UK Again Debate And Vote Withdrawal Agreement But Not The Political Declaration

Notes/Observations

• Optimism continues on US-China trade talks
• UK Parliament to vote on withdrawal agreement later today which sets out terms for UK’s departure from the Bloc; Motion likely again to face defeat as both Labour and DUP parties have stated they would vote against it. I fifth govt loses this vote it would have until Apr 12th to get a deal though or indicate a way forward
• European inflation data continued to come in soft (France CPI missed)
• Germany Feb Retail Sales beat expectations

Asia:

• Japan Feb Jobless Rate registered its lowest reading since Sept 2018 (2.3% v 2.5%e)
• Japan Mar Tokyo CPI Y/Y: 0.9% v 0.9%e; CPI Ex-Fresh Food Y/Y: 1.1%
• Japan Feb Preliminary Industrial Production M/M: 1.4% v 1.4%e; Y/Y: -1.0% v -1.1%e
• Japan Feb Preliminary Retail Sales M/M: 0.2% v 1.0%e; Retail Trade Y/Y: 0.4% v 1.0%e
• RBNZ Gov Orr stated that was pleased markets had shown they understood what the central bank was focused on in its policy review. Noted that its easing bias was the starting point for the MPC

Europe:

• Parliamentary Speaker Bercow accepted new Brexit deal vote; govt’s motion would cover only withdrawal agreement
• Northern Ireland’s DUP party confirmed they would vote against withdrawal agreement approval motion just announced
• ECB’s Draghi is said to have told EU officials last week that markets aren’t fully pricing in risk of ‘no deal’ Brexit
• Mar GfK Consumer Confidence: -13 v -14e

Americas:

• Treasury Sec Mnuchin stated that had a very productive working dinner last night with Chinese trade delegation and looked forward to Friday’s meeting
• Fed’s Williams (moderate, voter): US economy is in a very good place; Not worried about the chance of recession
• Fed’s Bullard (Dove, voter): premature to contemplate rate cut here. Most likely economy would be stronger in Q2. Believed recent spate of weaker data was temporary

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +0.3% at 378.0, FTSE +0.5% at 7273, DAX +0.5% at 11482, CAC-40 +0.7% at 5332, IBEX-35 %+0.5 at 9221, FTSE MIB +0.3% at 21134, SMI +0.4% at 9442, S&P 500 Futures +0.1%]
• Market Focal Points/Key Themes: European Indices trade higher across the board tracking higher Indices in Asia overnight and firmer US Index futures this morning. The FTSE trades over 0.5% higher ahead of today’s vote on the Withdrawal agreement which sets out terms for UK’s departure from the Bloc. On the corporate front Swedish retail giant H&M trades sharply higher after profits came in ahead of forecasts; Altice Europe rises sharply following a Revenue beat and upbeat guidance; CVS Group, Touax, and Tele Columbus are among other risers on earnings. TUI Group declines sharply after cutting their outlook due to the grounding of the 737-Max planes, Bowleven, Idox and Adesso are among other decliners in earnings. In other news Wirecard falls again on a fresh FT article on relationships between third party companies and Wirecard. Astrazeneca declines following a collaboration agreement with Daiichi Sankyo and $3.5B share offering; Galapagos gains following a study update, with Ion Beam another notable rise afte announcing an order in China. Looking ahead notable earners include Carmax and Blackberry.

Equities

• Consumer discretionary: H&M [HMB.SE] +13% (earnings), TUI [TUI1.DE] -11% (profit warning), Carl Zeiss Meditec [AFX.DE] -4.5% (analyst action)
• Energy: Bowleven [BLVN.UK] -7% (earnings)
• Healthcare: Astrazeneca [AZN.UK] -4% (deal with Daiichi Sankyo; to pay up to $6.9B), Galapagos [GPLG.BE] +15% (study update), Ion Beam Applications [IBAB.BE] +15% (contracts), CVS Group [SVSG.UK] +19% (earnings)
• Technology: Wirecard [WDI.DE] -4.5% (fresh FT article)
• Telecom: Altice [ATC.NL] +24% (earning), Tiscali [TIS.IT] +15% (restructuring program)

