• European bourses are mixed, though have tilted lower as the session progressed; US equity futures modestly softer
• DXY is flat, EUR benefits from strong EZ GDP metrics, USD/JPY firmer and just shy of 157.00
• Bonds are lower, dragged down by French/German and finally EZ figures
• Crude is incrementally firmer as Gaza peace talks continue, XAU at session lows and base metals in the red
• Looking ahead, US Employment Cost Index, Chicago PMI, Consumer Confidence, RBNZ FSR. Earnings from Amazon, McDonald's, Advanced Micro Devices, Eli Lilly, Mondelez, Air Products and Chemicals, Coca-Cola, 3M, PayPal, Marathon & Starbucks.

EUROPEAN TRADE

EQUITIES

• European bourses, Stoxx600 (-0.3%) are mixed, with a slight negative bias. Indices initially opened around flat, though tilted lower as the morning progressed, with little driving the shift in sentiment.
• European sectors hold little bias, with the breadth of the market fairly narrow, with the exception of Autos, dragged down by poor results from Mercedes (-3.4%), Stellantis (-2.4%) and Volkswagen (-2.1%). Real Estate tops the pile, propped up by post-earning gains in Vonovia (+5.5%).
• US Equity Futures (ES -0.2%, NQ -0.2%, RTY -0.3%) are modestly softer, in fitting with the broader price action seen in European trade. Earnings include: McDonald's, AMD, Amazon and Starbucks.
• Click here and here for the sessions European pre-market equity newsflow, including notable earnings/updates from: Mercedes, Stellantis, Volkswagen, HSBC and more.
• Click here for more details.

FX

• USD is attempting to claw back some of yesterday's JPY-induced losses which sent the index down to a low of 105.46. For now, the DXY has topped out at 105.96 and unable to reclaim 106 status, 106.18 was the high from yesterday. Recent EUR strength in the wake of the EZ data has led the index back down to the unchanged mark.
• EUR is slightly firmer vs. the broadly flat USD in the wake of a slew of EZ data with EUR being propped up by firmer than expected growth metrics. Inflation data was in-line on a headline basis and mixed from a core perspective.
• JPY is softer vs. the USD after yesterday's wild (touted intervention led) session which saw USD/JPY swing from a 160.20 peak to a 154.51 low; currently trades towards the top end of a 156.08-99 range.
• Antipodeans are giving back yesterday's gains and then some as the USD regains some poise. AUD/USD had advanced to a peak of 0.6586 yesterday (highest since April 12th) before pulling back as low as 0.6514 with soft retail sales also acting as a drag.
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• Click here for OpEx for today's NY Cut

FIXED INCOME

• Bunds began on the backfoot after hotter than expected French inflation and a sticky Services metric, with additional pressure coming from better-than-forecast GDP prints by France & Germany ahead of the EZ figures. EZ HICP headline Y/Y was in-line with the core metrics mixed against expected, which led to a hawkish reaction; Bunds currently sit at session lows around 130.40 given the strong GDP numbers and potentially mixed core.
• USTs are moving in tandem with EGBs which leaves the benchmark a touch softer but some way from Monday's 107-18+ base. Specifics light thus far into Wednesday's FOMC and Quarterly Refunding.
• Gilts are once again following EGB/UST impetus. A narrative that is unlikely to change significantly in the near-term given a sparse UK docket before next week's BoE; though, we are attentive to anything from the EZ/US, particularly around the Fed, which provides insight into the Central Bank divergence narrative.
• UK sells GBP 4bln 4.125% 2029 Gilt: b/c 3.21x, average yield 4.251%, tail 0.8bps.
• Click here for more details.

COMMODITIES

• Crude futures are choppy and now in modest positive territory after earlier subdued trade. Prices are on standby ahead of key macro risk events including the FOMC and US jobs data on Friday; Brent July similarly found an intraday base at USD 86.64/bbl.
• Softer trade across precious metals amid yesterday's geopolitical unwind coupled with a rebound in the Dollar today. Spot silver sits as the laggard after yesterday's outperformance; XAU fell under yesterday's low (USD 2,319.84/oz) to a current base at USD 2,310.96/oz.
• Losses seen across base metals amid the aforementioned Dollar rebound coupled with a pullback in sentiment. 3M LME copper topped USD 10,200/t earlier to reach a USD 10,217.00/t intraday peak.
• Click here for more details.

NOTABLE EUROPEAN HEADLINES

• ECB's Knot said he is increasingly confident inflation is falling towards the 2% target but the ECB must be cautious beyond a June rate cut.

