Euro Area Inflation On The Rise But Far From Target

Notes/Observations

• UK Q4 GDP revised higher in final reading.
• UK March House Prices unexpectedly drop.
• Euro Zone Mar CPI gains were mixed but remain far from target (higher headline, lower core).
• Bond yield ease from recent climb ahead of President Biden’s speech on infrastructure; overlying picture remains on massive fiscal stimulus and concerns about inflation.

Asia:

• China Mar Manufacturing PMI (Govt Official) beat expectations but still registered its 13th month of expansion (51.9 v 51.2e).
• Japan Feb Preliminary Industrial Production M/M: -2.1% v -1.2%e; Y/Y: -2.6% v -1.8%e.
• South Korea Apr Business Manufacturing Survey: 91 v 85 prior (highest since Aug 2011).
• South Korea Feb Industrial Production M/M: 4.3% v 1.1%e (fastest since June 2020); Y/Y: 0.9% v 1.0%e.
• South Korea Feb Retail Sales M/M: -0.8% v +1.6% prior; Y/Y: 8.4% v 0.0% prior.

Coronavirus:

• Total global cases 128.2M (+0.5% d/d); total deaths: 2.80M (+0.4% d/d).

Europe:

• German Chancellor Merkel and France President Macron said to be in talks with Russia President Putin to supply the Russia’s Covid-19 vaccine (Sputnik) to the EU.

Americas:

• President Biden expected to present a plan to spend $2.25T jobs and infrastructure package Wednesday (expected to include $650B on to rebuild the country’s infrastructure, $300 B revive US manufacturing and hundreds of billions to bolster the nation’s electric gird, nationwide broadband.
• President Biden said not to seek a wealth tax to pay for infrastructure plan.
• Fed’s Barkin (voter, hawk): hopeful that we were on the brink of completing the recovery.

Energy:

• Weekly API Crude Oil Inventories: +3.9M v +2.9M prior.
• Opec+ JMMC technical Panel said to have increased concerns around rising numbers of global Covid-19 cases, lockdown restrictions and travel restrictions. Stressed of continued cautious and vigilant approach to monitor oil market needed due to recent volatility.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

• Indices [Stoxx600 +0.13% at 431.18, FTSE -0.27% at 6,753.99, DAX +0.07% at 15,018.45, CAC-40 -0.13% at 6,080.08, IBEX-35 +0.47% at 8,636.00, FTSE MIB +0.51% at 24,761.50, SMI -0.22% at 11,097.40, S&P 500 Futures -0.01%]
• Market Focal Points/Key Themes: European indices open mixed with a slight downward bias and failed to gain direction as the session wore on; sectors among those trending upwards include telecom and industrials; while trending to the down side were materials and tech sectors; Norway to close early for holiday; Deliveroo opens for trading; Arrow Global receives takeover offer from TDR; corporate events scheduled during the upcoming US session include earnings from Walgreens Boots Alliance, Pirelli and Micron Technology.

Equities

• Consumer discretionary: Grammer [GMM.DE] +19% (prelim sales), H&M [HMB.SE] -3% (sales), Deliveroo [ROO.UK] -9% (IPO).
• Healthcare: Ipsen [IPN.FR] +7% (approval).
• Industrials: Volkswagen [VOW3.DE] -2% (rebrands US unit).
• Technology: Capgemini [CAP.FR] +1.5% (new targets).

Speakers

• ECB chief Lagarde: Reiterates stance that ECB must provide as much certainty as possible; balance of risk tilted to downside in short term. Reiterated view that Council was very attentive to financing conditions ECB would not be guided by short-term fluctuations in economy and added that markets could test us as much as they wanted. Reiterated stance to reassess Pandemic Bond Buying Purchases (PEPP) in due course at quarterly pace.
• ECB’s Rehn (Finland) stated that the inflation outlook was weak and vital to maintain a loose policy.
• German DIW Institute saw Q1 GDP -1.5% as rising inflection rates to delay recovery in consumer-related services.
• BOJ announced Bond purchases for month of April and cut the frequency of purchases under new format.
• OPEC+ said to cut its 2021 global oil demand growth from 5.9M bpd to 5,6M bpd.
• Kuwait Oil Min: Oil market supply and demand balance has improved.

