Various German Individual States Mar CPI Data Come In Below Expectations

Notes/Observations

• German Economy continued to hum along as Mar Unemployment Rate hit a fresh record low of 5.3%
• Various German individual States Mar CPI data come in below expectations of the overall composite figure (due out later today)
• UK Q4 Final GDP data was unrevised but confirmed its slowest annual pace since 2012 (YoY: 1.4%)
• One year to go for Brexit to become a reality (takes effect March 29, 2019 at 2300 GMT)

Asia:

• Japan Fin Min Aso stated that the country’s long standing stance was to definitely avoid bilateral trade negotiations with US
• China Commerce Ministry (MOFCOM) reiterated it hoped US took measures and resolved conflict with China through dialogue, did not want a trade war with the US
• South Korea Finance Ministry reiterated that its FX policy related talks with the US were separate from trade talks. Disclosing FX intervention details was likely to ease worries about Korea getting a currency manipulator label.

Europe:

• EU canceled a scheduled Brexit meeting for Apr 17th due to lack of new topics to discuss (Reminder: On Mar 19th EU and UK agreed on Brexit transition terms but Ireland issue remained)
• UK Labour Party (opposition) said to be likely to vote in favor of a final Brexit agreement
• UK Mar GfK Consumer Confidence data at a 10-month high (-7 v -10e)

Americas:

• Fed’s Bostic (FOMC voter, dove): not seeing upward wage pressure despite low level of unemployment

Economic Data

• (NL) Netherlands Mar Producer Confidence: 9.5 v 10.9 prior
• (UK) Mar Nationwide House Price M/M: -0.2% v +0.2%e; Y/Y: 2.1% v 2.6%e
• (ZA) South Africa Feb M3 Money Supply Y/Y: 6.9% v 6.0%e; Private Sector Credit Y/Y: 5.7% v 5.5%e
• (FI) Finland Jan Final Trade Balance: -€0.1B v -€0.2B prelim
• (DE) Germany Mar CPI Saxony M/M: 0.4% v 0.4% prior; Y/Y: 1.5% v 1.3% prior
• (CH) Swiss Mar KOF Leading Indicator: 106.0 v 107.2e
• (TR) Turkey Q4 GDP Q/Q: 1.8% v 1.2%e; Y/Y: 7.3% v 6.7%e
• (AT) Austria Feb PPI M/M: 0.0% v 0.4% prior; Y/Y: 1.2% v 1.3% prior
• (HU) Hungary Feb PPI M/M: 0.8% v 0.3% prior; Y/Y: 3.9% v 3.3% prior
• (CZ) Czech Jan Export Price Index Y/Y: -4.1% v -2.8% prior; Import Price Index Y/Y: -5.8% v -4.2% prior
• (HU) Hungary Jan Final Trade Balance: €0.7B v €0.7B prelim
• (DE) Germany Mar Unemployment Change: -19K v -15Ke; Unemployment Claims Rate: 5.3% (record low) v 5.3%e
• (DE) Germany Mar CPI Brandenburg M/M: 0.4% v 0.3% prior; Y/Y: 1.6% v 1.5% prior
• (DE) Germany Mar CPI Hesse M/M: 0.4% v 0.4% prior; Y/Y: 1.5% v 1.1% prior
• (DE) Germany Mar CPI Bavaria M/M: 0.5% v 0.5% prior; Y/Y: 1.7% v 1.6% prior
• (CZ) Czech Feb M2 Money Supply Y/Y: 7.2% v 7.7% prior
• (IT) Italy Feb PPI M/M: 0.3% v 0.8% prior; Y/Y: 1.8% v 1.8% prior
• (DE) Germany Mar CPI Baden Wuerttemberg M/M: 0.4% v 0.5% prior; Y/Y: 1.7% v 1.6% prior
• (DE) Germany Mar CPI North Rhine Westphalia M/M: 0.4% v 0.5% prior; Y/Y: 1.6% v 1.3% prior
• (UK) Q4 Final GDP (3rd reading) Q/Q: 0.4% v 0.4%e; Y/Y: % v 1.4%e
• (UK) Q4 Final Total Business Investment Q/Q: 0.3% v 0.0%e; Y/Y: 2.6% v 2.1%e
• (UK) Q4 Current Account: -£18.4B v -£24.0Be
• (UK) Feb Net Consumer Credit: £1.6B v £1.4Be; Net Lending: £3.7B v £3.4Be
• (UK) Feb Mortgage Approvals: 63.9K v 66.0Ke
• (UK) Feb M4 Money Supply M/M: -0.3% v +1.5% prior; Y/Y: 4.1% v 4.3% prior, M4 Ex IOFCs 3M Annualized: 3.3% v 5.5% prior
• (UK) Jan Index of Services M/M: 0.2% v 0.2%e; 3M/3M: 0.6% v 0.6%e
• (PT) Portugal Mar Preliminary CPI M/M: +1.9% v -0.7% prior; Y/Y: 0.7% v 0.6% prior
• (PT) Portugal Mar CPI EU Harmonized M/M: 2.2% v -0.6% prior; Y/Y: 0.8% v 0.7% prior

