Notes/Observations
- Eurogroup yet to find solidarity on funding an economic recovery package to address coronavirus impact; to try again Thursday
Asia:
- S&P lowered Australia sovereign outlook to negative from stable; Affirms AAA rating
Coronavirus:
- Global cumulative cases: 1,430,453 (+6.1% d/d); cumulative deaths 82.1K (+9.8% d/d)
Europe:
- Eurogroup Finance Ministers meeting said to have been deadlocked with key issue focusing on conditions for loans from ESM bailout fund
- ECB announced package of temporary collateral easing measures, increasing Eurosystem’s risk tolerance and included a waiver to accept Greek sovereign debt instruments as collateral in Eurosystem credit operations
- ECB’s Makhlouf (Ireland) stated that he was agnostic about whether action was taken through a ‘coronabond’, the ESM or something else
- UK Johnson spent a second night in intensive care for monitoring. Condition said to be stable and PM in good spirits
Americas:
- President Trump: Would ask congress for additional $250B in small business relief; 110K ventilators being delivered in US by July. Saw see glimmers of hope despite a very, very painful week
- US VP Pence: Trump call on reopening economy to be driven by data
Mid-East/Energy:
- Weekly API Crude Oil Inventories: +11.9M v +10.5M prior
- Texas oil regulators: to consider reducing oil output at April 14th meeting as part of effort to curtail price drop
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 -1.16% at 322.86, FTSE -1.58% at 5,614.40, DAX -0.92% at 10,261.19, CAC-40 -1.72% at 4,361.86, IBEX-35 -1.69% at 6,884.00, FTSE MIB -0.68% at 17,292.50, SMI -1.25% at 9,395.50, S&P 500 Futures +0.02%]
- Market Focal Points/Key Themes: European indices open lower across the board and continued lower as the session progressed; materials and utilities sectors among better perfomers; Energy and financials sector lower; risk sentiment off following failure of Eurogroup to reach agreement; reportedly EC looking to increase budget to support recovery; French medical advisers urged to extend confinement for several weeks after Easter; earnings expected during the US session include MSC Industrial and RPM International
Equities
- Consumer discretionary: Asos [ASC.UK] +32% (earnings; placement), Tesco [TSCO.UK] +-3% (earnings), Heineken [HEIO.NL] -1.5% (withdraws outlook)
- Consumer staples: Hyve [HYVE.UK] +20% (trading update)
- Financials: Commerzbank [CBK.DE] -9% (puts mBank sale on hold), Aviva [AV.UK] -8% (COVID-19 update)
Speakers
- ECB’s Kazaks (Latvia): Reiterates ECB stance that it could expand and extend stimulus if necessary. Would be irresponsible for EU member States to leave the ECB alone in the battle against the coronavirus European Finance Ministers (Eurogroup) said to have failed to reach an agreement over its response to the coronavirus
- Eurogroup chief Centeno stated that the group came close to an agreement but not there yet. Suspended talks for the day and would reconvene the Eurogroup meeting on Thursday (Apr 9th)
- ECB said to have told Eurogroup finance ministers that financing need to mitigate covid-19 outbreak could be up to €1.5T. Germany said to have supported €500B in measures
- Germany Fin Min Scholz: Eurogroup discussion on deploying €500B, agreement is close but not quite there. Hoped to have an agreement before Easter (Apr 19th)
- Finland Fin Min Kulmuni reiterated his opposition to EU joint borrowing
- Greece Fin Min Staikouras: Differences among Eurogroup members expected to be resolved by Thursday (Apr 9th)
- ECB’s Villeroy (France): Europe needed more investment to aid its recovery
- Bank of France stated that Q1 GDP was seen contracting by 6.0% with a 32% loss of activity during the confinement period
- France Medical advisers believe the coronavirus confinement in France should be extended for several weeks (**Reminder: on Mar 27th France PM: Announced a two week extension of lockdown until April 15th)
- German Leading Economic Institutes forecasts 2020 GDP -4.2% (in-line with speculation) with 2021 GDP growth at 5.8%. Specifically saw Q1 GDP seen -1.9% and Q2 GDP seen -9.8%. German 2020 unemployment to peak at 5.9%
- UK Banks said to be in talks with BoE on fresh capital relief
- Hungary Central Bank Dep Gov Nagy: Prepared to raise the 1-week Deposit Rate if necessary
- Hong Kong Monetary Authority (HKMA) to lower the regulatory reserve requirement with a 50% cut effective immediately
- Iran President Rouhani said to urge the IMF to approve a $5.0B loan
- OPEC Sec Gen Barkindo: To discuss OPEC+ readiness to cut production at the meeting on Thursday (Apr 9th)
- OPEC+ monitoring committee said to have prepared a production cut draft
- India said to be buying oil for its strategic reserves following the steep price declines (**Reminder: On Apr 2nd China was said to start buying oil for state reserves after price crash)
- Nigeria said to shut down all of its oil refineries
Currencies/Fixed Income
- Some risk aversion beset the early part of the EU session as Eurogroup Finance Ministers failed to find any solidarity on funding an economic recovery package to address coronavirus impact. Tuesday’s meeting said to have been deadlocked on conditions for loans from ESM bailout fund, EU to meet again on Thursday and various officials put on a positive aspect that a compromise would be found.
