Notes/Observations
- Euro Area GDP data generally less of a contraction as anticipated…but Q2 readings will go from severe to unthinkable
- German Q1 GDP data has country formally entering a technical recession with its worst quarterly performance since financial crisis
- UK and the EU likely to have made little progress during the latest round of trade deal talks that are set to conclude Friday
- Focus on a rash of US data with April retail sales in the spotlight
Asia:
- China Apr Industrial Production Y/Y: 3.9% v 1.5%e
- China Apr Retail Sales Y/Y: -7.5% v -6.0%e
- China Apr Fixed Urban Assets Y/Y: -10.3% v -10.0%e
- China Apr Surveyed Jobless Rate: 6.0% v 5.8%e – China PBoC conducted a CNY100B 1-year Medium-term Lending Facility
- China National People’s Congress (NPC) said to plan a new stimulus package to ease coronavirus woes which is expected policy to focus on increasing consumption and strengthening demand
Coronavirus:
- Total global cases 4,443,597 (+2.2%); Total deaths: 302.5K (+1.8%)
Europe:
- German Bundestag (lower house) said to approve a multi-billion dollar corona crisis aid through ESM rescue fund
Americas:
- White House said to likely support new round of stimulus checks (Reminder: President Trump has previously talked about more relief checks for Americans)
- -Sen Maj Leader McConnell: Not ruling out another stimulus; Anticipating having to act again to help economy during coronavirus
- Fed’s Kaplan (dove, voter) believed unemployment rate will be at 10% end of year; but needed more stimulus to bring it down. Reiterated stance that he did not favor Fed using negative interest rates, negative rates in the US could do ‘great damage’
- New York Gov Cuomo: New York stay at home order to be extended until June 13th [unless regions meet certain conditions]; 5 regions (including central NY) would be ready to open on May 15th, other places can be ‘un-paused’ the moment they reach their benchmarks- Press [in line with prior reporting]
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 +1.27% at 330.86, FTSE +1.39% at 5,821.20, DAX +1.62% at 10,504.60, CAC-40 +1.02% at 4,316.76, IBEX-35 +0.33% at 6,567.00, FTSE MIB +1.12% at 17,056.50, SMI +1.01% at 9,540.84, S&P 500 Futures +0.30%]
- Market Focal Points/Key Themes: European indices open higher across the board, retracing some of the gains as the session progressed, though still all positive; outperforming sectors include materials and consumer discretionary; lagging sectors include financials; Bundestag approves coronavirus ais package; Varta’s earnings widely beat estimates on li-ion battery sales; earnings expected in the upcoming US session include VF Corp, JD.com and Reply
Equities
- Consumer discretionary: William Hill [WMH.UK] +10% (trading update), Royal Mail [RMG.UK] +1% (trading update), Richemont [CFR.CH] -2% (earnings), Ubisoft [UBI.FR] -2% (earnings)
- Technology: Sopheon [SPE.UK] -2% (earnings)
- Telecom: BT Group [BT.A.UK] +10% (in talks to sell stake)
Speakers
- German Economic Ministry commented that Q2 economic activity probably well below Q1 as the contraction would accelerate in Q2. It noted that the recession low point would be seen in Apr
- Germany Stats Office: Q2 GDP seen around -10.0%
- Italy govt said to allow additional easing of lockdown measures which would allow free movement within regions from Monday, May 18th and free movement between regions from Jun 3rd
- Czech Central Bank (CNB) May Minutes: MPC voted for differing degree of cuts as members Nidetzky and Michl sought only a 50bps cut. Reaching zero lower bound on rates would be signal for potential use of unconventional tools. Majority members saw risks to inflation tilted to the downside as well as a considerable amount of uncertainty in the baseline economic scenario
- Czech Central Bank Gov Rusnok: Negative interest rates would not make much sense. Using FX as a policy tool seen as unlikely in the foreseeable future
- China Foreign Ministry spokesperson: Best interest for both China and US to keep developing relations (**Reminder: on May 14th during a Fox TV interview President Trump threatened to cut off relations with China
Currencies/Fixed Income
- USD was little mixed in quiet trading after a firmer performance earlier in the week.
