• European and US equities are mixed and trading on either side of the unchanged mark; slight RTY outperformance
• DXY is flat, JPY underperforms and is comfortably above 150.00
• Bonds are mixed but rangebound, Treasuries underperform slightly
• Crude is softer and unable to benefit from the OPEC+ cut extension; Geopols and ceasefire talks remain in focus
• Looking ahead, Australian PMI, Tokyo CPI, Comments from Fed’s Harker & ECB's Holzmann

EUROPEAN TRADE

EQUITIES

• European bourses, Stoxx600 (+0.1%) began the session on a mixed footing and currently trade on either side of the unchanged mark in what has been a catalyst-thin morning.
• Sectors are mostly lower; Tech takes the top spot, seemingly benefitting from broad-base optimism within the sector. Basic Resources is hampered by the softer risk tone in Chinese trade overnight.
• US Equity Futures (ES -0.1%, NQ +0.1%, RTY +0.2%) are firmer, though trading with little direction ahead of a quiet docket on Monday. The RTY outperforms, lifted by gains in SMCI (+12.2%) and in tandem with strength in Bitcoin. Attention this week will be on appearances from Fed Chair Powell, the ECB and the US NFP report on Friday.
• Click here and here for the sessions European pre-market equity newsflow, including earnings.
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FX

• Contained trade for DXY on a 103 handle, holding above Friday's trough of 103.65 and the 200DMA at 103.79. Catalyst-light session thus far with greater attention on the week's upcoming risk events.
• The EUR briefly eclipsed Friday's high at 1.0856 before pulling back a touch. For now, is contained between between its 50DMA at 1.0867 and 200DMA at 1.0828.
• A slightly softer start to the week for JPY as USD/JPY maintains a footing on a 150 handle. Attention for the pair remains to the upside with Friday's high at 150.72 and the YTD peak at 150.88. A decisively more hawkish BoJ is required to change fortunes for the pair.
• The Swiss Franc is the marginal outperformer across the majors in the wake of firmer-than-expected inflation metrics. EUR/CHF remains above its 200DMA at 0.9560. ING continues to target a move towards 0.96 for EUR/CHF by spring.
• PBoC set USD/CNY mid-point at 7.1020 vs exp. 7.1906 (prev. 7.1059).
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FIXED INCOME

• USTs are the relative underperformers, and have been gradually fading from the 111-01 session peak which left USTs just one tick shy of Friday's best, a pullback which has been gradual and without any real driver but one that is relatively modest when compared to Friday's action overall.
• Bunds are in a tight 132.53-132.89 bound which keeps it near Friday's best of 132.87 but markedly shy of last week's 133.61 peak. There was no reaction to EZ Sentix as attention turns to ECB's Holzmann later today (ECB is in the quiet period) and the ECB Policy Announcement on Thursday.
• Gilts are slightly weaker than EGBs but with an equally narrow 30 tick range, the high point resides at 98.33 shy of Friday's 98.43 best and another 10 ticks from that week's contract peak.
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COMMODITIES

• Sideways trade across crude futures with little impetus from the weekend OPEC+ output cut extension through Q2 (as expected), with the move seemingly limiting near-term downside. Geopolitics also remain in focus with Gaza truce talks underway; "Egyptian media reports 'significant progress' in talks between the mediators and Hamas on a ceasefire in Gaza", according to Walla News' Elster.
• A flat-to-subdued morning for precious metals with the Dollar index also caged in a tight range as participants await this week's myriad of risk events in the absence of unscheduled macro drivers; Spot gold found intraday resistance at Friday's high (2,088.19/oz) before waning.
• Mixed trade across base metals with copper firmer intraday despite the recently reported increases in Chinese inventories; 3M LME copper briefly fell under USD 8,500/t before reclaiming the level and currently prints a USD 8,481.50-8,570/t intraday range.
• OPEC+ members agreed to extend voluntary cuts to Q2 whereby Saudi Arabia is to extend its voluntary oil cut of 1mln bpd for Q2 with its output to be around 9mln bpd through June and Russia is to cut oil output and exports by an additional 471k bpd, while the UAE is to voluntary cut oil output by 163k bpd and Iraq will voluntary cut output by 220k bpd. Furthermore, Kazakhstan is to extend voluntary oil output cuts of 82k bpd through to Q2 2024 and Kuwait is to cut oil output by 135k bpd for June.
• Russian Deputy PM Novak said Russia will implement an additional voluntary oil and export output cut of 471k bpd for Q2 in which it will cut output by 350k bpd in April with exports cut by 121k bpd, while it will cut output by 400k bpd in May with exports cut by 71k bpd and will cut 471k bpd in June which will all be from output, according to Reuters and The Moscow Times.
• GCC ministerial meeting communiqué stated that the entire Durra gas field and its natural resources are jointly and only owned by Saudi Arabia and Kuwait.
• Iran’s Oil Minister said Iran aims to reach 1.3bln cubic metres per day of gas output in 5 years.
• HSBC says Qatar expansion is likely to prolong Global LNG glut until 2030; cuts Europe TTF forecasts by 14% on average to USD 9.25/9.5/MBTU in 2024/2025E
• EQT (EQT) is to curtail approximately 1bcf per day of gross production beginning late Feb amid low nat gas prices from warm winter weather and elevated storage inventories Q1 curtailments expected to total 30-40bcf of net production.
• EU sells EUR 4.45bln vs exp. 5.0bln 2028 & 2038 bonds
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NOTABLE EUROPEAN HEADLINES

