• USTR’s office was reported on Friday to have prepared a framework for staggered reciprocal trade negotiations aimed at streamlining talks with 18 partners on a rolling basis over the next 2 months until the US’s July 8th deadline, according to WSJ.
• US Treasury Secretary Bessent said he had interaction with his Chinese counterpart in Washington last week and thinks the Chinese will see the tariff level as unsustainable and he also thinks there is a path to an agreement with China on tariffs, according to ABC New; US Agriculture Secretary said the US is holding daily conversations with China over tariffs.
• European indices are modestly firmer whilst US futures are incrementally in the red.
• Choppy USD session thus far on spot month end, GBP bid whilst CHF lags.
• Relatively contained start to the week for USTs, EGBs lag slightly into supply.
• Crude is lacklustre despite US-Iran talks, Gold continues to pullback.
• Looking ahead, US Dallas Fed Manufacturing Business Index, BoC's Market Participants Survey, Speakers including ECB’s Rehn & de Guindos, Supply from the EU, Earnings from Domino's Pizza, Roper, NXP Semiconductors.

TARIFFS/TRADE

• Chinese President Xi and US President Trump have not had a call recently, according to China's Foreign Ministry; says the US and China have not conducted negotiations and consultations on tariffs.
• USTR’s office was reported on Friday to have prepared a framework for staggered reciprocal trade negotiations aimed at streamlining talks with 18 partners on a rolling basis over the next 2 months until the US’s July 8th deadline, according to WSJ.
• US Treasury Secretary Bessent said he had interaction with his Chinese counterpart in Washington last week and thinks the Chinese will see the tariff level as unsustainable and he also thinks there is a path to an agreement with China on tariffs, according to ABC News. It was separately reported that Bessent had met with Japanese Finance Minister Kato on Thursday and held productive discussions across a broad range of bilateral issues including reciprocal trade, while he was said to be encouraged by discussions with South Korean officials that focused on an ‘expanded equilibrium’ which encourages rather than restricts trade.
• US Agriculture Secretary said the US is holding daily conversations with China over tariffs.
• China has reportedly quietly exempted some US-made products from tariffs with Beijing said to have been canvassing companies and waiving duties on US goods in sectors where there is a lack of alternatives, according to WSJ.
• Shein is said to have raised US prices on some items by as much as 377% ahead of tariff increases, according to Bloomberg.
• Fox’s Gasparino posted on X that the Trump Administration would like to roll out trade deals this week, at least the outlines that have been agreed upon, citing sources close to the matter.” However, he also noted there are a lot of moving targets that could delay matters, while the deals on deck include India, Japan and maybe South Korea and Australia, although the White House spokesperson didn’t respond to a request for comment.
• Pershing Square CEO Ackman posted on X that the US could choose to unilaterally pause China tariffs to better facilitate US companies transitioning supply chains out of China, while he believes the US and China are incentivised to take tariffs down to more reasonable levels of 10%-20% as quickly as possible.
• South Korean's Vice Industry Minister says no chance of reaching an agreement on a trade package with the US before the June 3rd snap elections.

EUROPEAN TRADE

EQUITIES

• European bourses (STOXX 600 +0.4%) opened modestly firmer across the board, and have traded rangebound throughout the morning thus far given limited fresh macro drivers.
• European sectors hold a strong positive bias, but with the breadth of the market fairly narrow. Food Beverage & Tobacco takes the top spot, joined closely by Autos. Real Estate sits at the foot of the pile, given the relatively higher yield environment today.
• US equity futures (ES -0.2% NQ -0.2% RTY -0.4%) are modestly lower across the board, but with some underperformance in the RTY.
• Click for the sessions European pre-market equity newsflow
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FX

• A choppy session for the Dollar, but ultimately flat on spot month end in what has been the quiet before the storm in terms of news flow thus far, with the rest of the week packed with risk events including the first look at Q1 USD GDP and the US labour market report. There was minimal major and new tariff news, but US consumers may soon feel the impact (e.g. Shein raising prices by up to 377%, logistics slowdown in air freight and imports). DXY currently resides in a relatively tight 99.46-99.84 range.
• EUR is subdued, albeit marginally, against the backdrop of a string of relatively dovish ECB rhetoric, whereby policymakers are becoming increasingly confident about a rate cut in June. EUR/USD resides in a 1.1330-80 range.
• Flat trade for the JPY amidst a lack of major updates over the weekend. US Treasury Secretary Bessent met with Japanese Finance Minister Kato on Thursday and held productive discussions across a broad range of bilateral issues including reciprocal trade. USD/JPY resides in a 143.29-143.90 range.
• GBP is slightly firmer in a quiet session thus far to start the week. In terms of UK trade headlines, UK Chancellor Reeves said she met with US Treasury Secretary Bessent, says the goal is reaching an agreement that is in both their national interests. GBP/USD trades in a 1.3280-1.3346 range.
• Antipodeans are lower intraday amid the cautious risk tone alongside ongoing tariff uncertainty between the world's two largest economies, whilst domestic updates have been light. AUD/USD dipped under Friday's trough in a 0.6369-0.6406 intraday range.
• PBoC set USD/CNY mid-point at 7.2043 vs exp. 7.2898 (Prev. 7.2066).
• Click for a detailed summary
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FIXED INCOME

