Original insights into market moving news

US Market Open: Europe takes the lead from Wall St. upside, AUD outperforms & EGB/UST yields climb

  • European bourses are firmer across the board, Euro Stoxx 50 +0.6%, following late-door Wall St. upside; though, the FTSE 100 -0.5% lags as it catches up from Monday's holiday.
  • Stateside, futures are modestly firmer/flat on the session but have been rangebound throughout the European morning
  • DXY struggles to gain firm direction as global yields err higher with EUR & GBP bolstered on their yield movements
  • AUD outperforms following an above-exp 25bp hike from the RBA
  • Crude and base metals are subdued amid renewed COVID concerns as Beijing orders residents not to unnecessarily leave the area
  • Looking ahead, highlights include US Factory Orders and New Zealand Unemployment, a speech from ECB's Lagarde, Earnings from AMD, Pfizer, Starbucks. Holidays in China and Japan.

As of 11:15BST/06:15ET


  • US Factory Orders and New Zealand Unemployment, Speech from ECB's Lagarde, Earnings from AMD, Pfizer, Starbucks. Holidays in China and Japan.
  • Click here for the Week Ahead preview




  • French President Macron will be speaking to Russian President Putin around mid-day via a phone call, via Elysee.


  • US Senate Majority Leader Schumer said he hopes the Senate can start addressing President Biden's USD 33bln Ukraine aid request as soon as next week, while he added that an agreement on Ukraine funding might be reached very soon, according to Reuters.
  • UK PM Johnson is to address Ukraine's parliament and announce a new USD 375mln defence package, according to Sputnik.


  • US Embassy in Kyiv tweeted that the US Charge d'Affaires Kristina Kvien returned to Ukraine for the first time since the beginning of the war.
  • MSCI said in the light of its treatment of recent sanctions targeting Russian oil companies it has decided to suspend MSCI Russia 10/40 index effective May 6th, while it is unlikely that the Russia 10/40 Index will have enough securities in the near future and the index will be discontinued as part of the May index review, according to Reuters.
  • Slovakia is to seek exemption from any agreed EU embargo on Russian oil, according to the economy ministry.
  • Some holders of two Russian sovereign bonds where USD 650mln in payments were due by April 4th have received the funds, according to Reuters sources; additionally, Russian Eurobond funds have been processed by at least one clearinghouse, according to Bloomberg.
  • Russian President Putin has signed retaliatory economic measures in response to unfriendly actions of some foreign states, according to Russia's Kremlin.


  • Iranian Foreign Minister Masirah says "I think the US has understood well Iran's red lines. And we are continuing the talks [on that basis].", according to Argus Media's Itayim.



  • European bourses are firmer across the board, Euro Stoxx 50 +0.6%, following late-door Wall St. upside; though, the FTSE 100 -0.5% lags as it catches up from Monday's holiday.
  • Stateside, futures are modestly firmer/flat on the session but have been rangebound throughout the European morning ahead of Wednesday's FOMC.
  • In Europe, sectors are primarily positive with Energy outperforming post-BP earnings and Banks supported on yield upside.
  • US Securities and Exchange Commission (SEC) will boost the size of its special unit devoted to investigating cryptocurrency frauds, according to WSJ.

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  • RBA hikes in front of Fed to give Aussie a leg up vs Greenback and advantage over Kiwi that is labouring ahead of NZ jobs data; AUD/USD hovers around 0.7100, AUD/NZD probes 1.1050 from lows circa 100 pips below and NZD/USD pivots 0.6450.
  • DXY firm around 103.500 awaiting FOMC, with passing interest provided by US factory orders 103.930 is near term resistance, with some charts also citing 103.807 as a long term hurdle.
  • Sterling rebounds on return from long UK holiday weekend and in anticipation of another 25bp rate hike on super Thursday, Cable back above 1.2500 and EUR/GBP retreats from 0.8400+ again.
  • Euro clinging to 1.0500 against Buck with aid of higher EGB yields and some technical support, 10 year German cash touches 1% and EUR/USD underpinned by 1.0494 ascending trendline.
  • Yuan fends off another attack on 6.7000 vs Dollar and Won looking for boost from BoK following strong SK inflation data.

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Notable FX Expiries, NY Cut: Click here for more detail.