Currencies/Fixed Income

• USD retraced some of its recent strength as US bond yields eased from recent climb ahead of President Biden’s speech on infrastructure. Month-end and quarter-end flows kept participants on the sidelines. US 10-year at 1.73% after hitting 1.773% on Tuesday. President Biden expected to unveil his infrastructure plan under a two-part government-spending package that could total anywhere between $2T to $4T.
• EUR/USD holding above the 1.17 level as yields eased. Recent USD strength has been attributed to the view that a stimulus-powered recovery would push the Fed to raise interest rates as early as 2023. Pair edged away from 5-month lows of 1.1703 hit during the Asian session. Market awaiting Euro Zone flash estimate inflation data for March.

Economic data

• (NL) Netherlands Mar Producer Confidence Index: 3.4% v 0.1 prior.
• (NL) Netherlands Feb Retail Sales Y/Y: -5.7% v -7.8% prior.
• (UK) Q4 Final GDP Q/Q: 1.3% v 1.0%e; Y/Y: -7.3% v -7.8%e.
• (UK) Q4 Final Private Consumption Q/Q: -1.7% v -0.2%e; Government Spending Q/Q: 6.7% v 6.4%e; Gross Fixed Capital Formation Q/Q: 4.4% v 2.1%e; Exports Q/Q: 6.1% v 0.1% prelim; Imports Q/Q: 11.0% v 8.9% prelim;
• (UK) Q4 Final Total Business Investment Q/Q: 5.9% v 1.3%e; Y/Y: -7.4% v -10.3%e.
• (UK) Q4 Current Account Balance: -£26.3B v -£34.8Be.
• (UK) Mar Nationwide House Price Index M/M: -0.2% v +0.4%e; Y/Y: 5.7% v 6.4%e.
• (DK) Denmark Q4 Final GDP Q/Q: 0.7% v 0.6% prelim; Y/Y: -1.5% v -2.6% prelim.
• (DK) Denmark Feb Gross Unemployment Rate: 4.6% v 4.4% prior; Unemployment Rate (seasonally adj): 4.2% v 4.0% prior.
• (FI) Finland Jan Final Trade Balance: -€0.3B v -€0.3B prelim.
• 02:45 (FR) France Mar Preliminary CPI M/M: 0.6% v 0.7%e; Y/Y: 1.1% v 1.2%e.
• (FR) France Mar Preliminary CPI EU Harmonized M/M: 0.7% v 0.8%e; Y/Y: 1.4% v 1.5%e.
• (FR) France Feb PPI M/M: 0.8% v 1.2% prior; Y/Y: 1.8% v 0.4% prior.
• (FR) France Feb Consumer Spending M/M: 0.0% v 1.2%e; Y/Y: -0.1% v +1.5%e.
• (CH) Swiss Q4 Foreign Exchange Transactions (CHF): 8.7B v 11.0B prior.
• (AT) Austria Mar Preliminary CPI M/M: 1.1% v 0.5% prior; Y/Y: 2.0% v 1.2% prior.
• (TR) Turkey Feb Trade Balance: -$3.3B v -$3.4Be.
• (TR) Turkey Mar Economic Confidence: 98.9 v 95.8 prior.
• (HU) Hungary PPI M/M: 1.2% v 0.7% prior; Y/Y: 8.1% v 6.6% prior.
• (HU) Hungary Jan Average Gross Wages Y/Y: 9.5% v 8.1%e.
• (TH) Thailand Feb Current Account Balance: -$1.1B v -$0.9Be; Overall Balance of Payments (BOP): -$0.2B v -$0.7B prior; Trade Account Balance: $2.1B v $1.9B prior; Exports Y/Y: -0.2% v -0.3% prior; Imports Y/Y: +23.9% v -6.9% prior.
• (DE) Germany Mar Net Unemployment Change: -8.0K v -3.0Ke; Unemployment Claims Rate (seasonally adj): 6.0% v 6.0%e.
• (ES) Spain Jan Current Account Balance: -€1.0B v +€0.5B prior.
• (CH) Swiss Mar Expectations Survey: 66.7 v 55.5 prior.
• (NO) Norway Central Bank (Norges) Apr Daily FX Purchases (NOK): -1.8B v -1.7B prior.
• (PL) Poland Mar Preliminary CPI M/M: 1.0% v 0.6%e; Y/Y: 3.2% v 2.8%e.
• (CZ) Czech Feb M2 Money Supply Y/Y: 11.9% v 11.0% prior.
• (PT) Portugal Mar Preliminary CPI M/M: +1.4% v -0.5% prior; Y/Y: 0.5% v 0.5% prior.
• (PT) Portugal Mar Preliminary CPI EU Harmonized M/M: +1.5% v -0.5% prior; Y/Y: 0.1% v 0.3% prior.
• (EU) Euro Zone Mar Advance CPI Estimate Y/Y: 1.4% v 1.4%e; CPI Core Y/Y: 0.9% v 1.1%e; CPI M/M: 0.9% v 1.0%e.
• (IT) Italy Mar Preliminary CPI M/M: 0.3% v 0.1%e; Y/Y: 0.8% v 0.6%e.
• (IT) Italy Mar Preliminary CPI EU Harmonized M/M: 1.8% v 2.0%e; Y/Y: 0.6% v 0.8%e.
• (GR) Greece Jan Retail Sales Value Y/Y: -3.0% v -11.0% prior; Retail Sales Volume Y/Y: -5.0% v -12.8% prior.
• (IS) Iceland Feb Final Trade Balance (ISK): -11.9B v -12.0B prelim.

