• Equities are mostly firmer with slight outperformance in the NQ, paring some of the prior days losses
• Dollar is contained and G10s are mostly flat with slight strength seen in the NZD & GBP
• Bonds hold a bearish tilt, continuing price action seen in the prior few days; Bunds caught a slight bid following dovish remarks from ECB’s Stournaras
• Crude is firmer and near session highs, base metals are entirely in the red
• Looking ahead, US IJC, PPI, Retail Sales, NZ Manufacturing PMI, Comments from ECB’s Schnabel, Knot, de Guindos, Supply from the US, Earnings from Dollar General

EUROPEAN TRADE

EQUITIES

• European bourses are mostly in the green, with sentiment lifted after dovish remarks from ECB's Stournaras. The SMI (-0.3%) underperforms, hampered by post-earnings weakness in Swiss Life (-5.7%).
• European sectors are mixed, with Basic Resources found at the foot of the pile, hampered by broader weakness in base metals, whilst Energy benefits from firmer crude prices.
• US equity futures (ES +0.2%, NQ +0.5%, RTY +0.2) are trading on a firmer footing, with slight outperformance in the NQ, attempting to pare back some of its losses from the prior session.
• Click here and here for the sessions European pre-market equity newsflow, including earnings.
• Click here for more details.

FX

• DXY is broadly flat vs. peers ahead of a slew of Tier 1 US data, with the index contained within yesterday's 102.66-103.02 range. Strong data could see DXY reclaim 103 and approach the weekly high at 103.17. A soft release could see the index approach the post-NFP low at 102.35.
• EUR is steady vs. the USD and contained within yesterday's 1.0920-1.0963 range. ECB's Stournaras sparked modest pressure for the Single-Currency, though the move quickly faded.
• JPY is a touch softer vs. the USD but ultimately contained within yesterday's 147.23-148.05 range. Markets are on tenterhooks ahead of tomorrow's Rengo announcement which will likely shape expectations for next week's BoJ decision.
• AUD/USD is flat vs. the USD in what has been a week of contained price action, and currently sits within yesterday's 0.6599-0.6635 range. NZD is trivially firmer vs. USD after edging above yesterday's peak at 0.6170.
• SEK is weaker vs. peers given soft inflation metrics which has seen odds of a May cut creep higher. EUR/SEK made a new high for the week at 11.218 but still some way off March highs.
• Click here for more details.

FIXED INCOME

• Once again, USTs are marginally in the red within the European morning. Specifics since the 30yr auction (strong) have been light and USTs are now back to pre-auction levels of 110-30; data and 20yr announcement due.
• Gilts are the relative laggard as they continue to pare from the outperformance seen on Tuesday's labour data, with few fresh drivers able to change the narrative. Gilts hold towards the lower end of a 99.01-98.80 range.
• Bunds are in the red but off the 132.42 trough after remarks from ECB's Stournaras who said that two cuts are needed before the summer break and four for 2024 is reasonable. Commentary which has helped to lift Bunds to a 132.66 high. Comments from ECB's Lane failed to spark any price action in Bunds.
• Click here for more details.

COMMODITIES

• Crude is firmer with gains facilitated by Russian facility outages, bullish US energy inventory data and several geological updates. Brent May rose from support at USD 83.98/bbl and currently holds just shy of USD 84.75/bbl.
• A subdued morning thus far for precious metals and with overall trade rangebound, awaiting impetus from US Tier 1 data. XAU trades within a tight range between USD 2,167.47-2,177.05/oz.
• Base metals are mostly subdued as a function of the Dollar and quiet macro updates. Copper holds onto a bulk of the prior day's gains (following reports that major Chinese copper smelters agreed to curb output) whilst iron ore overnight continued trundling lower amid ongoing Chinese demand woes.
• IEA OMR: Raises 2024 oil demand growth forecast by 110k BPD to 1.3mln BPD; says if OPEC+ voluntary cuts remain in place through 2024, market is seen in a slight deficit rather than a surplus. While 2024 growth has been revised up by 110 kb/d from last month’s Report, the pace of expansion is on track to slow from 2.3 mb/d in 2023 to 1.3 mb/d, as demand growth returns to its historical trend while efficiency gains and EVs reduce use. World oil production is projected to fall by 870 kb/d in 1Q24 vs 4Q23 due to heavy weather-related shut-ins and new curbs from the OPEC+ bloc. Refining margins improved through mid-February before receding, with the US Midcontinent and Gulf Coast as well as Europe leading the gains. In this Report, we are now holding OPEC+ voluntary cuts in place through 2024 – unwinding them only when such a move is confirmed by the producer alliance (see OPEC+ cuts extended). On that basis, our balance for the year shifts from a surplus to a slight deficit, but oil tanks may get some relief as the massive volumes of oil on water reach their final destination.
• Click here for more details.

