MNI EUROPEAN OPEN: Russia Admits Losses Of Troops As EU Bans Its Coal Imports

EXECUTIVE SUMMARY

• FED’S BULLARD FAVOURS 3%-3.25% RATES THIS YEAR TO BLUNT INFLATION (BBG)
• FED’S BOSTIC, EVANS BACK RATE RISES WITH DOVISH OVERTONES (RTRS)
• EU BACKS RUSSIAN COAL BAN IN FIRST PUNCH AT ENERGY REVENUE (BBG)
• PUTIN’S SPOKESMAN ADMITS “SIGNIFICANT” RUSSIAN LOSSES IN UKRAINE (Sky)
• TOP CHINESE SECURITIES NEWSPAPER SEES LIKELY RRR CUT IN 2Q (BBG)

Fig. 1: U.S. Dollar Index (DXY)

Source: MNI - Market News/Bloomberg

UK

POLITICS: Rishi Sunak believes he is the victim of a “political hit job” designed to cause maximum damage after details of his wife’s tax affairs were leaked. The chancellor thinks the disclosure of her tax status on the day he increased national insurance was a “co-ordinated attack”. Allies even claimed that the leak represented a potential criminal offence. However, neither Sunak nor Akshata Murty, his wife, have gone to the police. “He thinks it’s a total smear,” one ally said. “It feels like there’s a full-time briefing operation against him. This is a hit job, a political hit job. Someone is trying to undermine his credibility.” (The Times)

ENERGY: The government has been accused of "incoherence" and "missed opportunities" in its Energy Security Strategy, by environmentalists who say it contradicts climate targets and overlooks cheaper, greener and faster alternatives. Policy experts, scientists, fuel poverty groups and campaigners have all picked out energy efficiency as the "missing piece" of the plans, with many pointing to the fact the cheapest, greenest form of energy is that which is currently wasted. Tessa Khan, director of campaign group Uplift, described the plans as a "betrayal of the millions of families across the UK... being pushed to the brink" by the cost of living crisis. Government advisers on the Climate Change Committee called it "disappointing", but acknowledged difficulties in implementing policy quickly. (Sky News)

EUROPE

GERMANY/UKRAINE: German Chancellor Olaf Scholz is delaying a final decision over whether to give Ukraine high-end tanks for its battle against Russia, despite pressure from several other top officials, according to four people familiar with the deliberations. The plan, pushed by Vice Chancellor and Economy Minister Robert Habeck and Foreign Minister Annalena Baerbock — both senior members of the Green party — would involve about 100 tanks. It comes amid a growing acceptance in Berlin and other Western capitals that Russia’s war in Ukraine could drag on for months or years, and as Kyiv directly appeals for such equipment. A decision on the matter was initially expected this week. But it’s now in limbo as the Social Democrat chancellor — much to the frustration of his governing coalition partners — argues Germany should first reach a common position with Western allies on the subject before delivering such heavy military equipment, the officials said.

GERMANY: German Chancellor Olaf Scholz said he was disappointed the lower house of parliament on Thursday voted against a COVID-19 vaccine mandate for people over 60, but would not launch a second attempt to push for a mandate. A cross-party proposal had envisaged a bill requiring citizens aged 60 and over to be vaccinated against COVID-19 from Oct. 15, in an attempt to avoid another wave of the virus in the autumn. (RTRS)

FINLAND: Public support and political momentum for Finland joining NATO has reached an all-time high as a result of the war in Ukraine, raising the very real possibility that the alliance's borders with Russia could extend by more than 830 miles in a matter of months. The Finnish government is expected to submit a report to parliament on the changed security environment by the end of this month, kicking off a debate and eventually a recommendation on applying for NATO membership. (Axios)

ESTONIA: Nato is stuck on a cold war footing in Europe and needs to acknowledge its eastern expansion by deploying far more forces in the Baltic states to repel a potential Russian attack, according to Estonia’s prime minister. (FT)

U.S.

FED: Federal Reserve Bank of St. Louis President James Bullard said he favors raising interest rates sharply to counter the highest inflation in four decades, and suggested he backs a half-point hike in May along with shrinking the Fed’s bloated balance sheet. “I would like the committee to get to 3-3.25% on the policy rate in the second half of this year,” Bullard told reporters Thursday after a speech at the University of Missouri. “We have to move forthrightly in order to get the policy rate to the right level to deal with the inflation we have got in front of us.” The Fed raised its benchmark overnight rate by 25 basis points last month to a target range of 0.25% to 0.5%. Bullard, who favored a half-point increase, was the lone dissenter in the 8-1 policy vote. (BBG)

