Notes/Observations
- IEA slashes 2020 oil demand with Global Oil Demand reduced from 99.9M bpd to 90.5M bpd as demand seen lower by 9.3M bpd for year (previously saw demand growth of 825K bpd); WTI falls to lowest level since 2002 at $19.20/contract
Asia:
- China PBoC conducted 1-year MLF operation that injected CNY100B into the system with rate lowered by 20bps to 2.95% (lowest on record)
Coronavirus:
- Total global cases 1,981,239 (+3.1%); deaths at 126.7k (+5.8%)
- US temporarily halting funding of the World Health Organization while a review was conducted to assess WHO’s role in mismanaging the Coronavirus outbreak
Europe:
- Eurogroup President Centeno stated that he expected EU council to give guidance on the newly proposed recovery fund at EU Leader teleconference on Apr 23rd
Americas:
- Federal Emergency Management Authority (FEMA) and Centers for Disease Control (CDC) said to have created plan to reopen economy; Plan to provide guidance to state and local governments on how they could gradually ease coronavirus mitigation efforts. Trump might issue suggestions for some states to reopen May 1st
- President Trump stated that would authorize each Governor to implement reopening plan; To speak to all 50 governors by Thursday; Some states might open before May 1st; Noted that 29 States were in “good shape” in regards to coronavirus
- Mid-East/ Energy:- Weekly API Crude Oil Inventories: +13.1M v +11.9M prior
- Texas Oil and Gas regulators will meet Apr 14th in the morning to consider production limits
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 -1.65% at 5,667.40, FTSE -2.20% at 5,667.40, DAX -1.89% at 10,494.65, CAC-40 -1.82% at 4,441.53, IBEX-35 -2.41% at 4,441.53, FTSE MIB -1.85% at 17,233.50, SMI -0.79% at 9,463.59, S&P 500 Futures -1.82%]
- Market Focal Points/Key Themes: European indices open marginally lower across the board and proceeded downward as the session wore on; theme focusing on various countries working on roadmaps to resume economic activity; better performance among consumer discretionary; energy sector impacted following drop in the price of crude; France FinMin says industrial production operating at close to 60%; upcoming earnings in the US session include UnitedHealth, Bank of America and Goldman Sachs.
Equities
- Consumer discretionary: Connect [CNCT.UK] +53% (divestment), Costain [COST.UK] +27% (update on contracts), Adidas [ADS.DE] -1% (will not pay dividend), TomTom [TOM2.NL] -5% (earnings)
- Energy: Total [FR.FR] -4% (refining margins; IEA report)
- Healthcare: UDG Healthcare [UDG.UK] -10% (trading update)
- Industrials: Ferguson [FERG.UK] +1% (trading update; seeks listing in US)
- Technology: ASML [ASML.NL] -1.5% (earnings; cancel buybacks)
Speakers
- ECB’s Villeroy (France): Economic shock from coronavirus would be temporary if well managed. Reiterated General Council view that ECB was obliged to keep interest rates low for a very long time
- EU Commission President Von der Leyen Roadmap on reopening economies noted that a gradual lifting of measures to combat the virus was needed and the social distancing to remain. No signal for lifting containment at this time and cautioned that cases to increase when lockdowns are eased
- European Finance Ministers said to back a dividend suspension for both banks and insurers at upcoming meeting on Thursday, Apr 16th
- France Fin Min Le Maire stated that close to 60% of French industry had resumed operations; Cost of economic rescue package seen up to €110B
- France Labor Min Penicaud: 8.7M workers are temporarily unemployed
- Germany govt said to be planning to extend lockdown restrictions until May 3rd
- Greece Fin Min Staikouras stated that the country would recover quickly from the 2020 recession
- Denmark Central Bank: Govt had a good starting point to finance the expenses related to coronavirus; saw financing requirement over DKK250B for Apr-July period. Bond sales in coming months could be increased if high demand
- Poland Central Bank member Zyzynski stated that MPC did have small room for rate cuts but was against cutting rates to zero (**Note: Base rate currently at 0.50%)
- Turkey Fin Min Albayrak: Govt had not sought help from any institution (aka IMF or World Bank)
- China Foreign Ministry spokesperson Zhao Lijian: China stated that it had updated the WHO conscientiously; serious concerns about US President Trump halting WHO funding
- IEA Apr Monthly Report measures announced by OPEC+ and G20 would not be enough to re-balance the market immediately’. No feasible agreement’ on supply could offset near-term demand losses as the impact of global lockdowns had brought mobility to a halt. April Global demand to decline by 29M bpd to lowest level since 1995 while May Global demand to decline by 26M bpd. The annual 2020 global oil demand to decline by 9.3M bps (record decline) while the annual 2020 global supply to decline by 12M bpd (also a record decline). OPEC+ production cut agreement represented a 10.7M bpd supply cut. Saudi Apr oil production at 12.0M bpd vs. 10.15M bpd m/m
Currencies/ Fixed Income
- Safe-haven flows in the session favored the USD with an IEA report highlighting the demand destruction from the coronavirus outbreak and resulting global lockdown on movement. IEA conceded that even the recent OPEC+ and G20 production cuts were not enough to offset the supply overload. WTI slumped to 18-year lows to test the 19.20 area per contract.
