• APAC stocks were positive after taking impetus from the rally on Wall St while the region also digested a slew of earnings, data and the BoJ.
• BoJ kept policy settings unchanged, tweaked its forward guidance which remained dovish and announced it is to conduct a policy review.
• Amazon shares initially rose by some 9% in after-hours trade post-earnings before dropping to losses of 2% with some highlighting the Co. signalling lower AWS growth.
• European equity futures are indicative of a firmer open with Euro Stoxx 50 future +0.4% after the cash market closed higher by 0.2% yesterday.
• DXY is broadly firmer vs. peers, EUR/USD maintains 1.10 status, JPY lags post-BoJ and Cable fails to hold onto a 1.25 handle.
• Looking ahead, highlights include EZ GDP Flash, German HICP Prelim., US PCE Price Index, ECI, Speech from ECB's Lagarde, Earnings from Mercedes-Benz, NatWest, Colgate, Berkshire Hathaway & Chevron.

US TRADE

EQUITIES

• US stocks rallied with risk appetite fuelled by strong earnings reports and as fears surrounding regional banks took a back seat, while participants also digested data releases including Q1 GDP which missed on the headline print amid a decline in business inventories but the internals showed strong underlying demand and was accompanied by a surprise fall in jobless claims.
• SPX +1.96% at 4,135, NDX +2.76% at 13,160, DJIA +1.58% at 33,827, RUT +1.20% at 1,751.
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NOTABLE HEADLINES

• Fed Discount Window borrowing USD 73.9bln on April 26th (prev. 69.9bln W/W), BTFP lending USD 81.3bln (prev. 74.0bln W/W), Other Credit USD 170.3bln (prev. 172.6bln W/W), Balance Sheet USD 8.613tln (prev. 8.643tln W/W).
• White House Press Secretary said Congress should act on avoiding default without pre-conditions, while they are continuing to monitor the situation at First Republic (FRC) but noted that deposits at regional banks have stabilised and they can use tools again if needed.
• Recently, it was reported that US officials are coordinating urgent rescue discussions for First Republic (FRC), via Reuters citing sources; FDIC, Fed and Treasury are among the bodies which in recent days have been putting together meetings with financial companies regarding a lifeline.
• US House Speaker McCarthy accused President Biden and Democrats of ignoring the debt-limit issue and said that the debt limit can't pass without dealing with the budget.

EARNINGS RELEASES

• Amazon (AMZN) - Q1 2023 (USD): EPS 0.31 (exp. 0.21), Revenue 127.4bln (exp. 124.55bln). AWS +16% to USD 21.4bln (exp. 21.03bln); Q2 revenue view 127-133bln (exp. 129.83bln). Q1 OM 3.7% (exp. 2.4%). Amazon's CFO observed consumer shifts towards lower-priced items, as well as cloud customers continuing to optimise their spending amid economic uncertainty. Despite this, they have noted no changes in the competitive balance among cloud providers and believe that the step down in discretionary spending in cloud services is still ongoing. Advertising continues to experience strong growth, and as inflation decreases internationally, consumer confidence is reportedly on the rise. (Amazon IR/Newswires) Shares initially rose by some 9% before dropping to losses of 2%. Newswires suggested Amazon shares fell amid Co. signalling lower AWS growth.
• Amgen Inc (AMGN) Q1 2023 (USD): EPS 3.98 (exp. 3.85), Revenue 6.11bln (exp. 6.17bln)
• Intel Corp (INTC) Q1 2023 (USD): Adj. EPS -0.04 (exp. -0.15), Revenue 11.70bln (exp. 11.04bln)

APAC TRADE

EQUITIES

• APAC stocks were positive after taking impetus from the rally on Wall St where the S&P 500 and DJIA posted their best daily performance since January as sentiment was fuelled by strong earnings results, while the region also digested a slew of earnings, month-end data releases and the BoJ policy decision.
• ASX 200 was initially led higher by outperformance in financials and tech, but then faded most of the gains.
• Nikkei 225 was lifted after Industrial Production and Retail Sales topped forecasts, while the BoJ kept also policy settings unchanged, tweaked its forward guidance which remained dovish and announced it is to conduct a policy review.
• Hang Seng and Shanghai Comp were firmer amid tech strength and an abundance of earnings releases, with sentiment also supported by the PBoC’s liquidity efforts ahead of the 5-day closure in the mainland.
• US equity futures (ES -0.1%) were rangebound with price action not helped by Amazon shares faltering after-hours.
• European equity futures are indicative of a firmer open with Euro Stoxx 50 future +0.4% after the cash market closed higher by 0.2% yesterday.

