Notes/Observations
- Risk-on sentiment finding legs in session; President Biden’s $2.25T infrastructure plan to help US growth rate
- Euro Area PMI Manufacturing continues the trend of improvement despite lockdowns (Beat: Euro Zone, France, Spain, UK; In-line: Germany, Italy)
- Last trading day ahead of the Easter break but US Payroll data will still be released on Fri
Asia:
- Japan Q1 Tankan Large Manufacturers Index: +5 v -1e; Non-Manufacturing Index -1 v -4e
- Japan Mar Final PMI Manufacturing: 52.7 v 52.0 prelim ( 2nd consecutive expansion and highest since Oct 2018)
- China Mar Caixin PMI Manufacturing: 50.6 v 51.4e (11th straight expansion, lowest reading since April 2020)
- Australia Mar Final PMI Manufacturing: 56.8 v 57.0 prelim (confirms 10th consecutive month of expansion)
- Australia Feb Final Retail Sales M/M: -0.8% v -1.1% prelim
- Australia Feb Final Trade Balance (A$): 7.5B v 9.7Be
- South Korea Mar Trade Balance: $4.2B v $4.3Be; Exports Y/Y: 16.6% v 16.6%e; Imports Y/Y: 18.8% v 19.1%e
Coronavirus:
- Total global cases 128.8M (+0.5% d/d); total deaths: 2.81M (+0.4% d/d)
- Canada: Ontario is introducing a 28-day lockdown
Europe:
- France President Macron ordered France into its third lockdown. Noted that might be able to see a light at the end of the tunnel if we stick with new Covid restrictions in coming weeks
Americas:
- President Biden: infrastructure plan was a once in a generation investment; we were not tinkering around the edges. American Jobs Plan’ to modernize, repair and upgrade transportation network. Proposing a $2T capital investment over 8 years in the most key infrastructure. Infrastructure contracts would only be going to US firms, no one should complain about a 28% corp tax rate , toramp up IRS enforcement of taxes ; no one making $400k would see a Fed tax increase
- Biden’s infrastructure plan said to face controversy over price tag and design. The $2.25T in spending would take place over the next 8 years, however it would take until 2036 for Biden’s proposed corporate tax hikes to generate that much revenue.
Energy:
- OPEC+ JMMC technical panel said to have ended without oil policy recommendation
- Saudi Arabia and Iraq joint statement: eager to speed up restoration of balance to oil markets through committing to OPEC+ agreement
- OPEC Sec General Barkindo: oil market remains challenging and uncertain; oil demand and the economy remain fragile
Speakers/Fixed income/FX/Commodities/Erratum
Equities
- Indices [Stoxx600 +0.57% at 432.06, FTSE +0.72% at 6,761.95, DAX +0.59% at 15,097.10, CAC-40 +0.45% at 6,094.40, IBEX-35 +0.35% at 8,610.00, FTSE MIB +0.35% at 24,735.50, SMI +0.76% at 11,131.48, S&P 500 Futures +0.38%]
- Market Focal Points/Key Themes: European indices open broadly higher (with Ibex notable exception) but moderated gains somewhat as the session progressed; sectors leading to the upside include technology and materials; underperforming sectors include utilities and telecom; several European bourses closed ahead of extended weekend holidays, including Denmark, Norway and Sweden; Vinci to acquire ACS’s energy unit; Autogrill sells US highway unit; earnings expected in the upcoming US session include Carmax and Progressive
Equities
- Consumer discretionary: Next [NXT.UK] +2% (earnings), Autogrill [AGL.IT] -2% (updates outlook), Sodexo Alliance [SW.FR] -1% (earnings)
- Industrials: Vinci [DG.FR] +3% (acquisition), Volvo [VOLVA.SE] -6% (completes divestment)
