Euro Area Inflation Data Remains Subdued

Notes/Observations

• Various Euro Area Mar inflation data registered lower readings compared to Feb (Euro Zone, France, Portugal, Italy)
• China PMI and Japanese data provides some cautious optimism into month/quarter end but disruptions caused by the coronavirus pandemic linger

Asia:

• South Korea Feb Industrial Production M/M: -3.8% v -4.5%e; Y/Y: 11.4% v 3.4%e
• Feb Jobless Rate: 2.4% v 2.4%e – Japan Feb Retail Sales M/M: +0.6% v -1.5%e; Y/Y: +1.7% v -1.5%e – Japan Feb Preliminary Industrial Production M/M: 0.4% v 0.0%e; Y/Y: -4.7% v -4.8%e
• China Mar Manufacturing PMI (Govt Official): 52.0 v 44.8e (returned to expansion)

Coronavirus:

• Global cumulative cases: 786.0K (+8.8% d/d); cumulative deaths 37.8K (+11.2% d/d)
• Country-by-country summary: US 155.5K (+15.1%), Italy 75.5K (+2.2%), Iran 24.8K (+6.7%), Spain 63.5K (+8.3%), Germany 52.7K (+0.1%), France 34.2K (+10.7%), UK 20.9K (+8.0%), China: 82.6K (+0.5% Japan 1.5K (+6.1%), South Korea 4.2K (-1.4%)

Europe:

• G20 Trade Minister statement noted that the time was now for the global community to step up cooperation and coordination in the face of the pandemic
• Eurogroup’s Centeno proposed accelerating work on euro zone bailout fund and EIB instruments in response to the coronavirus pandemic

Americas:

• Canada said to have had 1.55M jobless claims between March 16-25th, with average daily claims at over 200K on the last 3 days of that period Mid-East/ Energy:US Dept of Energy noted that the energy chiefs from Russia and the US to discuss volatility in the oil market

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +1.92% at 320.92, FTSE +2.02% at 5,676.00, DAX +2.41% at 10,052.95, CAC-40 +1.57% at 4,447.32, IBEX-35 +2.10% at 6,799.85, FTSE MIB +2.04% at 17,217.00, SMI +1.50% at 9,311.50, S&P 500 Futures +0.65]
• Market Focal Points/Key Themes: European indices open higher across the board and continued higher as the session progressed; Consumer discretionary among better performer after report household sales increased; Energy sector supported after slight increase in crude; Financials underperforming, ECB says banks should use their buffers; France reportedly to support exporters; press speculation that Italy lockdown measures might extend to May 4, EconMin said need to prepare for end of lockdown; Altice unit HOT desists in takeover of Partner Communications; Euronext suspends bid for BME; upcoming earnings expected in the US session include McCormick, ConAgra and Alliance Data Systems

Equities

• Consumer discretionary: WPP [WPP.UK] +7% (trading and coronavirus update), HelloFresh [HFG.DE] +11% (Q1 outlook) , Zalando [ZAL.DE] +2% (Q1 guidance), Tom Tailor [TTI.DE] -15% (COVID-19 update)
• Energy: Royal Dutch Shell [RDSB.UK] +7% (Q1 update)
• Healthcare: Synairgen [SNG.UK] +11% (doses first patient in trial of SNG001 in COVID-19 patients)
• Industrials: Aston Martin Lagonda [AML.UK] -10% (secondary offering)
• Technology: CompuGroup Medical [COP.DE] +9% (analyst action)

Speakers

• ECB’s Visco (Italy): To explore all options to support economy; to review measures to increase liquidity and reduce risks
• ESM’s Regling stated that any issuance of Coronabonds would have to come by existing EU bodies
• ECB SSM chief Enria: Banking sector needed to preserve its capital and show restraint; to take legal action if banks did not comply. Saw the issue of paying bonuses as less compared to dividends but should be moderate
• Italy Economic Development Min Patuanelli: Guaranteed funds for companies not less than €7-8B. Virus data was showing a regression and needed to prepare for end of lockdown
• Finland Treasury on issuance: To increase frequency of bill sales in Q2 to prepare for rising government expenditures
• Thailand Central Bank official Don: Contraction in Q2 GDP likely due to drop in tourism
• Japan LDP (ruling party) official Kishida: LDP proposal called for ¥60T economic plan; stimulus approx 10% of GDP. The plan would involve ¥20T in fiscal spending and over ¥10T in handouts. Corporate funding measures to exceed ¥40T. To discuss tax postpone payment and tax cuts and consider more economic stimulus if necessary
• Indonesia President Jokowi said to sign emergency law of State finances. Allocated IDR405.1T in additional spending to combat the economic impact of the coronavirus and cut corporate tax rate for 2020 to 22%

