• European bourses are mixed though have been edging higher, taking impetus from strength in US equity futures
• Dollar is weaker, NZD benefits from a softer AUD/NZD cross
• Bonds incrementally firmer and Gilts outperform after BoE’s Mann
• Crude is modestly softer, XAU higher and near session highs
• Looking ahead, US Durable Goods, Philly Fed Non-manufacturing Business Outlook, Richmond Fed Survey, BoC’s Rogers and ECB’s Lane, Supply from the US

EUROPEAN TRADE

EQUITIES

• European equities, Stoxx600 (+0.1%), began the session without direction, though caught a bid alongside strength in US equity futures; however, the FTSE 100 (-0.1%) lags, given the underperformance in the Basic Resources sector.
• European sectors hold a negative tilt; Banks is found at the top of the pile, propped up by BNP Paribas (+1.9%), which benefits from a broker upgrade. Basic Resources is hampered by broader weakness in base metals.
• US equity futures (ES +0.3%, NQ +0.4%, RTY +0.4%) are entirely in the green, attempting to pare back some of the weakness seen in the prior session.
• Click here and here for the sessions European pre-market equity newsflow, including earnings.
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FX

• DXY is marginally softer but holding just above the 104 mark with not much in the way of fresh newsflow. If 104.00 is breached, Friday's low sits at 103.92.
• EUR is trivially firmer vs. the USD with a high print of 1.0853 after moving above 200 and 50DMAs at 1.0836 and 1.0839 respectively.
• GBP is edging higher vs. the USD but yet to test last Friday's high at 1.2675 or 50DMA at 1.2679. Comments from BoE's Mann reasserts her hawkish position on the MPC despite voting unchanged last week.
• JPY is a touch firmer but the USD but only marginally so as Japanese officials continue to try and defend the Yen.
• Antipodeans are both a touch firmer vs. the USD but NZD more so; newsflow very quiet. AUD/USD currently eyeing its 50 and 200DMAs which both sit at 0.6550.
• PBoC set USD/CNY mid-point at 7.0943 vs exp. 7.2037 (prev. 7.0996).
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FIXED INCOME

• USTs are incrementally firmer but with action more contained than in Europe ahead of a handful of data points before the 5yr auction. No concession ahead of the auction yet, and within a 6 tick range between Monday's 110-15 to 110-30 parameters.
• Bunds are modestly firmer as EGBs unwind some of the slight pressure seen on Monday, sparked by Bostic/2yr supply concession; usual hawkish-leaning rhetoric from ECB's Muller and a less-downbeat German GfK spurred no real reaction; currently higher by around 22 ticks at 132.84.
• Gilts initially conformed to the broader positive sentiment in the fixed complex, subsequent hawkish commentary from BoE's Mann did little to cap the upside. The outspoken hawk mentioned that rates can be held at the current level for "quite some time"; Gilts at a fresh 99.70 peak, seemingly driven by Mann's remarks underscoring her shift to be in-line with the majority but on the hawkish end of this. Little reaction seen following the UK auction.
• UK sell GBP 3bln 4.50% 2028 Gilt: b/c 3.48x (prev. 3.34x), average yield 3.928% (prev. 4.095%) & tail 0.3bps (prev. 0.4bps)
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COMMODITIES

• Crude price action has been contained and near recent highs despite a quiet European morning, following several geopolitical headlines over the weekend; Brent currently around USD 86.60/bbl.
• Relatively uneventful trade in precious metals thus far in European hours with the Dollar contained and news flow light in a holiday-thinned week ahead of month end. XAU caught a bid in recent trade and now at session highs around USD 2190/oz.
• Base metals are mixed and within confined ranges on Monday amid a lack of macro narrative to drive price action.
• Head of Venezuela's opposition coalition said it was not possible to register a candidate for the presidential election.
• Brazilian miner Vale said it was selected by the US government to begin negotiations for financing related to an iron ore briquette plant and it will negotiate for an award of up to USD 282.9mln for the US project.
• Japan's Eneos says shut Kawasaki No.3 CDU (77k BPD) for maintenance on March 22.
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NOTABLE EUROPEAN HEADLINES

• BoE's Mann says she switched to an unchanged rate vote based on consumer behaviour, labour demand & supply and the financial market curve. Can hold the bank rate for quite some time. Markets are perhaps a bit too complacent when it comes to how long the BoE can hold rates. Markets are pricing in too many rate cuts. In some ways does not have to cut because the market already is. Avoids giving a prediction on the number of 2024 rate cuts.
• ECB's Muller says data can confirm inflation trend for ECB's June meeting, ECB is closer to the point of cutting rates.
• UK MPs warned that pension rules risk 'finishing off' the remaining defined-benefit plans and noted concerns that the new funding regime would require schemes to de-risk inappropriately, according to FT.
• Kantar UK Supermarket update (Mar): Grocery price inflation eased to 4.5% over the four weeks to 17 March, the lowest level since February 2022. Take-home grocery sales rose by 4.6% over the four weeks to 17 March, with an early Easter boosting sales of seasonal treats in the first three months of 2024.
• Sweden's NIER sees 2024 GDP +0.8% (prev. 1.0%), sees 2024 headline inflation 1.9% (prev. 1.7%), End-2024 repo rate 3.00% (prev. 3.30%); Expects Riksbank to start cutting rates in June.