Speakers
- ECB’s Lane (Ireland, chief economist)reiterated stance that near-term economic outlook was dominated by uncertainty; further extensions of lockdown measures to impact Q2. GDP likely to have contracted again in Q1. Saw no basis for a sustained shift in inflation dynamics with volatility of inflation over the past year being largely attributed to the pandemic shock. fter the pandemic ECB needed to ensure its monetary policy stance delivers on inflation. US stimulus impact on EU inflation seen around 8bps in 2023 and on GDP seen at 0.3%
- France Health Min Veran stated that the peak of epidemic could be seen in 7-10 days under the new lockdownmeasures
- BOJ’s Noguchi (new Board member) stated that he supported BoJ’s current policy stance as it had stopped the trend of falling price. Needed to prepare options in case if more easing is necessary
- South Korea Presidential Secretary for Economic Affairs Lee: GDP likely to reach pre-pandemic level in Q2
- China Commerce Ministry (MOFCOM): Reiterates stance that US and China should address concerns via dialogue; reiterates opposition to unilateral imposition of tariffs
- China State Planner NDRC: To ensure decline in steel production for 2021and launch nationwide inspection on steel capacity cuts
- China PBoC Wang Xin stated that had launched multi-lateral digital currency research pilot with Hong Kong, Thailand and UAE.. To test digital Yuan at upcoming winter Olympics
- China PBOC monetary policy Dept chief Sun Guofeng impact of any new US policies on China would be limited. Financial markets were operating in a stable manner
- Senior PBOC official Zou Lan stated that keeping close watch on foreign investment in bond market, believed the Chinese bond market was resilient. To continue opening up domestic bond market. Reiterated stance to keep money supply growth in line with GDP growth
- OPEC+ said to discuss options that include rollover and gradual oil output hike by up to 500Kbpd with Gradual oil production increase would be maximum of 500K bpd
Currencies/Fixed Income
- The USD was softer in the session as participants digested the fiscal plans of the Biden administration. President Biden’s $2.25T infrastructure plan said to help US growth rate
- EUR/USD was touch higher aided by Euro Area PMI Manufacturing data as it continued the trend of improvement despite lockdowns. Pair does remain constricted as fresh measures continued to be introduced to combat the spread of coronavirus. France recently announced its 3rd national lockdown for another month.
Economic data
- (DE) Germany Feb Retail Sales M/M: 1.2% v 2.0%e; Y/Y: -9.0% v -5.0%e
- (RU) Russia Mar PMI Manufacturing: 51.1 v 51.4e (3rd month of expansion)
- (SE) Sweden Mar PMI Manufacturing: 63.7 v 62.5e (10th month of expansion)
- (CH) Swiss Mar CPI M/M: 0.3% v 0.4%e; Y/Y: -0.2% v -0.3%e; CPI Core Y/Y: -0.4% v -0.2%e
- (CH) Swiss Mar CPI EU Harmonized M/M: 0.2% v 0.1% prior; Y/Y: -0.2% v -0.4% prior
- (CH) Swiss Feb Real Retail Sales Y/Y: -6.3% v -0.7% prior
- (NL) Netherlands Mar Manufacturing PMI: 64.7 v 59.6 prior (8th straight expansion)
- (HU) Hungary Mar Manufacturing PMI: 48.7 v 53.0e (2nd straight contraction)
- (PL Poland Mar PMI Manufacturing: 54.3 v 55.5e (8th straight expansion and highest since Jan 2018)
- (TR) Turkey Mar PMI Manufacturing: 52.6 v 51.7 prior (10th month of expansion)