  • Debt futures bounce from new long term lows in some cases; Bunds back over 153.00 vs 152.66, Gilts 117.75 from 117.39 and 10 year T-note 118-12+ vs 118-04+.
  • Benchmark yields touch or top psychological levels at 1%, 2% and 3% respectively before retracement.
  • Treasury curve re-flattens marginally on the eve of the Fed, 2/10 year -4 bp and 2/30 year in -5 bp.

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  • WTI and Brent are pressured on demand-side concerns as the COVID situation in China remains in focus and Beijing has asked residents not to leave the are unnecessarily.
  • Currently, the benchmarks are holding marginally above session troughs of USD 103.41/bbl and USD 105.62/bbl respectively.
  • Spot gold is softer as yields continue to climb, but remains above USD 1950/oz as the USD struggles to derive traction.
  • Similarly to crude, base metals are impacted on demand-side concerns re. China's COVID backdrop.

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  • EU Unemployment Rate (Mar) 6.8% vs. Exp. 6.7% (Prev. 6.8%, Rev. 6.9%); German Unemployment Rate SA (Apr) 5.0% vs. Exp. 5.0% (Prev. 5.0%)
  • EU Producer Prices MM (Mar) 5.3% vs. Exp. 5.0% (Prev. 1.1%); YY (Mar) 36.8% vs. Exp. 36.3% (Prev. 31.4%, Rev. 31.5%)
  • UK S&P Global/CIPS Manufacturing PMI Final (Apr) 55.8 vs. Exp. 55.3 (Prev. 55.3).


  • UK government is set to abandon its plan to empower a new tech regulator, according to FT.


  • USTR's Tai said all tools to tackle price surges are on the table such as potential tariff reductions, although they must keep an eye on medium-term goals, according to Reuters.
  • Click here for the US Early Morning note.


  • Bitcoin is little changed in European trade, pivoting narrow parameters above the USD 38k mark.



  • APAC stocks traded mixed and lacked direction amid key market closures and looming risk events.
  • ASX 200 was subdued heading into the RBA meeting and was pressured after the central bank delivered a larger than expected hike to the Cash Rate Target which was lifted by 25bps to 0.35%.
  • Hang Seng initially declined on return from an extended weekend amid heavy losses in tech including Alibaba on speculation its founder Jack Ma could be the individual mentioned in Chinese press surnamed Ma who was subjected to compulsory measures for collusion with anti-China hostile forces However, sources later denied that the person was Jack Ma which helped pare some of the losses, while the announcement of looser COVID restrictions in Hong Kong from May 19th also provided encouragement.


  • RBA hiked rates by 25bps to 0.35% (exp. 15bps hike). RBA said it is committed to doing what is necessary to ensure that inflation in Australia returns to target over time and the Board judged now was the right time to begin withdrawing some of the extraordinary monetary support, while it will require a further lift in interest rates during the period ahead. RBA Board will continue to closely observe incoming information and evolving balance of risks as it determines the timing and extent of future interest rate increases. Furthermore, it is not currently planning to sell government bonds purchased during the pandemic and does not plan to reinvest the proceeds of maturing government bonds.
  • RBA Governor Lowe says he expects further interest rate increases will be necessary in the months ahead; does not preclude a bigger or smaller rate move in the future. Has an open mind on how fast rates need to increase, a more normal level of interest rate would be 2.50%.
  • Hong Kong Chief Executive Lam said they will reopen bars in the second phase of easing COVID-19 restrictions on May 19th, according to Bloomberg.
  • BoK said a 4% CPI level may persist for a while and that managing inflation expectations stability is important, while South Korean Finance Minister Hong said inflationary pressures are anticipated to persist for a while, led by energy and food prices, according to Reuters.
  • Beijing has asked city residents not to leave the area unnecessarily, via CCTV. Additionally, Beijing continues strict anti-virus measures as 51 new COVID-19 cases were reported on Tuesday, according to Global Times; Beijing is to postpone school reopening for a minimum of a week after Labour Day holidays, according to an official.
  • Fitch has lowered its 2022 GDP target for China to 4.3% from 4.8% and raises 2023 to 5.2% from 5.1%.


  • South Korean CPI MM (Apr) 0.7% vs. Exp. 0.4% (Prev. 0.7%); YY (Apr) 4.8% vs. Exp. 4.4% (Prev. 4.1%)