FED: As expectations rise that the U.S. Federal Reserve will step up its efforts to contain inflation with bigger interest rate hikes, Chicago Fed President Charles Evans and Atlanta Fed President Raphael Bostic on Thursday provided a somewhat dovish counterpoint. "It's time that we get off of our emergency stance -- I think it's really appropriate that we move our policy closer to a neutral position -- but I think we need to do it in a measured way," Bostic told a Chicago Fed virtual conference on economic mobility. Evans said: "I'm optimistic that we can get to neutral, look around, and find that we're not necessarily that far from where we need to go." (RTRS)

FED: President Joe Biden's nominees to the Federal Reserve moved a step closer to confirmation Thursday after U.S. Senate Majority Leader Chuck Schumer entered procedural motions for two of them, setting up for a potential vote after lawmakers return from Easter Break on April 25. The filing of the motions on Michigan State University's Lisa Cook, nominated to fill a vacant seat on the Board, and Fed Governor Lael Brainard, nominated to be the Fed's vice chair, limits the time for floor debate and starts the clock toward a confirmation vote. A final vote on all four Fed nominees could take place as soon as late April, just days before the Fed is expected to deliver a large interest rate increase and begin shrinking its massive bond holdings in a double-barreled effort to fight decades-high inflation. (RTRS)

CORONAVIRUS: A U.S. appeals court panel on Thursday reinstated President Joe Biden's executive order mandating that federal civilian employees be vaccinated against COVID-19.By a 2-1 vote, the 5th Circuit Court of Appeals lifted an injunction issued by a U.S. district judge in Texas in January that had blocked enforcement of the federal employee vaccine mandate. (RTRS)

CORONAVIRUS: U.S. House of Representatives Speaker Nancy Pelosi has COVID-19 and is currently asymptomatic, her spokesman said on Thursday, after more than half a dozen other federal officials tested positive in recent days. The Democratic leader tested positive after a negative test result earlier in the week, spokesman Drew Hammill said in a statement. (RTRS)

POLITICS: Ketanji Brown Jackson was confirmed by the Senate on Thursday as the first Black woman to serve on the Supreme Court in a milestone for the United States and a victory for President Joe Biden, who made good on a campaign promise as he seeks to infuse the federal judiciary with a broader range of backgrounds. The vote to confirm the 51-year-old federal appellate judge to a lifetime job on the nation's top judicial body was 53-47, with three Republicans - Susan Collins, Lisa Murkowski and Mitt Romney - joining Biden's fellow Democrats. (RTRS)

OTHER

U.S./CHINA: Any visit to Taiwan by US House Speaker Nancy Pelosi would cross Beijing’s “red line”, China’s Foreign Minister Wang Yi warned on Thursday, in a rare direct comment on a specific American visitor to the self-ruled island. Wang warned that Washington would bear sole responsibility for the consequences of a visit, in a phone conversation with French diplomatic counsellor Emmanuel Bonne. (SCMP)

U.S./CHINA: A Chinese national has been sentenced to 29 months in prison after pleading guilty in January to conspiring to steal trade secrets from agricultural company Monsanto to benefit the Chinese government, the U.S. Justice Department said on Thursday. (RTRS)

G20: The Kremlin said on Thursday that it would make a decision on whether Russian President Vladimir Putin takes part in a G20 summit later this year in Indonesia based on how events evolve. Kremlin spokesperson Dmitry Peskov was responding to a question about calls by some leaders of G20 countries to exclude Putin from the summit over his decision to send tens of thousands of troops into Ukraine. "We will clarify this, after all Indonesia is the organiser," said Peskov. (RTRS)

CANADA: Finance Minister Chrystia Freeland tabled her second federal budget Thursday — a multi-billion dollar plan meant to help the country weather increasingly uncertain times through major investments to cool Canada's red-hot housing market and supercharge the transition to a cleaner, greener economy. Freeland signalled the days of eye-popping 12-digit budget deficits are coming to an end and promised a return to greater fiscal prudence now that the immediate threat of COVID-19 has abated. With corporate Canada jittery about Ottawa's sky-high deficit spending in recent years, Freeland acknowledged the country's ability to spend is "not infinite" and — with interest rates now rising to tame inflation — it's time for the government to "review and reduce" spending. (CBC)

PERU: Peru's government on Thursday ordered its armed forces to supervise the country's highways for the next month, amid crippling protests nationwide over rising food and fuel prices. (RTRS)

RUSSIA: The European Union agreed to ban coal imports from Russia in its first move targeting Moscow’s crucial energy revenue after reports of Russian atrocities in Ukraine propelled officials to expand its fifth round of sanctions. The sanctions package, which also includes a ban on most Russian trucks and ships from entering the EU, was signed off by the bloc’s diplomats Thursday, France announced. It was also coordinated with the U.S. and the U.K. Member states have until Friday morning to lodge final objections before the sanctions are formally adopted. (BBG)

