• APAC stocks traded mixed as early momentum from the tech-led gains on Wall St was offset by Chinese developer default concerns.
• Toyota, Nissan, Panasonic, Hitachi & Nippon Steel were among the companies that have responded to Japanese unions' wage hike demands in full.
• European equity futures indicate a flat open with the Euro Stoxx 50 future unchanged after the cash market closed up 1.1% on Tuesday.
• DXY is steady below the 103 mark, USD/JPY trades around the 147.50 level, antipodeans marginally outperform.
• Looking ahead, highlights include UK GDP, Services, Industrial Output, Trade Balance, EZ Industrial Production, ECB Operational Framework Review, Speech from ECB’s Cipollone & RBNZ’s Conway, Supply from Italy, Germany & US.

US TRADE

EQUITIES

• US stocks finished mostly in the green and ultimately shrugged off the firmer-than-expected US CPI data with early weakness in stocks swiftly pared and with the major indices led by the Nasdaq as tech and semiconductor shares soared, while the S&P 500 posted a record close and the Russell 2000 was the outlier which closed flat. Furthermore, the dollar and bonds also saw two-way price action to the inflation prints although finished the session with a more traditional response to the hawkish data.
• SPX +1.12% at 5,175, NDX +1.49% at 18,219, DJIA +0.61% at 39,005, RUT -0.02% at 2,065.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US President Biden secured enough votes to clinch the Democratic presidential nomination and Donald Trump secured enough delegates to win the Republican nomination, according to Reuters.

APAC TRADE

EQUITIES

• APAC stocks traded mixed as early momentum from the tech-led gains on Wall St was offset by Chinese developer default concerns and as participants digested Japanese wage hike announcements.
• ASX 200 was led higher by consumer stocks after China's MOFCOM released an interim proposal to remove tariffs on Australian wine although the advances in the index were limited by losses in the mining sector as iron ore prices continued to tumble.
• Nikkei 225 swung between gains and losses with initial strength reversed amid firm wage hike announcements.
• Hang Seng and Shanghai Comp. were varied and price action was contained within relatively narrow ranges with the Hong Kong benchmark kept afloat by strength in auto names and tech, while the mainland was pressured amid developer default fears and with the US House set to vote later on the TikTok crackdown bill.
• US equity futures took a breather after yesterday's gains on Wall St where the major indices shrugged off firmer-than-expected US CPI data and the S&P 500 notched a record close.
• European equity futures indicate a flat open with the Euro Stoxx 50 future unchanged after the cash market closed up 1.1% on Tuesday.

FX

• DXY remained flat just beneath the 103.00 level after recently strengthening on the US inflation data.
• EUR/USD traded steadily with little reaction seen following the latest ECB comments in which Villeroy noted broad agreement to begin lowering interest rates in the spring, while ECB's Wunsch said the ECB can act before wage inflation drops to 3%.
• GBP/USD was contained by resistance near the 1.2800 handle ahead of monthly GDP and Industrial Output data.
• USD/JPY saw two-way price action with early headwinds following the strong wage increase signals.
• Antipodeans conformed to the rangebound picture amid the mixed risk appetite and quiet calendar albeit with a marginal uptick in late trade.
• PBoC set USD/CNY mid-point at 7.0930 vs exp. 7.1775 (prev. 7.0963).

FIXED INCOME

• 10-year UST futures struggled to recoup losses after the hawkish reaction to US CPI and a poor 10yr auction.
• Bund futures bounced off lows after finding support at 133.00 but with the rebound limited ahead of supply.
• 10-year JGB futures lacked demand as participants reflected on the firm wage hike announcements.

COMMODITIES

• Crude futures traded marginally higher following bullish private sector inventory data.
• US Energy Inventory Data (bbls): Crude -5.5mln (exp. +1.3mln), Gasoline -3.8mln (exp. -1.9mln), Distillate -1.2mln (exp. -0.2mln), Cushing -1mln.
• EIA STEO stated that US crude oil production is expected to rise by 260k BPD to 13.19mln BPD in 2024 (vs. previously forecasted rise of 170k) and is expected to rise by 460k BPD to 13.65mln in 2025 (prev. forecast of a rise of 390k BPD).
• Spot gold languished near yesterday's lows after sliding as the dollar gained on firmer-than-expected US CPI.
• Copper futures were restrained for most of the session alongside the mixed risk appetite and Chinese developer default concerns, but then saw a brief uptick in late trade.

