Market movers today

Financial markets will look for whether the European countries continue to see an improvement in the coronavirus epidemic and to what extent the US will put in force sufficient measures to get the problem under control.

In the euro area, the preliminary HICP inflation numbers for March are released. We still look for 0.8% on headline inflation as increasing food prices are dampening some of the downward pressure from declining energy prices. For core inflation we look for 1.1% on the back of decreasing inflation from services (especially package tours). However, most of the data was likely collected before the lockdowns, only partially reflecting the coronavirus repercussions on the inflation front so far.

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In the US, the conference board consumer confidence is released. Bloomberg consensus is looking for a fall to 110 from 130.7 last month.

Overnight in Japan, the Tankan business survey on Wednesday is set to give Bank of Japan key information on the need for more stimulus. Also overnight in China, the private PMI manufacturing is released. After the better than expected number this morning, we expect the Caixin to rise above the 50 mark tomorrow as well.

Norges Bank will announce scheduled April fiscal NOK purchases (see FX section).

Selected market news

Risk sentiment was moderately positive yesterday with global equities up 1-3%. The much tested European economies may finally start to see some positive news after recent COVID-19 numbers amid Italy extending the lockdown past Easter. The WHO said yesterday that there are signs of some stabilisation in Europe’s coronavirus outbreak. Also, Danish PM Frederiksen was moderately optimistic yesterday by saying that the economy may be opened gradually after Easter, if data play out according to expectations. Overnight the Asian equities had a tough session despite the better-than-expected China manufacturing, which rose to 52 (above the 50 mark indicating improving conditions).

Oil declined further yesterday and touched new lows in past 18 months on the back of the ongoing oil war and the significant oversupply in the current low-growth environment. Saudi Aramco was said to consider to sell some of the pipeline sale to raise cash. WTI touched below USD20/barrel briefly yesterday, but trades at USD21/barrel at the time of writing.

In Hungary, coronavirus emergency measures have been taken, which effectively support Orban’s domestic political power as well. While this is hardly a big mover in EUR/HUF, it does have the potential to amplify the already ongoing disagreements between Hungary and the EU. As such, these somewhat right-wing initiatives did lend support to EUR/HUF yesterday and more HUF weakness could come at a later point in time as a result.

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