• APAC stocks traded mixed as markets digested the first of this week's central bank announcements.
• BoJ carried out a widely telegraphed and dovish exit from NIRP, YCC and ETF/J-REIT buying.
• RBA kept rates unchanged whilst providing a dovish tweak to its guidance on rates.
• JPY and AUD lag peers post-rate decisions with USD/JPY back on a 150 handle.
• European equity futures indicate a slightly lower open with the Euro Stoxx 50 future -0.3% after the cash market closed down 0.1% on Monday.
• Looking ahead, highlights include EZ Labour Costs, German ZEW, Canadian CPI, Comments from BoJ Governor Ueda & ECB’s de Guindos, Supply from UK & US.

US TRADE

EQUITIES

• US stocks were mostly positive in a relatively quiet newsflow session from a macro perspective with the Nasdaq leading the charge ahead of the Nvidia (NVDA) GTC event after the close, while there was additional bullish momentum behind big tech stocks after Bloomberg reported Apple (AAPL) is to integrate Google's (GOOGL) Gemini AI app. The major US indices finished in the green, while the Russell 2000 small cap index was hit and Treasuries continued to tumble with little catalysts ahead of the BoJ and FOMC.
• SPX +0.63% at 5,149, NDX +0.99% at 17,985, DJI +0.20% at 38,790, RUT -0.72% at 2,025.
• Click here for a detailed summary.

NOTABLE HEADLINES

• US Congressional leaders and the White House reached an agreement to avert a partial shutdown and fund the government through September 30th, according to people familiar with the negotiations cited by Bloomberg.

APAC TRADE

EQUITIES

• APAC stocks traded mixed as markets digested the first of this week's central bank announcements.
• ASX 200 finished with mild gains after a lack of hawkish surprises at the RBA policy announcement in which it kept rates unchanged and reiterated that the Board remains resolute in its determination, while there was also a slight tweak in its language as guidance around further tightening was softened.
• Nikkei 225 was underpinned after a widely telegraphed and dovish exit from NIRP, YCC and ETF/J-REIT buying which a Nikkei source report had flagged, while the central bank also announced its monthly bond purchase intentions and said it will make nimble responses with JGB purchases and could increase the amount of JGB buying or conduct fixed-rate operations in the event of a rapid rise in yields.
• Hang Seng and Shanghai Comp. lagged with the Hong Kong benchmark dragged lower by weakness in tech stocks as the EU mulls joining the US in reviewing risks of Chinese legacy chips and is flagging potential risks to national security and supply chains.
• US equity futures traded sideways as markets await tomorrow's FOMC and after NVIDIA's GTC conference failed to ignite a rally.
• European equity futures indicate a slightly lower open with the Euro Stoxx 50 future -0.3% after the cash market closed down 0.1% on Monday.

FX

• DXY was underpinned amid gains against the JPY and AUD following the BoJ and RBA rate decisions.
• EUR/USD languished at the prior day's lows after recently slipping from a brief incursion above 1.0900.
• GBP/USD was subdued amid weakness in cyclical peers and ahead of upcoming pertinent catalysts.
• USD/JPY strengthened following a dovish and widely-telegraphed BoJ exit from NIRP, YCC and ETF buying.
• Antipodeans declined with AUD/USD pressured after the lack of hawkish surprises from the RBA.
• PBoC set USD/CNY mid-point at 7.0985 vs exp. 7.2056 (prev. 7.0943).

FIXED INCOME

• 10-year UST futures nursed some of the prior day's losses and attempted to return above the 110.00 level.
• Bund futures are off yesterday's lows although remain beneath the 132.00 level ahead of German ZEW data.
• 10-year JGB futures edged higher heading into the BoJ announcement and held on to the gains despite the central bank's decision to hike rates for the first time since 2007 and abandon YCC, as it also announced to continue roughly the current amount of JGB buying.

COMMODITIES

• Crude futures were little changed after rallying yesterday to fresh multi-month highs amid the ongoing geopolitical climate and recent strong Chinese activity data.
• Spot gold was rangebound with little data to digest from the US as participants await the FOMC mid-week.
• Copper futures traded cautiously amid the mixed risk appetite and as participants digested the first of this week's central bank policy decisions.