DATA RECAP

• Spanish GDP Final QQ (Q4) 0.6% vs. Exp. 0.6% (Prev. 0.6%); GDP YY (Q4) 2.0% vs. Exp. 2.0% (Prev. 2.0%).
• Swedish Overall Sentiment (Mar) 93.1 (Prev. 90.5); Manufacturing Confidence (Mar) 98.7 (Prev. 98.4); Total Industry Sentiment (Mar) 94.4 (Prev. 92.0); Consumer Confidence SA (Mar) 87.5 (Prev. 82.7)

NOTABLE US HEADLINES

• Dell Technologies (DELL) - Says despite near-term challenges, expects demand environment to improve in fiscal 2025 enabling net revenue growth for full fiscal year. Expect input costs to rise in fiscal 2025, principally driven by anticipated inflation for component costs as year progresses. Anticipates pricing environment will be more competitive in FY25, which it began to observe during H2 of fiscal 2024. Forecasts continued reduction of other businesses’ net revenue in 2025 as result of change in commercial relationship with VMware. Plans to mitigate impact of dynamics of input cost trends through continued disciplined cost management.
• McDonalds (MCD) to sell Krispy Kreme (DNUT) in their US restaurants DNUT shares +14.5% in pre-market
• UPS (UPS) announces strategic initiatives and three-year financial targets; Sees 2026 consolidated revenue ranging from approx. USD 108bln-114bln

GEOPOLITICS

MIDDLE-EAST

• US Secretary of State Blinken underscored to Israel's Defence Minister Gallant that alternatives exist to a ground invasion of Rafah that would both better ensure Israel's security and protect Palestinian civilians, while it was also reported that White House's Sullivan had a constructive discussion with Israel's Gallant.
• "Israeli sources: The Israeli delegation leaves Doha after Hamas rejected the US proposal approved by Israel", according to Sky News Arabia. Subsequent reports said, Gaza ceasefire and hostage release talks continue and Mossad officials remain in Doha, according to Reuters sources; Mossad team is returning to Israel for consultations on developments

OTHER

• New Zealand Foreign Minister Peters confirmed that New Zealand’s concerns about cyber activity have been conveyed directly to the Chinese government and he directed senior foreign ministry officials to speak to the Chinese ambassador, according to Reuters.

CRYPTO

• Bitcoin holds above USD 71k, and Ethereum now back above USD 3.5k.
• The Nasdaq-listed spot bitcoin (BTC) ETFs registered inflows totalling USD 15.4mln on Monday, ending a five-day run of outflows, according to provisional data published by investment firm Farside cited by CoinDesk.

APAC TRADE

• APAC stocks were choppy after a similarly subdued handover from Wall St owing to early tech headwinds and ahead of month-end.
• ASX 200 declined as tech losses clouded over the outperformance in the energy sector, while weaker Consumer Confidence added to the glum mood.
• Nikkei 225 swung between gains and losses amid an indecisive currency and inconclusive Services PPI data.
• Hang Seng and Shanghai Comp. saw two-way price action with earnings releases in focus, while the mainland failed to sustain early optimism from the PBoC's more forceful liquidity operation.

NOTABLE ASIA-PAC HEADLINES

• Chinese Vice President Han said it is important to promote economic globalisation and smooth global industrial and supply chains, while they will accelerate the development of new productive forces and provide stability and security for the global economy.
• Japanese Finance Minister Suzuki said it is important for currencies to move in a stable manner reflecting fundamentals and rapid FX moves are undesirable, while he won't rule out any steps to respond to disorderly FX moves.
• Japan's Business Lobby Chief says USD/JPY beyond 150.00 is excessive, according to Kyodo (USD/JPY currently at 151.32).
• China's Deputy Head FX regulator says volatility in FDI inflows is normal.
• Shipments of smartphones within China -31.3% Y/Y at 14mln (prev. 29.5mln M/M) handsets in Feb, via CAICT.
• China has initiated WTO dispute settlement proceedings against the US over interests in the EV industry.

DATA RECAP

• Japanese Services PPI (Feb) 2.10% (Prev. 2.10%)
• Australian Westpac Consumer Confidence Index (Mar) 84.4 (Prev. 86.0); Westpac Consumer Confidence MM (Mar) -1.8% (Prev. 6.2%)