- (CZ) Czech Q4 Final GDP (3rd reading) Q/Q: 0.6% v 0.6%e; Y/Y: -4.8% v -4.7%e
- (ES) Spain Mar Manufacturing PMI: # v 56.0e (2nd month of expansion and highest since 2006)
- (CH) Swiss Mar Manufacturing PMI: 66.3 v 64.5e (8th straight expansion)
- (CZ) Czech Republic Mar PMI Manufacturing: 58.0 v 58.0e (7th straight expansion and highest since Feb 2018)
- (TH) Thailand Mar Business Sentiment Index: 50.1 v 45.6 prior
- (IT) Italy Mar Manufacturing PMI: 59.8 v 59.8e ((9th month of expansion and highest since Mar2000)
- (FR) France Mar Final Manufacturing PMI: 59.3 v 58.8e(confirmed 4th month of expansion and highest since Sept 2000)
- (DE) Germany Mar Final Manufacturing PMI: 66.6 v 66.6e (confirmed 9th month of expansion and record high)
- (EU) Euro Zone Mar Final Manufacturing PMI: 62.5 v 62.4e (confirmed 9th month of expansion and record high)
- (GR) Greece Mar Manufacturing PMI: 51.8 v 49.4 prior (moved back into expansion)
- (UK) Mar Final Manufacturing PMI: 58.9 v 57.9e (confirmed 10th straight expansion and highest reading since Nov 2017
- (ZA) South Africa Mar Manufacturing PMI: 57.4 v 52.3e (11th month of expansion)
Fixed income Issuance
- None seen
Looking Ahead
- OPEC+ meeting
- (ZA) South Africa Mar Naamsa Vehicle Sales Y/Y: No est v -13.3% prior
- (RO) Romania Mar International Reserves: No est v $40.0B prior
- (US) Mar Total Vehicle Sales data to be released by major auto makers in session
- 05:10 (EU) Daily ECB Liquidity Stats
- 06:00 (UK) DMO to sell £4.0B in 1-month, 3-month and 6-month bills (£0.5B, £1.5B and £2.0B respectively)
- 06:45 (US) Daily Libor Fixing
- 07:30 (US) Mar Challenger Job Cuts: No est -34.5K prior; Y/Y: No est v -39.1% prior
- 07:30 (CL) Chile Feb Economic Activity Index (Monthly GDP) M/M: 0.1%e v 1.3% prior; Y/Y: -1.5%e v -3.1% prior
- 08:00 (CZ) Czech Mar Budget Balance (CZK): No est v -86.1B prior
- 08:00 (BR) Brazil Feb Industrial Production M/M: 0.5%e v 0.4% prior; Y/Y: 1.9%e v 2.0% prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:30 (US) Initial Jobless Claims: 675Ke v 684K prior; Continuing Claims: 3.75Me v 3.870M prior
- 08:30 (CA) Canada Feb MLI Leading Indicator M/M: No est v 0.1% prior
- 08:30 (CA) Canada Feb Building Permits M/M: -1.4%e v +8.2% prior
- 08:30 (US) Weekly USDA Net Export Sales
- 09:00 (RU) Russia Gold and Forex Reserve w/e Mar 26th: No est v $580.9B prior
- 09:00 (BR) Brazil Mar PMI Manufacturing: No est v 58.4 prior
- 09:30 (CA) Canada Mar Manufacturing PMI: No est v 54.8 prior
- 09:45 (US) Mar Final Markit Manufacturing PMI: 59.2e v 59.0 prelim
- 10:00 (US) Mar ISM Manufacturing: 61.5e v 60.8 prior; Prices Paid: 83.5e v 86.0 prior
- 10:00 (US) Feb Construction Spending M/M: -1.0%e v +1.7% prior
- 10:30 (US) Weekly EIA Natural Gas Inventories
- 11:00 (PE) Peru Mar CPI M/M: 0.7%e v -0.1% prior; Y/Y: 2.4%e v 2.4% prior
- 11:00 (US) Fed’s Harker
- 12:00 (IT) Italy Mar New Car Registrations Y/Y: No est v -12.3% prior
- (IT) Italy Mar Budget Balance: No est v -€10.2B prior
- 12:00 (RU) Russia Q4 GDP YoY: -2.4% v -3.4% prior
- 13:00 (US) Weekly Baker Hughes Rig Count
- 14:00 (BR) Brazil Mar Trade Balance: $3.1Be v $1.2B prior; Exports: $23.5Be v $16.2B prior; Imports: $20.2Be v $15.0B prior
- 19:00 (KR) South Korea Mar CPI M/M: -0.1%e v +0.5% prior; Y/Y: 1.5%e v 1.1% prior ; CPI Core Y/Y: 0.9%e v 0.8% prior
- 19:50 (JP) Japan End-Mar Monetary Base: No est v ¥614.7T prior
- 23:30 (JP) Japan to sell 3-Month Bills