Economic Data
- (SE) Sweden Maklarstatistik Mar Housing Prices Y/Y 6% v 6% prior; Apartment Prices Y/Y: 7% v 9% prior
- (NO) Norway Mar CPI M/M: 0.0% v 0.1%e; Y/Y: 0.7% v 0.9%e
- (NO) Norway Mar CPI Underlying M/M: 0.3% v 0.3%e; Y/Y: 2.1% v 2.1%e
- (NO) Norway Mar PPI M/M: -7.5% v -3.3% prior; Y/Y: -12.6% v -7.4% prior
- (DK) Denmark Feb Current Account (DKK): 16.4B v 18.4B prior; Trade Balance: 10.5B v 10.9B prior
- (CZ) Czech Mar Unemployment Rate: 3.0% v 3.0% prior
- (HU) Hungary Mar CPI M/M: +0.2% v -0.1%e; Y/Y: 3.9% v 3.6%e (moved back into target range for 1st time in 3 months)
- (HU) Hungary Feb Preliminary Trade Balance: €1.1B v €0.4B prior
- (SE) Sweden Feb Household Consumption M/M: +0.4% v -0.3% prior; Y/Y: 2.3% v 1.5% prior
- (TW) Taiwan Mar Trade Balance: $2.8B v $3.5Be; Exports Y/Y: -0.6% v -2.2%e; Imports Y/Y: +0.5% v -4.8%e
- (TW) Taiwan Mar CPI Y/Y: 0.0% v -0.1%e; CPI Core Y/Y: 0.3% v 0.4%e; WPI Y/Y: -7.3% v -4.4% prior
- (CZ) Czech Mar International Reserves: $146.8B v $146.6B prior
Fixed Income Issuance
- (IN) India sold total INR250B vs. INR250B indicated in 3-month, 6-month and 12-month bills
- (UK) DMO sold £2.0B in 4.75% Dec 2030 Gilts; Avg Yield: 0.376% v 0.307% prior; Bid-to-cover: 3.85x v 2.23x prior; Tails: 0.2bps v 0.7bps prior
- (IT) Italy Debt Agency (Tesoro) sold €3.0B vs. €3.0B indicated in 3-month bills; Avg Yield: 0.188%; Bid-to-cover: 1.88x
- (IT) Italy Debt Agency (Tesoro) sold €6.5B vs. €6.5B indicated in 12-month bills; Avg Yield: 0.534% v 0.072% prior; Bid-to-cover: 1.57x v 1.65x prior
Looking Ahead
- (MX) Mexico Mar Nominal Wages: No est v 5.5% prior – 05:30 (ZA) South Africa Mar SACCI Business Confidence: 85.0e v 92.7 prior
- 05:30 (DE) Germany to sell €4.0B in 0.00% Feb 2030 Bunds -05:30 (GR) Greece Debt Agency (PDMA) to sell €375M in 13-week Bills
- 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays)
- 06:00 (PL) Poland Central Bank (NBP) Interest Rate Decision: Expected to leave base rate unchanged at 1.00%
- 06:00 (RU) Russia to sell OFZ bonds (if held) – 06:30 (UK) DMO to sell £2.75B in 2% Sept 2025 conventional Gilts
- 06:45 (US) Daily Libor Fixing – 07:00 (US) MBA Mortgage Applications w/e Apr 3rd: No est v +15.3% prior
- 07:00 (BR) Brazil Apr IGP-M Inflation (1st Preview): 0.4%e v 0.2% prior
- 07:00 (MX) Mexico Feb Industrial Production M/M: 0.3%e v 0.3% prior; Y/Y: -1.3%e v -1.6% prior; Manufacturing Production Y/Y: +0.9%e v -0.9% prior
- 07:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (3-7 years)
- 08:00 (HU) Hungary Central Bank (MNB) Mar Minutes
- 08:00 (BR) Brazil Feb IBGE Services Sector Volume Y/Y: 1.9%e v 1.8% prior
- 08:00 (CL) Chile Mar CPI M/M: 0.4%e v 0.4% prior; Y/Y: 3.8%e v 3.9% prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:15 (CA) Canada Mar Annualized Housing Starts: 172.5Ke v 210.1K prior
- 08:30 (CA) Canada Feb Building Permits M/M: -4.0%e v +4.0% prior
- 09:00 (EU) Weekly ECB Forex Reserves
- 08:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (7-20 years)
- 09:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (20+ years)
- 10:00 (MX) Mexico Central Bank (Banxico) Mar Minutes (intra-policy decision)
- 10:00 (PL) Poland Central Bank Gov Glapinski to hold post rate decision press conference
- 10:30 (US) Weekly DOE Oil Inventories
- 12:00 (CA) Canada to sell 1.5% May 2022 notes
- 13:00 (US) Treasury to sell 10-Year Notes Reopening
- 14:00 (US) FOMC Mar 18th Minutes (intra-policy decision)
- 18:00 (NZ) New Zealand Mar Heavy Truckometer M/M: No est v -3.0% prior
- 19:01 (UIK) Mar RICS House Price Balance: 10%e v 29% prior
- 21:00 (KR) Bank of Korea (BoK) Interest Rate Decision: Split expectations: Approx 50% of analysts expect to leave 7-Day Repo Rate unchanged at 0.75%; Approx 50% expected a 25bps cut to 0.50%
- 21:30 (AU) RBA Financial Stability Review
- 22:00 (JP) Japan Mar Tokyo Avg Office Vacancies: No est v 1.49 prior
- 22:00 (SL) Sri Lanka Central Bank (CBSL) Interest Rate Decision: Standing Deposit Rate at 6.25%; Standing Lending Rate at 7.25%
- 23:30 (TH) Thailand Mar Consumer Confidence: No est v 64.8 prior; Economic Confidence: no est v 52.5 prior
- 23:30 (JP) Japan to sell 6-Month Bills
- 23:35 (JP) Japan to sell 5-Year JGB Bonds
