• APAC stocks were mostly subdued with weekend macro newsflow light and dominated by geopolitical commentary.
• European equity futures indicate a lower open with Euro Stoxx 50 future -0.2% after the cash market closed up 0.4% on Friday.
• DXY is contained around the 104 mark, EUR/USD sits near its 200DMA @ 1.0826, NZD lags.
• Israeli PM Netanyahu said that they are all working on a hostage deal but he cannot say if they will have it.
• Looking ahead, highlights include US Dallas Fed Manufacturing Business Index, Japanese CPI, Comments from BoE’s Breeden, Pill & ECB’s Lagarde, Supply from UK & US, Earnings from Target.

US TRADE

EQUITIES

• US stocks ultimately finished mixed and relatively flat on Friday after a choppy session which saw two-way swings in NVIDIA before its shares closed marginally in the green, while Treasuries saw pronounced flattening as Fed's Waller was back to being hawkish and with a squeeze higher seen in the long end.
• SPX +0.03% at 5,088, NDX -0.37% at 17,937, DJIA +0.16% at 39,131, RUT +0.14% at 2,016.
• Click here for a detailed summary.

NOTABLE HEADLINES

• Fed's Williams (voter) said on Friday that the view of the economy hasn't changed after the January data and things are moving in the right direction but would have to rethink the outlook if inflation progress stalls, according to an Axios interview. Williams expects consumer spending growth to slow this year and at some point, thinks it will be appropriate to pull back on restrictive monetary policy which he added would likely be later this year.
• US Treasury Department issued a statement on the FSOC's meeting on Friday in which it noted that it is to closely monitor CRE markets and OCC staff were briefed on real estate market developments.
• Former US President Trump won the South Carolina Republican primary to defeat Nikki Haley in her home state, while Haley insisted that she is not giving up the fight, according to Sky News.

APAC TRADE

EQUITIES

• APAC stocks were mostly subdued amid a lack of fresh catalysts ahead of month-end and this week's key data releases including the Fed's preferred inflation gauge, while weekend macro newsflow was light and dominated by geopolitical commentary.
• ASX 200 finished flat after failing to sustain its early gains with price action indecisive amid a slew of earnings.
• Nikkei 225 outperformed on its return from the long weekend and extended on record levels.
• Hang Seng and Shanghai Comp. marginally declined with weakness seen in Hong Kong consumer stocks, while the mainland was also pressured amid ongoing frictions after China's MOFCOM slammed the latest USTR report on China's WTO compliance.
• US equity futures lacked demand with price action uneventful as participants brace for this week's data fest.
• European equity futures indicate a lower open with Euro Stoxx 50 future -0.2% after the cash market closed up 0.4% on Friday.

FX

• DXY kept within a tight range between 103.93-104.02 amid a lack of drivers ahead of this week's data releases.
• EUR/USD traded both sides of its 100-DMA at 1.0813, while the 200-DMA also hovers nearby at 1.0826.
• GBP/USD marginally softened after hitting resistance late last week on approach to the 1.2700 level.
• USD/JPY lacked direction amid the mixed risk appetite in Asia and despite the softer PPI Services data.
• Antipodeans weakened with underperformance in NZD/USD despite the absence of any clear catalysts behind the move, while participants await the RBNZ rate decision scheduled on Wednesday.
• PBoC set USD/CNY mid-point at 7.1080 vs exp. 7.1998 (prev. 7.1064).

FIXED INCOME

• 10-year UST futures marginally extended on last Friday's rebound and climbed back above the 110.00 level in the absence of any major macro drivers heading into month-end and the key events later in the week.
• Bund futures slightly extended upon recent advances with a firmer footing above the 133.00 level.
• 10-year JGB futures tracked the gains in global peers after softer than expected Services PPI data.

COMMODITIES

• Crude futures remained subdued after last week's late retreat despite the various geopolitical headlines and a jump in natural gas futures which climbed as much as 5% amid protest-related disruptions in Libya that closed a subsea natural gas link to Italy.
• US Treasury official said on Friday the US is encouraged by 'significant progress' in the second phase of the Russian oil price cap.
• QatarEnergy CEO said Europe will continue to need gas as part of an energy mix for a very long time and Europe’s gas needs have not peaked, while QatarEnergy also stated that it may need to make additional orders of tankers to ship expanded LNG volumes.
• Exports from the Wafa oil field in western Libya and a subsea natural gas link to Italy were closed following protests, according to Bloomberg citing a person familiar with the matter.
• Spot gold traded rangebound following the pullback from Friday's peak.
• Copper futures were mildly lower with demand sapped alongside the mixed risk appetite.

CRYPTO

• Bitcoin traded marginally lower after an indecisive weekend and briefly dipped below the USD 51,500 level.