• UK Chancellor Hunt said he hoped to be able to lower taxes further in his annual budget on Wednesday but noted it would be “deeply unconservative” for him to do so in a way that required higher borrowing and his budget will be prudent and responsible, according to Reuters. Furthermore, Hunt said during an interview with the BBC that he wants to move towards lower taxes but will only do so in a responsible way and that the most unconservative thing he could do would be to cut taxes by increasing borrowing.
• UK Chancellor Hunt is putting together plans for up to GBP 9bln worth of tax increases and spending cuts in order to fund a 2p reduction in national insurance, according to The Times.
• UK Chancellor Hunt is reportedly expected to set out plans for private companies to trade shares on exchanges, according to FT.
• UK PM Sunak’s close allies reportedly worry that his chances of winning the next UK election have been made even more difficult as one of his Cabinet ministers, Business Secretary Badenock is said to be positioning to succeed him as Conservative Party leader, according to Bloomberg.
• EU’s Dombrovskis said it is positive that the e-commerce moratorium has been extended, while he noted there were disappointments related to agriculture and fisheries talks.
• S&P upgraded Portugal from BBB+ to A-; Outlook Positive amid ongoing steep external and government deleveraging.

DATA RECAP

• Turkish CPI YY (Feb) 67.07% vs. Exp. 65.74% (Prev. 64.86%); CPI MM (Feb) 4.53% vs. Exp. 3.7% (Prev. 6.7%)
• Swiss CPI YY (Feb) 1.2% vs. Exp. 1.1% (Prev. 1.3%); CPI MM (Feb) 0.6% vs Exp. 0.5% (Prev. 0.2%)

NOTABLE US HEADLINES

• Fed Chair Powell is expected to double down on his message that there’s no rush for the Fed to cut rates when he delivers in semi-annual testimony to the House committee and a Senate panel on Wednesday and Thursday, respectively, according to Bloomberg.
• US congressional leaders released the text of a bill to fund the government through September 30th and avert a government shutdown, while Senate Majority leader Schumer said the bill sets discretionary spending of USD 1.66tln for fiscal 2024, according to Reuters.
• Former US President Donald Trump won the Michigan Republican caucuses, while Nikki Haley was projected to win the District of Columbia Republican Presidential primary.
• Fitch affirmed the US at AA+; Outlook Stable.
• Fitch downgraded New York Community Bancorp’s (NYCB) rating; Outlook Negative, while Moody’s downgraded NYCB’s long-term issuer rating to B3; Outlook remains on review for a further downgrade.
• Tesla (TSLA) sold 60,365 (prev. 71,447 M/M; 74,402 Y/Y) China-made vehicles in Feb, via CPCA.

