Notes/Observations
- RBI again cuts key rates to aid the sluggish economy ahead of upcoming elections
- UK House of Commons voted to block a no-deal Brexit and a softer divorce with the European Union becomes more likely.
- Trump to meet with China Vice Premier Liu He on Thursday in possible sign that trade talks are entering the final stages
Asia:
- Japan PM Abe stated that Japan was not applying modern monetary theory (MMT) and was maintaining trust as yen currency was purchased during times of crisis
- BOJ Gov Kuroda reiterated to continue easing persistently and that it would take some time to reach price target. Modern monetary theory (MMT) was extreme theory and hard to accept as idea of not considering deficit seemed extreme
Europe:
- UK Parliament backed efforts to prevent a disorderly departure from EU as its passed amendment to making changing Brexit date simpler, blocking a no deal Brexit on April 12th Vote was 312-311
- UK Govt issued statement on Brexit vote on Wed noting that it was disappointed that MPs had chosen to back the EU withdrawal bill; if passed bill would place severe constraint on Govt’s ability to negotiate an extension
- BoE Gov Carney: Risk of ‘no deal’ Brexit is alarmingly high. Reiterates that there was no need to worry about the financial sector in the event of a ‘no deal’ scenario
- UK Labour Leader Corbyn stated that talks with PM May on Wed went “very well”, expected more talks soon. Not as much change after talks with PM May; meeting was useful but inconclusive. Discussed red lines on Customs Union; want access to the market. Want European regulations as a minimum on the environment and employment
- UK PM May could request a 9-month delay to Brexit during upcoming EU summit
Americas:
- Fed’s Kashkari (dove, non-voter): did not believe that the economy was overheating not that the Fed needed to tap the brakes
- US said to set 2025 target for China to meet trade pledges; US wants binding China pledges, enforced by tariffs
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 -0.4% at 387.3, FTSE -0.6% at 7371, DAX -0.1% at 11945, CAC-40 -0.3% at 5451, IBEX-35 +0.1% at 9496, FTSE MIB -0.5% at 21651, SMI -0.2% at 9553, S&P 500 Futures -0.1%]
- Market Focal Points/Key Themes: Equities European Indices trade mostly lower consolidating sharp gains seen of late tracking slightly lower US Index futures and mixed Asian Indices. On the corporate front UK Based Saga Plc falls over 30% after earnings and outlook, with Ao World, B&) and Rocket Internet also declining on earnings and trading updates. To the upside Imimobile rises sharply after guiding full year results ahead of consensus, NWF Group, Entertainment One and Homeserve also gain on earnings and updates. In the M&A space Commerzbank trade higher, after reports Unicredit were said to eye a multi billion Euro rival bid, with Deutsche Bank and Unicredit trading slightly lower on the report. In other news, Reneuron Group trades shaprly higher on a study update while Casino Guichard declines on a downgrade at Morgan Stanley. In the US, Tesla shares trades lower in the pre market on Q1 deliveries numbers, while Boeing is active on the official Ethiopian authority response to the crash. Looking ahead notable earners include RPM International, Constellation Brands and Schnitzer Steel.
- Consumer discretionary: Bang & Olufsen [BO.DK] -3.1% (Earnings), Casino [CO.FR] -5.3% (Analyst downgrade), AO World [AO.UK] -5.9% (Earnings)
- Energy: NWF Group [NWF.UK] +8.6% (Trading update)
- Financials: Saga Plc -31% (Earnings, Guidance)
- Healthcare: ReNeuron Group +16% (Study update)
- Industrials: Manz [M5Z] +4.7% (Order)
- Technology: ImIMobile +7.2% (Trading update)
Speakers
- UK Brexit Sec Barclay: Holding European elections would damage public trust. House of Lords to explore flaws in bill passed by commons. Reiterated that a 2nd Brexit referendum was not consistent with Labour manifesto
- Italy Govt said to confirm €18.0B in privatizations in upcoming budget update
- Italy Dep PM Di Maio (5-Star) said to offer finance ministry position to League after the upcoming European Parliamentary elections (**Note: later refuted he wanted to replace Tria)
- Swiss Financial Market Supervisory Authority FINMA called for measures to curb Swiss property market bubble; says mortgage market is ‘too big to fail’
- Turkey Central Bank (CBRT): again raises limits on domestic banks swaps with central bank from 30% to 40%
- Poland Labor Ministry: Mar Unemployment Rate seen at 5.9% vs. 6.1% m/m
- India Central Bank (RBI) policy statement noted that the vote was 5-1 to cut rates (dissenter sought a hold). It maintained its neutral stance and added that inflation to be within the 4% target. Saw no reason to activate countercyclical capital buffer (CCCB) at this time
- China Commerce Ministry (MOFCOM) spokesperson Geo Feng reiterated that President Xi sought to talk with Trump via all channels. China was willing to work with US to implement agreement reached by two leaders and would reveal if there’s further information on trade talks in Washington
Currencies/Fixed Income
- FX market was quiet with little in terms of key data releases in the session. Markets awaiting further developments on the US-China trade front.
