UKRAINE: WSJ Reporting Trump Told EU Leaders Putin Believes He’s Winning

At the Tokyo lunch break, JGB futures are sharply weaker and at session lows, -41 compared to the settlement levels.

• "Bank of Japan officials see no need to change their stance on gradually raising interest rates despite US tariffs, as they wait for more data to analyse the impact. The BOJ is likely to hold its policy settings steady at its May 1 meeting and may cut its price forecast due to a stronger yen, cheaper oil, and economic weakness." (per BBG)
• “The impact of Donald Trump’s tariff campaign has already filtered through to Japanese companies, with about 10% saying the measures have affected their businesses and more voicing concern on the future jolt, according to a MoF survey.” (per BBG)
• Cash US tsys are slightly cheaper, with a flattening bias, in today's Asia-Pac session after yesterday's long-end sell-off.
• Cash JGBs are 1- 5 bps cheaper across benchmarks, with the belly leading. The benchmark 10-year yield is 4.5bps higher at 1.330% versus the cycle high of 1.596%.
• Swap rates are 2-6 bps higher. Swap spreads are mixed.
• Today, the local calendar will be empty apart from an Enhanced Liquidity Auction for 15.5-39-year JGBs.

Earlier USD gains haven't been sustained, with the G10 currencies supported on dips so far today versus the USD. The BBDXY index was last near 1214, down around 0.15% for the session, but still above intra-session lows from Monday (near 1212). 

• There hasn't bene an obvious catalyst for this turnaround in USD sentiment since this morning. US equity futures are still positive, albeit off earlier highs. Regional equity sentiment is mixed, but outperforming Monday's cash US falls (so hinting at further US asset market underperformance). US Tsy yields are little changed in latest dealings.
• Yen is the strongest performing G10 currency, with USD/JPY finding selling interest above 141.00. We track near 140.15/20 now, up 0.50% in yen terms. This is fresh lows in the pair back to September last year. Sep 16 lows from that period were at 139.58.
• EUR/USD is back up to 1.1535/40, just short of recent highs (1.1573). USD/CHF is back under 0.8100 but little changed for the session.
• AUD/USD is near 0.6430/35, eyeing Monday highs close to 0.6440, while NZD/USD is up to 0.6015/20. 

AUDUSD approached 64c earlier in the APAC session but rebounded following a higher CNY fixing. The pair is now up 0.2% to 0.6427, close to the intraday high and just below resistance at 0.6428. Risk appetite appears to have stabilised with mixed equity and commodity prices, which is probably contributing to the narrow range in AUDUSD. After falling 0.7% yesterday, the USD index is flat but off today’s peak. 

• Aussie is little changed against other major currencies, which it weakened against on Monday. AUDNZD is slightly higher at 1.0697 following a peak of 1.0706. AUDJPY is down 0.1% to 90.30 after rising to 90.58. AUDEUR is up 0.1% to 0.5579 but off today’s high of 0.5588 and AUDGBP is flat at 0.4796 after breaking above 0.4800 briefly.
• Equities are mixed with the S&P e-mini up 0.6% and KOSPI +0.1%, ASX & CSI 300 flat, but Hang Seng down 0.5% & TAIEX -0.8%. Oil prices are higher with WTI +0.7% to $62.85/bbl. Copper is up 0.6% but iron ore is below $99/t.
• Later the Fed’s Jefferson, Harker, Kashkari, Barkin and Kugler appear with the focus likely to be on any comments related to central bank independence. April Philly/Richmond Fed indices and preliminary April euro area consumer confidence print. The ECB’s de Guindos speaks.