Speakers

• ECB’s Visco (Italy): reiterated General Council forward guidance that interest rates were expected to remain at current level at least until end of 2019. Reiterated confidence that inflation to converge towards target; to be pursued with all available tools
• ECB’s Coeure (France): Medium-term inflation expectations have remained close to levels consistent with price stability
• Northern Ireland DUP Brexit Spokesman Wilson: Confirms that DUP Party to oppose Parliament vote on Withdrawal Agreement later today (as expected) as the deal would keep the UK tied to the EU. DUP to work with Govt to ensure UK leaves the EU
• UK Trade Minister Fox: Not voting for Withdrawal Agreement today would create a new cliff-edge. Parliament has chance to set path for smooth exit on May 22nd. Losing the vote would mean a longer extension to the Brexit. Govt would set out a new approach if it lost the upcoming Parliamentary vote
• UK Attorney General Cox opened Parliamentary debate ahead of the Withdrawal Vote in Commons noting that voting against PM May’s Brexit agreement would hand the EU a veto on extension
• Treasury Sec Mnuchin: have concluded constructive talks in Beijing; looking forward to continuing the negotiations in Washington DC next week
• US and Japan said to launch trade talks on Apr 15-16th
• Russia said not to propose any extension scenario on OPEC+ production cut agreement in Baku and refuted reports that would only agree to extend the OPEC+ production cuts by three months

Currencies/Fixed Income

• GBP currency was softer ahead of the Parliamentary vote on the Withdrawal Agreement. Markets were expecting PM May risks another loss. The vote will be on the Withdrawal Agreement (WA) but only the WA part and not the Political Declaration on the Future Relationship (as with the two previous votes) and outcome likely seen complicating the ratification process. Thus the optimistic view of Brexit was fading as participants looked towards the potential departure of PM May and the risk of a more pro-Brexit leader replacing her. GBP/USD at 1.3025 just ahead of the NY morning

