• German Apr IFO survey misses expectations across the board as the domestic economy continued to lose steam
  • PBoC chose a special lending tool (TMLF) to try and alleviate a banking-system liquidity shortage; move suggests the PBoC was keen to avoid stock and property bubbles
  • RBA rate cut now seen on cards for May after soft inflation data


  • Australia Q1 CPI data missed expectations and registered its 3rd straight reading below the RBA target range of 2-3% target and pace matched the lowest level since Q3 2016 (Q/Q: 0.0% v 0.2%e; Y/Y: 1.3% v 1.5%e)
  • China PBoC conducted a 1-year Targeted Medium-Term Lending facility (TMLF) for its 2d use of such facility; allotted CNY267.4B at 3.15%


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  • UK Cabinet ministers reportedly urging PM May to end cross-party talks with Labour Party and force a fourth Commons showdown on Brexit deal next week
  • UK PM May spokesman Slack: No specific timetable for end of talks with Labour, Talks serious, difficult in areas. Cabinet agreed on importance of passing withdrawal bill asap
  • The 1922 Committee last night failed to reach a decision on a rule change; to hold further talks about whether to change party rules to enable an early leadership challenge to PM May
  • Italy coalition government said to find compromise on Rome-debt relief


  • White House confirmed that USTR Lighthizer and US Treasury Sec Mnuchin to travel to China, trade talks to start on April 30th and cover IP, tech transfer and agriculture


  • Weekly API Oil Inventories: Crude: +6.9M v -3.1M prior



  • Indices [Stoxx600 -0.04% at 391.20, FTSE -0.40% at 7,493.25, DAX +0.40% at 12,284.39, CAC-40 -0.17% at 5,582.31, IBEX-35 -0.36% at 9,492.85, FTSE MIB -0.37% at 21,815.50, SMI +0.42% at 9,675.50, S&P 500 Futures -0.07%]

Market Focal Points/Key Themes:

  • European Indices trade mostly lower tracking lower US index futures and mixed Asian Indices as German IFO missed forecasts.
  • On a busy morning for corporate earnings Swiss traded Credit Suisse trades higher following a beat on the top and bottom line as well as continued positive momentum through April; Novartis also trades higher after a beat on both the top and bottom line and raised outlook. Strength in Novartis and Credit Suisse helping the Swiss SMI outperform.
  • In Germany, SAP trades over 7% higher, helping the DAX outperform as the company beat forecasts and raised outlook, as well as announced a comprehensive review to accelerate operational excellence. Elsewhere ABF, Volvo, ST Micro, Dassault Systems, Randstad and Vinci are among other notable names rising on earnings.
  • French traded Renault declines over 3% after Nissan cut their full year outlook; Akzo Nobel and Anglo American also trade lower on earnings.
  • In other news Wirecard trades over 8% higher after confirming a €900M investment from Softbank, while Bayer falls as shareholders Blackrock and DWS are said to not support management at the AGM.
  • Looking ahead notable earners include Boeing, Caterpillar, Biogen, Northrop Grumman, General Dynamics and Thermo Fisher among others.


  • Consumer discretionary: Heineken [HEIA.NL] -1% (earnings), Remy Cointreau [RCO.FR] -0.5% (earnings), Finnair [FIA1S.FI] -5% (earnings), AB Dynamics [ABDP.UK] +6.5% (earnings), Associated British Foods [ABF.UK] +2% (earnings)
  • Materials: Akzo Nobel [AKZA.NL] -3% (earnings)
  • Financials: Credit Suisse [CSGN.CH] +2.5% (earnings), Deutsche Bank [DBK.DE] -0.5% (Reportedly DB and UBS asset management arms are in serious merger discussions)
  • Healthcare: Novartis [NOVN.CH] +2.5% (earnings; outlook raise), Ingenico [ING.FR] +3.5% (earnings)
  • Industrials: Volvo [VOLVA.SE] +2.5% (earnings), Renault [RNO.FR] -4% (Nissan outlook cut), Dassault Systems [DSY.FR] +1.5% (earnings)
  • Technology: SAP [SAP.DE] +6% (earnings; Elliott Management comments), Wirecard [WDI.DE] +6.5% (Softbank investment), STMicroelectronics [STM.FR] +3% (earnings), Nordic Semiconductor [NOD.NO] +14% (earnings)
  • Telecom: Elior [ELIOR.FR] +3.5% (confirms divestment)


  • UK Govt to hold interviews over the summer for BOE Gov position (**Reminder: BOE Carney had agreed to extend his term by an additional 7-months until end-Jan 2020)
  • UK Debt management Office (DMO) raised its FY19/20 Gilt issuance by £3.7B to £118B
  • German IFO economists stated that the domestic economy continued to lose steam
  • Thailand Central Bank official Don: H1 GDP growth may be below 3.2% vs. 3.4% forecast due to weak exports
  • North Korea Leader Kim: Hoped upcoming visit to Russia would be successful; planned to discuss situation of Peninsula
  • China President Xi stated that he hoped China and IMF would deepen cooperation. China welcomed the IMF’s participation in Belt and Road.
  • China said to maintain Australia coal ‘go-slow’ until Beijing had assessed government policy in Canberra after federal elections in May. China had been delaying clearance of coal through its ports
  • Saudi Energy Min Al-Falih: More debt issuance forthcoming; recent Aramco debt sale was only the beginning. Oil inventories continued to rise despite sanctions
  • Iran President Rouhani reiterated that cutting Iran oil exports to zero would never happen
  • Iran Supreme Leader Khamenei: Nation would respond to US ‘enmity’

Currencies/ Fixed Income

  • EUR/USD briefly tested below the 1.12 level in the aftermath of disappointing German IFO data which missed expectations across the board as the domestic economy continued to lose steam. The pair failed to make a fresh 3-week low and saw a slight retracement just ahead of the NY morning to trade around 1.1220 area.
  • USD/JPY still unable to break above the 112 level with focus remaining on the upcoming BOJ rate decision.
  • Soft Australia inflation data had numerous analysts revise their outlook for the RBA and now expected rate cut as soon as May (next meeting).