DATA RECAP

• EU HICP-X F&E Flash YY (Apr) 2.8% vs. Exp. 2.9% (Prev. 3.1%); HICP Flash YY (Apr) 2.4% vs. Exp. 2.4% (Prev. 2.4%); HICP-X F, E, A, T Flash MM (Apr) 0.7% vs. Exp. 0.80% (Prev. 1.10%); HICP-X F,E,A&T Flash YY (Apr) 2.7% vs. Exp. 2.7% (Prev. 2.9%)
• EU GDP Flash Prelim QQ (Q1) 0.3% vs. Exp. 0.2%; GDP Flash Prelim YY (Q1) 0.4% vs. Exp. 0.2% (Prev. 0.1%)
• German Retail Sales MM Real (Mar) 1.8% vs. Exp. 1.1% (Prev. -1.9%); YY Real (Mar) 0.3% (Prev. -2.7%); Import Prices YY (Mar) -3.6% vs. Exp. -3.8% (Prev. -4.9%); MM (Mar) 0.4% vs. Exp. 0.2% (Prev. -0.2%); GDP Flash YY NSA (Q1) -0.9% vs. Exp. -0.8% (Prev. -0.4%); GDP Flash QQ SA (Q1) 0.2% vs. Exp. 0.1% (Prev. -0.3%)
• German Unemployment Chg SA (Apr) 10.0k vs. Exp. 9.0k (Prev. 4.0k); Unemployment Rate SA (Apr) 5.9% vs. Exp. 5.9% (Prev. 5.9%); Unemployment Total SA (Apr) 2.732M (Prev. 2.719M); Unemployment Total NSA (Apr) 2.75M (Prev. 2.769M)
• French GDP Preliminary QQ (Q1) 0.2% vs. Exp. 0.1% (Prev. 0.1%); CPI Prelim MM NSA (Apr) 0.5% vs. Exp. 0.5% (Prev. 0.2%); CPI (EU Norm) Prelim YY (Apr) 2.4% vs. Exp. 2.2% (Prev. 2.4%); Producer Prices MM (Mar) -0.2% (Prev. -1.7%); CPI Prelim YY NSA (Apr) 2.2% vs. Exp. 2.2% (Prev. 2.3%)
• UK BRC Shop Price Index YY (Apr) 0.8% (Prev. 1.3%)
• UK Lloyds Business Barometer (Apr) 42 (Prev. 42)
• UK Mortgage Approvals (Mar) 61.325k vs. Exp. 61.5k (Prev. 60.383k, Rev. 60.497k); Mortgage Lending (Mar) 0.26B GB vs. Exp. 1.5B GB (Prev. 1.51B GB, Rev. 1.646B GB); BOE Consumer Credit (Mar) 1.577B GB vs. Exp. 1.5B GB (Prev. 1.378B GB, Rev. 1.429B GB); M4 Money Supply (Mar) 0.7% (Prev. 0.5%, Rev. 0.6%)
• Swiss KOF Indicator (Apr) 101.8 vs. Exp. 102.0 (Prev. 101.5, Rev. 100.4)

EARNINGS

• NXP Semiconductors NV (NXPI) Shares climb 3.4% pre-market on top- and bottom-line beats, and guidance. Q1 adj. EPS 3.24 (exp. 3.16), Q1 revenue USD 3.13bln (exp. 3.13bln). Q1 gross margin 58.2% (exp. 58%), Q1 operating margin 34.5% (exp. 34%). Auto revenue -1% Y/Y, Industrial/IoT +14%, Mobile +34%, Communications Infrastructure -25% Y/Y. Exec said early views into H2 underpin a cautious optimism. Sees Q2 revenue of 3.125bln (exp. 3.11bln), Q2 EPS of 3.20 (exp. 3.12).
• Paramount Global (PARA) Q1 Adj. EPS 0.62 (exp. 0.36), Q1 revenue USD 7.69bln (exp. 7.73bln); Q1 Paramount+ net additions +3.7mln (exp. +2.2mln); Q1 EBITDA USD 0.987bln (exp. 0.756bln), Q1 FCF USD 209mln (exp. -62mln). President and CEO Bob Bakish stepped down, as many press reports suggested he would do over the weekend. Establishes a management committee; George Cheeks, Chris McCarthy, and Brian Robbins will work with CFO Naveen Chopra to accelerate growth, streamline operations, and optimise streaming strategy; Chair Shari Redstone (of National Amusements) has expressed confidence in their leadership.
• Adidas (ADS GY) Q1 (EUR): Revenue 5.45bln (exp. 5.46bln, prev. 5.27bln Y/Y). Currency-neutral sales +8% driven by growth in all regions except in North America, where revenue fell by 4% to 1.12bln. Europe: +14%.
• Stellantis (STLAM IM/STLAP FP) Q1 (EUR): Revenue 41.7bln (exp. 43.92bln), -12% Y/Y due to "volume, mix and foreign exchange headwinds, partly offset by firm net pricing". Click here for more detail.
• Volkswagen (VOW3 GY) Q1 (EUR): Operating Profit 4.59bln (exp. 4.51bln). Revenue 75.5bln (exp. 74.193bln). Operating Margin 6.1% (prev. 7.5% Y/Y); outlook confirmed. Click here for more details.
• Mercedes-Benz Group (MBG GY) Q1 (EUR): Adj. EBIT 3.60bln (exp. 3.71bln). Sales 35.87bln (exp. 35.58bln). Cars Adj. EBIT 2.32bln (2.57bln); Outlook maintained. Click here for more details.
• HSBC (5 HK/ HSBA LN) Q1 (USD): Revenue 20.75bln (exp. 21.03bln). Pretax profit 12.65bln (exp. 12.61bln). CET1 ratio 15.2% (exp. 15.4%). CEO Quinn is unexpectedly retiring. Click here for more details.