RUSSIA: The United States is ramping up sanctions against Russia to deprive Moscow's "war machine" of money and components needed to sustain its invasion of Ukraine, but curbing a main source of funding, Russian energy exports, will take time, U.S. Deputy Treasury Secretary Wally Adeyemo told Reuters on Thursday. The United States and its allies have "a lot more that we can and we will do" to punish Moscow if Russia fails to halt its invasion, Adeyemo told Reuters in an interview. (RTRS)

RUSSIA: Vladimir Putin's spokesman has admitted a "significant" loss of Russian troops since the invasion of Ukraine began, telling Sky News their deaths are a "tragedy". Dmitry Peskov, in his first broadcast interview with Western media, also said Russia hopes "this operation" will reach its goals "in the coming days". He told Sky News' Mark Austin that "we're living in days of fakes and lies" and verified photos and satellite images of dead civilians in the streets of Ukrainian cities were a "bold fake". "We deny the Russian military can have something in common with these atrocities and that dead bodies were shown on the streets of Bucha," he told Sky News. He maintained the whole situation in Bucha, where photos show many murdered Ukrainian civilians, was a "well-staged insinuation, nothing else". (Sky News)

RUSSIA: The war in Ukraine is in a "precarious" phase with the Russian military "resetting and positioning" ahead of what may be an "even more brutal" campaign, according to the head of the Royal Air Force. Air Chief Marshall Sir Mike Wigton told Sky News: "Everything from our intelligence tells us that Russia is repositioning for another attack. "Potentially it will be even more brutal, even more barbaric, even more illegal than what we've already seen," he said. (Sky)

RUSSIA: Kremlin spokesperson Dmitry Peskov said on Thursday that if Finland and Sweden joined NATO then Russia would have to "rebalance the situation" with its own measures. If the two countries join, "we'll have to make our western flank more sophisticated in terms of ensuring our security," Peskov told Britain's Sky News. (RTRS)

RUSSIA: The world's third-largest coal importer Japan plans to reduce Russian coal imports gradually while looking for alternative suppliers in the wake of sanctions against Moscow, the industry minister said on Friday. The move also highlights a potential shift in Japan's energy procurement policy. (RTRS)

RUSSIA: Ukraine would expect Russia to suspend hostilities during an eventual papal visit to Kyiv, the Ukrainian ambassador to the Vatican told Reuters on Thursday. Ambassador Andriy Yurash spoke hours after he met Pope Francis and top Vatican officials to formally present his credentials. Francis told reporters during a visit to Malta at the weekend that he was considering a trip to Kyiv to make a peace appeal there. Francis said a trip was "on the table." (RTRS)

RUSSIA: The territory of Sumy region is completely free from the Russians. It is noted that the explosions are caused by rescuers and explosives technicians disposing of ammunition left by the Russian military. (Ukrainska Pravda)

PAKISTAN: Pakistan's Prime Minister Imran Khan is due to address the nation on Friday after the Supreme Court ruled he acted unconstitutionally in blocking an attempt to oust him - a decision that could end his premiership in days. (RTRS)

MIDDLE EAST: Saudi Arabia, Kuwait and Yemen on Thursday announced a return of their ambassadors to Lebanon in a sign of improving ties that hit rock bottom last year when the kingdom and other Gulf states withdrew their envoys. The Saudi foreign ministry said its ambassador returned in response to calls by "moderate" Lebanese political forces and after remarks by Prime Minister Najib Mikati regarding "ending all political, military and security activities" that affect Saudi Arabia and other Gulf states. (RTRS)

MIDDLE EAST: Yemen's president delegated power to a presidential council and dismissed his deputy on Thursday as Saudi Arabia moved to strengthen an anti-Houthi alliance amid U.N.-led efforts to revive negotiations to end the seven-year war. Riyadh announced $3 billion in financial aid to the Saudi-backed government after the announcement by President Abd-Rabbu Mansour Hadi. It called for talks with the Houthis who control the north and have been battling the Saudi-led coalition. (RTRS)

METALS: Commodity trader Trafigura and other firms are moving to take large amounts of zinc out of London Metal Exchange approved warehouses in Asia, sources familiar with the matter said, fuelling concern about more problems at the exchange after chaotic nickel trading last month. A Trafigura spokesperson in response to request for comment said "we don't usually comment on commercial matters". (RTRS)

OIL: Record volumes of fuel oil from Latin America landed in the United States in March, customs data showed, as refiners snapped up alternatives to Russian feedstocks ahead of Washington's April 22 deadline to end U.S. imports of Russian oil. U.S. Gulf Coast refiners that use fuel oil to supplement heavy crude went hunting for new supplies last month after U.S. President Joe Biden placed a ban on Russian crude and refined products with a 45-day wind-down period. (RTRS)

