• APAC stocks traded negatively following the soft lead from the US and with Chinese tech names spooked by US delisting fears.
• Russia agreed to allow a Ukrainian repair team to access power lines in the area around the Chernobyl nuclear power station.
• US President Biden is to call for an end to Russia's preferred trade status.
• European equity futures are indicative of a firmer open with the Euro Stoxx 50 future up 0.3% after the cash market closed lower by 3.0% yesterday.
• DXY remains firm around the 98.50 mark, USD/JPY took out YTD highs to reach its highest level since 2017.
• Looking ahead, highlights include German CPI (final), UK GDP, Canadian Labour Market Report, Uni. of Michigan (prelim), supply from Italy.

US TRADE

• US stocks finished negative but off their lows as cyclicals led a rebound into the NY afternoon amid a retreat in oil prices.
• S&P 500 -0.43% at 4,260, Nasdaq 100 -1.10% at 13,591, Dow Jones -0.34% at 33,174, Russell 2000 -0.23% at 2,012.

NOTABLE US HEADLINES

• US Senate voted (68 vs 31) to pass the bill that will fund the government through to September 30th which includes aid for Ukraine, while the White House welcomes the Senate passage of the bipartisan funding bill which President Biden looks forward to signing into law.
  • US Treasury Secretary Yellen said she expects to see a further rise in US inflation stemming from Russia's invasion of Ukraine, while she doesn't expect a recession in the US.

GEOPOLITICS

RUSSIA-UKRAINE

NEGOTIATIONS

• Russian Defence Ministry said it will open humanitarian corridors for evacuation of Ukrainians to Russia at 10am Moscow time (07:00GMT) every day, according to Interfax.
  • EU said it will support Ukraine in pursuing its European path and Austrian Chancellor Nehammer noted that EU leaders see Ukraine as part of the European family, while Netherlands PM Rutte said it may take years for the EU Commission to assess the Ukraine bid.
  • Russian Defence Ministry agreed to allow a Ukrainian repair team to access power lines in the area around the Chernobyl nuclear power station, according to Interfax.

DEFENCE/MILITARY

• UN Security Council is to convene on Friday at Russia's request as it seeks to discuss its claims of US biological activities in Ukraine, while US dismissed the claims as laughable and warns Moscow may be preparing to use chemical or biological weapons.
  • UK's PM Johnson said he fears Russia will use chemical weapons in Ukraine.
• Ukrainian Parliament said Russian forces attacked a Kharkiv institute that contains an experimental nuclear reactor and the neighbouring hostel is on fire.
• US satellite image company Maxar said new images show the large Russian military convoy that was last seen northwest of Kyiv near Antonov Airport has largely dispersed and redeployed, while images showed armoured units manoeuvring in and through the surrounding towns close to the airport and that convoy elements further north have repositioned near Lubyanka with artillery howitzers nearby.

ENERGY/ECONOMIC UPDATES

• US President Biden will speak regarding Russia at 10:15EST/15:15GMT today and will announce actions to continue to hold Russia accountable for its unprovoked and unjustified war on Ukraine, according to the White House. US President Biden also called for an end to Russia's preferred trade status and is to announce a trade push by the G7, US and EU this Friday, which paves the way for higher tariffs on Russian goods.
• US Treasury Secretary Yellen said they can do more regarding sanctions on Russia and she hasn't seen evidence of China assisting Russia with sanctions.
• White House Press Secretary Psaki said the US supports corporations making decisions about Russia and if Russia seizes companies' assets, it will cause further suffering.
• Ukrainian Foreign Minister Kuleba says he had a productive meeting with his Polish counterpart and agreed pressure on Russia must further mount until it ceases its barbaric aggression.
• Netherlands PM Rutte said the EU is almost finished with the fourth package of sanctions against Russia.
• Russia announced a grain export ban to the Eurasian Economic Union until August 31st which includes wheat, meslin, rye, barley, and corn, while it includes sugar but with some exceptions. It was also separately reported that Russia is to temporarily suspend fertilizer exports and ban exports of cars until December 31st, according to Tass.
• Russian Embassy to the US demanded that Washington hold Meta (FB) to account over extremist activities after it permitted calls for violence against Russians, according to Sputnik

OTHER THIRD-PARTY REMARKS/NEWS

• IMF's Georgieva said unprecedented sanctions caused an abrupt, sharp contraction of the Russian economy and a deep recession is expected, while she sees a clear contraction in global trade as a result of the war in Ukraine and expects a downward revision to the global growth forecast.

FUND/SOVEREIGN ACTION

• Russia is to pay its Eurobond obligations in Rubles if banks refuse to take other currencies and will allow foreign currency payments on bonds only if the currency accounts of the central bank and government are unfrozen, according to Tass.
• Russia is seeking ways to resume stock trading next week with the Bank of Russia and Moscow Exchange in talks on stock trading, according to Vedomosti.
• Moody's cut Belarus from B3 to Ca; Outlook Negative and downgraded the ratings of 95 Russian corporates.
• MSCI said some participants are to be stopped from dealing in existing and newly issued debt/equity of some Russian companies from March 26th and it will delete VTB Bank from MSCI Russia indexes on March 14, while it also removes Russian securities from the Suite of corporate bond indexes.