Currencies/Fixed Income

• Month-end/quarter-end saw the USD maintain a firm tone and higher by approx 0.5% against the major pairs .
• GBP/USD saw its worst quarterly performance since the 2016 Brexit referendum with GBP/USD at 1.2345 by mid-session.
• The end of japan’s fiscal year helped to weaken the yen with USD/JPY at 108.40

Economic Data

• (DE) Germany Feb Import Price Index M/M: -0.9% v -0.3%e; Y/Y: -2.0% v -1.5%e
• (UK) Q4 Final GDP Q/Q: 0.0% v 0.0%e; Y/Y: 1.1% v 1.1%e
• (UK) Q4 Final Private Consumption Q/Q: 0.0% v 0.1%e Government Spending Q/Q: 1.5% v 2.1%e; Gross Fixed Capital Formation Q/Q: -1.2% v -1.6%e; Exports Q/Q: 5.0% v 4.1%e; Imports Q/Q: +0.4% v -0.8%e
• (UK) Q4 Final Total Business Investment Q/Q: % v -1.0%e; Y/Y: % v 0.9%e
• (UK) Q4 Current Account Balance: -£5.6B v -£7.0Be
• (DK) Denmark Q4 Final GDP Q/Q: 0.6% v 0.2% prelim; Y/Y: 2.3% v 1.8% prelim
• (DK) Denmark Feb Unemployment Rate (Seasonally Adj): 3.1% v 3.1% prior; Gross Unemployment Rate: 3.7% v 3.7% prior
• (NO) Norway Feb Credit Indicator Growth Y/Y: 4.8% v 5.0% prior
• (FI) Finland Jan Final Trade Balance: -€0.3B v -€0.4B prelim
• (CH) Swiss Feb Real Retail Sales Y/Y: +0.3% v -0.1% prior
• (FR) France Mar Preliminary CPI M/M: 0.0% v 0.4%e; Y/Y: 0.6% v 1.0%e
• (FR) France Mar Preliminary CPI EU Harmonized M/M: 0.0% v 0.5%e; Y/Y: 0.7% v 1.0%e
• (FR) France Feb PPI M/M: -0.6% v -0.1% prior; Y/Y: -0.9% v +0.2% prior
• (FR) France Feb Consumer Spending M/M: -0.1% v +0.7%e; Y/Y: -0.6% v 0.0%e
• (ES) Spain Q4 Final GDP Q/Q: 0.4% v 0.5%e; Y/Y: 1.8% v 1.8%e
• (CZ) Czech Q4 Final GDP Q/Q: 0.5% v 0.3%e; Y/Y: 2.0% v 1.8%e
• (TR) Turkey Feb Trade Balance: -$3.0B v -$3.1Be
• (HU) Hungary Jan Average Gross Wages Y/Y: 9.2% v 10.7%e
• (HU) Hungary Feb PPI M/M: -0.2% v +0.9% prior; Y/Y: 3.8% v 3.8% prior
• (TH) Thailand Feb Current Account Balance: $5.4B v $4.3Be; Overall Balance of Payments (BOP): -$0.6B v +$5.9B prior; Trade Account Balance: $5.4B v $0.4B prior; Exports Y/Y: 3.6% v 3.5% prior; Imports Y/Y: -7.8% v -0.1% prior
• (DE) Germany Mar Unemployment Change: +1.0K v +25.0Ke; Unemployment Claims Rate: 5.0% v 5.1%e (**Note: data only up to Mar 12 was included)
• (NO) Norway Central Bank (Norges) Apr Bank Daily FX Purchases (NOK): -2.0B v -500M prior
• (CZ) Czech Feb M2 Money Supply Y/Y: 7.9% v 8.0% prior
• (ES) Spain Jan Current Account Balance: -€1.7B v +€2.2B prior
• (PT) Portugal Mar Preliminary CPI M/M: +1.5% v -0.6% prior; Y/Y: 0.1% v 0.4% prior
• (PT) Portugal Mar Preliminary CPI EU Harmonized M/M: +1.6% v -0.6% prior; Y/Y: 0.1% v 0.5% prior
• (HK) Hong Kong Q4 Current Account Balance: $42.8B v $71.9B prior (revised from $74.5B); Overall Balance of Payments (BOP): -$10.3B v -$59.9B prior
• (HK) Hong Kong Feb Retail Sales Value Y/Y: -44.0% v -40.3%e; Retail Sales Volume Y/Y: -46.7% v -37.5%e (**Note: both were record declines)
• (EU) Euro Zone Mar Advance CPI Estimate Y/Y: 0.7% v 0.8%e; CPI Core Y/Y: 1.0% v 1.1%e
• (IT) Italy Mar Preliminary CPI M/M: +0.1% v -0.2%e; Y/Y: +0.1% v 0.0%e
• (IT) Italy Mar Preliminary CPI EU Harmonized M/M: 2.2% v 1.7%e; Y/Y: +0.1% v -0.1%e
• (GR) Greece Dec Retail Sales Value Y/Y: +8.4% v +0.6% prior; Retail Sales Volume Y/Y: 10.1% v 2.2% prior
• (IS) Iceland Feb Preliminary Trade Balance (ISK): -1.8B v -1.9B prior