OIL: The International Energy Agency (IEA) on Thursday confirmed member country contributions to the second collective action to release oil stocks in response to Russia’s invasion of Ukraine. The commitments submitted by members reached 120 million barrels to be released over a six month period, the IEA added. The U.S. will release 60 million barrels of oil from storage and Japan will release 15 million barrels. (RTRS)

CHINA

PBOC: China is likely to cut banks’ reserve requirement ratio in the second quarter to stabilize the economy, China Securities Journal says in a front-page report, citing analysts. China is also expected to accelerate approval of local government special bond issuance quota to prop up investment: paper. Some analysts also hope there is room for deposit interest rate cut. (BBG)

CORONAVIRUS: The Chinese Communist Party’s flagship newspaper defended President Xi Jinping’s stringent virus strategy, saying the Covid Zero policy is essential to saving lives and keeping the economy going, as doubts grow with more than 21,000 new cases recorded in Shanghai alone. In a front-page commentary, the People’s Daily said that the more transmissible omicron variant “has made it more difficult to find the virus and prevent the epidemic.” It then went on to say that “the more this is the case, the more we should adhere to the general policy of ‘dynamic zero’ without hesitation or wavering,” using Beijing’s wording for the country’s virus approach. (BBG)

CORONAVIRUS: Shanghai is transforming conference centers and conscripting neighboring provinces to create isolation facilities for hundreds of thousands of people, a sign of its commitment to a zero tolerance approach to Covid-19 amid China’s worst outbreak to date. The Chinese financial hub is adding tens of thousands of beds to what are already some of the world’s biggest isolation sites as it sticks to a policy of quarantining all those positive for the virus, regardless of severity, plus everyone they interacted with while infected. Nearly 150,000 people have been identified as close contacts and put into isolation. More than 100,000 others are considered secondary contacts and are being monitored, according to the government. (BBG)

CORONAVIRUS: China's targeted and effective COVID-19 prevention and control efforts have ensured the safe and smooth hosting of Beijing Olympic and Paralympic Winter Games, Chinese President Xi Jinping said Friday. Xi, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, made the remarks at a gathering in Beijing on Friday morning to honor those who have made outstanding contributions to the Beijing 2022 Olympic Winter Games and the Beijing 2022 Paralympic Winter Games. (Xinhua)

OVERNIGHT DATA

JAPAN FEB BOP TRADE BALANCE -Y176.8BN; MEDIAN -Y205.0BN; JAN -Y1,604.3BN
JAPAN FEB BOP CURRENT ACCOUNT BALANCE +Y1,648.3BN; MEDIAN +Y1,450.0BN; JAN -Y1,196.4BN
JAPAN FEB BOP CURRENT ACCOUNT ADJUSTED +Y516.6BN; MEDIAN +Y274.8BN; JAN +Y184.0BN

JAPAN MAR BANKRUPTCIES -6.46% Y/Y; FEB +2.91%

JAPAN MAR CONSUMER CONFIDENCE INDEX 32.8; MEDIAN 36.8; FEB 35.3

SOUTH KOREA FEB BOP CURRENT ACCOUNT BALANCE +$6,419.4MN; JAN +$1,915.5MN
SOUTH KOREA FEB BOP GOODS BALANCE +$4,273.3MN; JAN +$820.1MN

NEW ZEALAND MAR ANZ TRUCKOMETER HEAVY +1.8%; FEB +0.8%

CHINA MARKETS

PBOC INJECTS CNY10 BILLION VIA OMOS, LIQUIDITY UNCHANGED

The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged at 2.1% on Friday. This keeps the liquidity unchanged after offsetting the maturity of CNY10 billion repos today, according to Wind Information.

• The operation aims to keep liquidity reasonable and ample, the PBOC said on its website.
• The 7-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.9893% at 09:30 am local time from the close of 2.0223% on Thursday.
• The CFETS-NEX money-market sentiment index closed at 44 on Thursday vs 45 on Wednesday.

PBOC SETS YUAN CENTRAL PARITY AT 6.3653 FRI VS 6.3659

The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 6.3653 on Friday, compared with 6.3659 set on Thursday.

MARKETS

UP TODAY (Times GMT/Local)

Date	GMT/Local	Impact	Flag	Country	Event
08/04/2022	0001/0101	**		UK	IHS Markit/REC Jobs Report
08/04/2022	0600/0800	**		NO	Norway GDP
08/04/2022	0700/0900	**		ES	Industrial Production
08/04/2022	0800/1000	*		IT	Retail Sales
08/04/2022	1115/1315			EU	ECB Panetta at IESE Business School Conference
08/04/2022	1230/0830	***		CA	Labour Force Survey
08/04/2022	1400/1000	**		US	Wholesale Trade
08/04/2022	1600/1200	***		US	USDA Crop Estimates - WASDE