• APAC stocks traded mixed with a mild positive bias as global banking sector fears continued to dissipate.
• European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.3% after the cash market closed up 0.3% on Monday.
• In FX, DXY extended declines below 103, JPY leads G10 FX, EUR/USD and Cable linger just above 1.08 and 1.23 respectively.
• 10yr USTs attempted to nurse recent losses, crude futures plateaued and held on to the spoils from its largest daily gain since October.
• Looking ahead, highlights include US Senate Banking Committee re. SIVB, Speeches from ECB's Lagarde, Enria, BoE's Bailey, Ramsden & Fed's Barr, Supply from Italy, Germany & US.

US TRADE

EQUITIES

• US stocks finished mixed albeit with the major indices mostly higher on receding fears around the banking crisis and surging oil prices which spurred outperformance in the energy sector and value stocks, while the acute bear-flattening weighed heavily on rate-sensitive industries such as tech and dragged the NDX in the red.
• SPX +0.17% at 3,978, NDX -0.74% at 12,673, DJIA +0.60% at 32,432, RUT +1.08% at 1,754.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Jefferson (voter) said inflation has come down and should fall back to towards the 2% target as demand falls but noted that inflation has been longer lasting and the current level is too high, while they want inflation to return to 2% sooner rather than later and don't want expectations to become embedded. Jefferson also commented that they are still learning how much tight monetary policy has influenced the economy and inflation, as well as noted that Fed's actions in recent weeks aimed to show depositors that there is someone out there willing to lend.
• US Treasury official Liang said the US government will use tools to prevent banking contagion again if warranted and that the US financial system is significantly stronger now due to stronger capital and liquidity requirements, while she added the US must ensure that banking regulations and supervision are appropriate for today's risk and challenges, according to her prepared testimony, according to Reuters.
• FDIC Chairman said the agency is undertaking a comprehensive review of the deposit insurance system and has the authority to hold failed banks accountable, while the Chairman noted that losses to the FDIC insurance fund will be repaid and that the vast majority of banks are reporting no material deposit outflows.
• US HHS Secretary declared a public health emergency for Mississippi in response to severe weather.

APAC TRADE

EQUITIES

• APAC stocks traded mixed with a mild positive bias as global banking sector fears continued to dissipate and with early advances led by energy after the recent surge in oil prices although gains were capped in the region as North Korean nuclear rhetoric stoked geopolitical concerns.
• ASX 200 was boosted amid strength in the commodity-related sectors with outperformance in energy after oil prices notched the largest daily gain since October and financials were also lifted as Australia downplayed the risks to domestic banks from the recent global banking issues.
• Nikkei 225 was indecisive despite Japan reiterating plans for a JPY 2.2tln economic stimulus package with trade stuck in a narrow range near 27,500 after the nuclear rhetoric by North Korea which called for the scaling up of weapons-grade nuclear materials and included similar language used before its last nuclear test in 2017.
• Hang Seng and Shanghai Comp. were choppy ahead of key earnings results and after PBoC liquidity efforts.
• US equity futures (ES +0.1%) were rangebound overnight following the prior day's indecisive performance.
• European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.3% after the cash market closed up 0.3% on Monday.

FX

• DXY was marginally softer and extended further beneath the 103.00 level as the dollar made way for its major counterparts and after yields slightly eased with the US 2yr yield back beneath 4%.
• EUR/USD gradually edged higher and reclaimed the 1.0800 following the recent slew of ECB rhetoric including reports that ECB's Schnabel pushed for the ECB statement to say more hiking is possible.
• GBP/USD continued to benefit alongside the mild positive bias and with recent comments from BoE Governor Bailey who said inflation is likely to fall steeply in the UK but also suggested further monetary tightening would be required if signs of persistent inflationary pressures become evident.
• USD/JPY reversed Monday’s gains as yield differentials between US and Japan narrowed.
• Antipodeans were firmer amid tailwinds from recent gains in commodities and Australian Retail Sales data.
• PBoC set USD/CNY mid-point at 6.8749 vs exp. 6.8737 (prev. 6.8714)

FIXED INCOME

• 10yr UST futures attempted to nurse some of its recent losses and found slight reprieve from the bear flattening seen yesterday which coincided with receding banking sector fears and following a dismal 2yr auction.
• Bund futures languished near the prior day’s lows after the hawkish ECB rhetoric and German Ifo data.
• 10yr JGB futures were subdued after the selling pressure across global peers but with prices off worse levels following stronger results at the latest 40yr JGB auction.