• USTs are contained, but do hold a downward bias. Newsflow on the tariff/trade front included indications of a potential path to a US-China agreement, however, specifics have been light with major catalysts ex-geopols a touch light. Amidst this, USTs find themselves in a thin 111-14+ to 111-22+ band. Ahead, the docket is focussed on the Dallas Fed Manufacturing Business Index before the Treasury Financing Estimates ahead of Wednesday’s Quarterly Refunding.
• Bunds are in-fitting with USTs and as such are also in a relatively modest 131.32 to 131.76 band. Developments for the bloc, ex-earnings, have been light. The slight underperformance seen in EGBs vs USTs/Gilts is likely a function of some concession into upcoming EZ supply where over EUR 5bln is expected to be sold across three lines. On the ECB front, Reuters reported that officials are increasingly confident on a June move, though there is little/no appetite for a big move.
• Gilts are essentially unchanged in a very narrow 93.10 to 93.33 band. As above, updates light as we await further details on the meeting between US Treasury Secretary Bessent and BoE Governor Bailey, a discussion on regulation and financial markets which was reported as being “good”.
• Click for a detailed summary

COMMODITIES

• Crude benchmarks have been trading very choppy on either side of the unchanged mark, as traders digest the latest US-Iran talks and Ukraine peace talks. On the former, talks are reportedly progressing, but there is still a lot of work to do. WTI and Brent trade at USD and 63.50 and 65.70/bbl respectively.
• Gold is softer, and underperforms within the metals space in a continuation of the sell-off from record highs, printed Tuesday at USD 3500/oz, currently, the yellow metal is trading either side of the USD 3,280/oz mark, with eyes on the USD 3300/oz mark, a level which it retreated from overnight.
• Base metals are mixed, given the flimsy risk tone and after China's press briefing on policy underwhelmed. 3M LME Copper sits in a busy USD 9,316.15-9,402.85/t range.
• China is stockpiling oil amid Trump tariff shocks impacting crude prices as imports of crude to China surged in March and continued to accelerate in April with imports at nearly 11mln BPD vs 8.9mln BPD in January, according to FT citing Kpler data.
• China Q1 gold consumption fell around 6% Y/Y to 290.5 metric tons and gold production rose 1.5% Y/Y to 87.2 metric tons, according to the China Gold Association.
• Click for a detailed summary

NOTABLE DATA RECAP

• Spanish Retail Sales YY (Mar) 3.6% (Prev. 3.6%)
• Spanish Unemployment Rate (Q1) 11.36% (Prev. 10.61%)

NOTABLE EUROPEAN HEADLINES

• BoE Governor Bailey and US Treasury Secretary Bessent held discussions on financial markets and the regulatory environment.
• ECB’s Centeno said uncertainty is dominating economic analysis which was largely being caused by US trade policy.
• ECB’s Kazaks urged cautious steps and said the ECB should only lower interest rates into accommodative territory if the growth outlook continues to deteriorate much further, according to Bloomberg.
• ECB's Knot said the ECB June meeting is going to be really complicated, according to European press cited by Bloomberg.
• ECB’s Simkus said the ECB may have to cut rates a couple of more times as US tariffs weigh on economic growth and as inflation continues to slow, according to Bloomberg.
• ECB's Villeroy says he "does note see any extra inflation for Europe; says we still have margin for rate cuts in Europe".
• ECB policymakers reportedly are becoming increasingly confident about a rate cut in June although there is little to no appetite for a big move, according to six sources cited by Reuters. It was also reported that the central bank established a task force to simplify banking regulation.
• SNB adjusts the remuneration of sight deposits; lowers the threshold factor to 18 (prev. 20), effective June 1st.