NOTABLE US HEADLINES

• Caterpillar (CAT) Caterpillar announced a voluntary delisting from Euronext Paris and the Six Swiss Exchange; cites low trading volumes and high administrative costs. CAT will solely trade on NYSE thereafter. (Newswires)
• Tesla (TSLA) CEO Musk is reportedly planning more layoffs as two senior executives depart, while roughly 500 people will be laid off in supercharger group, according to The Information. (The Information)
• WSJ's Timiraos article "Fed to Signal It Has Stomach to Keep Rates High for Longer" & "Firmer price pressures could lead longer-term rates to rise as investors continue paring back expectations of cuts"

GEOPOLITICS

MIDDLE EAST

• "IDF finalizes Rafah plans, invasion possible if no deal in 72 hours", according to Times of Israel.
• "Israeli delegation will not head to Cairo until Hamas gives its response, according to Israeli official", according to Walla's Elster.
• Hamas is expected to respond to the exchange deal proposal "tomorrow evening", Al Arabiya reports
• Hamas delegation left Cairo and will return with a written response to the ceasefire proposal, according to Egypt's Al Qahera News.
• An Israeli delegation plans to travel to Cairo to resume ceasefire talks if Hamas agrees to attend, according to NYT.
• Israeli PM Netanyahu asked US President Biden to help prevent the ICC from issuing arrest warrants against Israeli officials, according to Axios.
• Yemen's Houthis said they targeted the 'Cyclades' vessel and two US destroyers in the Red Sea, while it also targeted 'Israeli ship MSC Orion' in the Indian Ocean, according to Reuters. US CENTCOM later confirmed that Iranian-backed Houthis fired three anti-ship ballistic missiles and three UAVs from Yemen into the Red Sea towards MV Cyclades but added there were no injuries or damages reported by US, coalition or merchant vessels.

OTHER

• Chinese Coast Guard expelled a Philippines Coast Guard ship and vessels from waters adjacent to the Scarborough Shoal.
• Shanghai Maritime Safety Administration said military activities will be carried out in a part of the East China Sea from 07:00 AM on May 1st to 09:00 AM on May 9th local time and vessels unrelated to the activity are prohibited from entering the area.

CRYPTO

• Bitcoin sinks under USD 62k, with Ethereum also under hefty selling pressure now down below USD 3.1k.

APAC TRADE

• APAC stocks were mostly higher but with gains capped heading into month-end amid a slew of data and earnings.
• ASX 200 was led by strength in the mining sector but with upside limited after a surprise contraction in Retail Sales.
• Nikkei 225 outperformed on return from the long weekend and as participants digested a slew of earnings releases.
• Hang Seng and Shanghai Comp. were varied in which the former made another brief foray into bull market territory, while the mainland lagged ahead of the Labour Day holidays and as participants reflected on mixed Chinese PMI data in which the official NBS Manufacturing and Caixin Manufacturing PMIs topped forecasts but Non-Manufacturing PMI disappointed despite remaining in expansion territory.

NOTABLE ASIA-PAC HEADLINES

• PBoC injected CNY 440bln via 7-day reverse repos with the rate at 1.80%.
• PBoC reportedly wants to halt the bond-buying spree and not join in on it, with the central bank concerned about bond market bubbles and economic gloom, according to Bloomberg.
• Japan's top currency diplomat Kanda said no comment on FX intervention and noted that a weak yen has positive and negative impacts, while he added the currency has a bigger impact on import prices now and that excessive FX moves could impact daily lives. Kanda said they need to take appropriate actions on FX and reiterated they are ready to take action 24 hours a day and will continue taking appropriate actions when needed.
• BoJ keep monthly bond purchases plan for May unchanged from April
• China's Communist Party Central Committee is to hold a 3rd plenum during July, via State Media; Politburo undertook a meeting on Tuesday. Click here for full details.
• Former Japanese top FX diplomat Furusawa says it is highly likely the Japanese government intervened on Monday to prop up the JPY

APAC DATA RECAP

• Chinese NBS Manufacturing PMI (Apr) 50.4 vs. Exp. 50.3 (Prev. 50.8); Non-Manufacturing PMI (Apr) 51.2 vs. Exp. 52.3 (Prev. 53.0)
• Chinese Composite PMI (Apr) 51.7 (Prev. 52.7)
• Chinese Caixin Manufacturing PMI Final (Apr) 51.4 vs. Exp. 51.0 (Prev. 51.1)
• Japanese Industrial Production MM (Mar P) 3.8% vs. Exp. 3.5% (Prev. -0.6%)
• Japanese Retail Sales YY (Mar) 1.2% vs. Exp. 2.2% (Prev. 4.6%, Rev. 4.7%)
• Australian Retail Sales MM Final (Mar) -0.4% vs. Exp. 0.2% (Prev. 0.3%)