• Asian equity markets extended on losses as the subdued tone rolled over once again from Wall St where sentiment was pressured by the continued oil market rout
• Oil prices remained jittery overnight following the prior day’s losses which saw June WTI crude prices briefly slip into single digit territory
• The DXY was rangebound above the 100.00 level, EUR/USD was flat around 1.0850 and GBP/USD languished below 1.2300
• US Senate approved the new USD 480bln coronavirus relief bill as expected by unanimous consent, which the House is set to vote on this Thursday
• US President Trump said 20 states are moving along pretty quickly towards reopening and that the country wants to return to work
• Looking ahead, highlights include UK CPI, CBRT Rate Decision, Canadian CPI, EZ Consumer Confidence, DoEs, supply from the UK, earnings from Delta Airlines, AT&T, Kimberly-Clark, Thermo Fisher

CORONAVIRUS UPDATE

US Senate approved the new USD 480bln coronavirus relief bill as expected by unanimous consent, which the House is set to vote on this Thursday. This follows earlier reports of a bipartisan deal to expand virus aid which includes USD 250bln+ for the Payment Protection Program, USD 60bln more for small lenders, USD 60bln in disaster relief loans, USD 75bln for hospitals and USD 25bln for testing. (Newswires) US Senate Majority Leader McConnell said the next coronavirus relief debate should take place when full Senate is in session considering the nation's debt burden and House Speaker Pelosi commented the next coronavirus bill will happen very soon. (Newswires) US sources expect the newest tranche of PPP loans to run out in three to four days, according to FBN's Gasparino. (Fox)

US President Trump said 20 states are moving along pretty quickly towards reopening and that the country wants to return to work. Furthermore, US President Trump earlier commented that discussions on aid to state and local governments will begin after small business loans aid is signed and that the next round will cover infrastructure and tax incentives for restaurants, entertainment, hospitals, sports and payroll tax cuts. (Newswires)

US Treasury Secretary Mnuchin said he think this will be last tranche of money for small business although more can be added in the future, while he also stated that broadband and infrastructure is important for phase 4 relief and that it is premature to say how much phase 4 of relief will cost. (Newswires)

Netherlands extended its ban of large public events until Sept.1st, schools could open in May. (Newswires)

UK COVID-19 cases rose to 135,342 (prev. 124,743), death toll rose to 17,337 (prev. 16,509); deaths increased by 823 (+5%) vs. yesterday's increase of 449 (+2.8%). (Newswires) UK Deputy Chief Medical Officer said there has been a peak in London and since a decline, with a plateau in other regions but suggested the country is still not out of danger. (Newswires)

US COVID-19 cases +3.95% at 776,093 (Prev. 746,625); death toll +6.8% at 41,758 (Prev. 39,083). (Newswires)

ASIA

Asian equity markets extended on losses as the subdued tone rolled over once again from Wall St where sentiment was pressured by the continued oil market rout in which WTI June contract prices briefly slipped to single digits and with underperformance in tech amid President Trump’s plans for an immigration ban given the sector’s reliance on foreign talent. ASX 200 (-0.8%) and Nikkei 225 (-1.5%) were weaker with Australia dragged lower by the mining related sectors and as corporate updates trickled in with Beach Energy also suffering from softer quarterly production, while the Japanese benchmark briefly fell below 19k as the recent detrimental currency flows reverberated across exporter names. Hang Seng (-0.9%) and Shanghai Comp. (-0.2%) conformed to the subdued global risk tone but with losses in the mainland limited by anticipation of further support after Chinese President Xi pledged stronger macro policy tools to soften the epidemic fallout and the State Council noted that China will boost targeted assistance to those in need, as well as small businesses. Finally, 10yr JGBs advanced as the took advantage of the weakness in stocks and amid the BoJ’s presence in the market today for JPY 710bln of JGBs heavily concentrated in 3yr-10yr maturities.

PBoC skipped open market operations and are net neutral on the day. (Newswires) PBoC set USD/CNY mid-point at 7.0903 vs. Exp. 7.0840 (Prev. 7.0752)

Chinese President Xi said China will use stronger macro policy tools to soften the epidemic fallout while making sure the epidemic will not rebound. (Newswires)

UK/EU

UK PM Johnson and US President Trump committed to continue working together to strengthen their bilateral relationship, including the signing a Free Trade Agreement as soon as possible. (Newswires)

BoE Governor Bailey said Britain should be cautious about lifting lockdown too early and suggested lifting lockdown then slamming on brakes again would damage the economy even more. (Daily Mail)

The ECB may hold an emergency call on Wednesday evening where it could discuss junk bonds as collateral, according to sources. (Newswires)

FX

The DXY was rangebound above the 100.00 level to hold on to the recent gains and as the events in Washington D.C. did little to spur price action including the Senate’s passage of the new USD 480bln coronavirus relief bill as expected which the House is set to vote on this Thursday, while US President Trump reiterated to issue a temporary suspension on immigration which will likely be signed today. EUR/USD was flat around 1.0850 ahead of a potential emergency call by the ECB this evening where it could discuss junk bonds as collateral and GBP/USD languished below 1.2300. USD/JPY and JPY-crosses were mostly subdued by the lack of risk appetite and antipodeans were lifted in which AUD/USD surged through 0.6300 and NZD/USD approached 0.6000 before retracing the majority of the gains, while HKD remained firmer at the strong end of the trading range against USD despite intervention by the HKMA which sold HKD for a 2nd consecutive day in an effort to defend the peg. MXN only marginally extended on its recent weakness following the Bank of Mexico decision to lower rates by 50bps to 6.00% via unanimous decision, while it announced the measures to help the financial system worth MXN 750bln along with the previously announced measures equivalent to 3.3% of GDP.

