• Russian President Putin says there are certain positive shifts in talks with Ukraine - sparking significant risk-on.
• European bourses are firmer, Euro Stoxx 50 +3.0%, as are US futures though magnitudes are more contained amid a thin US docket.
• DXY is firmer, but off-highs, in tandem with the broader move that sees US/German 10yr yields at 2.0% and 0.30% again.
• WTI and Brent futures are firmer on the day with initial upside bolstered by a pause in Iranian talks, whilst upside pared amid constructive remarks from Russian President Putin.
• US President Biden will speak regarding Russia at 10:15EST/15:15GMT today and will announce actions to continue to hold Russia accountable.
• Looking ahead, highlights include Canadian Labour Market Report, Uni. of Michigan (prelim).

As of 11:40GMT/06:40EST

LOOKING AHEAD

• Canadian Labour Market Report, Uni. of Michigan (prelim).
• Note; US Clocks Change to EDT from EST on Sunday, March 13th. London to New York time gap is four-hours until the UK change on March 27th.
• Click here for the Week Ahead preview.

GEOPOLITICS

RUSSIA-UKRAINE

• Russian President Putin says there are certain positive shift in talks with Ukraine. An update which sparked significant risk-on across the market, reaction here

DISCUSSIONS/NEGOTIATIONS

• 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.
• A source close to Turkish President Erdogan says a meeting between Russian President Putin and Ukrainian President Zelensky could become possible in the near future, according to Sky News Arabia.

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.
• 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.
• 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.

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.
• Russian President Putin agrees to the idea of sending volunteers who want to fight Ukrainian forces in Ukraine, supports sending additional arms to separatists in Donbas.
• Russia's Defence Minister Shoigu says Russia plans to reinforce its western borders; over 16,000 volunteers from the Middle East are ready to help; proposes handing over the spoils of Ukrainian weapons from tanks, artillery, Stinger missiles and Gafflin to Donetsk and Lugansk forces.

OTHER

• 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.
• EU Foreign Affairs Minister Borrell says "a pause in Vienna Talks is needed, due to external factors. A final text is essentially ready and on the table."; subsequently, journalists such as Aslani and Stein suggest that Russia's new demands are blocking the option to sign a deal.
• Russian Envoy to Iranian talks says the conclusion of the Nuclear Deal does not just depend on Russia; other actors have additional concerns.
• 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.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer, Euro Stoxx 50 +3.0%, and were back around cash-open parameters after a choppy first-half to the session; however, President Putin's remarks have sparked further risk-on.
• US futures are firmer across the board and derived recent upside from the Russian President, ES +1.3%, though magnitudes are somewhat more contained amid a thin US docket.
• In terms of the European sectors, cyclicals are outperforming with Energy/Retail among the top performers throughout the morning.
• France is said to be mulling reviving plans to nationalise EDF (EDF FP), according to Bloomberg sources.
• UK CMA and European Commission are launching parallel probes into the "Jedi Blue" agreement between Alphabet's (GOOG) Google and Meta's (FB).

Click here for more detail.

FX

• DXY firmer, but off highs, around 98.500 after recent steep retreat as acceleration in US CPI underpins Fed tightening expectations, but with safe-havens and USD paring amid Russia's Ukraine commentary.
• Yen folds amidst multiple bearish factors, including rates, risk, fiscal and technical impulses; USD/JPY probed 117.00 after breaching prior YTD twin peaks.
• Aussie also underperforming as RBA Governor Lowe keeps markets guessing on a 2022 rate hike, AUD/USD is back under 0.7350 and nearer round number below.
• Euro trying to find its feet following sharp post-ECB reversal that saw EUR/USD snap-back from 1.1100+ peaks to sub-1.1000 again; lifting to a new high of 1.1042 post-Putin.
• Rouble maintains and extends on recovery momentum as prospects for a Russia/Ukraine Presidential talks persist, but Lira continues to weaken as Turkish IP falls short of expectations and CBRT survey reveals another jump in end 2022 inflation projections; USD/RUB circa 113.7500, USD/TRY on brink of 15.000.

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FIXED INCOME

• Core EZ debt remains mildly divergent at the end of another bleak week, as Bunds suffer post-APP taper hangover.
• However, benchmarks dropped in tandem to fresh lows sending the US/German 10yr yields back to 2.0% and 0.30% respectively following Putin's update.
• BTPs have regrouped after pronounced ECB fallout with supply out of the way.
• USTs are now unchanged after initial firmer performance though the curve continues its post-supply flattening.

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COMMODITIES

• WTI and Brent futures are firmer on the day with initial upside bolstered by a pause in Iranian talks, whilst upside pared amid constructive remarks from Russian President Putin.
• 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 fell further below USD 2,000/oz amid a Putin-induced unwind.
• LME copper extends gains above USD 10k/t as risk appetite buoys the red metal.

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NOTABLE EUROPEAN HEADLINES

DATA RECAP

• UK GDP Estimate MM (Jan) 0.8% vs. Exp. 0.2% (Prev. -0.2%); YY (Jan) 10.0% vs. Exp. 9.3% (Prev. 6.0%); 3M/3M (Jan) 1.1% vs. Exp. 0.8% (Prev. 1.0%)

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.

Click here for the US Early Morning Note

CENTRAL BANKS

• ECB's Villeroy says we (the ECB) are guarantors of the stability of prices to avoid inflation spiralling; there will be more inflation in Europe and more economic uncertainty; there is no recession in Europe.
• ECB's Kazimir says there is a higher risk of inflation remaining above target for longer, raising key interest rates will not happen immediately.
• ECB's Centeno says the decision announced yesterday did not change medium-term policy perspectives.
• ECB's Muller says he expects inflation to slow in 2023, high inflation for the remainder of 2022 that is inevitable.

APAC TRADE

EQUITIES

• 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%)

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.
• Chinese President Xi is reportedly considering putting a confident he has known for decades at the helm of China's economic/financial systems, according to WSJ sources; He Lifeng is reportedly the lead candidate.
• 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.