Fixed Income Issuance

• (ID) Indonesia sold total IDR22.2T vs. IDR15.0T target in 3-month, 12-month bills and 5-year, 10-year, 15-year, 20-year and 30-year Bonds
• (BE) Belgium Debt Agency (BDA) opened book to sell Oct 2027 OLO bond via syndicate; guidance seen +13bps to mid-swaps
• (IT) Italy Debt Agency (Tesoro) sold €7.75B vs. €6.25-7-75B indicated range in 5-year and 10-year BTP bonds (3 tranches)

Looking Ahead

• (G20) G20 Finance Minister hold video conference call on coronavirus
• (IT) Italy Debt Agency (Tesoro) to sell €250-750M in Floating-rate 2023 CCTeu) bonds
• (IT) Bank of Italy (BOI) Q4 Credit Conditions and Risk
• (EG) Egypt Q4 GDP Q/Q: No est v -6.0% prior
• 05:30 (ZA) South Africa Q4 Non-Farm Payrolls Q/Q: No est v -0.3% prior; Y/Y: No est v 0.8% prior
• 05:30 (SL) Sri Lanka Mar CPI Y/Y: 5.9%e v 6.2% prior
• 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills
• 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO)
• 05:30 (ZA) South Africa to sell combined ZAR4.53B in 2026, 2032 and 2048 bonds
• 05:40 (UK) BOE allotment in 6-month GBP-enhanced liquidity repo operation (ILTR)
• 06:00 (IT) Italy Feb PPI M/M: No est v -0.3% prior; Y/Y: No est v -3.4% prior – 06:45 (US) Daily Libor Fixing
• 07:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed)
• 07:30 (IN) India Feb Eight Infrastructure (key) Industries: No est v 2.2% prior
• 07:45 (US) Weekly Chain Store Sales data
• 07:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (3-7 years)
• 08:00 (ZA) South Africa Feb Trade Balance (ZAR): +3.6Be v -1.9B prior
• 08:00 (BR) Brazil Feb National Unemployment Rate: 11.6%e v 11.2% prior
• 08:00 (CL) Chile Feb Unemployment Rate: 7.5%e v 7.4% prior
• 08:00 (CL) Chile Feb Retail Sales Y/Y: 2.6%e v 0.1% prior; Commercial Activity Y/Y: No est v 1.6% prior
• 08:00 (CL) Chile Feb Industrial Production Y/Y: 3.1%e v 1.8% prior; Manufacturing Production Y/Y: 3.5%e v 3.4% prior; Total Copper Production: No est v 466.7K prior
• 08:00 (MX) Mexico Jan Gold Production: No est v 7.3K kilograms prior; Silver Production: No est v 347.3K kilograms; Copper Production: No est v 41.5K tons prior
• 08:00 (UK) Daily Baltic Dry Bulk Index
• 08:30 (CA) Canada Jan GDP M/M: 0.2%e v 0.3% prior; Y/Y: 1.9%e v 1.9% prior
• 08:30 (CA) Canada Feb Industrial Product Price M/M: -0.2%e v -0.3% prior; Raw Materials Price Index M/M: No est v -2.2% prior
• 08:30 (BR) Brazil Feb Primary Budget Balance (BRL): -21.7Be v 56.3B prior; Nominal Budget Balance: -50.0Be v +19.1B prior; Net Debt to GDP Ratio: 54.0%e v 54.2% prior
• 08:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (7-20 years)
• 08:55 (US) Weekly Redbook LFL Sales data
• 09:00 (RU) Russia Q4 Final Current Account Balance: No est v $16.3B prelim
• 09:00 (US) Jan S&P Case-Shiller House Price Index (20-City) M/M: 0.40%e v 0.43% prior; Y/Y: 3.23%e v 2.85% prior; HPI: 219.38e v 218.73 prior
