Oil Continues Its Heavy Footing, German ZEW Survey Shows Some Optimism

Notes/Observations

• German April ZEW Survey shows some light at the end of the tunnel
• Oil continues to face headwinds and eroding overall global risk appetite for the time being

Asia:

• RBA Apr Minutes noted that daily operations likely to be on a smaller scale in near-term if conditions improved. To do what is necessary to reach 3-year yield target. Reaffirmed their commitment to supporting jobs, income and business
• RBNZ Gov Orr stated that QE was more effective to deal with sharp virus shock rather than negative rate
• North Korea leader Kim said to be in “grave danger” after surgery (Insight: Kim recently missed the celebration of his grandfather’s birthday on April 15th, which raised speculation about his well-being)

Coronavirus:

• Global cases: 2,477,426 (+3.1%); Total deaths: 170.3k (+3.1%);

Americas:

• President Trump tweet: In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!
• House Speaker Pelosi told Democrats she expected a deal with GOP tonight on billions to replenish a small businesses loan program and provide more hospital funds; Maj Leader Hoyer stated that a vote could happen as soon as Wednesday

Mid-East/Energy:

• Saudi Arabia and other OPEC countries said to be cutting oil output as soon as possible following US oil price plunge into negative territory
• President Trump: US to put up to 75M barrels into strategic reserve

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 -1.31% at 330.58, FTSE -1.55% at 5,722.49, DAX -1.94% at 10,469.00, CAC-40 -1.83% at 4,445.29, IBEX-35 -1.35% at 6,739.50, FTSE MIB -1.21% at 16,862.50, SMI -1.46% at 9,642.23, S&P 500 Futures -0.43%]
• Market Focal Points/Key Themes: European indices open lower across the board; Italy PM announces will release plan to reopen economy starting on May 4; EU official advocates spending 10% of GDP to deal with coronavirus; upcoming earnings expected in the US session include Coca-Cola, Philip Morris and Netflix

Equities

• Consumer discretionary:AB Foods [ABF.UK] -5% (earnings), Danone [BN.FR] -3% (earnings; withdraws outlook)
• Financials: London Stock Exchange [LSE.UK] +2% (sales)
• Healthcare: Pharming Group [PHARM.NL] +24% (trial results)
• Industrials: PSA [UG.FR] -2% (earnings)
• Technology: SAP [SAP.DE] -2% (final earnings)

Speakers

• ECB’s Panetta (Italy) wrote an op-ed article and stressed that Europe needed a joint fiscal response; action to date had been inadequate and threatened the single market
• EU Leaders said not to take any final decisions on financing recovery at the upcoming teleconference call on Thursday (Apr 23rd)
• France Budget Min Darmanin: Might need a 3rd emergency budget
• Italy PM Conte stated that the country to gradually reopen from Monday, May 4th
• Denmark said to change limits for crowds in May and allow up to 500 people to gather
• Germany Public Health RKI Institute official Schaade: No end in sight for COVID-19 epidemic; must watch very closely to avoid a 2nd wave of outbreaks. Hygiene rules needed until a vaccine exists
• Thailand PM Prayuth: Coronavirus outbreak is improving but some steps are still necessary. Govt to consider whether to extend current lockdown measures on Sat, Apr 28th

Currencies/Fixed Income

• USD maintained a firm bid as oil markets continued to face headwinds which eroded overall global risk appetite
• EUR/USD lower by 0.3% at 1.0840 but just hovering above its worst level. German ZEW survey 6-month outlook did showed some optimism that the virus will end and economies to reopen.
• USD/JPY softer by 0.3% at 107.35 while GBp?USD was off 0.4% at 1.2390
• Oil-related currencies (CAD, NOK, RUB) were softer with the MXN getting an additional kick after President Trump tweeted that he will stop all immigration into the US to combat the virus.