COMMODITIES

• Crude futures plateaued and held on to the spoils from its largest daily gain since October as banking fears cooled, while the recent gains were also attributed to supply risk out of Iraq/Kurdistan and geopolitical concerns.
• India was the largest buyer of Russia's seaborne Urals oil in March which accounted for 65% of the total and kept Russia's exports high, according to Reuters citing traders and Refinitiv data. Traders also noted that Russia may continue to maintain high oil exports in April to meet Indian refiner needs.
• Spot gold was uneventful as the tailwinds from a softer dollar were offset by the lack of haven demand.
• Copper futures were kept afloat amid a mild positive tone but with gains capped amid indecision in China.

CRYPTO

• Bitcoin continued to pull back from this month's surge and dipped beneath the USD 27,000 level.
• Binance CEO said the CFTC complaint appears to have an incomplete recitation of the facts and they do not agree with the issues alleged in the complaint. Binance CEO said they intend to respect and collaborate with US and other regulators around the world, while he added that Binance.com does not trade for profit or manipulate the market under any circumstances, according to Reuters.

NOTABLE ASIA-PAC HEADLINES

• China's Foreign Ministry said Premier Li Qiang met with foreign representatives at the China Development Forum in Beijing on Monday and met with executives including Apple (AAPL) CEO Cook, while Li told executives China will unswervingly expand its opening up, according to Reuters.
• US and Japan reached a trade deal for critical EV battery minerals in which the deal prohibits enacting export restrictions on lithium, cobalt, nickel, manganese and graphite, according to US officials. Furthermore, the deal includes provisions to combat non-market practices, while access for Japanese automakers to the battery minerals portion of USD 7,500 in US EV tax credit depends on the tax guidance this week from the US Treasury.

DATA RECAP

• Australian Retail Sales MM Final (Feb) 0.2% vs. Exp. 0.1% (Prev. 1.9%, Rev. 1.8%)

GLOBAL NEWS

• Israeli PM Netanyahu confirmed to delay the second and third readings of the justice bill and the Israeli labour union called off a nationwide strike after PM Netanyahu announced to delay the judicial overhaul.

GEOPOLITICAL

• US senior admin official said at least 50 US government staffers stationed in ten countries were targeted with spyware and President Biden is set to sign an Executive Order to prevent the use of such tools.
• Russian Defence Ministry said it fired supersonic anti-ship missiles at a mock target in the Sea of Japan.
• Russia failed to get the UN Security Council to ask for an independent inquiry into the Nord Stream gas pipeline explosions which occurred in September last year, according to Reuters.
• Hungary’s parliament approved Finland's NATO membership.
• North Korean leader Kim guided the nuclear weaponisation programme and inspected nuclear trigger technology during a recent simulation. Kim also called for constant efforts to improve nuclear capability and said the country should be fully ready to use nuclear weapons at any time, while he called for the scaling up of weapons-grade nuclear materials to exponentially increase nuclear weapons arsenal. North Korea also alleged that US and South Korea military drills involving an air carrier are aimed at pre-emptive nuclear strike and said that US anti-North Korean activities are intensifying to unacceptable levels, according to KCNA.

EU/UK

• BoE Governor Bailey said inflation is likely to fall steeply in the UK and if signs of persistent inflationary pressures become evident, further monetary tightening would be required. Bailey said the MPC's response will be firmly anchored in the emerging evidence and said it is too soon to say if UK credit conditions have tightened in recent weeks.
• ECB's Schnabel said it is not easy to say how restrictive rates are and there is no sign of weakening in the labour market, while she noted there is no real concern about financial stability risks but added the situation is still fragile.

DATA RECAP

• UK BRC Shop Price Index YY (Mar) 8.9% (Prev. 8.4%)