CRYPTO

• Bitcoin gradually edged higher during the session and climbed back above the USD 72,000 level.

NOTABLE ASIA-PAC HEADLINES

• Country Garden Holdings (2007 HK) onshore bondholders said they have not received a coupon payment due on Tuesday, while the developer said funds for a CNY 96mln coupon payment due on Tuesday were not fully in place and it plans to do its best to raise money for payment within a 30-day grace period, according to Reuters.
• TikTok US executives told headquarters recently that a ban wasn't an imminent risk, according to WSJ citing sources. However, it was separately reported that the US House plans to vote on the TikTok crackdown bill today at around 10:00EDT (14:00GMT).
• Japan Chief Cabinet Secretary Hayashi said it is important for wage hikes to spread to mid-sized and small companies, while he added they are seeing strong momentum for wage hikes. It was also reported that Toyota, Nissan, Panasonic, Hitachi & Nippon Steel were among the companies that have responded to unions' wage hike demands in full.

GEOPOLITICS

MIDDLE EAST

• CIA Director Burns said there is "still a possibility" of a Gaza ceasefire deal but added that many complicated issues are still to be worked through.
• US may urge partners and allies to fund a privately run operation to send aid by sea to Gaza that could begin before a much larger US military effort, according to sources cited by Reuters.
• US Central Command announced that Houthis fired a close-range ballistic missile from Yemen toward USS Laboon in the Red Sea on March 12th but it did not impact the vessel, while CENTCOM forces and a coalition vessel successfully engaged and destroyed two unmanned aerial systems launched from Yemen.

OTHER

• Russian President Putin said if US troops appear in Ukraine, Russia will treat them as interventionists and noted that from a military-technical point of view, Russia is ready for nuclear war but not 'everything is rushing to it'. Putin said Russia's nuclear triad is more modern than any other and if the US conducts nuclear tests, Russia may do the same. Furthermore, he stated there has never been a need to use nuclear weapons in Ukraine and that Russia is ready to use nuclear weapons if the existence of the Russian state is threatened, as well as stated that Russia is ready for talks on Ukraine but only when talks are based on realities, according to RIA.
• Russian President Putin said he does not trust anyone and Russia needs signed guarantees when asked about an honest treaty with the West. Putin also stated that Russia will deploy troops and equipment to the Finnish border after Finland enters NATO, while he added that Sweden and Finland's entry into NATO is a meaningless step, according to RIA.
• Ukrainian Army Chief Syrskyi and Ukraine's Defence Minister Umerov held a phone call with US Defense Secretary Austin on weapons delivery to Ukraine, according to Reuters.
• Poland’s PM Tusk said he talked about quickly unblocking US funds for Ukraine with US President Biden and there was a confirmation that the US will not hesitate to defend Poland if necessary In relevant news, Poland's President Duda said in a meeting with US President Biden that NATO allies should increase their defence spending to 3% of GDP, while it was also reported that the US State Department approved a potential sale of Sidewinder missiles and advanced medium-range air-to-air missiles to Poland.

EU/UK

NOTABLE HEADLINES

• Citi/YouGov Poll (Feb) showed UK 1yr ahead inflation expectations fell to 3.6% (prev. 3.9% M/M) and 5-10yr expectations fell to 3.5% (prev. 3.6%).
• ECB's Villeroy noted broad agreement in the ECB to start cutting rates in spring as the battle against inflation is being won, while he noted the risk of waiting too long before loosening monetary policy and unduly hurting the economy is now “at least equal” to acting too soon and letting inflation rebound, according to an interview with Le Figaro.
• ECB's Wunsch said the ECB can act before wage inflation drops to 3%, while he added that the ECB sees a cautious move because of high services and wage inflation. Furthermore, he stated the ECB should 'make a bet' on an interest rate cut before so long.
• French Central Bank sees full-year 2024 growth at 0.8% (prev. 0.9%), 2025 at 1.5% (prev. 1.3%) and 2026 at 1.7% (prev. 1.6%), while it sees HICP inflation at 2.5% in 2024 and 1.7% in both 2025 and 2026.