Asia:
- RBA Mar Minutes: Prepared to ease monetary policy further to support economy. Board agreed importance of maintaining contact to assess impact of coronavirus. Q1 growth to be noticeably weaker than expected. Hard to predict length of slowdown. Reiterated stance that reasonable to expect an extended period of low interest rates
- New Zealand announces NZ$12.1 billion fiscal package (4% of GDP) to combat coronavirus impact
- Philippine stock bourse to suspend trading starting March 17th (1st country to shut financial markets)
- South Korea political parties said to have agreed on KRW11.7T extra budgetCoronavirus:
- Global cumulative 182,406 (+12,019); cumulative deaths 7,154 (+641)
- China National Health Commission Coronavirus Update for March 16th: 21 additional cases v 16 prior; Additional deaths: 13 v 14 prior; Hubei: 1 additional cases v 4 prior; additional deaths: 12 v 14 prior (China cumulative: cases at 81,117; cumulative deaths at 3,231)
Europe:
- Eurogroup chief Centeno: Eurozone Fin Mins have agreed to fiscal boost at 1% of GDP to fight coronavirus epidemic effects – statement after Fin Min meeting
- German Econ Min Altmaier stated that was ready to take on new debt to cushion the impact of the coronavirus
- Saudi Crown Prince Mohammed bin Salman said to have told Spain PM Sanchez that he will call for extraordinary G20 meeting (Reminder: Saudi Arabia is the host of the next G20 Leader Summit)
- Spain regulator CNVM to ban short selling for an a month due to coronavirus
- Italy market regulator CONSOB to ban short selling on 20 MTA stocks beginning Tuesday, Mar 17th
Brexit:
- UK Govt set to announce more financial measures to help the economy during the coronavirus outbreak, amid warnings the latest restrictions could put firms out of business
- British Chambers of Commerce (BCC): UK economy looked on track to grow by the smallest amount since the financial crisis this year as the coronavirus outbreak threatened to drag major economies into recession
Americas:
- President Trump stated that the worst of coronavirus outbreak could be over in July or August or later; avoid discretionary travel and eating at restaurants. Not considering nationwide quarantine at this point but may look at certain hotspots. US economy might be heading into a recession
- VP Pence: guidance for next 15 days is the best chance to contain the coronavirus
- White House econ adviser Kudlow: declines to make any economic forecast at this time; US economy would be “very challenged”. US has $400B in fiscal actions that it could take to support the economy
- US House overcame procedural hurdle related to the coronavirus bill, now the legislation to be sent to the Senate
- Treasury Sec Mnuchin said the ‘technical fixes’ to the House virus bill ‘fully worked out’, House GOP leaders ‘signed off’ on the virus bill.
- Financial Services Forum Statement: JPMorgan and other major US financial service firms now actively support using the Discount Window; All members of the Financial Services Forum were accessing funding from the discount window
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 -1.64% at 279.98, FTSE -1.62% at 5,067.75, DAX -1.54% at 8,611.25, CAC-40 -1.22% at 3,834.26, IBEX-35 +1.25% at 6,179.00, FTSE MIB -1.35% at 14,770.00, SMI -1.23% at 8,125.50, S&P 500 Futures +1.13%]
- Market Focal Points/Key Themes: European indices open higher across the board then reversed to trade negative; regulators in France, Italy, Spain and Belgium ban short selling in certain assets, after similar measures in Asia; financials and materials among better peformers; travel and energy stocks among underperformers; plethora of companies issue updates regarding their exposure to COVID-19; auto manufacturers announce further production halts in Europe; upcoming earnings expected in US session include Baxter and FedEx
Equities
- Consumer discretionary: Lufthansa [LHA.DE] -5% (analyst action)
- Industrials: Volkswagen [VOW3.DE] -3% (final earnings; closes plants), Wacker Chemie [WCH.DE] -1% (earnings)
- Telecom: Iliad [ILD.FR] +14% (earnings)
Speakers
- France Fin Min Le Maire stated that France 2020 GDP was now seen contracting by 1.0% (prior view was +1.3% growth); To spend €45B to support economy and present a revised 2020 budget. Emergency spending to push Debt to GDP ratio to over 100%
- Sweden Central Bank (Riksbank) Gov Ingves stated that no single measure could resolve the current economic situation. Riksbank’s toolbox was finite but govt had large room for fiscal measures
- Finland ETLA research institute: Finland 2020 GDP could contract by as much as 5.0%
- France AMF regulator to ban short-selling for 24 hours on 92 stocks
- Japan LDP policy chief Kishida: PM Abe ordered the ruling LDP party to draft stimulus measures. LDP would prepare proposals by the end of the month and present them to the government
- South Korea govt said to announce more comprehensive measures to stabilize markets. Would included measures to ease FX funding shortage in Korea; President Moon to host emergency conomic meeting March 19th (Thursday)
- Thailand Cabinet said to approve THB18B budget for coronavirus outbreak and drought
- Thailand Central Bank said to inject liquidity in both bond and FX markets
- Hong Kong Govt stated that its labor market would be subject to greater pressure (**Note: comments after Feb unemployment data)
- China Foreign Ministry spokesperson Geng Shuang: very angry at US President Trump comment regarding ‘Chinese virus’; strongly opposed it (**Note: refers to tweet where Trump used the term ‘Chinese virus” for the 1st time from prior use of ‘foreign virus’
Currencies/ Fixed Income
- Risk appetite trying to find fresh legs on growing signs govt and central banks would embark on high-profile measures to mitigate the impact of the coronavirus.