FX

• DXY was kept afloat following the prior day’s modest gains which coincided with a higher yield environment after the data releases stateside including GDP which missed on the headline print but showed that the internals of the report were strong with Q1 PCE prices firmer and was also accompanied by a surprise fall in jobless claims.
• EUR/USD was lacklustre with price action remaining choppy after yesterday’s brief dip beneath 1.1000.
• GBP/USD traded rangebound and resumed its attempts to reclaim the 1.2500 status.
• USD/JPY was lifted after the BoJ policy announcement where it kept policy settings unchanged but tweaked its forward guidance and announced a broad monetary policy review lasting one to one and a half years.
• Antipodeans eventually softened in late trade.
• PBoC set USD/CNY mid-point at 6.9240 vs exp. 6.9249 (prev. 6.9207)

FIXED INCOME

• 10yr UST futures languished around the prior day’s lows after the continued bear-flattening with pressure from recent US data releases although found some support after the BoJ kept policy settings unchanged.
• Bund futures were initially pressured beneath 134.00 but then pared losses after the BoJ announcement.
• 10yr JGB futures were underpinned following the BoJ policy decision where it kept policy setting unchanged and stuck to a dovish tone despite the tweak to its forward guidance.

COMMODITIES

• Crude futures gradually edged higher with tailwinds from the broader risk tone.
• Russia is mulling a range of options to get extra cash from oil firms, according to Bloomberg.
• Spot gold was kept rangebound as the greenback edged modest gains.
• Copper futures were underpinned amid the mostly constructive risk environment.

CRYPTO

• Bitcoin was choppy after the prior day's rally lost steam around the USD 29,500 level.

NOTABLE ASIA-PAC HEADLINES

• White House National Security Adviser Sullivan said the US is working for de-risking and diversifying, not decoupling from China. Sullivan said the US is trying to limit China's ability to use US technology against the US but added the US is not cutting off trade and is not looking for confrontation with China, while it is working to cooperate where possible.
• Chinese Commerce Minister Wang Wengtao met German Vice Chancellor Habeck in Berlin to discuss the implementation of economic and trade consensus between both countries, while they also discussed deepening bilateral practical cooperation, creating a fair and just business environment for Chinese and German companies, as well as green cooperation, according to MOFCOM.
• BoJ kept policy steady with rates at -0.10% and parameters of QQE with YCC maintained, but tweaked its forward guidance whereby it stated that it will take additional easing steps without hesitation as needed while striving for market stability in which the central bank dropped its reference to COVID-19 pandemic and dropped forward guidance that pledged to keep interest rates at current or lower levels. BoJ also announced to conduct a broad-perspective review of monetary policy with a planned time-frame of one to one and a half years and noted that it will patiently continue with monetary easing as uncertainty over Japan's economy is extremely high.

DATA RECAP

• Japanese Industrial Production MM (Mar) 0.8% vs. Exp. 0.5% (Prev. 4.6%)
• Japanese Retail Sales YY (Mar) 7.2% vs. Exp. 5.8% (Prev. 6.6%, Rev. 7.3%)
• Japanese Unemployment Rate (Mar) 2.8% vs. Exp. 2.5% (Prev. 2.6%)
• Tokyo CPI YY (Apr) 3.5% vs. Exp. 3.3% (Prev. 3.3%)
• Tokyo CPI Ex. Fresh Food YY (Apr) 3.5% vs. Exp. 3.2% (Prev. 3.2%)
• Tokyo CPI Ex. Fresh Food & Energy YY (Apr) 3.8% vs. Exp. 3.5% (Prev. 3.4%)

GEOPOLITICAL

• Air raid alerts were issued throughout Ukraine and explosions were reported in several Ukrainian cities including its capital Kyiv, according to Interfax and local Telegram channels.
• US imposed sanctions against Russia's FSB and the intelligence unit of Iran's IRGC.
• China's envoy to Japan Wu said China opposes bullying and meddling with other countries' internal affairs, as well as opposes pushing one country's system to others. Wu added the Taiwan issue is China's internal issue and a red line that should not be crossed, while China hopes for a peaceful resolution to the Taiwan issue but would not promise to abandon the use of force, according to Reuters.
• South Korean President Yoon said Seoul will respond firmly to North Korean provocations but will keep the door open for dialogue on North Korean denuclearisation.

EU/UK

• UK government reportedly U-turns on the plan to scrap or revise all EU law, according to FT.
• EU is to push index providers to include its debt in government bond indices and is currently analysing how it fulfils index criteria, while BlueBay and Amundi are among investors calling for inclusion, according to Reuters sources.
• EU lawmakers committee reached a deal on the artificial intelligence act, which would pave the way to the first-ever regulation of AI.

DATA RECAP

• UK Lloyds Business Barometer (Apr) 33 (Prev. 32)