NOTABLE US HEADLINES

• US President Trump posted on Truth that “When Tariffs cut in, many people’s Income Taxes will be substantially reduced, maybe even completely eliminated. Focus will be on people making less than $200,000 a year. Also, massive numbers of jobs are already being created, with new plants and factories currently being built or planned. It will be a BONANZA FOR AMERICA!!! THE EXTERNAL REVENUE SERVICE IS HAPPENING!!!”. Trump also posted that “…this is a crucial week to work on “THE ONE, BIG, BEAUTIFUL BILL,” which will contain Massive Tax Cuts, Strong Border Security Measures, Major Military Advancements, Dramatic Deregulation, Powerful Spending Reforms, and more!”
• US President Trump will meet with House Speaker Johnson at 14:00EDT/19:00BST and will be signing executive orders focused on restoring law and order and securing the homeland at 17:00EDT/22:00BST on Monday.

GEOPOLITICS

MIDDLE EAST

• Israel's Defence Minister said Israel conducted an attack on a site in Lebanon’s capital of Beirut which stored precision missiles.
• Qatar’s PM said he saw some progress in Thursday’s Gaza talks.
• Iran’s Foreign Minister Araqchi said the next round of nuclear talks with the US could occur next Saturday with the venue to be decided by Oman, while he added that both sides are showing seriousness and determination. Furthermore, a senior US official said the third round of nuclear talks with Iran were positive and productive with progress made on getting a deal but noted there is still much to do.
• Oman’s Foreign Minister said US-Iran talks will continue with a further high-level meeting provisionally scheduled for May 3rd and core principles, objectives and technical concerns were all addressed in US-Iran talks on Saturday.
• Israeli PM Netanyahu called for the complete dismantling of Iran's nuclear programme, insisting that any deal with Tehran must also address its ballistic missile capabilities, according to AFP News Agency.
• A huge explosion at a key Iranian port killed at least 40 and injured around 800 others. It was separately reported that an Iranian Defence Ministry spokesperson said there was no military material in the port affected by the blast, while - Russia will send several planes to Iran to help extinguish the fire at Iran’s port.

RUSSIA-UKRAINE

• US President Trump met with Ukrainian President Zelensky at the Vatican for 15 minutes which Zelensky’s staff said was constructive, covered a lot of ground and they agreed to meet again, while the White House said the meeting was very productive.
• US President Trump said the meeting with Ukrainian President Zelensky went well and we'll see what happens in the next days, while Trump is very disappointed with Russia and wants Russian President Putin to stop shooting and reach a deal. Furthermore, Trump said the confines of a deal are there and that Zelensky is calmer now and wants to make a deal, while it was separately reported that President Trump said he thinks Ukrainian President Zelensky is ready to give up Crimea, according to Al Arabiya.
• US President Trump said there was no reason for Russian President Putin to be shooting missiles into civilian areas, cities and towns over the last few days which makes him think that Putin doesn’t want to stop the war and is just ‘tapping’ him along, while Trump added too many people are dying and this has to be dealt with differently through banking or secondary sanctions.
• US Secretary of State Rubio said Russia and Ukraine are generally closer to a peace deal than in the last three years and a peace deal needs to happen soon, while he added that the US has options to hold responsible those that don’t want a Ukraine peace deal, according to NBC.
• Russian President Putin confirmed Russia’s readiness to negotiate with Ukraine without preconditions during a meeting with US envoy Witkoff, according to IFAX.
• Russian President Putin said Kyiv’s adventure in the Kursk region completely failed and Chief of General Staff Gerasimov said Ukrainian saboteurs in Russia’s Belgorod region have been liquidated. Furthermore, Russia’s military commander told Russian President Putin that scattered remnants of Ukrainian forces in Russia’s Kursk region will be destroyed soon, according to RIA.
• Russian Foreign Minister Lavrov said Russia will continue to target sites used by Ukraine’s military, foreign fighters and military instructors sent by Europe, while he added that Russia would be willing to store Iran’s enriched nuclear material if both the US and Iran believe that was useful.
• Ukrainian military said Moscow’s assertion it has ended Ukraine’s incursion into the Kursk region is not true and operations inside Kursk continue, while its forces are still on active operations in the Belgorod region.
• French President Macron said he had a very positive exchange with Ukrainian President Zelensky and that Ukraine is ready for an unconditional ceasefire, while the coalition of the willing will continue working on a ceasefire and lasting peace in Ukraine.
• German Defence Minister Pistorius said US demands for Ukraine to cede territory to Russia are going too far.
• North Korea confirmed troop deployment to Russia and said it will faithfully implement its agreement with Russia, according to Yonhap. Furthermore, South Korea said North Korea's confirmation of Russia troop deployment is an admission of a criminal act and the US State Department noted it is concerned by North Korea's direct involvement in Russia's war in Ukraine, while it added that North Korea's military deployment to Russia and any support provided by Russia to it in return must end.

