What to watch

There is some divergence between equity index futures this morning with European and to a lesser extent US equity futures moving higher this morning but Asian indices lower, led by Hong Kong.

• Asian equities have been under pressure due to hits to HK tech stocks and worsening local COVID dynamics (most notably lockdowns in Shenzhen and Jilian province and restrictions in Shanghai).
• However, western markets hav focused more on the positives with the potential for a Russia-Ukraine agreement in "days" (in the words of diplomats on both sides of the negotiating table), although the conflict continues to rage and Russia moved their airstrikes further west within Ukraine over the weekend.
• The Eurodollar futures strip is down 4-5 ticks since Friday's close with a steepening in the Whites. SONIA futures have opened lower, too, with most of the strip down 1.5-2.0 ticks. The Euribor strip is little moved on the day.
• US and German government bond curves have both seen yields increase by over 3bp actoss the curve.
• This morning saw Swedish inflation come in higher than expected and we have already seen Nordea update its Riksbank forecast to now be looking for two hikes this year. The rest of the day is light for the data calendar.
• Markets will continue to trade Russia-Ukraine headlines this morning while there will also be focus on this Wednesday's FOMC meeting and Thursday's BOE meeting.