- EUR/USD was lower by 0.5% to test 1.0930 and reversed earlier gains from the Asian session.
- USD/JPY was higher by 0.3% as the yen could not muster any benefit from risk aversion sentiment.
Economic Data
- (SE) Sweden Mar PES Unemployment Rate: 4.2% v 4.0% prior
- (NL) Netherlands Feb Retail Sales Y/Y: 8.2% v 4.8% prior
- (FI) Finland Feb Final Retail Sales Volume Y/Y: 3.3% v 2.8% prelim
- (FI) Finland Feb GDP Indicator Y/Y: 1.0 v 1.4% prior
- (PE) Peru Feb Economic Activity Index (Monthly GDP) Y/Y: 3.8% v 2.8%e
- (PE) Peru Mar Unemployment Rate: 7.8 v 7.1% prior
- (IN) India Mar Wholesale Prices Y/Y: 1.0% v 1.4%e
- (FR) France Mar Final CPI M/M: 0.1% v 0.0%e; Y/Y: 0.7% v 0.6%e; CPI Ex-Tobacco Index: 103.85 v 103.80e
- (FR) France Mar Final CPI EU Harmonized M/M: 0.1% v 0.0%e; Y/Y: 0.8% v 0.7%e
- (ES) Spain Mar Final CPI M/M: -0.4% v -0.3%e; Y/Y: 0.0% v 0.1%e
- (ES) Spain Mar Final CPI EU Harmonized M/M: 0.6% v 0.7%e; Y/Y: 0.1% v 0.2%e
- (ES) Spain Mar CPI Core M/M: 0.5% v 0.3% prior; Y/Y: 1.1% v 1.1% prior
- (SE) Sweden Mar CPI M/M: -0.2% v -0.3%e; Y/Y: 0.6% v 0.5%e; CPI Level: 333.91 v 333.45e
- (SE) Sweden Mar CPIF M/M: -0.2% v -0.4%e; Y/Y: 0.6% v 0.5%e
- (SE) Sweden Mar CPIF (ex-energy) M/M: 0.2% v 0.1%e; Y/Y: 1.5% v 1.4%e
- (PL) Poland Mar CPI M/M: 0.2% v 0.0%e; Y/Y: 4.6% v 4.4%e
- (IT) Italy Mar Final CPI M/M: 0.1% v 0.1% prelim; Y/Y: 0.1% v 0.1%e; CPI Index (ex-tobacco): 102.6 v 102.5 prior
- (IT) Italy Mar Final CPI EU Harmonized M/M: 2.2% v 2.2% prelim; Y/Y: 0.1% v 0.1% prelim
- (TR) Turkey Mar Central Gov’t Budget Balance (TRY): -43.7B v -7.4B prior
- (IT) Italy Feb General Government Debt: €2.447T v €2.444T prior
Fixed Income Issuance
- (GR) Greece Debt Agency (PDMA) opened its book to sell EUR-denominated 7-year bond via syndicate; guidance seen +230bps to mid-swaps
- (NL) Netherlands Debt Agency (DSTA) sold €1.99B vs. €1.0-2.0B indicated range in 0% 2030 DSL Bonds; Avg Yield: -0.120% v -0.487% prior
- (IN) India sold total INR250B vs. INR250B indicated in 3-month, 6-month and 12-month bills
- (DK) Denmark sold total DKK2.3B in 3-month, 6-month, 9-month and 12-month bills
- (UK) DMO sold £3.0B in 0.875% Oct 2029 Gilts; Avg Yield: 0.269% v 0.512% prior; Bid-to-cover: 2.94x v 2.16x prior; Tail: 0.3bps v 0.4bps prior
Looking Ahead
- G20 Finance Ministers and central bankers meet
- (CO) Colombia Central Bank Economist Survey
- 05:30 (DE) Germany to sell €1.0B in 2.5% July 2044 Bunds
- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell 3-month and 9-month bills