Australian Retail Sales (Mar P) 8.2% (Prev. 0.5%); largest increase on record. ABS said the March sales data indicated unprecedented demand for food retailing industry. (Newswires)

COMMODITIES

Oil prices remained jittery overnight following the prior day’s losses which saw June WTI crude prices briefly slip into single digit territory amid the OPEC+ conference which didn’t result to any new policies and with the likes Saudi, UAE and Kuwait not present in the call, while a delegate also suggested that members would not be able to bring forward agreed cuts due to April contract commitments. Furthermore, Texas oil regulators failed to agree on a vote on production in which they postponed the issue to next month and the latest private inventory report failed to support prices given the elevated stockpiles despite printing a narrower than expected build. As such, WTI crude futures fluctuated between gains and losses during Asia trade and Brent crude underperformed as it slipped below the USD 17.00/bbl level to narrow the spread. Elsewhere, gold prices were rangebound amid an uneventful greenback and with prices contained below this week’s resistance at USD 1700/oz, while copper was also subdued by the lacklustre risk appetite.

US Private Inventory Crude Stocks +13.2mln vs. Exp. +15.2mln (Prev. +13.1mln). (Newswires)

CME will permit listing of negative oil options from today. CME also announced to raise crude oil NYMEX margins by 13.3% to USD 8500/contract from USD 7500/contract and raised NY Harbor Heating Oil margins by 16.3% to USD 5350/contract from USD 4600/contract for May, while it raised natgas Henry Hub futures margins by 6.1% to USD 1750/contract from USD 1650/contract and raised RBOB gasoline futures margins by 14.1% to USD 8,100/contract from USD 7,100/contract. (Newswires)

OPEC Delegates discussed the oil market crisis within a conference call although the call was reportedly not designed to make a new oil decision and they were said to consider a May 10th meeting for further production cuts. Furthermore, Saudi, UAE and Kuwait did not take part in the OPEC conference call and a delegate noted that OPEC+ members will be unable to start production cuts earlier because April's oil production is already committed for export contracts. (Newswires/Argus)

Iraq Energy Minister said OPEC+ could take additional steps to absorb the oil surplus but added that taking further measures by producer countries depends on global market development and compliance by other OPEC+ and other non-member producers with the oil cut deal. (Newswires)

Russian Energy Minister Novak said there is no need to dramatize the WTI decline and that oil markets will remain under pressure until the OPEC+ deal is enforced in May, while he added that OPEC+ has the ability to react if necessary. (Newswires)

Two out of three Texas Oil and Gas regulators stated they are not ready to vote on oil output cuts today and they are to revisit the issue on May 5th. (Newswires) (Newswires)

Producers in Alberta, Canada have reportedly already voluntarily cut 400k-700k bpd, according to Energy Intel citing industry sources. Canadian PM Trudeau responded the government is always open to helping particular industries when asked whether there would be further aid to the energy sector. (Newswires)

Australia Energy Minister said they are to establish a strategic fuel reserve with initial allocation of AUD 94mln and want to take advantage of low fuel prices, while the government is working with industry to establish local storage and signed a deal with US to access fuel reserves. (Newswires)

The collapse of Singapore oil trader Hin Leong which filed for bankruptcy protection and is under investigation for hundreds of millions of undisclosed losses, risks a severe liquidity crunch for Singapore’s commodities sector. (FT)

GEOPOLITICS

US President Trump said we don't know about North Korea Leader Kim's health and that nobody has confirmed if he is ill, while other reports noted that North Korea succession is thought to mean that if Leader Kim dies, his sister would be the custodian of power. (Newswires)

US

The TPLEX continued to flatten amid the wave of risk-off induced by falling oil prices. Similar to recent sessions, the bid in duration came in European trade, as the 10-year yield breached 0.60% to the downside, but lost pace as the US arrived, seeing the benchmark move in a channel of 0.54-0.58%. Meanwhile, the front/belly of the UST curve was more hesitant, although 5-year yields edged to new record lows at 0.301%. By settlement, 2s were unchanged at 0.20%, 5s -2bps at 0.34%, 10s -5bps at 0.58%, 30s -7bps at 1.17%. The falling oil prices set the negative risk tone today. Participants in the Fixed Income complex are also likely driving prices higher as they revaluate/downgrade their inflation expectations, as fears of oil price woes becoming more sustained grow louder. In rates, the nearby Eurodollar (M0) contract outperformed the rest of the pack, coinciding with an approximate 5bps fall in 3-month USD LIBOR, keeping T-Bill/Eurodollar spreads (TEDs) contained, as well as other spreads, such as FRA-OIS, which saw some pressure on Monday. T-notes (M0) settled 9 ticks higher at 139-12+.

US President Trump reiterated he will issue a temporary suspension of immigration and stated the measure will be in effect for 60 days then will be evaluated after, while he added it will apply to those seeking permanent residency and that the executive order on immigration will probably be signed today. (Newswires)