Economic Data

• (CH) Swiss Mar Trade Balance (CHF): 4.0B v 2.0B prior; Real Exports M/M: -4.0 v -3.1% prior; Real Imports M/M: -6.7 v -0.4% prior; Watch Exports Y/Y: -21.9 v -9.0% prior
• (UK) Mar Jobless Claims Change: +12.2 v +5.9K prior; Claimant Count Rate: 3.5% v 3.4% prior
• (UK) Feb Average Weekly Earnings 3M/Y: 2.8% v 3.0%e; Weekly Earnings (ex-bonus) 3M/Y: 2.9% v 3.0%e
• (UK) Feb ILO Unemployment Rate: 4.0% v 3.9%e; Employment Change 3M/3M: +172K v +100Ke
• (JP) Japan Mar Final Machine Tool Orders Y/Y: -40.7 v -40.8% prelim
• (CZ) Czech Mar PPI Industrial M/M: -0.5% v -1.0%e; Y/Y: +0.4% v -0.1%e
• (ES) Spain Feb House transactions Y/Y: +0.1% v -2.6% prior
• (CH) Swiss Mar M3 Money Supply Y/Y: 1.3% v 0.0% prior
• (ZA) South Africa Feb Leading Indicator: 103.0 v 101.5e
• (SW) Sweden Mar Unemployment Rate: 7.1% v 8.2% prior; Unemployment Rate (Seasonally Adj): 6.7% v 7.6% prior; Trend Unemployment Rate: 7.2% v 7.1% prior
• (NG) Nigeria Mar CPI Y/Y: 12.3% v 12.2%e
• (ES) Spain Feb Trade Balance: -€2.1B v -€3.5B prior
• (PL) Poland Mar Sold Industrial Output M/M: 2.4% v 3.5%e; Y/Y: -2.3% v -3.3%e
• (PL) Poland Mar PPI M/M: -0.5% v -0.4%e; Y/Y: -0.5% v -0.5%e
• (DE) Germany Apr ZEW Current Situation Survey: -91.5 v -77.5e; Expectations Survey: +28.2 v -42.0e
• (EU) Euro Zone Apr ZEW Expectations Survey: +25.2 v -49.5 prior
• (BE) Belgium Apr Consumer Confidence Index: -26 v -9 prior

Fixed Income Issuance

• (IT) Italy Debt Agency (Tesoro) opened book to sell EUR-denominated 2025 and 2050 BTP bonds
• (LX) Luxembourg opened its book to sell EUR-denominated 5-year and 10-year bonds
• (ID) Indonesia sold total IDR10.0T vs. IDR7.0T target in 6-month Islamic bills and 2-year, 4-year and 25-year year Islamic Bonds (Sukuk)
• (ES) Spain Debt Agency (Tesoro) sold total €2.95B vs. €1.5-2.5B indicated range in 3-month and 9-month bills
• (UK) DMO sold £3.25B in 0.625% 2025 Gilts; Avg Yield: 0.168% v 0.640% prior; Bid-to-cover: 2.83x v 1.97x prior; Tails: 0.3bps v 1.4bps prior

Looking Ahead

• (UK) House of Commons returns from Easter recess
• (HU) Hungary Central Bank on QE details
• 05:30 (SL) Sri Lanka Mar National CPI (NCPI) Y/Y: No est v 8.1% prior
• 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills;
• 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO)
• 05:30 (DE) Germany to sell 5.0B in 0% Mar 2022 Schatz
• 05:30 (ZA) South Africa to sell combined ZAR4.53B in 2026, 2030 and 2035 bonds
• 05:40 (UK) BOE allotment in 6-month GBP-enhanced liquidity repo operation (ILTR)
• 06:30 (UK) DMO to sell £1.5B in 1.625% Oct 2054 Gilts
• 06:30 (EU) ESM to sell €2.0B indicated in 6-month bills; Avg Yield: % v -0.4655% prior; Bid-to-cover: x v 1.9x prior
• 06:30 (EU) ECB allotment in its weekly fixed-rate 3-month LTRO operation (prior €4.64B with 53 bids recd)
• 06:45 (US) Daily Libor Fixing
• 07:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed)
• 07:45 (US) Goldman Economist Chain Store Sales
• 07:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (3-7 years)
• 08:00 (UK) Daily Baltic Dry Bulk Index
• 08:30 (CA) Canada Feb Retail Sales M/M: 0.3%e v 0.4% prior; Retail Sales (ex-auto) M/M: +0.3%e v -0.1% prior
• 08:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (7-20 years)
• 08:55 (US) Weekly Redbook LFL Sales data
• 09:00 (EU) Weekly ECB Forex Reserves
• 09:00 (GR) ECB’s Stournaras (Greece)
• 09:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (20+ years)
• 10:00 (US) Mar Existing Home Sales: 5.25Me v 5.77M prior
• 11:00 (CO) Colombia Feb Trade Balance: -$0.8Be v -$0.7B prior Total Imports: $4.0Be v $4.3B prior
• 11:30 (US) Treasury to sell 52-Week Bills
• 16:30 (US) Weekly API Oil Inventories
• 17:00 (KR) South Korea Mar PPI Y/Y: No est v 0.7% prior
• 20:30 (AU) Australia Mar Westpac Leading Index M/M: No est v -0.4% prior
• 21:00 (AU) Australia Mar Skilled Vacancies M/M: No est v -0.2% prior
• (MX) Citibanamex Survey of Economists