NOTABLE EUROPEAN HEADLINES

• ECB's Stournaras says they have to cut rates twice prior to the summer break, via Bloomberg; four cuts in 2024 seems reasonable. Need to begin cutting soon; policy must not become too restrictive. Dismisses the idea that the ECB cannot cut before the Fed. Don't exaggerate the risk of a wage-price-spiral. Structural portfolio will include government bonds. Remarks which sparked a modest uptick in EGBs.
• ECB Chief Economist Lane says the ECB has a bit more confidence that they are heading towards the inflation goal, more data will help gain more confidence, via CNBC; Better not to analyse whether it is April or June when it comes to lowering rates
• Norges Bank Regional Network Report Q1 2024 : Expects overall activity to remain virtually unchanged in the first half of 2024. Prospects have been revised up somewhat since the previous survey.Employment plans for 2024 Q1 have been revised up slightly since the previous survey. Contacts expect annual wage growth of 4.9% in 2024, which is an upward revision from the 4.5% estimate in November.

DATA RECAP

• UK RICS Housing Survey (Feb) -10.0 vs. Exp. -11.0 (Prev. -18.0)
• Swedish CPIF Ex Energy YY (Feb) 3.5% vs. Exp. 3.6% (Prev. 4.4%, Riksbank 3.7%); CPIF Ex Energy MM (Feb) 0.6% vs. Exp. 0.7% (Prev. -0.5%); CPIF YY (Feb) 2.5% vs. Exp. 2.8% (Prev. 3.3%, Riksbank 2.9%); CPIF MM (Feb) 0.2% vs. Exp. 0.3% (Prev. -0.3%); CPI MM (Feb) 0.2% vs. Exp. 0.4% (Prev. -0.1%); CPI YY (Feb) 4.5% vs. Exp. 4.7% (Prev. 5.4%, Riksbank 5.3%)
• Spanish CPI MM Final NSA (Feb) 0.4% vs. Exp. 0.3% (Prev. 0.3%); CPI YY Final NSA (Feb) 2.8% vs. Exp. 2.8% (Prev. 2.8%); HICP Final YY (Feb) 2.9% vs. Exp. 2.9% (Prev. 2.9%); HICP Final MM (Feb) 0.4% vs. Exp. 0.4% (Prev. 0.4%)
• Swiss Producer/Import Price YY (Feb) -2.0% (Prev. -2.3%); Producer/Import Price MM (Feb) 0.1% (Prev. -0.5%)

NOTABLE US HEADLINES

• Microsoft (MSFT) and Oracle (ORCL) expand partnership to satisfy global demand for oracle database Azure.
• MicroStrategy Incorporated (MSTR) - The crypto investor announced its intention to offer USD 500mln of convertible senior notes due 2031, with an additional option for purchasers to buy up to USD 75mln more. MSTR intended to use the proceeds to purchase additional bitcoin and for general corporate purposes. Shares +4.5 pre-market trade
• Under Armour (UAA) - Kevin Plank will assume the roles of President and CEO from April 1st, succeeding Stephanie Linnartz. Mohamed El-Erian will become the non-executive Chair of the Board. Plank, founder of Under Armour, transitions from the Executive Chair role, while Linnartz will remain to advise until April 30th. Shares -4.5% in pre-market trade
• Fisker Inc (FSR) Is considering a bankruptcy filing, according to WSJ sources. Shares -36% in pre-market trade