NOTABLE ASIA-PAC HEADLINES

• China's Mofcom commented regarding the US report about China's WTO compliance in which it noted that the US falsely claims China has created 'overcapacity' which fully reflects the US side's 'unilateralism and hegemonic behaviour'. Mofcom added the US side ignores the 'great achievements' made by China in fulfilling its WTO commitments and denies the important contribution made by China to the multilateral trading system and world economy, according to Reuters.
• China's Commerce Minister said China is willing to work with New Zealand to implement a free trade agreement and continue to strengthen cooperation in the process of joining the CPTPP.
• US Deputy Treasury Secretary Adeyemo said on Friday that it is clear the Chinese economy is facing challenges from the property sector and demographics, while he is not concerned about headwinds from China's economic challenges but has concerns about China's excess production capacity flowing to global markets.

DATA RECAP

• Japanese Services PPI YY (Jan) 2.1% vs Exp. 2.4% (Prev. 2.4%)

GEOPOLITICS

MIDDLE EAST

• Israeli PM Netanyahu said that they are all working on a hostage deal but he cannot say if they will have it, while he added that they will be weeks away from total victory once they begin the Rafah operation, according to a CBS interview.
• Israel's army presented at the war council meeting a plan to evacuate residents from fighting zones in Gaza, according to Al Jazeera. It was also reported that Israeli PM Netanyahu's spokesman said the war council approved a plan to supply the Gaza Strip with humanitarian aid, according to Al Arabiya.
• Israel’s Defense Minister said there will be no let up in Israeli action against Lebanon’s Hezbollah movement, even if a ceasefire and hostage deal is secured in Gaza, according to AFP.
• White House National Security Adviser Sullivan said Israel, Egypt, Qatar and the US came to a basic understanding of the basic contours of a hostage deal for a temporary ceasefire and the US is hopeful that an agreement could be reached in the coming days, although he noted that a deal is still under negotiation and there will have to be indirect discussions by Qatar and Egypt with Hamas. It was also reported that Egyptian security sources said Qatar will host mediated Hamas-Israel truce talks this week.
• Hezbollah said they targeted a gathering of Israeli enemy soldiers in the vicinity of the Marj site with a volcano missile and achieved a direct hit, according to Al Jazeera.
• US Central Command said Yemen's Houthis launched one anti-ship ballistic missile likely targeting MV Torm Thor in the Gulf of Aden on Saturday although the missile impacted water causing no damage nor injuries, while US forces shot down two one-way attack unmanned aerial vehicles over the southern Red Sea.
• US and UK forces conducted 9 air strikes in Sanaa, according to Al Masirah TV cited by Reuters.
• UKMTO received a report of a small fast boat behaving in an irregular manner 20NM east of UAE’s Khor Fakkan.
• Syrian Defence Ministry said its forces downed seven drones that tried to target military positions and villages in the vicinity of Hama and Idlib, according to state media.

OTHER

• Ukrainian President Zelensky said he hopes a peace summit in Switzerland will take place in spring and a peace plan prepared with partners in Switzerland will be presented to Russia. Zelensky said that the current moment is the most difficult for Ukrainian unity and that improving troop rotations is critical to the war effort, while he also noted there is a clear plan for a new Ukrainian offensive but didn't give details and said Russian forces will attempt another offensive in late May or summer.
• Ukrainian President Zelensky said a US aid package is needed within a month and is essential to support troops on the battlefield, according to FT. It was separately reported that Zelensky and Canadian PM Trudeau signed a bilateral security agreement during a ceremony in Kyiv and Zelensky stated via Telegram that Canada is to provide more than CAD 3bln in financial and defence aid this year. Zelensky also signed a security agreement with Italian PM Meloni, while Meloni stated that Italy committed to military support for Ukraine and said peace cannot mean surrender, according to Reuters.
• G7 Leaders’ statement stated they remain convinced that they can ensure Ukraine prevails in fighting for its future and will help Ukraine meet its urgent financing needs, while it added that Ukraine can count on their support for as long as it takes.
• UK PM Sunak called for Western countries to be more aggressive in seizing frozen Russian assets and passing the proceeds on to Ukraine to finance its defence, according to Bloomberg.
• Ukraine attacked Russia’s Novolipetsk Steel plant with drones which caused a major fire at the facility, according to Reuters.
• Russian Defence Ministry said Russian forces took a more advantageous position near Avdiivka and rebuffed seven Ukrainian counterattacks, according to Reuters.
• Russia’s Deputy Foreign Minister said contact with the US over nuclear weapons in space has proven to be unproductive, while he added that the US has not presented any proof of allegations that Russia wants to put nuclear weapons in space.
• US military aircraft intercepted a balloon over Utah on Friday which was said to be small and not manoeuvrable, while the balloon was allowed to continue flying as the US concluded the balloon was not a threat to civil aviation or national security.

EU/UK

NOTABLE HEADLINES

• ECB is reportedly close to agreeing on a new monetary framework that some officials hope will pave the way to an ultimate revival of the interbank market, according to people familiar cited by Bloomberg.
• EU finance ministers reportedly clash over efforts to centralise markets supervision with Eurogroup President Donohoe noting there is a ‘strong diversity of views,’ and that member states disagree over the level of ambition to build a common supervisory regime as part of the roadmap to progress toward a capital markets union that the EU wants to settle by next month, according to Bloomberg.
• Hopes of a reversal in the UK's "tourist tax" in the upcoming budget are "diminishing" after the financial secretary to the Treasury warned of the complexities of such a move, according to The Times.