Economic Data

  • (FI) Finland Mar PPI M/M: 0.0% v 0.1% prior; Y/Y: 2.3 v 1.0% prior
  • (FI) Finland Mar Unemployment Rate: 7.0 v 7.4% prior
  • (FR) France Apr Business Confidence: 105 v 104e; Manufacturing Confidence: 101 v 102e; Production Outlook Indicator:-2 v -1e; Own-Company Production Outlook: 9 v 13 prior
  • (FR) France Apr Business Survey Overall Demand: 2 v 2 prior
  • (CZ) Czech Apr Consumer Confidence Index: 1.5 v 2.3 prior; Business Confidence: 15.1 v 14.7 prior; Composite (Consumer & Business): 12.3 v 12.2 prior
  • (ZA) South Africa Q1 BER Consumer Confidence: 2 v 6e
  • (TR) Turkey Apr Real Sector Confidence (Seasonally Adj): 100.0 v 99.3 prior; Real Sector Confidence NSA (unadj): 105.5 v 102.1 prior
  • (TR) Turkey Apr Capacity Utilization:75.0 % v 74.3% prior
  • (EU) ECB Economic Bulletin
  • (DE) Germany Apr IFO Business Climate Survey: 99.2 v 99.9e; Current Assessment Survey: 103.3 v 103.5e; Expectations Survey: 95.2 v 96.1e
  • (ES) Spain Feb Trade Balance: -€2.6B v -€4.5B prior
  • (CH) Swiss Apr Credit Suisse Expectations Survey: -7.7 v -26.9 prior
  • (PL) Poland Mar Unemployment Rate: 5.9% v 5.9%e
  • (PL) Poland Mar Construction Output Y/Y: 10.8% v 9.8%e
  • (TW) Taiwan Mar M2 Money Supply Y/Y: 3.1% v 2.9% prior; M1 Money Supply Y/Y: 6.9% v 6.0% prior
  • (UK) Mar Public Finances (PSNCR): £8.9B v £0.7B prior; Public Sector Net Borrowing: +£0.8B v -£1.1Be; Central Government NCR: +£22.5B v -£1.7B prior; PSNB ex Banking Groups: £1.7B v £0.4Be

Fixed Income Issuance

  • (CY) Cyprus opened its book to sell EUR-denominated 5-year and 30-year bonds via syndicate
  • (IN) India sold total INR200B vs. INR200B indicated in 3-month, 6-month and 12-month bills
  • (DK) Denmark sold total DKK1.545B in 2029 and 2030 DGB bonds
  • (SE) Sweden sold total SEK1.5B vs. SEK1.5B indicated in 2028 and 2029 Bonds
  • (IT) Italy Debt Agency (Tesoro) sold €3.5B vs. €3.0-3.5B indicated range in new Jun 2021 Zero Coupon CTZ notes; Avg Yield: 0.697% v 0.288% prior; Bid-to-cover: 1.53x v 1.81x prior
  • (IT) Italy Debt Agency (Tesoro) sold €909B vs. €0.5-1.0B indicated range in 1.25% 2032 inflation-linked bonds (BTPei); Avg Yield: 1.93% v 2.24% prior; Bid-to-cover: 1.33x v 1.98x prior

Looking Ahead

  • 05:30 (UK) Weekly John Lewis LFL Sales data
  • 05:30 (DE) Germany to sell €3.0B in 0.25% Feb 2029 Bunds
  • 05:30 (EU) ECB allotment in 3-month LTRO (prior €1.1B with 17 bids recd)
  • 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays)
  • 06:00 (PT) Portugal Mar PPI M/M: No est v 0.0% prior; Y/Y: No est v 1.0% prior
  • 06:00 (RU) Russia to sell 2024 and 2023 OFZ bonds
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (US) MBA Mortgage Applications w/e Apr 19th: No est v -3.5% prior
  • 07:00 (UK) Weekly PM May question time in House of Commons
  • 07:15 (BR) Brazil Mar Total Formal Job Creation: +80.0Ke v +173.1K prior
  • 09:00 (BE) Belgium Apr Business Confidence Index: -0.7e v -0.7 prior
  • 09:00 (CL) Chile Mar PPI M/M: No est v 0.7% prior
  • 09:00 (EU) Weekly ECB Forex Reserves: no est v €286.6B prior
  • 09:30 (BR) Brazil Mar tax Collections (BRL): 113.9Be v 115.1B prior
  • 10:00 (CA) Bank of Canada (BOC) Interest Rate Decision: expected to leave Interest Rates unchanged at 1.75%
  • 10:30 (US) Weekly DOE Crude Oil Inventories
  • 11:30 (US) Treasury to sell 2-Year Floating Rate Notes
  • 13:00 (US) Treasury to sell 5-Year Notes
  • 15:00 (AR) Argentina Mar Trade Balance: $0.5Be v $0.5B prior; Total Exports Y/Y: No est v $4.5B prior; Total Imports Y/Y: No est v $4.0B prior
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