- EUR/USD hovering around the 1.08 area as a rash of EU Q1 GDP data showed varying degrees of contraction. Germany entered into a technical recession with Q2 data looking bleaker with a contraction of 10% seen by govt officials. The EU data highlighted the need that Euro Zone leaders resolve their differences and put a recovery plan into place.
- GBP was softer as UK and the EU were likely to have made little progress during the latest round of trade deal talks that were set to conclude Friday. GBP/USD -0.2% at 1.2210
Economic Data
- (FI) Finland Mar GDP Indicator Y/Y: -2.7% v +1.2% prior
- (DE) Germany Apr PPI M/M: -0.7% v -0.6%e; Y/Y: -1.9% v -1.8%e
- (DK) Denmark Q1 GDP Indicator Q/Q: -1.9% v +0.3% prior
- (DK) Denmark Apr PPI M/M: -0.9% v -1.9% prior; Y/Y: -5.4% v -3.9% prior
- (RO) Romania Q1 GDP Q/Q: +0.3% v -0.9%e; Y/Y: 2.4% v 1.9%e
- (NO) Norway Apr Trade Balance (NOK): 3.2B v 1.3B prior
- (FR) France Apr Final CPI M/M: 0.0% v 0.1%e; Y/Y: 0.3% v 0.4%e; CPI Ex-Tobacco Index: 103.81 v 103.91e
- (FR) France Apr Final CPI EU Harmonized M/M: 0.0% v 0.1%e; Y/Y: 0.4% v 0.5%e
- (CZ) Czech Q1 Advance GDP (1st of 3 readings) Q/Q: -3.6% v -3.4%e; Y/Y: -2.2% v -2.0%e
- (HU) Hungary Q1 Preliminary GDP Q/Q: -0.4% v -1.0%e; Y/Y: 2.2% v 2.1%e
- (NL) Netherlands Q1 Preliminary GDP Q/Q: -1.7% v -3.0%e; Y/Y: -0.5% v -1.9%e
- (NL) Netherlands Mar Trade Balance: €6.2B v €5.6B prior
- (CN) Weekly Shanghai copper inventories (SHFE): 208.9K v 204.2K tons prior
- (RU) Russia Narrow Money Supply w/e May 8th (RUB): 12.20T v 12.11T prior
- (DE) Germany Q1 Preliminary GDP Q/Q: -2.2% v -2.2%e; Y/Y: -2.3% v -2.0%e r; GDP NSA Y/Y: -1.9% v -1.6%e
- (PL) Poland Q1 Preliminary GDP Q/Q: -0.5% v -1.2%e; Y/Y: 1.9% v 1.7%e
- (PL) Poland Apr Final CPI M/M: -0.1% v 0.0% prelim; Y/Y: 3.4% v 3.4% prelim
- (IT) Italy Mar Industrial Sales M/M: -25.8% v +1.1% prior; Y/Y: -25.2% v -1.7% prior
- (IT) Italy Mar Industrial Orders M/M: -26.5% v -4.1% prior; Y/Y: -26.6% v -2.5% prior
- (TR) Turkey Apr Central Gov’t Budget Balance (TRY): -43.2B v -43.7B prior
- (PT) Portugal Q1 Preliminary GDP Q/Q: -3.9% v +0.7% prior; Y/Y: -2.4% v +2.2% prior
- (IT) Italy Mar General Government Debt: €2.431T v €2.447T prior
- (HK) Hong Kong Q1 Final GDP Q/Q: -5.3% v -5.3%e; Y/Y: -8.9% v -8.9%e
- (EU) Euro Zone Q1 Preliminary GDP Q/Q: -3.8% v -3.8%e; Y/Y: -3.2% v -3.3%e
- (EU) Euro Zone Q1 Preliminary Employment Q/Q: -0.2% v +0.3% prior; Y/Y: 0.3% v 1.1% prior
- (EU) Euro Zone Mar Trade Balance (seasonally adj): €23.5B v €17.0Be; Trade Balance NSA (unadj): €28.2B v €23.0B prior
- (IT) Italy Apr Final CPI M/M: % v 0.1% prelim; Y/Y: % v 0.0% prelim; CPI Index Ex Tobacco: # v 102.6 prior
- (IT) Italy Apr Final CPI EU Harmonized M/M: 0.5% v 0.5% prelim; Y/Y: 0.1% v 0.1% prelim
- (CY) Cyprus Q1 Preliminary GDP Q/Q: -1.3% v 1.0% prior; Y/Y: 0.9% v 3.4% prior
