Notes/Observations
- German IFO Survey more optimism than the previous month.
- Italy said to reach a deal with the EU Commission over its recovery plan.
- Focus on Fed’s rate decision on Wed and was expected to reaffirm its pledge to maintain loose policy measures.
Asia
- Japan LDP Ruling party lost 3 parliament election races to opposition (Reminder: Japan to hold a general election later this year).
- China Academy of Social Sciences (CASS) saw 2021 GDP ~8%; USD/CNY exchange rate might have 2-way moves between 6.40-6.50.
- China to launch various promotional activities during May in order to boost consumption [China to hold its 5-day Labour Day holiday during May].
Coronavirus
- EU Commission chief von der Leyen stated that American tourists that had been fully vaccinated against Covid-19 would be able to visit the EU over the summer.
- German Fin Min Sholz stated that did not expect any moves to ease virus restrictions before the end of May, the infection rate rose at the w-end despite tougher restrictions.
Europe
- BOE’s Broadbent saw very rapid growth over the next couple of quarters but cautioned that Inflation would be less predictable.
- Italy said to have reached a deal with EU on its Recovery Plan and will be sent to Parliament.
- German Federal Election Poll showed Greens overtake CSU/CDU coalition in latest federal election poll.
- Russia said to signal June date for possible Putin-Biden summit in an effort to normalize relations.
- S&P affirmed Italy sovereign rating at BBB; outlook Stable.
- Fitch affirmed Netherlands sovereign rating at AAA; outlook Stable.
- S&P raised Greece sovereign rating to BB; outlook positive.
Americas
- President Biden to attend G7 and would call on allies to increase pressure on China to stop forced labor in Xinhiang.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
- Indices [Stoxx600 +0.05% at 439.28, FTSE % at #, DAX +0.11% at 15,296.40, CAC-40 +0.15% at 6,267.40, IBEX-35 +0.65% at 8,675.00, FTSE MIB +0.05% at 24,399.50, SMI -0.35% at 11,159.70, S&P 500 Futures -0.09%].
- Market Focal Points/Key Themes: European indices open mixed with a downside bias and failed to gain direction as the session wore on; sectors among those trading higher include materials and consumer discretionary; sectors among those trading lower are financials and industrials; materials sector supported after copper reached highest price in a decade; automakers under pressure on reports of further stoppages due to chip shortage; Tate & Lyle confirms looking to divest food and beverage unit; Leonardo takes stake in Hensoldt; Nova’s bid for KAZ becomes compulsory; earnings expected in the upcoming US session include Michelin, Tesla and NXP Semiconductors.
Equities
- Consumer discretionary: PostNL [PNL.NL] +7% (earnings), Tate & Lyle [TATE.UK] +6% (confirms divestment talks).
- Healthcare: Koninklijke Philips [PHIA.NL] -2% (earnings).
- Industrials: Conzzeta [CON.CH] +1% (divestment).
- Technology: AMS [AMS.CH] -4% (analyst downgrade).
Speakers
- France Fin Min Le Maire: Stated that the govt expected to receive €5.0B in EU funds in Sept. To meet with various corporate executives on Monday, Apr 26th regarding broader plans to aid sectors impacted by pandemic.
- German Fin Min Sholz stated that did not expect any moves to ease virus restrictions before the end of May.
- EU’s Dombrovskis (trade chief) stated that saw a welcomed opening with US on digital deal.
- German IFO Economists: Stated that the upward trend was continuing but subdued. 3rd wave of pandemic and bottlenecks with semi-conductors were subduing the recovery.
Currencies/ Fixed income
- USD remained on soft footing with market participants focusing on Wed’s FOMC policy decision. Federal Reserve is expected to reaffirm its pledge to maintain loose policy measures. Fed being viewed to be in no rush to kick off any exit strategy and to stress that a pickup in inflation could be tolerated before taking any policy action.
- EUR/USD hovering around the 1.21 area. German Green party was ahead in the polls with the upcoming Sept elections while Italy was said to reach a deal with the EU Commission over its recovery plan. Some analysts noted that ECB might wait until the 70% vaccination rate for Europe was achieved before gradually phasing down the Pandemic Emergency Purchase Program.
- USD/JPY holding below the 108 level with Tuesday’s BOJ policy decision in focus. Analysts are unanimous that BOJ will keep interest rates and asset purchases unchanged. Focus to be on the quarterly outlook report with expectations that BOJ would cut its FY21/22 inflation outlook. And concede that it would not hit its 2% price target before Gov Kuroda’s term ended in Apr 2023.
Economic data
- (FI) Finland Mar PPI M/M:1.4 % v 1.7% prior; Y/Y: 6.7% v 2.0% prior.
