Notes/Observations
- Resumption of normal market activity after the Easter break.
- Recent spat of good US economic numbers helping to drive risk appetite.
Asia:
- Reserve Bank of Australia (RBA) left both Cash Rate Target and its 3-year Yield Target at 0.10% (as expected). Committed to maintaining highly supportive policy and would undertake further bond purchases if needed. Reiterated forward guidance that would not increase cash rate until CPI was within 2.0-3.0% band and reiterated do not expect conditions to be met until 2024 at the earliest.
- Japan Feb Household Spending Y/Y: -6.6% v -5.0%e.
- Japan Feb Labor Cash Earnings Y/Y: -0.2% v -0.5%e; Real Cash Earnings Y/Y: +0.2% v -0.1%.
- China Mar Caixin PMI Services registered its (11th month of expansion, highest level since Dec (54.3 v 52.1e)
Coronavirus:
- UK PM Johnson confirmed England non-essential shops, outdoor hospitality to reopen April 12th might maintain ban on non-essential foreign travel beyond May 17th.
Americas:
- President Biden stated that he was not worried a hike in taxes would harm the economy and that there was no evidence that it would drive business abroad.
- Fed’s Mester (FOMC voter) stated hat needed more job reports like the one we’ve had in March; Fed was still far from its policy goals; 8.5M are still out of work.
- US Senate parliamentarian stated that Democrats could use reconciliation to pass more bills (Note: move would allow Democrats to pass another major piece of legislation without Republican support.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
- Indices [Stoxx600 +0.74% at 435.42, FTSE +1.20% at 6,817.95 , DAX +1.00% at 15,258.75 , CAC-40 +0.62% at 6,140.61 , IBEX-35 +0.84% at 8,650.00, FTSE MIB +0.73% at 24,890.50, SMI +0.62% at 11,186.42, S&P 500 Futures -0.18%]
- Market Focal Points/Key Themes: European indices open broadly higher, and remained upbeat as the session progressed; sectors leading to the upside include materials and technology; telecom only sector starting the session in the red; UK PM confirms to proceed to second stage of lockdown easing next week; German CDU Chairmand called for increased lockdown; Credit Suisse discloses financial impact of Achegos; Suez to sell Recycling and Recovery unit to Australia’s Cleanaway; reportedly Telefonica to receive bids for its underwater cable business; equities events expected later in the US session include Applied Materials investor meeting, and earnings from Greenbrier.
Equities
- Energy: BP [BP.UK] +3% (update on progress towards net debt target)
- Financials: Credit Suisse [CSGN.CH] -1% (Losses related to Archegos; suspends stock program; exec step down; dividend cut)
- Healthcare: Valneva [VLA.FR] +5% (positive vaccine data)
- Technology: SAP [SAP.DE] +2% (Google reportedly plans to migrate its internal financial software from Oracle to SAP)
Speakers
- EU draft document on region’s vaccination rate in Q2 noted that member states would have sufficient Covid vaccine supplies to immunize the majority of people by the end of June. Germany could vaccinate 61% of its population by end-June with France at 58.2% and Italy at 57.1%.
- EU Economic Commissioner Gentiloni (Italy): confident EU recovery fund legal basis was strong (**Reminder: On Mar 29th reports circulated that Germany constitutional court ordered the president not to sign the EU recovery fund into law until the court has examined a motion brought by a handful of Eurosceptics)
- Sweden Fin Min Andersson: To spend an extra SEK7.0B on pandemic measures.
- Sweden Central Bank (Riksbank) e-Krona report: Solution for e-Krona based on block-chain tested but needed more investigation. Phase 2 of project would see market actors test pilot.
- Czech Central Bank (CNB) Mar Minutes noted that the pace of rate hikes was seen slower than previously forecasted as it saw longer pandemic downturn.
- Indonesia Central Bank Dep Gov reiterated view that current IDR currency (Rupiah) level was undervalued and needed to guide the Rupiah exchange rate to reflect fundamentals.
Currencies/Fixed Income
- USD was softer after 10-year yields failed again to test their March highs following another piece of strong U.S. economic data. Dealers noted that a recent spat of good US economic numbers was helping to drive risk appetite risk.
- EUR/USD was back above the 1.18 level and firmly entrenched within the 1.15-1.20 range.
- GBP was initially firmer aided by easing of virus restrictions. PM Johnson confirmed England non-essential shops, outdoor hospitality to reopen April 12th.
- Euro Zone government bond yields were trading higher between 3-4bps but dealers suspected they would remain within ranges favored by the ECB.
Economic data
- (SE) Sweden Mar PMI Services: 61.3 v 62.5 prior; PMI Composite: 62.0 v 62.3 prior.