Fixed Income Issuance:

• None seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +0.4% at 370.6, FTSE +0.5% at 7079, DAX +0.6% at 12015, CAC-40 +0.5% at 5157, IBEX-35 +1.0% at 9647, FTSE MIB +0.5% at 22440 , SMI -0.2% at 8744, S&P 500 Futures +0.3%]

Market Focal Points/Key Themes:

• European Indices rebound after yesterdays losses following a raft of inflation data out of Europe and data in the UK. M&A remains the dominant theme with Nex Group confirming its to be acquired by the CME in a £3.9B deals, with shares of Renault trading higher after talk of a potential tie up with Nissan, Swiss Re trades higher after talk of Softbank acquiring a $9.6B stake; Tomtom trades higher after denying it engaged with advisers to look for buyers.
• On the earnings front, Sodexo trades sharply lower after cutting its outlook on a weaker Q2, Manz and Nemetschek trade higher following results.
• Looking ahead notable earners include Constellation Brands, Worthington and Movado.

Movers

• Consumer Discretionary [TomTom [TOM2.NL] +2.6% (Denies reports on hiring advisors for sale of co), Sodexo [SW.FR] -14.2% (Earnings, Cuts outlook), Compass [CPG.UK] -2.8% (In sympathy with Sodexo)]
• Industrials [ Renault [RNO.FR] +4.4% (Report on potential merger with Nissan), Manz Automation [M5Z.DE]+2.3% (Earnings)]
• Financial [ CMC Markets [CMCX.UK] +8.6% (Trading update), Swiss Re [SREN.CH] +2.9% (Reportedly Softbank mulling $9.6B stake)]
• Technology [TeleColumbus [TC1.DE] -0.3% (Earnings), Nemtschek [NEM.DE] +6.7% (Earnings) ]

Speakers

• UK Trade Sec Fox: Brexit transition period beyond 2020 is unlikely and would not support any extension. Believed UK govt would get a Brexit deal that is acceptable to parliament
• Italy President Mattarella to begin talks on forming new govt on Wed, Apr 4th
• Romania Central Bank gov Isarescus stated that it had raised rates rapidly to calm inflation. RON currency (Leu) facing depreciation pressures
• Canada Fin Min Morneau reiterated view that NAFTA negotiations were going well
• South Korea Unification Ministry official confirmed that South and North Korea leaders to hold a summit on April 27th to discuss denuclearization and a peace treaty. The two countries to also hold a meeting regarding the summit’s security on April 4th.
• China State Council: To review proposed intellectual property transfers that might affect national security

Currencies

• FX price action was sparse ahead of the Easter and Passover holidays with the greenback holding on to recent gains. A plethora of European economic released did little to quell any fresh position taking
• GBP was softer for a 3rd straight session and hovered around 1-week lows in the mid-1.40 area. UK Q4 Final GDP was unrevised but confirmed its slowest annual pace since 2012
• EUR/USD hovered around the 1.24 level as various German individual States Mar CPI data came in below expectations of the overall German inflation data due out later today. The CPI reinforced some of the recent cautious remarks by ECB officials on making any abrupt changes in its policy and giving more time to decide about its future moves until summer period

Fixed Income

• Bund Futures trade 16 ticks higher at 159.34 as the German unemployment rate hits a record low. Upside targets 159.75, while a return lower targets the158.25 level.
• Gilt futures trade at 122.77 up 17 ticks as the third and final gdp reading comes in unrevised. Support continues stands at 121.25 then 120.85, with upside resistance at 123.35 then 123.85.
• Thursday’s liquidity report showed Wednesday’s excess liquidity rose to €1.798T from €1.789T prior. Use of the marginal lending facility increased from €110M to €131M.