- GBP/USD was steady after UK Parliament voted to block a no-deal Brexit and a softer divorce with the European Union becomes more likely. The motion still needed to go the House of lords
Economic Data
- (NL) Netherlands Mar CPI M/M: 0.4% v 0.9% prior; Y/Y: 2.8% v 2.6% prior
- (NL) Netherlands Mar CPI EU Harmonized M/M: 0.5 v 1.3% prior; Y/Y: 2.9% v 2.9%e
- (IN) India Mar PMI Services: 52.0 v 52.5 prior; PMI Composite: 52.7 v 53.8 prior
- (DE) Germany Feb Factory Orders M/M: -4.2% v +0.3%e; Y/Y: -8.4% v -3.1%e
- (IN) India Central Bank (RBI) cut Repurchase Rate by 25bps to 6.00% (as expected) for its 2nd straight cut
- (CN) Weekly Shanghai copper inventories (SHFE): 257.3K v 261.4K prior
- (DE) Germany Mar Construction PMI: 55.6 v 54.7 prior
- (UK) Mar New car Registrations Y/Y: -3.4% v +1.4% prior
- FAO Mar World Food Price Index: 167.0 v 166.8 prior; M/M: 0.1% v 1.7% prior
- (IS) Iceland Mar Preliminary Trade Balance (ISK): -13.2B v -15.1B prior
Fixed Income Issuance
- (ES) Spain Debt Agency (Tesoro) sold total €3.0B vs. €2.5-3.5B indicated range in 2021 and 2029 bonds
- Sold €1.19B in 0.05% Oct 2021 SPGB; Avg yield: -0.244% v -0.182% prior, Bid-to-cover: 3.25x v 2.06x prior
- Sold €1.81B in 1.45% Apr 2029 SPGB; Avg Yield: 1.121% v 1.100% prior, bid-to-cover: 1.35x v 1.55x prio
- (ES) Spain Debt Agency (Tesoro) sold €515M vs. €250-750M indicated range in 0.65% inflation-linked 2027 bond (SPGBei); Real Yield: -0.338% v -0.154% prior; Bid-to-cover: 2.09x v 1.59x prior
- (FR) France Debt Agency (AFT) sold total €8.998B vs. €7.5-9.0B indicated range in 2029, 2034 and 2050 bonds
- Sold €5.491B in 0.50% May 2029 Oat; Avg Yield: 0.39% v 0.57% prior; Bid-to-cover: 2.06x v 1.88x prior (Mar 7th 2019)
- Sold €1.643B in 1.25% May 2034 Oat; Avg Yield: 0.80% v 0.99% prior; Bid-to-cover: 3.29x v 1.94x prior (Mar 7th 2019)
- Sold €1.864B in 1.50% May 2050 Oat; Avg Yield: 1.46%; Bid-to-cover: 1.94x (syndicated on Feb 19th 2019)
- (SE) Sweden sold SEK 500M vs. SEK500M indicated in I/L Dec 2027 bond; Avg yield: -1.6260%; Bid-to-cover: 3.36x
Looking Ahead
- (BR) Brazil Feb CNI Capacity Utilization: No est v 78.3% prior
- (RU) Russia Mar Light Vehicle Car Sales Y/Y: No est v -4% prior
- 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month bills
- 05:30 (PL) Poland to sell Bonds
- (PT) Portugal banking sector report
- 06:00 (IE) Ireland Mar Live Register Monthly Change: No est v -3.5K prior; Live Register Level: No est v 196.5K prior
- 06:00 (IE) Ireland Feb Industrial Production M/M: No est v 15.4% prior (revised from 15.3%); Y/Y: no est v -8.6% prior
- 06:45 (US) Daily Libor Fixing
- 07:00 (ZA) South Africa Feb Electricity Production Y/Y: No est v -2.1% prior; Electricity Consumption Y/Y: No est v 0.1% prior
- 07:30 (US) Mar Challenger Job Cuts: No est v 78.6K prior; Y/Y: No est v 117.2% prior
- 07:30 (TR) Turkey Mar Real Effective Exchange Rate (REER): No est v 77.24 prior
- 07:30 (EU) ECB account of March Meeting (Minutes)
- 08:00 (UK) Baltic Bulk Index
- 08:30 (US) Initial Jobless Claims: 215Ke v 211K prior; Continuing Claims: 1.75Me v 1.756M prior
- 08:30 (US) Weekly USDA Net Export Sales
- 09:00 (RU) Russia Gold and Forex Reserve w/e Mar 29th: No est v $487.1B prior
- 10:00 (MX) Mexico Mar Consumer Confidence Index: No est v 116.8 prior
- 10:00 (CA) Canada Mar Ivey Purchasing Managers Index (Seasonally Adj): No est v 50.6 prior; PMI (unadj): No est v 48.9 prior
- 10:00 (PT) Portugal PM Costa in parliament
- 10:20 (BR) Brazil Mar Vehicle Production: No est v 257.2K prior; Vehicle Sales: No est v 198.6K prior; Vehicle Exports: No est v 40.5K prior
- 10:30 (US) Weekly EIA Natural Gas Inventories
- 11:00 (US) Treasury announcement for upcoming 3-year, 10-0year and 30-year bonds
- 11:00 (BR) Brazil to sell July2023 LTN
- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills
- 13:00 (US) Fed’s Mester (hawk, non-voter) at Banking Conference
- 15:00 (AR) Argentina Feb Industrial Production Y/Y: -8.0%e v -10.8% prior; Construction Activity Y/Y: No est v -15.7% prior