- (CZ) Czech Apr Consumer Confidence Index:-12.5# v -22.0 prior; Business Confidence: +6.8 v -1.3 prior; Composite Confidence (Consumer & Business): +2.9 v -5.4 prior.
- (ES) Spain Mar PPI M/M: +2.5% v -1.7% prior; Y/Y: %6.3 v 0.6% prior.
- (TR) Turkey Apr Capacity Utilization: 75.9% v 74.7% prior.
- (TR) Turkey Apr Real Sector Confidence (seasonally adj): 107.4 v 110.2 prior; Real Sector Confidence (unadj): 111.0 v 110.8 prior.
- (DE) Germany Apr IFO Business Climate Survey: 96,8 v 97.8e; Current Assessment Survey: 94.1 v 94.4e; Expectations Survey: 99.5 v 101.2e.
- 00 (PL) Poland Mar Unemployment Rate: 6.4% v 6.4%e.
- (CH) Swiss weekly Total Sight Deposits (CHF): 701.7B v 701.5B prior; Domestic Sight Deposits: 633.3B v 633.5B prior.
Fixed income issuance
- (EU) ESM opened its book to sell EUR-denominated Oct 2031 bonds via syndicate; guidance seen -10bps to mid-swaps; order book over €12B.
- (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 6-month bills; Avg Yield: 0.22% v 0.16% prior; Bid-to-cover: 2.36x v 2.61x prior.
Looking Ahead
- (UR) Ukraine Central Bank Apr Minutes.
- (EU) Daily ECB Liquidity Stats.
- 05:30 (DE) Germany to sell €4.0B in 12-month Bubills.
- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).
- 06:00 (IL) Israel Mar Unemployment Rate: No est v 5.1% prior; Unemployment Rate 9including Covid): No est v 16.7% prior.
- 06:00 (IL) Israel Feb Manufacturing Production M/M: No est v -0.5% prior.
- 06:00 (IL) Israel to sell bonds.
- 06:00 (RO) Romania to sell RON500M in 4.15% 2028 Bonds.
- 06:45 (US) Daily Libor Fixing.
- 07:00 (MX) Mexico Feb IGAE Economic Activity Index (Monthly GDP): M/M: 0.1%e v 0.1% prior; Y/Y: -4.1%e v -5.4% prior.
- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:00 (IT) ECB’s Panetta (Italy).
- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).
- 08:30 (US) Mar Preliminary Durable Goods Orders: +2.5%e v -1.2% prior; Durables (ex-transportation): +1.6%e v -0.9% prior; Capital Goods Orders (non-defense/ex-aircraft): +1.8%e v -0.9% prior; Capital Goods Shipments (non-defense/ex-aircraft): +1.5%e v -1.1% prior.
- 08:30 (BR) Brazil Mar Current Account Balance: -$2.5Be v -$2.3B prior; Foreign Direct Investment (FDI): $7.2Be v $9.0B prior.
- 09:00 (BE) Belgium Apr Business Confidence: +1.8e v -1 prior.
- 09:00 (FR) France Debt Agency (AFT) to sell €5.5-6.8B in 3-month, 6-month, 9-month and 12-month bills.
- 09:00 (IE) ECB’s Lane (Ireland, chief economist).
- 09:45 (EU) ECB weekly QE bond-buying update
- 09:45 (UK) BOE to buy £1.48B in APF Gilt purchase operation (3-7 years).
- 10:30 (US) Apr Dallas Fed Manufacturing Activity Index: 30.0e v 28.9 prior.
- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.
- 13:00 (US) Treasury to sell 5-Year Notes.
- 15:00 (AR) Argentina Feb Shop Center Sales Y/Y: No est v -31.5% prior; Supermarket Sales Y/Y: No est v 3.8% prior.
- 16:00 (US) Weekly Crop Progress Report.
- 19:00 (KR) South Korea Q1 Preliminary GDP Q/Q: 1.1%e v 1.2% prior; Y/Y: +1.2 v -1.2% prior.
- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 114.0 prior.
- 21:30 (CN) China Mar Industrial Profits Y/Y: No est v 20.1% prior.
- 22:30 (KR) South Korea to sell KRW700B in 20-year Bonds.
- 23:00 (TH) Thailand Central bank to sell 3-month bills.
- 23:30 (HK) Hong Kong to sell 3-month and 6-month bills
- (JP) Bank of Japan (BOJ) Interest Rate and Policy Decision: Expected to leave Interest Rates on excess Reserves (IOER) unchanged at -0.10% and maintain Yield Control (YCC) at 0.00%.
- BOJ Quarterly Outlook for Economic Activity and Prices.
