend the Shanghai Cooperation Organisation Defence Ministers' Meeting; a bilateral meeting is scheduled for today later in the evening, according to Print India.
• Military object found in Poland was likely not fired from another nation, and probably belongs to the Polish army, via RMF citing "unofficial information".
• Russian Kremlin says it would welcome a call between Chinese President Xi and Ukraine President Zelenskiy if it brought the end of conflict closer; still needs to achieve its aims in Ukraine. President Putin will hold a call with Turkish President Erdogan later today.

CRYPTO

• Hong Kong Securities and Futures Commission chief said will issue crypto exchange guidelines in May.

APAC TRADE

• 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.

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.

DATA RECAP

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