Roche and Nestle have negative fx impact on Q1 results

EU Market Update: Roche and Nestle have negative fx impact on Q1 results; German ZEW mixed

Notes/Observations

- Roche, ROG.CH, Q1 Rev CHF11.5B v CHF11.5Be, saw negative impact from foreign exchange. Noted new medicines seeing strong uptake.

- Nestle, NESN.CH, in Q1 results failed to meet expectations, Rev CHF20.8B v CHF21.3Be, saw negative impact of foreign exchange of 8.6%. Affirmed outlook.

- (UR) Russia Foreign Min Lavrov: Ukraine referendum in the East is a step in the right direction

- (CN) PBoC official Sheng: Reiterates 2014 M2 Money Supply Target to be above 13% - Chinese press

- Bravofly Rumbo IPO in Switzerland opens for trade at CHF45/shr v the CHF48/shr it priced

- (ES) Bank of Spain denies it is planning to do its own stress tests to Spanish banks ahead of European wide checks

- Focus will be key Chinese data set for release on Wed. The recent Chines aggregate financing figures pointed to a slowing economy. ; China Mar M2 Money Supply registered its slowest growth since Jan 2001 (12.1% v 13.0%e); China Mar New Yuan Loans (CNY): 1.05T v 1.0Te

- RBA Minutes: Interest rates likely to stay steady under current economic outlook; AUD currency high by historical standard

- UK CPI YoY reading remained below the BOE 2.0% inflation target for the 3rd straight month. The March data was the 6th straight lower MoM reading in UK inflation

- Germany's April ZEW Current Situation Survey: 59.5 (highest since July 2011)

Equities

- Following declines in China, Italy's FTSE MIB underperforms, Russia Micex -1%, Roche and Nestle report in line Q1 sales amid impact of stronger Swiss Franc, Capital concerns continue to weigh on peripheral banks (Banca Monte Paschi), Mixed German ZEW data largely ignored, European Corporate issuance remains subdued for the week, UK retailer Debenhams rises on H1 LFL sales growth, Software companies rise on better than expected results from Infosys (SAP, Cap Gemini, ATOS Origin), Miners weighed down by decline in metals prices ahead of China Q1 GDP data (due on Wed)

- Indices [Stoxx50 -0.5%, FTSE 100 -0.2% at 6,568, DAX -0.6% at 9,283, CAC-40 -0.3% at 4,373, IBEX-35 -0.7% at 10,117, FTSE MIB -1% at 21,077, SMI +0.2% at 8,326, S&P 500 Futures flat at 1,824]

***By Sector ***

- Industrials [Finmeccanica FNC.IT -2% (new CEO), SKF SKFB.SE -1.5% (mixed Q1 results); Aker Solutions AKSO.NO +5% (contract), GKN GKN.UK +2.5% (Q1 profits rose y/y), Hochtief HOT.DE +2% (broker commentary)

- Consumer Discretionary [Alma Media ALN1V.FI -4% (profit warning), SABMiller SAB.UK -2% (FY net producer Rev below ests); Debenhams DEB.UK +4% (H1 LFL sales +1.5%), Aggreko AGK.UK +3% (reaffirmed forecast), Michael Page MPI.UK +2% (reaffirmed forecast), L'Oreal OR.FR +1% (Q1 sales in line)]

- Financials [Banca Monte Paschi BMPS.IT -7% (capital concerns)]

- Healthcare [Roche ROG.CH +1% (Q1 sales in line, reaffirmed outlook)]

- Stoxx600 [Telecom -1%, Industrials -0.6%, Energy -0.4% Utilities

-0.3%, Basic Materials -0.3% Consumer Cyclical -0.3%, Financials -0.2%; Consumer Non-cyclical +0.2%, Technology flat]

***Currencies/Fixed Income***

- Major FX currency pairs remained within narrow ranges. The mixed German ZEW survey failed to inspire price action. EUR/USD steady at 1.3800 area

- The GBP exhibited some volatility following the release of its CPI data. GBP/USD briefly took out stops below 1.6685 before recovering. Overall the plethora of inflation data was mixed Third straight month CPI YoY reading came in below the BOE 2.0% inflation target. The March CPI data was the 6th straight lower MoM reading in UK inflation - Focus will be key Chinese data set for release on Wed. The recent Chines aggregate financing figures pointed to a slowing economy.

Economic Data

- (SG) Singapore Feb Retail Sales M/M: +3.0% v -0.6%e; Y/Y: -9.5% v

-3.6%e; Retail Sales Ex Auto Y/Y: 9.2% v -0.6%e

- (FI) Finland Feb GDP Indicator WD: +0.4% v -0.4% prior

- (JP) Japan Mar Final Machine Tool Orders Y/Y: 41.8% v 41.8% prelim

- (IN) India Mar Wholesale Prices Y/Y: 5.7% v 5.3%e

- (PH) Philippines Feb Overseas Workers Remittances: $1.8B v $1.8B prior; Y/Y: 5.6% v 5.9% prior

- (FI) Finland Feb Current Account Balance: +€100M v -€380M prior

- (TR) Turkey Jan Unemployment Rate: 10.1% v 10.0% prior; highest since mar 2013)

