• European sentiment pressured by Flash-Prelim. growth data while earnings remain in focus
• A dynamic that has eased somewhat since the EZ-wide figure, Euro Stoxx 50 -0.7%, with attention on upcoming US data points/earnings
• AMZN initially rose but is currently -2% in pre-market with the focus on AWS; in Europe, banking names lag amid NatWest and yield action
• DXY eclipsed 102.00 as JPY sinks as BoJ maintains ultra-easy policy and gives dovish sounding guidance
• EGBs bid given the mostly sub-consensus EZ data, though off highs, USTs moving in-tandem
• Looking ahead, highlights include German HICP Prelim., US PCE Price Index, ECI, Speech from ECB's Lagarde, Earnings from Colgate, Berkshire Hathaway.

EUROPEAN TRADE

EQUITIES

• European bourses are in the red with earnings continuing to be in focus alongside numerous macro developments, with initial downside exacerbated on the softer-than-expected German growth data, though this dynamic has lessened slightly after the near in-line EZ figures and as attention turns to the US docket and next week's EZ data.
• Specifically, Euro Stoxx 50 -0.8% with the Banking sector pressured by a poorly received NatWest update with a focus on margins alongside the pullback in yields; more broadly, FRC remains in focus as Reuters reports officials are said to be coordinating urgent rescue talks.
• Autos are pressured as Mercedes-Benz failed to retain opening gains and after Thursday's relative outperformance for the sector.
• Stateside, futures have been somewhat rangebound but showing modest downside, ES -0.3; with the after-market reports from AMZN & INTC in focus as the oil majors begin reporting.
• Click here and here for the European earnings, highlights include: Mercedes-Benz, Danske Bank, NatWest, Saint-Gobain & more.
• Click here for more detail.

US EARNINGS

• 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%. In the pre-market, -1.5%.
• Amgen Inc (AMGN) Q1 2023 (USD): EPS 3.98 (exp. 3.85), Revenue 6.11bln (exp. 6.17bln) -0.7% in the pre-market
• Intel Corp (INTC) Q1 2023 (USD): Adj. EPS -0.04 (exp. -0.15), Revenue 11.70bln (exp. 11.04bln) +4.1% in the pre-market
• Aon PLC (AON) Q1 2023 (USD): Adj. EPS 5.17 (exp. 5.32), Revenue 3.9bln (exp. 3.84bln).
• Chevron Corp (CVX) Q1 2023 (USD): adj. EPS 3.55 (exp. 3.41), Revenue 48.8bln (exp. 47.89bln)

FX

• Yen sinks as BoJ sticks to ultra-easy policy and gives dovish-sounding guidance via the statement and post-meeting presser; USD/JPY probes 136.00 from sub-133.50 low, EUR/JPY touches 149.50 from under 147.50.
• DXY tops 102.000 compared to 101.420 base amidst broader Dollar recovery gains pre-US PCE and ECI, Euro undermined by largely weaker than forecast EZ data as EUR/USD retreats through 1.1000 and away from mega option expiries at the strike
• Aussie losing battle to defend 0.6600 vs its US rival, but may be aided by decent option expiry interest at the round number
• PBoC set USD/CNY mid-point at 6.9240 vs exp. 6.9249 (prev. 6.9207)
• Norwegian/Norges Bank Currency Purchase (May) NOK 1.4bln vs Exp. NOK 1.0-1.3bln (Prev. NOK 1.5bln).
• Click here for more detail.
• Click here for the notable FX expiries for today's NY cut.

FIXED INCOME

• Bunds and fellow EGBs bounce strongly in the wake of mostly sub-consensus Eurozone data, aside from hot French inflation.
• 10 year German benchmark up to 135.26 at best from 133.64, Gilts and T-notes follow suit between 100.53-101.51 and 114-17+/115-08 + bounds pre-US PCE and ECI.
• Click here for more detail.

COMMODITIES

• WTI and Brent futures have erased the modest gains seen overnight in light of the German GDP metrics, which saw Europe’s largest economy stagnating Q/Q in Q1; though, in-fitting with European sentiment, the benchmarks have picked up from post-data lows ahead of the US docket & oil major updates.
• The metals complex sees broader pressure from a firmer Dollar. Spot gold remains under USD 2,000/oz but within yesterday’s range.
• Base metals are mostly lower given the downbeat risk tone and the aforementioned firmer Dollar, 3M LME copper eyes USD 8,500/t to the downside.
• Click here for more detail.

NOTABLE HEADLINES

• US officials reportedly coordinate 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 Cos regarding a lifeline. Gov't involvement is reportedly in bringing more parties to the discussions. Piece adds that it is unclear if the gov't is considering partaking in a private-sector rescue of FRC.

DATA RECAP

• German North Rhine-Westphalia State CPI YY (Apr) 6.8% (Prev. 6.9%); MM (Apr) 0.5% (Prev. 0.6%)
• French CPI Prelim YY NSA (Apr) 5.9% vs. Exp. 5.7% (Prev. 5.7%); NSA (Apr) 0.6% vs. Exp. 0.4% (Prev. 0.9%)
• French CPI (EU Norm) Prelim YY (Apr) 6.9% vs. Exp. 6.6% (Prev. 6.7%)
• Spanish CPI YY Flash NSA (Apr): 4.1% vs Exp. 4.4% (prev. 3.3%); Core 6.6% (prev. 7.5%)
• Spanish HICP Flash YY (Apr) 3.8% vs. Exp. 4.1% (Prev. 3.1%)
• EU GDP Flash Prelim QQ (Q1) 0.1% vs. Exp. 0.2%; YY (Q1) 1.3% vs. Exp. 1.4% (Prev. 1.8%)
• German GDP Flash QQ SA (Q1) 0.0% vs. Exp. 0.2% (Prev. -0.4%, Rev. -0.5%); YY SA (Q1) -0.1% vs. Exp. 0.3% (Prev. 0.9%)
• French GDP Preliminary QQ (Q1) 0.2% vs. Exp. 0.2% (Prev. 0.1%)
• Swiss KOF Indicator (Apr) 96.4 vs. Exp. 98.1 (Prev. 98.2, Rev. 99.2)
• UK Lloyds Business Barometer (Apr) 33 (Prev. 32)

NOTABLE US 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).
• 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.
• Click here for the US Early Morning Note.

GEOPOLITICS

• 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.
• Russian Defence Ministry says they are increasing the combat readiness of bases in Kyrgyzstan and Tajikistan amid US attempts to restore a military presence in central-Asia, via Tass.

CRYPTO

• Bitcoin has eased further away from the USD 30k mark after failing to convincingly challenge it overnight or in Thursday's session.

APAC TRADE

• 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.

NOTABLE ASIA-PAC HEADLINES

• 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.
• China's Politburo says China economic expansion is under recovery, but internal momentum is weak; economic transformation faces new constraints. Should prioritise attracting foreign investment and stabilise the basic market for foreign trade/investment.
• 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.
• Governor Ueda: Will make changes to monetary policy as needed during the review period.; decided to maintain policy easing including YCC, will conduct a review of policy of past 25 years; Japanese CPI is likely to slow below 2% in H2 2023. Review is differentiated from examination/assessment as it does not intend near-term policy changes. Won't hesitate to ease policy further if necessary.

DATA RECAP

• Japanese Industrial Production MM (Mar) 0.8% vs. Exp. 0.5% (Prev. 4.6%); 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%); Ex. Fresh Food & Energy YY (Apr) 3.8% vs. Exp. 3.5% (Prev. 3.4%)