Economic Data

• (ZA) South Africa Feb M3 Money Supply Y/Y: 5.3% v 5.2%e; Private Sector Credit Y/Y: 6.0% v 6.3%
• (DE) Germany Feb Retail Sales M/M: +0.9% v -1.0%e; Y/Y: 4.7% v 2.1%e
• (DE) Germany Feb Import Price Index M/M: 0.3% v 0.4%e; Y/Y: 1.6% v 1.7%e
• (UK) Mar Nationwide House Price Index M/M: 0.2% v 0.0%e; Y/Y: 0.7% v 0.6%e
• (NO) Norway Feb Retail Sales (included Auto/fuel) M/M: -1.3% v -0.1%e
• (TR) Turkey Feb Current Account Balance: -$2.1B v -$2.2Be
• (DK) Denmark Q4 Final GDP Q/Q: 0.8% v 0.7% prelim; Y/Y: 2.6% v 2.2% prelim
• (DK) Denmark Feb Gross Unemployment Rate: 3.7% v 3.7% prior; Unemployment Rate (Seasonally Adj): 3.1% v 3.1% prior
• (FI) Finland Jan Final Trade Balance: €0.5B v €0.5B prior
• (TH) Thailand Feb Current Account Balance: $6.5B v $3.0Be; Overall Trade Account Balance: $3.3B v $2.3B prior; Trade Balance: $3.5B v $0.1B prior; Exports Y/Y: -1.7% v -4.7% prior; Imports Y/Y: -7.3% v 4.2% prior
• (FR) France Mar Preliminary CPI M/M: 0.8% v 0.9%e; Y/Y: 1.1% v 1.2%e
• (FR) France Mar Preliminary CPI EU Harmonized M/M: 0.9% v 1.0%e; Y/Y: 1.3% v 1.4%e – (FR) France Feb Consumer Spending M/M: -0.4% v +0.2%e; Y/Y: -1.8% v -1.2%e
• (FR) France Feb YTD Budget Balance: -€36.9B v -€17.3B prior
• (ES) Spain Q4 Final GDP Q/Q: 0.6% v 0.7%e; Y/Y: 2.3% v 2.4%e
• (ES) Spain Feb Adjusted Retail Sales Y/Y: 1.2% v 1.0%e; Retail Sales (unadj) Y/Y: 1.7% v 1.7% prior
• (CH) Swiss Mar KOF Leading Indicator: 97.4 v 93.8e
• (AT) Austria Feb PPI M/M: 0.0% v 0.1% prior; Y/Y: 1.6% v 1.6% prior
• (RU) Russia Narrow Money Supply w/e Mar 22nd (RUB): 10.23T v 10.32T prior
• (HU) Hungary Feb PPI M/M: -0.3% v -0.5% prior; Y/Y: 2.7% v 3.8% prior
• (HU) Hungary Jan Average Gross Wages Y/Y: 10.6% v 9.9%e
• (DE) Germany Mar Unemployment Change: -7K v -10Ke; Unemployment Claims Rate: 4.9% (record low) v 4.9%e
• (ES) Spain Jan Current Account Balance: -€1.5B v +€4.2B prior
• (NO) Norway Mar Unemployment Rate: 2.4% v 2.4%e
• (CZ) Czech Feb M2 Money Supply Y/Y: 5.9% v 5.7% prior
• (NO) Norway Central Bank (Norges) Bank Daily FX Purchases (NOK): -600M v -600M prior
• (PL) Poland Mar Preliminary CPI M/M: 0.3% v 0.2%e; Y/Y: 1.7% v 1.6%e
• (IS) Iceland Feb Final Trade Balance (ISK): -15.1B v -15.3B prelim
• (UK) Q4 Final GDP Q/Q: 0.2% v 0.2%e; Y/Y: 1.4% v 1.3%e
• (UK) Q4 Final Total Business Investment Q/Q: -0.9% v -1.4%e; Y/Y: -2.5% v -3.7%e
• (UK) Q4 Current Account Balance: -£23.7B v -£22.5Be
• (UK) Feb Net Consumer Credit: £1.1B v £0.9Be; Net Lending: £3.5B v £3.7Be
• (UK) Feb Mortgage Approvals: 64.3K v 65.0Ke
• (UK) Feb M4 Money Supply M/M: 0.3% v 0.2% prior; Y/Y: 1.2% v 0.5% prior; M4 Ex IOFCs 3M Annualized: 2.3% v 2.4% prior
• (PT) Portugal Mar Preliminary CPI M/M: +1.8% v -0.2% prior; Y/Y: 0.9% v 0.9% prior
• (PT) Portugal Mar Preliminary CPI EU Harmonized M/M: +2.1% v -0.3% prior; Y/Y: 0.8% v 0.9% prior

Fixed Income Issuance

• (ZA) South Africa sold total ZAR650M vs. ZAR650M indicated in I/ L 2025, 2038 and 2050 bonds