- (DK) Denmark Mar PPI M/M: -1.1% v +0.8% prior; Y/Y: 0.0% v 1.0% prior

- (EU) ECB €0.0M borrowed in overnight loan facility vs. €0.0M prior; €21.5B parked in deposit facility vs. €21.2B prior - Daily Eurosystem Liquidity Conditions

- (CH) Swiss Mar Producer & Import Prices M/M: 0.0% v 0.0%e; Y/Y: -0.7% v -0.8%e

- (NL) Netherlands Feb Retail Sales Y/Y: 0.1% v 0.9% prior

- (UK) Mar CPI M/M: 0.2% v 0.2%e; Y/Y: 1.6% v 1.6%e; CPI Core Y/Y: 1.6% v 1.6%e

- (UK) Mar RPI M/M: 0.2% v 0.3%e; Y/Y: 2.5% v 2.5%e; RPI Ex Mort Interest Payments Y/Y: 2.5% v 2.5%e; Retail Price Index: 254.8 v 255.1e

- (UK) Mar PPI Input M/M: -0.6% v -0.2%e; Y/Y: -6.5% v -6.1%e

- (UK) Mar PPI Output M/M: 0.2% v 0.1%e; Y/Y: 0.5% v 0.3%e

- (UK) Mar PPI Output Core M/M: 0.1% v 0.1%e; Y/Y: 1.0% v 0.9%e

- (UK) Feb ONS House Price Y/Y: 9.1% v 7.4%e

- (DE) Germany Apr ZEW Current Situation Survey: 59.5 (highest since July 2011) v 51.5e; Expectation Survey: 43.2 v 45.0e

- (EU) Euro Zone Apr ZEW Expectations Survey: 61.2 v 61.5 prior

- (EU) Euro Zone Feb Trade Balance (Seasonally Adj): €15.0B v €15.0Be; Trade Balance NSA (unadj): €13.6B v €10.0Be

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)

- 06:15 (SE) Sweden Central Bank (Riksbank) Floden

- 06:45 (US) Daily Libor Fixing

- 07:00 (SE) Sweden Fin Min Borg testifies to parliament committee

- 07:00 (EU) ECB allotment in 7-day Term Deposit Tender

- 07:45 (US) Weekly ICSC Chain Store Sales

- 08:00 (IN) India Mar CPI Y/Y: 8.3%e v 8.1% prior

- 08:00 (IS) Iceland Mar Unemployment Rate: No est v 4.5% prior

- 08:00 (BR) Brazil Feb Retail Sales M/M: 0.1%e v 0.4% prior; Y/Y: 8.1%e v 6.2% prior; Broad Retail Sales Y/Y: 6.0%e v 3.5% prior

- 08:00 (PL) Poland Mar CPI M/M: 0.2%e v 0.1% prior; Y/Y: 0.7%e v 0.7% prior

- 08:15 Baltic Dry Bulk Index

- 08:30 (US) Apr Empire Manufacturing: 7.50e v 5.61 prior

- 08:30 (US) Mar CPI M/M: 0.1%e v 0.1% prior; Y/Y: 1.4%e v 1.1% prior

- 08:30 (US) Mar CPI Ex Food and Energy M/M: 0.1%e v 0.1% prior; Y/Y: 1.6%e v 1.6% prior

- 08:30 (US) Mar CPI Index NSA: 236.017e v 234.781 prior; CPI Core Index: 236.452e v 236.122 prior

- 08:30 (CA) Canada Feb Manufacturing Sales M/M: 1.0%e v 1.5% prior

- 08:30 (US) Fed's Lockhart speaks at Stone Mountain, Georgia Conference

- 08:45 (US) Fed's Yellen to speak at Financial Markets Conference

- 08:55 (US) Weekly Redbook Retail Sales

- 09:00 (US) Feb Net Long-term TIC Flows: $30.0Be v $7.3B prior; Total Net TIC Flows: No est v $83.0B prior

- 09:00 (PL) Poland Mar YTD Budget Balance Level (PLN): No est v 11.7B prior; Budget Balance Performance: No est v 24.7% prior

- 09:00 (BE) Belgium Feb Trade Balance: No est v -€955.9M prior

- 09:00 (CA) Canada Mar Existing Home Sales M/M: No est v 0.3% prior

- 09:00 (EU) Weekly ECB Forex Reserves

- 10:00 (US) Apr NAHB Housing Market Index: 50e v 47 prior

- 10:00 (MX) Mexico Weekly International Reserves

- 11:00 (US) Fed to purchase $1.75-2.25B in Notes

- 11:30 (US) Treasury to sell $25B in 4-Week Bills

- (UK) DMO to announce size of upcoming 1.75% 2019 Gilt

- 15:00 (AR) Argentina Mar National Urban CPI M/M: 3.0%e v 3.4% prior

- 15:00 (AR) Argentina Mar Wholesale Price Index M/M: No est v 5.1% prior; Y/Y: No est v 24.0% prior

- 15:00 (US) Fed's Plosser moderates panel in Stone Mountain, Georgia - 16:00 (US) Fed's Rosengren speaks in Bangor, Maine

- 16:30 (US) Weekly API Oil Inventories