GEOPOLITICS

MIDDLE EAST

• US Secretary of State Blinken held a video call with officials from Cyprus, Britain, UAE, Qatar, EU and the UN to discuss getting a new maritime corridor for delivering humanitarian aid into Gaza up and running, according to Reuters.
• US is expected to impose new sanctions on two illegal outposts in the occupied West Bank that were used as a base for attacks by extremist Israeli settlers against Palestinian civilians, according to three US officials cited by Axios.
• US CENTCOM said Iranian-backed Houthis fired one anti-ship ballistic missile in the Gulf of Aden although the missile did not impact any vessels and there was no damage reported, while its forces successfully engaged and destroyed four unmanned aerial systems and one surface-to-air missile in Houthi-controlled areas of Yemen.

OTHER

• Taiwan and China authorities both dispatched teams to join a rescue mission after a Chinese fishing boat capsized near Taiwan-controlled Kinmen Islands on Thursday morning, according to Taiwanese press.
• Philippines President Marcos and US Secretary of State Blinken to meet on March 19th to discuss cooperation and security matters, while Marcos vowed to defend maritime rights in the face of a 'more active attempt by China to annex some territories'.
• North Korean leader Kim guided a military demonstration involving a tank unit on Wednesday, according to KCNA.

CRYPTO

• Bitcoin takes a breather after soaring to highs yesterday, and currently holds just shy of USD 73.5k.

APAC TRADE

• APAC stocks were mixed after the indecisive performance stateside amid light catalysts and tech weakness, with participants lacking conviction ahead of next week's central bank bonanza.
• ASX 200 was subdued as losses in financials and tech overshadowed the gains in the commodity-related sectors.
• Nikkei 225 traded indecisively after a slew of BoJ-related source reports suggesting a policy shift next week.
• Hang Seng and Shanghai Comp. were somewhat varied with the Hong Kong benchmark pressured amid tech-related headwinds after the US House approved the bill which threatens to ban TikTok, while the mainland was indecisive with downside initially cushioned after China issued plans to promote trading in consumer goods and equipment upgrades.

NOTABLE ASIA-PAC HEADLINES

• BoJ will discuss whether to end its negative interest rate policy as pay hikes by major companies bring the central bank's 2% price stability target within reach. Furthermore, with more BoJ policymakers embracing the idea, the decision is seen coming down to the results of Japan's annual wage negotiations, to be published by top labour confederation Rengo on Friday, according to Nikkei.
• Japanese Federation of Textile, Chemical, Commerce, Food and General Services Workers' Unions which is the largest industrial union and known as UA Zensen stated that the average pay increase offered by 231 firms reached the biggest on record since 2013 compared with the same period last year.
• Taiwan Central Bank Governor said they are concerned potential electricity price hikes will result in a chain reaction effect on inflation expectations and they will be very prudent about discussions on interest rates this time, while he added that they will not likely cut interest rates before June, according to Reuters.
• Foxconn (2317 TT) sees 2024 revenue to increase significantly Y/Y; sees Q1 revenue to slightly decline Y/Y, sees Q1 revenue for smart consumer electronics to slightly decline Y/Y. Q4 net profit TWD 53.14bln (exp. 43.5bln; prev. 43.1bln Q/Q). Sees Q1 revenue for cloud and networking products to be flat Y/Y. Sees Q1 revenue for computing products to be flat Y/Y. Says major growth momentum this year will be AI servers, expects the servers business to grow strongly this year; sees very strong demand in AI from clients. AI server growth in 2023-25 could be stronger than the market average, potentially above 30% or higher annually. Semiconductor revenue will surpass TWD 100bln this year.
• China's Commerce Ministry on the review into Australian wine tariffs says the final ruling will be made in accordance with the investigation procedures.
• Chinese State Planner has issued a draft rules to support high-quality firms to take on medium and long-term foreign debt.

DATA RECAP

• Indian WPI Inflation YY (Feb) 0.2% vs. Exp. 0.25% (Prev. 0.27%); WPI Food Articles YY (Feb) 6.95% (Prev. 6.85%); WPI Mfg Inflation (Feb) -1.27% (Prev. -1.13%); WPI Fuel YY (Feb) -1.59% (Prev. -0.51%); WPI Food Index (Feb) 4.09% (Prev. 3.79%)