- USD was firmer against the major pairs in the session by approx. 0.7%
- GBP/USD was trading at 1.2180 area with focus on whether UK Govt would announce more financial measures to help the economy. Growing expectations that the BOE could add more monetary easing measures by cutting interest rates even further and relaunching quantitative easing given the recent moves by the Fed.
- EUR/USD back below the 1.11 level as analyst noted that potential EU measures won’t avoid a recession in the region but could ensure some ‘green shoots and a prompt recovery
Economic Data
- (ES) Spain Q4 Labour Costs Y/Y: 2.3% v 2.2% prior
- (HK) Hong Kong Feb Unemployment Rate: 3.7% v 3.6%e
- (NG) Nigeria Feb CPI Y/Y: 12.2% v 12.3%
- (UK) Feb Jobless Claims Change: +17.3K v +0.2K prior; Claimant Count Rate: 3.5% v 3.4% prior
- (UK) Jan Average Weekly Earnings 3M/Y: 3.1% v 3.0%e; Weekly Earnings (ex-bonus) 3M/Y: 3.2% v 3.2%e
- (UK) Jan ILO Unemployment Rate: 3.9% v 3.8%e; Employment Change 3M/3M: +184K v +140Ke
Fixed Income Issuance
- (ID) Indonesia sold total IDR17.1T vs. IDR15.0T target in in 3-month, 12-month Bills; 5-year, 10-year, 15-year, 20-year and 30-year bonds
- (ZA) South Africa sold total ZAR4.53B vs. ZAR4.53B indicated in 2026, 2032 and 2048 bonds
Looking Ahead
- G7 finance leaders to hold conference call
- (EU) European Finance Ministers meet (Ecofin) with ECB’s lagarde participating
- EU Leaders to hold teleconference call
- 06:00 (DE) Germany Mar ZEW Current Situation Survey: -30.0e v -15.7 prior; Expectations Survey: -30.0e v 8.7 prior
- 06:00 (EU) Euro Zone Mar ZEW Expectations Survey: No est v 10.4 prior
- 06:00 (EU) Euro Zone Jan Construction Output M/M: No est v -3.1% prior; Y/Y: No est v -3.7% prior
- 06:00 (EU) Euro Zone Q4 Labour Costs Y/Y: No est v 2.6% prior
- 06:00 (FI) ECB’s Rehn (Finland)
- 06:00 (EU) Daily Euribor Fixing
- 06:15 (CH) Switzerland to sell 3-month bills
- 06:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills
- 06:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO)
- 06:30 (UK DMO to sell 1.75% 2049 Gilts
- 06:40 (UK) BOE allotment in 6-month GBP-enhanced liquidity repo operation (ILTR)
- 07:30 (EU) ESM to sell €3.0B in 6-month bills
- 07:45 (US) Weekly Chain Store Sales data
- 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed)
- 08:30 (US) Feb Advance Retail Sales M/M: 0.2%e v 0.3% prior; Retail Sales (ex-auto) M/M: 0.1%e v 0.3% prior; Retail Sales (ex-auto/gas) M/M: 0.3%e v 0.3% prior; Retail Sales Control Group: 0.4%e v 0.0% prior
- 08:30 (CA) Canada Jan Int’l Securities Transactions (CAD): No est v -9.6B prior
- 08:30 (CA) Canada Jan Manufacturing Sales M/M: -0.6%e v -0.7% prior
- 08:55 (US) Weekly Redbook LFL Sales data
- 09:00 (RU) Russia Feb Industrial Production Y/Y: 1.0%e v 1.1% prior
- 09:00 (UK) Daily Baltic Dry Bulk Index
- 09:15 (US) Feb Industrial Production M/M: +0.4%e v -0.3% prior; Capacity Utilization: 77.1%e v 76.8% prior; Manufacturing Production: +0.2%e v -0.1% prior
- 10:00 (US) Jan Business Inventories: -0.1%e v +0.1% prior
- 10:00 (US) Jan JOLTS Job Openings: 6.400Me v 6.423M prior
- 10:00 (US) Mar NAHB Housing Market Index: 74e v 74 prior
- 10:00 (EU) Weekly EC Forex Reserves
- 10:45 (UK) BOoto buy £1.456B in APF Gilt purchase operation (15-years+)
- 16:30 (US) Weekly API Oil Inventories
- 17:45 (NZ) New Zealand Q4 Current Account Balance (NZD): -2.8Be v -6.4B prior; Current Account to GDP Ratio : -3.1%e v -3.3% prior
- 19:30 (AU) Australia Feb Westpac Leading Index M/M: No est v 0.1% prior
- 19:50 (JP) Japan Feb Trade Balance: -¥929.5Be v -¥1.313T prior; Exports Y/Y: -4.2%e v -2.6% prior; Imports Y/Y: -14.0%e v -3.6% prior ; Adjusted Trade Balance: -¥535.5Be v -¥224.1B prior
- 23:00 (CN) China to sell to sell 1-year and 10-year r Upsized Government Bond
- 23:30 (JP) Japan to sell 3-Month Bills
- (US) Arizona, Florida, Illinois and Ohio Democratic Primary