• 09:00 (US) Jan S&P Case-Shiller House Price Index (overall) Y/Y: No est v 3.75% prior; House Price Index (HPI): No est v 212.59 prior
• 09:00 (EU) Weekly ECB Forex Reserves
• 09:45 (US) Mar Chicago Purchase Managers: 40.0e v 49.0 prior
• 09:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (20+ years)
• 10:00 (US) Mar Consumer Confidence: 110.0e v 130.7 prior
• 10:30 (CA) Canada to sell 3-month, 6-month and 12-month bills
• 11:00 (CO) Colombia Feb National Unemployment Rate: No est v 13.0% prior; Urban Unemployment Rate: 11.9%e v 12.9% prior
• 11:00 (MX) Mexico Feb Net Outstanding Loans (MXN): No est v 4671B prior
• 11:00 (MX) Mexico Weekly International Reserve data
• 12:00 (NZ) New Zealand Mar QV House Prices Y/Y: No est v 5.3% prior
• 12:00 (US) USDA crop report
• 16:30 (US) Weekly API Oil Inventories
• 17:00 (CL) Chile Central Bank (BCCh) Interest Rate Decision: Expected to cut Overnight Rate Target by 50bps to 0.50%
• 17:30 (AU) Australia Mar Performance of Manufacturing Index: No est v 44.3 prior
• 18:00 (AU) Australia Mar Final Manufacturing PMI: No est v 50.1 prelim
• 19:00 (AU) Australia Mar CoreLogic House Price Index M/M: No est v 1.2% prior
• 19:01 (UK) Mar BRC Shop Price Index Y/Y: -0.6%e v -0.6% prior
• 19:50 (JP) Japan Q1 Tankan Large Manufacturing Index: -10e v 0 (flat) prior; Outlook Index: -15e v 0 (flat) prior
• 19:50 (JP) Japan Q1 Tankan Large Non-Manufacturing Index: No est v 20 prior; Outlook Index: -1e v +18 prior; All Industry Capex: 2.5%e v 6.8% prior
• 19:50 (JP) Japan Q1 Tankan Small Manufacturers Index: -20e v -9 prior; Outlook Index: -25e v -12 prior
• 19:50 (JP) Japan Q1 Tankan Small Non-Manufacturers Index: -10e v +7 prior; Outlook Index: -15e v +1 prior
• 20:00 (KR) South Korea Mar Trade Balance: $5.5Be v $4.0B prior (revised from $4.1B); Exports Y/Y: 1.2%e v 4.5% prior; Imports Y/Y: 0.7%e v 1.4% prior
• 20:01 (IE) Ireland Mar PMI Manufacturing: No est v 51.2 prior
• 20:30 (AU) RBA Minutes of March 18 Meeting (QE decision)
• 20:30 (JP) Japan Mar Final PMI Manufacturing: No est v 44.8 prelim
• 20:30 (KR) South Korea Mar PMI Manufacturing: No est v 48.7 prior
• 20:30 (TW) Taiwan Mar PMI Manufacturing: No est v 49.9 prior
• 20:30 (PH) Philippines Mar PMI Manufacturing: No est v 52.3 prior
• 20:30 (ID) Indonesia Mar PMI Manufacturing: No est v 51.9 prior
• 20:30 (TH) Thailand Mar PMI Manufacturing: No est v 49.5 prior
• 20:30 (MA) Malaysia Mar PMI Manufacturing: No est v 48.5 prior
• 20:30 (VN) Vietnam Mar PMI Manufacturing: No est v 49.0 prior
• 20:30 (AU) Australia Feb Building Approvals M/M: +3.0%e v -15.3% prior
• 20:30 (AU) Australia Feb Private Sector Houses M/M: No est v 0.3% prior
• 21:45 (CN) China Caixin Mar PMI Manufacturing: 45.0e v 40.3 prior
• 22:35 (CN) China to sell combined CNY96B in 3-year and 7-year Upsized Bonds