Looking Ahead

• (EG) Egypt Central Bank Interest Rate Decision: Expected to cut Deposit Rate by 100bps to 16.75%
• (CA) Canada Mar CFIB Business Barometer: No est v 62.4 prior
• (BE) Belgium Mar CPI M/M: No est v 0.2% prior; Y/Y: No est v 1.5% prior
• (MX) Mexico Election deadline for parties to register their candidate for 2018 election
• (UK) Last Day of Commons Session Before Easter Recess
• 05:30 (ZA) South Africa Feb PPI M/M: 0.5%e v 0.3% prior; Y/Y: 5.0%e v 5.1% prior
• 05:30 (SL) Sri Lanka Mar CPI Y/Y: No est v 4.5% prior
• 05:30 (HU) Hungary Debt Agency (AKK) to sell Bonds (3 tranches)
• 06:00 (IL) Israel Feb Unemployment Rate: No est v 3.7% prior
• 06:00 (PT) Portugal Feb Industrial Production M/M: No est v 2.5% prior; Y/Y: No est v 2.8% prior
• 06:00 (PT) Portugal Feb Retail Sales M/M: No est v -0.5% prior; Y/Y: No est v 5.4% prior
• 06:00 (FI) Finland Quarterly Review
• 06:00 (UK) DMO to sell combined £3.5B in 1-month, 3-month and 6-month Bills (£0.5B, £1.0B and £2.0B respectively)
• 06:00 (HU) Hungary Central Bank holds Interest Rate Swap (IRS) Tender
• 07:00 (BR) Brazil Central Bank (BCB) Quarterly Inflation Report
• 07:00 (CZ) Czech Central Bank (CNB) Interest Rate Decision: Expected to leave Repurchase Rate unchanged at 0.75%
• 08:00 (DE) Germany Mar Preliminary CPI M/M: 0.5%e v 0.5% prior; Y/Y: 1.7%e v 1.4% prior
• 08:00 (DE) Germany Mar Preliminary CPI EU Harmonized M/M: 0.5%e v 0.5% prior; Y/Y: 1.6%e v 1.2% prior
• 08:00 (ZA) South Africa Feb Budget Balance (ZAR): No est v -41.3B prior
• 08:00 (ZA) South Africa Feb Trade Balance (ZAR): +1.0Be v -27.7B prior
• 08:00 (BR) Brazil Feb PPI Manufacturing M/M: No est v 0.4% prior; Y/Y: No est v 4.0% prior
• 08:00 (BR) Brazil Feb National Unemployment Rate: 12.5%e v 12.2% prior
• 08:00 (CL) Chile Feb Industrial Production Y/Y: 9.0%e v 5.3% prior, Manufacturing Production Y/Y: 5.9%e v 5.7% prior, Total Copper Production: No est v 503.8K prior
• 08:00 (CL) Chile Feb Unemployment Rate: 6.6%e v 6.5% prior
• 08:05 (UK) Baltic Dry Bulk Index
• 08:15 (CZ) Czech Central Bank Gov Rusnok post rate decision press conference
• 08:30 (US) Initial Jobless Claims: 230Ke v 229K prior; Continuing Claims: 1.87Me v 1.828M prior
• 08:30 (US) Feb Personal Income: 0.4%e v 0.4% prior; Personal Spending: 0.2%e v 0.2% prior; Real Personal Spending (PCE): +0.1%e v -0.1% prior
• 08:30 (US) Feb PCE Deflator M/M: 0.2%e v 0.4% prior; Y/Y: 1.7%e v 1.7% prior
• 08:30 (US) Feb PCE Core M/M: 0.2%e v 0.3% prior; Y/Y: 1.6%e v 1.5% prior
• 08:30 (CA) Canada Jan GDP M/M: 0.1%e v 0.1% prior; Y/Y: 2.9%e v 3.3% prior
• 08:30 (CA) Canada Feb Industrial Product Price M/M: No est v 0.3% prior; Raw Materials Price Index M/M: No est v 3.3% prior
• 08:30 (US) Weekly USDA Net Export Sales
• 09:00 (RU) Russia Gold and Forex Reserve w/e Mar 23rd: No est v $455.4B prior
• 09:45 (US) Mar Chicago Purchasing Manager: 62.0e v 61.9 prior
• 10:00 (US) Mar Final University of Michigan Confidence: 102.0e v 102.0 prelim
• 10:30 (US) Weekly EIA Natural Gas Inventories
• 12:00 (US) USDA Q1 Grain Stocks Report
• 13:00 (US) Weekly Baker Hughes Rig Count data
• 13:00 (US) Fed’s Harker (non-voter, moderate) speaks on the Economic Outlook