• Asian equities saw a tentative session ahead of upcoming risk events and lacklustre earnings from Apple
  • AUD underperforms FX markets in the wake of softer than expected domestic inflation data which heightened calls for further RBA rate cuts
  • Looking ahead highlights Include Fed, RBNZ and Brazilian rate decisions, UK GDP, US Pending Home Sales and ECB's Hansson

ASIA

Asia equity markets traded mixed following the tentative lead from Wall St. as participants remained weary ahead of the upcoming FOMC & BoJ meetings, while disappointing earnings from Apple also weighed on Asian suppliers . ASX 200 (-0.3%) initially outperformed after WTI climbed to YTD highs following an unexpected API drawdown, while weak domestic CPI data also boosted RBA rate cut hopes. However, the index was then dragged into negative territory alongside the risk-averse tone in the region. Nikkei 225 (-0.6%) was negative on cautiousness as the BoJ kicked off its 2-day policy meeting, with Apple suppliers in the region also suffering following poor Q2 results from the tech giant which missed on earnings, revenue and forecasts, while iPhone sales declined for the 1st time Y/Y. Shanghai Comp (+0.3%) was underpinned by strong Industrial Profits which rose 11.1% Y/Y, although declines in Chinese commodity prices and default concerns have capped gains. 10yr JGBs weakened with participants side-lined ahead of the upcoming policy decision, while the absence of the BoJ in the market also contributed to the lack of demand.

Chinese Industrial Profits (Mar) Y/Y 11.1% (Prev. -4.7%). (RTRS)

EUROPE/UK

ECB's Weidmann said expansionary ECB monetary policy is entirely appropriate. (BBG)

A Eurogroup spokesman has said there are no plans for Euro Zone ministers to meet on Thursday in regards to Greece, adding that they need more time. (RTRS) Additionally, Greek Prime Minister Tsipras plans to contact EU’s Tusk and ask for a summit of European leaders to discuss a bailout deal, according to a government source. (RTRS)

The King of Spain has said he sees no party forming a majority, as a result fresh Spanish elections are to be held in June. (BBG)

Barclays month-end extensions pan-eur agg +0.12, Barclays month-end extensions sterling agg +0.08

FX

AUD was the main focal point following a poor Australian CPI release in which all components missed estimates, which saw AUD/USD fall over 1 point to trade firmly below 0.7700 and pressured AUD/NZD firmly under 1.1200, while cash rate futures showed odds of a rate cut next week soared to 48% vs. around 13% prior to the announcement. CAD was supported by crude gains with USD/CAD testing a break below 1.2600, while USD/JPY pulled back from yesterday’s highs as the pair remained range-bound ahead of the key-risk events.

Australian CPI (Q1) Q/Q -0.2% vs. Exp. 0.2% (Prev. 0.4%)
CPI (Q1) Y/Y 1.3% vs. Exp. 1.7% (Prev. 1.7%). (RTRS)

New Zealand Balance of Trade (NZD)(Mar) M/M 117mln vs. Exp. 401mln (Prev. 339mln)
Exports (NZD)(Mar) M/M 4.20bln vs. Exp. 4.65bln (Prev. 4.25bln)
Imports (NZD)(Mar) M/M 4.09bln vs. Exp. 4.28bln (Prev. 3.91bln). (RTRS)

COMMODITIES

Oil continued its ascent with WTI crude futures gaining a strong foothold above the USD 44/bbl level to print its highest since November following an unexpected drawdown in API inventories . Gold (+0.1%) prices remained near yesterday’s highs as a cautious tone and USD weakness underpinned. Elsewhere, copper and Dalian iron ore futures extended on losses with the latter declining 6% to hit limit down on Chinese concerns and a continuation of the selling since China increased transaction costs.

API Crude Oil Inventories (Apr 22) W/W -1100k vs. Exp. 2400k (Prev. 3100k). (RTRS)

The World Bank raised its 2016 oil price forecast to USD 41.00/bbl from USD 37.00/bbl. (BBG)

US

The impending Fed meeting played its roles in the fixed income market yesterday, with price action in T-notes on the defensive side. Some tech analysts have noted that although the trend remains negative, oversold conditions are now prominent. T-notes closed the session down 6+ ticks at 129.05+.

Apple (AAPL) Q2 Adj. EPS USD 1.90 vs. Exp. USD 2.00 and Q2 Revenue USD 50.56bln vs. Exp. USD 51.97bln. They forecast Q3 Revenue between USD 41bln-43bln vs. Exp. USD 47.32bln. Q2 iPhone sales 51.2mln units vs. Prev. 61.2mln units last year and Q2 iPad sales 10.3mln units vs. Prev. 12.6mln units last year. Additionally, the Co. authorised an increase of USD 50bln to the return capital program. (RTRS) Co. shares were lower by 5% in post-market trade.

Barclays month-end extensions treas +0.09