Fixed Income Issuance
- (IN) India sold total INR340B vs. INR300B indicated range in 2024, 2033 and 2050 bonds
Looking Ahead
- (UA) Ukraine Q1 Preliminary GDP Q/Q: No est v 0.0% prior; Y/Y: No est v 1.5% prior
- (CO) Colombia Central Bank Economist Survey
- (EU) Eurogroup holds online meeting
- (EU) OECD publishes Economic Outlook
- 05:30 (ZA) South Africa to sell combined ZAR1.04B in I/L Bonds
- 06:00 (IE) Ireland Mar Trade Balance: No est v €3.9Be
- 06:00 (UK) DMO to sell £8.5B in 1-month, 3-month and 6-month bills (£1.5B, £2.5B and £4.5B respectively)
- 06:45 (US) Daily Libor Fixing
- 07:00 (IL) Israel Apr CPI M/M: -0.5%e v 0.4% prior; Y/Y: -0.8%e v 0.0% prior
- 07:30 (TR) Turkey Central Bank TCMB Survey of Expectations: 12-month inflation expectation: No est v 9.7% prior
- 07:30 (IN) India Weekly Forex Reserve w/e May 8th: No est v $481.1B prior
- 08:00 (IS) Iceland Apr Unemployment Rate: No est v 9.2% prior
- 08:00 (BR) Brazil Mar Economic Activity Index (Monthly GDP) M/M: -6.0%e v 0.4% prior; Y/Y: -2.4%e v +0.6% prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:00 (IN) India announces upcoming bill issuance (held on Wed)
- 08:00 (ES) Spain Debt Agency (Tesoro) announces upcoming issuance
- 08:30 (US) Apr Advance Retail Sales M/M: -12.0%e v -8.4% prior (revised from -8.7% ); Retail Sales (ex-auto) M/M: -8.5%e v -4.2% prior (revised from -4.5%); Retail Sales (ex-auto/gas): -7.6%e v -2.8% prior (revised from -3.1%); Retail Sales Control Group: -5.0%e v 2.0% prior (revised from 1.7%)
- 08:30 (US) May Empire Manufacturing: -60.0e v -78.2 prior
- 08:30 (CA) Canada Mar Int’l Securities Transactions (CAD): No est v 20.6B prior
- 09:00 (CA) Canada Apr Existing Home Sales M/M: No est v -14.3% prior
- 09:00 (RU) Russia Apr Trade Balance: $7.0Be v $9.7B prior; Exports: $23.8Be v $28.1B prior; Imports: $19.0Be v $18.5B prior
- 09:15 (US) Apr Industrial Production M/M: -12.0%e v -5.4% prior; Capacity Utilization: 63.8%e v 72.7% prior; Manufacturing Production: -14.6%e v -6.3% prior
- 10:00 (US) Mar Business Inventories: -0.2%e v -0.4% prior
- 10:00 (US) Mar JOLTS Job Openings: 5.800Me v 6.882M prior
- 10:00 (US) May Preliminary University of Michigan Confidence: 68.0e v 71.8 prior
- 11:00 (EU) Potential sovereign ratings after European close (Moody’s on Austria Sovereign Debt ; S&P on Netherlands, Iceland and Israel Sovereign Debt; Fitch on France and Austria Sovereign Debt; Cyprus on Canadian rating agency DBRS)
- 12:00 (CO) Colombia Q1 GDP Q/Q: -0.2%e v +0.5% prior; Y/Y: 1.5%e v 3.4% prior
- 12:00 (CO) Colombia Mar Economic Activity Index (Monthly GDP) Y/Y: -2.5%e v +4.8% prior
- 13:00 (US) Weekly Baker Hughes Rig Count
- 16:00 (US) Mar Net Long-term TIC Flows: No est v $49.4B prior; Total Net TIC Flows: No est v -$13.4B prior