- 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays)
- 06:00 (IE) Ireland Feb Trade Balance: No est v €6.4B prior
- 06:00 (CZ) Czech Republic to sell 2022, 2027 and 2031 bonds
- 06:00 (RU) Russia to sell 2025 and 2030 OFZ bonds
- 06:30 (EU) ESM to sell €1.0B in 12-month bills
- 06:30 (UK) DMO to sell £2.0B in 1.75% Sept 2037 Gilts
- 06:45 (US) Daily Libor Fixing
- 07:00 (BR) Brazil Apr FGV Inflation IGP-10 M/M: 1.3%e v 0.6% prior
- 07:00 (US) MBA Mortgage Applications w/e Apr 10th: No est v -17.9% prior
- 07:00 (SE) Sweden Parliament to debate spring budget
- 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 (US) Mar Advance Retail Sales M/M: -8.0%e v -0.5% prior; Retail Sales (ex-auto) M/M: -5.0%e v -0.4% prior; Retail Sales (ex-auto/gas): -5.2%e v -0.2% prior; Retail Sales (Control Group): -2.0%e v 0.0% prior
- 08:30 (US) Apr Empire Manufacturing: -35.0e v -21.5 prior
- 08:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (7-20 years)
- 09:00 (CA) Canada Mar Existing Home Sales M/M: -10.0%e v +5.9% prior
- 09:00 (RU) Russia Mar Industrial Production Y/Y: -0.4%e v +3.3% prior
- 09:00 (EU) (EU) Weekly ECB Forex Reserves:
- 09:15 (US) Mar Industrial Production M/M: -4.0%e v +0.6% prior; Capacity Utilization: 74.0%e v 77.0% prior; Manufacturing Production: -4.2%e v +0.1% prior
- 09:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (20+ years)
- 10:00 (US) Feb Business Inventories: -0.4%e v -0.1% prior
- 10:00 (US) Apr NAHB Housing Market Index: 56e v 72 prior
- 10:00 (CA) Bank of Canada (BOC) Interest Rate Decision: Expected to leave Interest Rates unchanged at 0.25%
- 10:30 (US) Weekly DOE Oil Inventories
- 11:00 (CO) Colombia Feb Manufacturing Production Y/Y: 3.2%e v 3.7% prior
- 11:00 (CO) Colombia Feb Retail Sales Y/Y: 7.0%e v 7.5% prior
- 14:00 (US) Fed Beige Book
- 15:00 (AR) Argentina Mar National CPI M/M: No est v 2.0% prior; Y/Y: No est v 50.3% prior
- 16:00 (US) Feb Net Long-term TIC Flows: No est v $20.9B prior; Total Net TIC Flows: No est v $122.9B prior
- 19:01 (UK) Mar BRC Sales Like-For-Like Y/Y: -5.5%e v -0.4% prior
- 21:00 (AU) Australia Apr Consumer Inflation Expectation Survey: No est v 4.0% prior
- 21:30 (CN) China Mar New Home Prices M/M: No est v 0.0% prior
- 21:30 (AU) Australia Mar Employment Change: -30.0Ke v +26.7K prior; Unemployment Rate: 5.4%e v 5.1% prior; Full Time Employment Change: No est v +6.7K prior; Part Time Employment Change: No est v +20.0K prior; Participation Rate: 65.9%e v 66.0% prior
- 23:30 (JP) Japan to sell 12-Month Bills