- (ES) Spain Mar Net Unemployment Change: -59.1K v +44.4K prior.
- (IT) Italy Feb Preliminary Unemployment Rate: 10.2% v 8.9%e.
- (NO) Norway Mar PMI Manufacturing: 60.4 v 57.5 prior (7th month of expense. Sion)
- (CH) Swiss weekly Total Sight Deposits (CHF): 701.8B v 702.7B prior; Domestic Sight Deposits: 626.0B v 630.0B prior.
- (UK) Mar New Car Registrations Y/Y: +11.5% v -35.5% prior (1st increase since July 2020)
- (EU) Euro Zone Apr Sentix Investor Confidence: 13.1 v 6.7e (highest reading since Aug 2018)
- (EU) Euro Zone Feb Unemployment Rate: 8.3% v 8.1%e.
- (BE) Belgium Feb Unemployment Rate: 5.7% v 5.6% prior.
- (DK) Denmark Mar PMI Survey: 65.4 v 40.1 prior (1st expansion in 5 months)
Fixed income Issuance
- (AT) Austria Debt Agency (AFFA) sold total €1.495B vs. €1.495B in 2031 and 2051 RAGB Bonds.
Looking Ahead
- (UR) Ukraine Mar Official Reserve Assets: No est v $28.5B prior.
- 05:10 (EU) Daily ECB Liquidity Stats.
- 05:15 (CH) Switzerland to sell 3-month Bills.
- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.
- 05:30 (DE) Germany to combined €6.0B in 3-month and 9-month Bubills.
- 05:30 (BE) Belgium Debt Agency (BDA) to sell 3-month bills.
- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO)
- 05:30 (ZA) South Africa to sell combined ZAR4.8B in 2030, 2032 and 2035 bonds.
- 06:00 (IE) Ireland Mar Live Register Monthly Change: No est v -2.8K prior; Live Register Level: No est v 188.5K prior.
- 06:45 (US) Daily Libor Fixing.
- 07:00 (MX) Mexico Mar Consumer Confidence: No est v 38.4 prior.
- 07:00 (MX) Mexico Mar Domestic Vehicle Sales: No est v 82.3K prior.
- 07:00 (MX) Mexico Feb Leading Indicators M/M: No est v 0.37 prior.
- 07:30 (TR) Turkey Mar Real Effective Exchange Rate (REER): No est v 69.69 prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:55 (US) Weekly Redbook LFL Sales data.
- 09:00 (BR) Brazil Mar PMI Services: No est v 47.1 prior; PMI Composite: No est v 49.6 prior.
- 09:00 IMF update its World Economic Outlook (WEO)
- 09:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed)
- 09:00 (FR) France Debt Agency (AFT) to sell €5.0-6.2B in 3-month, 6-month and 12-month bills.
- 09:45 (EU) ECB weekly QE bond buying update.
- 09:45 (UK) BOE to buy £1.48B in APF Gilt purchase operation (over 20-years)
- 10:00 (US) Feb JOLTS Job Openings: 6.900Me v 6.917M prior.
- 10:00 (MX) Mexico Weekly International Reserve data.
- 11:00 (CO) Colombia Feb Exports: $3.2Be v $2.6B prior v prior.
- 12:00 (RU) Russia Mar CPI M/M: 0.6%e v 0.8% prior; Y/Y: 5.8%e v 5.7% prior.
- 12:00 (RU) Russia Mar CPI Core M/M: 0.5%e v 0.6% prior; Y/Y: 5.1%e v 5.0% prior.
- 12:00 (RU) Russia Q1 Consumer Confidence Index: No est v -26 prior.
- 16:30 (US) Weekly API Oil Inventories.
- (MX) Citibanamex Survey of Economists.
- 18:00 (AU) Australia Mar Final PMI Services: No est v 57.0 prior; PMI Composite: No est v 56.2 prior.
- 18:30 (AU) Australia Mar Performance of Construction Index: No est v 57.4 prior.
- 19:00 (KR) South Korea Feb Current Account Balance: No est v $7.1B prior; Balance of Goods (BOP): No est v $5.7B prior.
- 19:00 (SE) Sweden Central Bank (Riksbank) Gov Ingves and member Breman at IMF event.
- 19:01 (IE) Ireland Mar PMI Services: No est v 41.2 prior; PMI Composite: No est v 42.7 prior.
- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 112.3 prior.
- 21:00 (NZ) New Zealand Mar ANZ Commodity Price Index M/M: No est v -2.1% prior.
- 23:00 (ID) Indonesia Mar Foreign Reserves: No est v $138.8B prior.
- 23:00 (CN) China to sell 3-year and 7-year upsized Bonds.