CRYPTO

• Bitcoin retreated overnight and tested the USD 65,000 level to the downside where a floor held.

NOTABLE ASIA-PAC HEADLINES

• BoJ changed its monetary policy framework in which it ended negative interest rate policy and abandoned YCC, while it will guide the overnight call rate in the range of 0%-0.1% and apply 0.1% interest to all excess reserves parked at the central bank. BoJ also announced to end ETF and J-REIT purchases, as well as gradually reduce the amount of purchases of commercial paper and corporate bonds whereby it will discontinue purchases of CP and corporate bonds in about one year. However, it stated that it will continue roughly the current amount of JGB buying and it expects to maintain an accommodative monetary environment for the time being. Furthermore, the BoJ announced its planned bond purchases and stated that in case of a rapid rise in long-term rates, it will make nimble responses with JGB purchases and could increase the amount of JGB purchases or conduct fixed-rate purchase operations of JGBs, while it will provide loans under Fund Provisioning Measure to stimulate bank lending with an interest rate of 0.1% and a 1-year duration.
• RBA kept its Cash Rate Target unchanged at 4.35%, as expected, while it reiterated that the Board remains resolute in its determination to return inflation to the target and inflation continues to moderate but remains high. RBA stated the board is not ruling anything in or out on interest rates (prev. a further increase in interest rates cannot be ruled out) and data is consistent with continuing excess demand in the economy and strong domestic cost pressures, both for labour and non-labour inputs. Furthermore, it noted that higher interest rates are working to establish a more sustainable balance between aggregate demand and supply in the economy and the board expects that it will be some time yet before inflation is sustainably in the target range.
• RBA Governor Bullock said they are making progress in the fight against inflation but reiterated inflation remains high and noted recent data suggests they are on the right track and they are keeping a keen eye on employment numbers. Bullock stated that risks to the outlook are finely balanced and war isn't won yet on inflation, while she noted the change of statement language is in response to data.
• Chinese Foreign Minister Wang Yi said during a visit to New Zealand that China is ready to work with New Zealand to implement an upgraded version of the China-New Zealand FTA and the two sides should launch negotiations on a negative list of service trade as soon as possible to push bilateral cooperation to a new level. Furthermore, he stated that China-New Zealand relations maintain a leading position among China's relations with developed countries, while it was also reported that New Zealand PM Luxon intends to visit China in the coming months following this week's meetings with China's Foreign Minister.
• US Senators will host a classified briefing on Wednesday with Biden admin national security officials regarding the threats posed by TikTok, according to Reuters citing a congressional aide.

GEOPOLITICS

MIDDLE EAST

• Israeli PM Netanyahu said he spoke with Biden about achieving goals in the Gaza war while providing needed humanitarian aid, while it was also reported that President Biden reiterated 'deep concerns' about Israel conducting ground operations in Rafah during the call with Israeli PM Netanyahu.
• Israeli officials said PM Netanyahu narrowed the mandate of the negotiating delegation and set red lines for what they can accept, according to Axios.
• White House's Sullivan said a deal for a ceasefire has been more elusive than what the US had hoped and more pressure needs to be applied to Hamas to end the conflict, while he believes a ceasefire deal is possible.
• US military said it destroyed seven anti-ship missiles and three unmanned aerial vehicles in Houthi-controlled areas of Yemen, while Houthi media reported six US-British raids near Hodeidah, Yemen, according to Al Arabiya.
• Syrian army ground defences confronted targets in the sky of Damascus and state media reported that Israeli airstrikes were targeting the countryside of Syria's Damascus.

OTHER

• EU Foreign Ministers announced sanctions against individuals and institutions in relation to Navalny's death. It was later reported that the EU drafted a law to send Russian Central Bank profits to Ukraine, while the plan could raise EUR 3bln/year for Ukraine and the EU aims to get the funds to Ukraine as soon as July, according to Bloomberg.
• US and Japan collaborate to warn against nuclear weapons in space.

EU/UK

NOTABLE HEADLINES

• ECB's Centeno said cutting rates may help prevent a recession.