Fixed income Issuance

• (SE) Sweden sold total SEK12.5B vs. SEK12.5B indicated in 3-month and 12-month Bills.

Looking Ahead

• (EU) Daily ECB Liquidity Stats.
• 05:30 (SL) Sri Lanka Mar CPI Y/Y: 3.8%e v 3.3% prior.
• 05:30 (DE) Germany to sell €2.5B in 0% 2036 Bunds.
• 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills.
• 05:30 Greece Debt Agency (PDMA) to sell €625M in 26-week bills.
• 05:30 (EU) ECB alloment in 3-month LTRO Tender (prior €30M with 2 bids recd).
• 06:00 (IE) Ireland Mar Unemployment Rate: No est v 5.8% prior.
• 06:00 (CZ) Czech Republic to sell 2026, 2031 and 2040 bonds.
• 06:30 (IN) India Feb Fiscal Deficit (INR): No est v 755.4B prior.
• 06:45 (US) Daily Libor Fixing.
• 07:00 (RU) Russia to sell 2028 and 2035 OFZ Bonds.
• 07:00 (US) MBA Mortgage Applications w/e Mar 26th: No est v -2.5% prior.
• 07:00 (UK) Weekly PM Question time in House.
• 08:00 (ZA) South Africa Feb Trade Balance (ZAR): 22.1Be v 11.8B prior.
• 08:00 (BR) Brazil Jan National Unemployment Rate: 14.1%e v 13.9% prior.
• 08:00 (CL) Chile Feb Unemployment Rate: 10.2%e v 10.3% prior.
• 08:00 (CL) Chile Feb Retail Sales Y/Y: 6.0%e v 5.8% prior; Commercial Activity Y/Y: No est v 4.3% prior.
• 08:00 (CL) Chile Feb Industrial Production Y/Y: No est v -2.4% prior; Manufacturing Production Y/Y: -2.0%e v -4.4% prior; Total Copper Production: No est v 464.8K tons prior.
• 08:00 (IN) India Feb Eight Infrastructure (key) Industries: No est v 0.1% prior.
• 08:00 (UK) Daily Baltic Dry Bulk Index.
• 08:15 (US) Mar ADP Employment Change: +550Ke v +117K prior.
• 08:30 (CA) Canada Jan GDP M/M: 0.5%e v 0.1% prior; Y/Y: -2.6%e v -3.0% prior.
• 08:30 (CA) Canada Feb Industrial Product Price M/M: 2.5%e v 2.0% prior; Raw Materials Price Index M/M: No est v 5.7% prior.
• 08:30 (BR) Brazil Feb Nominal Budget Balance: -50.8Be v 17.9B prior; Primary Budget Balance (BRL): -22.5Be v +58.4B prior; Net Debt to GDP Ratio: 61.9%e v 61.6% prior.
• 09:00 (RU) Russia Q4 Final Current Account Balance: No est v $5.5B prelim.
• 09:00 (FR) ECB’s Villeroy (France).
• 09:45 (US) Mar Chicago Purchaser Managers Index: 61.0e v 59.5 prior.
• 09:45 (UK) BOE to buy £1.48B in APF Gilt purchase operation (7-20 years).
• 10:00 (US) Feb Pending Home Sales M/M: -3.0%e v -2.8% prior; Y/Y: 6.5%e v 8.2% prior.