OTHER

• US President Trump said American military and commercial ships should be allowed to travel free of charge through the Panama and Suez Canals, while he asked Secretary of State Marco Rubio to immediately take care of and memorialise this situation.
• India test-fired missiles on Sunday as tensions rise with Pakistan following the Kashmir attack.
• China’s move to claim sovereignty over a disputed reef in the Spratly Islands by planting a flag triggered a stand-off with the Philippines in which the latter sent navy, coastguard and maritime police officers to Sandy Cay and two neighbouring sandbanks to uphold its sovereignty, rights and jurisdiction and displayed the national flag there, according to FT.

CRYPTO

• Bitcoin is a little firmer and trading around the USD 95k mark; Ethereum is flat and sits just above USD 1.8k.

APAC TRADE

• APAC stocks were mixed amid a lack of major catalysts from over the weekend and with a very quiet calendar to start a busy week of earnings results and key data releases including the latest US NFP report.
• ASX 200 was led higher by outperformance in tech, healthcare and energy, while miners lagged after mixed production updates.
• Nikkei 225 advanced at the open as participants digested earnings releases and M&A news in which Toyota Motor's chairman and founding family made a takeover proposal for Toyota Industries. However, the index has since pulled back from today's peak after failing to sustain a brief return above the 36,000 level.
• Hang Seng and Shanghai Comp lagged amid some disappointment from Beijing's press conference on policies and measures for stabilising employment, ensuring stable growth and promoting high-quality development which was conducted by the deputy heads of government agencies and the PBoC and lacked any major concrete policy measures.
• Japan's TOPIX Index erases all losses since the April 2nd US tariff announcement.

NOTABLE ASIA-PAC HEADLINES

• China held a press conference about policies and measures on stabilising employment, ensuring stable growth and promoting high-quality development which was attended by deputy heads of Chinese government departments and the PBoC.
• PBoC Deputy Governor said China will cut RRR and interest rates at an appropriate time, as well as guide financial institutions to guarantee financing demand for foreign trade firms. Furthermore, the PBoC is studying plans to enrich policy kits and will roll out new policies when needed, while it will boost financing support for private firms, allowing private firms to issue more debts.
• MOFCOM Vice Minister Sheng said China will further improve the second-hand car markets and will smooth consumption of used car market this year, while China will push the expansion of healthcare and childcare services and actively expand imports.
• China NDRC vice chief said will closely monitor domestic and external changes and improve policy toolkits, while they will unveil new policies based on changes in the economic situation and some new policies will be rolled out in Q2.
• China’s Finance Minister said China will adopt more proactive macroeconomic policies to promote the realisation of the growth target and that China is willing to further open up its super large markets to the world to achieve mutual benefits.
• China’s Cabinet passed the draft law of China’s medical security and will submit it to the NPC Standing Committee for deliberation, while it also approved the Sanmen nuclear power plant in Zhejiang province.
• China issued a notice on further improving tax refund policies for foreign tourists to boost inbound consumption and will promote the expansion of tax refund stores at shopping centres, scenic spots, airports and hotels.
• Chinese President Xi said China will use various policies to support development, while he urged for the healthy and orderly development of AI.
• China’s top market regulator said regarding a media report of separating the Panama Port from the CK Hutchison (1 HK) deal, that they are paying close attention to the transaction and will review it in accordance with the law. Furthermore, the regulator said parties to the transaction must not use any means to avoid a review.
• TikTok owner ByteDance plans to enter online shopping in Japan as it seeks to expand outside of the US.
• Huawei approached some Chinese tech companies about testing the technical feasibility of the new chip called Ascend 910D, according to WSJ.
• Rumours were circulating in social media that DeepSeek’s R2 AI model is nearing release which is set to feature double the parameters of R1.
• Following the Politburo statement on Friday, which flagged further interest rate cuts, a Reuters source close to the PBoC said it was in no rush to trim rates as the impact of tariffs is still unclear.
• BoJ Quarterly Schedule of Outright Purchases of JGBs: pace maintained for May.

DATA RECAP

• Chinese Industrial Profits YTD YY (Mar) 0.8% (Prev. -0.3%)