OTHER

• White House said it is close to an Iranian nuclear deal, but there can be challenges near the end of negotiations, while US State Department said a nuclear deal with Iran is down to a very small number of outstanding issues and they are at the final stages of negotiations but added that outstanding issues are hard.
• Iran Foreign Minister tweeted that a deal is within sight if the US acts realistically and consistently, while it added that no single party can determine an end result with a joint endeavour needed.
• Saudi Arabia said a petroleum refinery in Riyadh was attacked by a drone on Thursday although the refinery's operations and supplies were unaffected and there were no casualties or injuries.
• Senior US official said North Korea's recent launches involved an ICBM-capable platform, but did not demonstrate inter-continental ranges and the US concluded they involved a relatively new ICBM system, while US Treasury is to announce new actions on Friday to prevent North Korea from accessing foreign items and technology that would enable it to advance its weapons program.

APAC TRADE

EQUITIES

• APAC stocks traded negative amid global headwinds and with Chinese tech names spooked by US delisting fears.
• ASX 200 was led lower by losses in tech with the sector suffering across the region following similar underperformance stateside.
• Nikkei 225 slumped despite a weaker currency and better than expected Household Spending, with Toyota pressured on output cuts.
• Hang Seng and Shanghai Comp. declined with big tech names in Hong Kong spooked after the US SEC identified five US-listed Chinese companies for failing to comply with the HFCAA, which pressured the Nasdaq Golden Dragon China Index, while mainland China also reported its largest number of COVID-19 cases in two years.
• US equity futures head into the European session with little in the way of firm direction; ES +0.1%.
• European equity futures are indicative of a firmer open with the Euro Stoxx 50 future up 0.3% after the cash market closed lower by 3.0% yesterday..

FX

• DXY remained firmer around the 98.50 level amid the negative risk tone and with US CPI at a fresh 40-yr high.
• EUR/USD was choppy around the 1.1000 level following yesterday’s ECB-triggered price swings.
• GBP/USD languished beneath the 1.3100 handle with focus turning to the incoming monthly GDP and production data.
• USD/JPY extended above 116.00 and printed its highest level since 2017.
• Antipodeans were pressured amid the downbeat risk tone and with Governor Lowe maintaining a balanced view on rates.

FIXED INCOME

• 10yr USTs rebounded following yesterday's bear-steepening with support at 126.00 and following a strong 30yr auction.
• Bunds nursed some of their recent declines and just about reclaimed the 163.00 level.
• 10yr JGBs were kept afloat by the risk aversion but with upside limited by the absence of BoJ purchases.

COMMODITIES

• WTI and Brent were stuck near the previous day's lows amid the subdued risk mood and with an Iran deal said to draw near.
• G7 is looking at measures to halt gas price hikes and called on oil and gas producers to increase deliveries, according to AFP.
• Canada is examining boosting oil pipeline flows to the US and is conducting the analysis to ramp up pipeline flows with the industry, according to Reuters citing natural resources minister Wilkinson who expects to have an answer of what Canada can do as soon as next week.
• Kuwait set April KEC OSP for Asia at Oman/Dubai + USD 4.80/bbl, according to Reuters.
• Qatar sold May-loading Al-Shaheen and Marine crude at record premiums of USD 11-12/bbl above Dubai quotes.
• Spot gold mildly extended its retreat beneath the USD 2,000/oz level amid a firmer greenback.
• Copper prices were subdued amid the broad risk-averse mood across global markets.
• LME confirmed the nickel market will not open on Friday and has seen "limited" potential uptake to net off short positions.
• Chinese tycoon, Xiang Guangda, said he wants to keep shorting nickel and told around 10 banks and brokers through which his Co. Tsingshan holds its positions that he still believes prices will fall, according to Bloomberg.

CRYPTO

• Bitcoin declined overnight and briefly fell beneath the USD 38,500 level.

NOTABLE APAC HEADLINES

• PBoC injected CNY 10bln via 7-day reverse repos with the rate at 2.10% for a net neutral daily position.
• PBoC set USD/CNY mid-point at 6.3306 vs exp. 6.3286 (prev. 6.3105)
• Chinese Premier Li said maintaining medium-to-high speed growth for such a large economy is a significant challenge and it is not easy to achieve a GDP growth goal of around 5.5% this year, while he added China is faced with new downside challenge this year and that lowering the deficit rate gives room for policy. Premier Li added that hopes US and China can properly manage differences and said this will be his final year as Premier.
• China Securities Regulatory Commission voiced opposition against politicizing securities regulation after SEC put 5 Chinese firms on provisional removal from US exchanges, according to Global Times
• China reported 1.1k new COVID-19 cases which is the highest in around two years
• RBA Governor Lowe said this year should see relatively good growth and that they are not at the point where CPI is sustainably in the 2%-3% target range, while he reiterated that it is plausible interest rates could increase this year and it would be prudent for borrowers to plan for an increase in rates. However, Lowe added that he doesn't think there is a lot of demand for a rate hike and that there are plausible scenarios where a hike could be earlier or where there is no hike this year.

DATA RECAP

• Japanese All Household Spending MM* (Jan) -1.2% vs. Exp. -3.0% (Prev. 0.1%, Rev. 0.2%)
• Japanese All Household Spending YY* (Jan) 6.9% vs. Exp. 3.6% (Prev. -0.2%)