• 10:30 (US) Weekly DOE Oil Inventories – 11:00 (MX) Mexico Feb Net Outstanding Loans (MXN): No est v 4.59T prior.
• 11:00 (CO) Colombia Feb National Unemployment Rate: No est v 17.3% prior; Urban Unemployment Rate: 17.9%e v 19.5% prior.
• 15:00 (AR) Argentina Jan Wages M/M: No est v 1.8% prior.
• 17:00 (NZ) New Zealand Apr ANZ Consumer Confidence Index: No est v 113.1 prior.
• 17:00 (NZ) New Zealand Government 8-Month Financial Statements.
• 17:30 (AU) Australia Mar Performance of Manufacturing Index: No est v 58.8 prior.
• 18:00 (AU) Australia Mar Final PMI Manufacturing: No est v 57.0 prelim.
• 19:00 (AU) Australia Mar CoreLogic House Price Index M/M: No est v 2.0% prior.
• 19:50 (JP) Japan Q1 Tankan Large Manufacturers Index: -1e v -10 prior; Non-Manufacturing Index -5e v -5 prior.
• 19:50 (JP) Japan Q1 Tankan Small Manufacturers Index: -20e v -27 prior; Non-Manufacturing Index -14e v -12 prior.
• 19:50 (JP) Japan Q1 Tankan Large Manufacturers Outlook Survey: +4e v -8 prior; Large Non-Manufacturers Outlook Survey: -1e v -6 prior.
• 19:50 (JP) Japan Q1 Tankan Small Manufacturers Outlook Survey: -17e v -26 prior; Small Non-Manufacturers Outlook Survey: -14e v -20 prior.
• 20:00 (KR) South Korea Mar Trade Balance: $4.3Be v $2.7B prior; Exports Y/Y: 16.6%e v 9.5% prior; Imports Y/Y: 19.1%e v 13.8% prior.
• 20:01 (IE) Ireland Mar PMI Manufacturing: No est v 52.0 prior.
• 20:30 (AU) Australia Feb Job vacancies: No est v 23.4% prior.
• 20:30 (KR) South Korea Mar PMI Manufacturing: No est v 55.3 prior.
• 20:30 (JP) Japan Mar Final PMI Manufacturing: No est v 52.0 prelim.
• 20:30 (TW) Taiwan Mar PMI Manufacturing: No est v 60.4 prior.
• 20:30 (VN) Vietnam Mar PMI Manufacturing: No est v 51.6 prior.
• 20:30 (MY) Malaysia Mar PMI Manufacturing: No est v 47.7 prior.
• 20:30 (ID) Indonesia Mar PMI Manufacturing: No est v 50.9 prior.
• 20:30 (TH) Thailand Mar PMI Manufacturing: No est v 47.2 prior.
• 20:30 (SG) Singapore Q1 Preliminary Private Home Prices Q/Q: No est v 2.1% prior.
• 20:30 (AU) Australia Feb Trade Balance: A$9.9Be v A$10.1B prior.
• 20:30 (AU) Australia Feb Final Retail Sales M/M: -1.1%e v -1.1% prelim.
• 21:45 (CN) China Mar Caixin PMI Manufacturing: 51.4e v 50.9 prior.
• 23:35 (JP) Japan to sell 10-Year JGB Bonds.
• 23:30 (HK) Hong Kong to sell 3-month and 6-month Bills.
• 23:35 (JP) Japan to sell 10-Year JGB Bonds.