Looking Ahead

• (IT) Italy Feb PPI M/M: % v 0.0% prior; Y/Y: % v 4.4% prior
• (IT) Bank of Italy 4Q Credit Conditions and Risk
• (MX) Mexico Feb YTD Budget Balance (MXN): No est v -42.7B prior
• 06:00 (IT) Italy Mar Preliminary CPI (including tobacco) M/M: 0.2%e v 0.1% prior; Y/Y: 1.0%e v 1.0% prior
• 06:00 (IT) Italy Mar Preliminary CPI EU Harmonized M/M: +2.1%e v -0.3% prior; Y/Y: 1.0%e v 1.1% Prior
• 06:00 (GR) Greece Jan Retail Sales Value Y/Y: No est v 0.7% prior; Retail Sales Volume Y/Y: No est v 0.5% prior
• 06:00 (EU) Daily Euribor Fixing – 06:00 FR) France Debt Agency (AFT) announces upcoming issuance
• 07:00 (PT) Portugal Feb Industrial Production M/M: No est v 0.8% prior; Y/Y: No est v -3.0% prior
• 07:00 (PT) Portugal Feb Retail Sales M/M: No est v 1.5% prior; Y/Y: No est v 5.4% prior
• 07:00 (UK) DMO to sell €4.0B in 1-month, 3-month and 6-month bills £1.0B, £1.0B and £2.0B respectively)
• 07:30 (IN) India Weekly Forex Reserves w/e Mar 22nd: $405.6B prior
• 07:45 (US) Daily Libor Fixing – 08:00 (ZA) South Africa Feb Budget Balance (ZAR): +4.0Be v -60.3B prior
• 08:00 (ZA) South Africa Feb Trade Balance (ZAR): +3.3Be v -13.1B prior
• 08:00 (BR) Brazil Feb National Unemployment Rate: 12.4%e v 12.0% prior
• 08:00 (CL) Chile Feb Unemployment Rate: 6.9%e v 6.8% prior
• 08:00 (CL) Chile Feb Industrial Production Y/Y: -2.3%e v -0.9% prior; Manufacturing Production Y/Y: 1.1%e v 2.7% prior; Total Copper Production: No est v 460.1K tons prior
• 08:00 (IN) India to announce burrowing plan for H1
• 08:30 (US) Feb Personal Income: +0.3%e v -0.1% prior
• 08:30 (US) Jan Personal Spending: +0.3%e v -0.5% prior; Real Personal Spending (PCE): +0.3%e v -0.6% prior
• 08:30 (US) Jan PCE Deflator M/M: 0.0%e v 0.1% prior; Y/Y: 1.4%e v 1.7% prior
• 08:30 (US) Jan PCE Core M/M: 0.2%e v 0.2% prior; Y/Y: 1.9%e v 1.9% prior
• 08:30 (CA) Canada Jan GDP M/M: +0.1%e v -0.1% prior; Y/Y: 1.3%e v 1.1% prior
• 08:30 (CA) Canada Feb Industrial Product Price M/M: No est v -0.3% prior; Raw Materials Price Index M/M: No est v 3.8% prior
• 09:00 (RU) Russia Q4 Final Current Account Balance: No est v $38.8B prelim
• 09:00 (UK) Baltic Bulk Index
• 09:00 (IN) India announces upcoming bill issuance (held on Wed)
• 09:00 (ES) Spain Debt Agency (Tesoro) announces upcoming bond issuance for Thursday, Apr 4th
• 09:30 (BR) Brazil Feb Primary Budget Balance (BRL): -14.1Be v +46.9B prior; Nominal Budget Balance: -38.0Be v +26.0B prior; Net Debt to GDP Ratio: 54.1%e v 54.0% prior
• 09:45 (US) Mar Chicago PMI: 61.0e v 64.7 prior
• 10:00 (US) Feb New Home Sales: 620Ke v 607K prior
• 10:00 (US) Mar Final University of Michigan Confidence: 97.8e v 97.8 prelim
• 10:00 (MX) Mexico Jan Gold Production: No est v 6.9K kiligrams prior; Silver Production: No est v 335.5K kiligrams prior; Copper Production: No est v 419.2K tons prior
• 11:00 (MX) Mexico Feb Net Outstanding Loans (MXN): No est v 4.441T prior
• 11:00 (CO) Colombia Feb National Unemployment Rate: No est v 12.8% prior; Urban Unemployment Rate: 12.0%e v 13.7% prior
• 12:00 (EU) Rating Agencies sovereign rating actions
• 12:05 (US) Fed’s Quarles on Macroprudential Policy
• 13:00 (US) Weekly Baker Hughes Rig Count data
• 14:00 (CO) Colombia Monetary Policy Mar Minutes
• 17:00 (CL) Chile Central Bank (BCCh) Interest Rate Decision: Expected to leave Overnight Rate Target unchanged at 3.0%

Weekend data

Sat

• 21:00 (CN) China Mar Manufacturing PMI: 49.6e v 49.2 prior; Non-manufacturing PMI: No est v 54.3 prior; Composite PMI: No est v 52.4 prior