GEOPOLITICS

MIDDLE EAST

• Israeli military spokesman said the IDF concluded the initial review of civilian deaths at the Gaza aid convoy in which it was concluded that the IDF did not carry out a strike towards the aid convoy and the majority of Palestinians that died were the result of a stampede, while forces fired warning shots and responded towards several individuals that approached forces posing an ‘immediate threat’.
• Hamas delegation arrived in Cairo on Sunday for ceasefire talks, while it was also reported that a Palestinian official familiar with Gaza truce talks said they were not there yet when asked whether a deal was imminent. Furthermore, Egyptian security sources had previously stated that parties agreed on the duration of a truce, as well as hostage and prisoner releases although the completion of a deal still requires an agreement on the withdrawal of Israeli forces from northern Gaza and a return of residents.
• US VP Harris said what we are seeing every day in Gaza is devastating and too many innocent Palestinians have been killed and Gazans are suffering from a humanitarian catastrophe. Harris added that Israel’s government must do more to increase the flow of aid, "no excuses", as well as work to restore basic services and restore order in Gaza. Furthermore, she said there must be an immediate ceasefire and the threat posed by Hamas must be eliminated, while she added there is a deal on the table and Hamas needs to agree to that deal, according to Reuters.
• US VP Harris is to meet with Israeli war cabinet member Gantz on Monday and US Secretary of State Blinken is also to meet with Gantz in Washington on Tuesday.
• US official said on Saturday that the outlines of a Gaza peace deal are in place and it depends on Hamas agreeing to release hostages, according to Reuters.
• Houthi transport ministry said hostile actions by British and US naval vessels against Yemen caused a malfunction in submarine cables in the Red Sea.
• Hezbollah claimed it detonated a large IED and fired artillery at an Israeli force that attempted to infiltrate Lebanon, according to a source via social media platform X.
• "Tangible progress on the second day of Cairo negotiations on the truce in Gaza", according to Egyptian media cited by Sky News Arabia.
• "Egyptian media reports 'significant progress' in talks between the mediators and Hamas on a ceasefire in Gaza", according to Walla News' Elster.

OTHER

• Road traffic near Crimea’s port of Feodosia was temporarily restricted following reports of an explosion.
• China’s Embassy in the Philippines commented on remarks from the Philippines Ambassador to the US in which it stated the China-related remarks disregard basic facts, ‘wantonly hype up’ the South China Sea issue and maliciously smear China which they strongly condemn, according to Reuters.

CRYPTO

• Bitcoin continues to climb higher and edges above USD 65k; price action which has lifted Crypto stocks such as Coinbase and Riot.
• Chinese state media warned against cryptocurrency trading as domestic interest surges amid the bitcoin rally, according to SCMP.

APAC TRADE

• APAC stocks traded mixed amid a tentative mood ahead of an event-packed week.
• ASX 200 lacked conviction amid varied data releases and despite initially printing a fresh record high.
• Nikkei 225 resumed its uptrend and climbed above the 40,000 level for the first time.
• KOSPI outperformed as it played catch up on its return from a 3-day weekend.
• Hang Seng and Shanghai Comp. were choppy with an early lacklustre mood after the PBoC's liquidity drain, while China begins its Two Sessions meeting with the focus on the NPC tomorrow including Premier Li's first government work report and the official GDP target.

NOTABLE HEADLINES

• China NPC spokesperson said the 2024 annual parliamentary meeting will close on March 11th and they will make new laws to deepen economic reform including financial institutional reform to promote private companies, while the spokesperson said Premier Li will not give a press conference at the close of the NPC this year and will not hold a press conference in following years, according to Reuters. It was separately reported that Beijing is expected to resist market pressure for a much stronger stimulus to spur China’s economic recovery at the annual political event this week, according to FT.
• ZOZO (3092 JT), Disco Corp (6146 JT), and Socionext (6526 JT) are to join the Nikkei 225, from April 1
• China's NDRC is to raise retail gasoline and diesel prices by CNY 125/ton and CNY 120/ton respectively from March 5th.
• Chinese insurers reportedly warn of debt risks at property giant Vanke (2202 HK/ 2 CH), via Bloomberg

DATA RECAP

• Japanese Business Capex YY (Q4) 16.4% vs. Exp. 2.9% (Prev. 3.4%); Company Profits YY (Q4) 13.0% vs Exp. 21.3% (Prev. 20.1%); Company Sales YY (Q4) 4.2% vs Exp. 4.5% (Prev. 5.0%)
• Australian Building Approvals (Jan) -1.0% vs. Exp. 4.0% (Prev. -9.5%, Rev. -10.1%); Gross Company Profits (Q4) 7.4% vs. Exp. 1.8% (Prev. -1.3%); Business Inventories (Q4) -1.7% vs Exp. 0.0% (Prev. 1.2%)