China PBoC eases its mortgage policy to support property marke

EU Mid-Market Update: China PBoC eases its mortgage policy to support property market; Still awaiting Greece to submit the reform proposal

Notes/Observations

- Talks between Greece and its creditors continue; could take some more days before a reform list emerges that both sides are happy with

- Oil prices maintain soft tone as Iran and P5+1 world powers try to reach a deal that could add oil to the market if sanctions against Tehran are lifted.

- Japan Feb Prelim Industrial Production fell at its fastest pace since Jun and raises doubts about domestic demand (M/M: -3.4% vs -1.9%e)

- PBoC Gov Zhou says the central bank still has room to manoeuvre; Shanghai hit 7-year high at 3,786

Economic data

- (ZA) South Africa Feb M3 Money Supply Y/Y: 8.1% v 7.6%e; Private Sector Credit Y/Y: 8.7% v 8.9%e

- (DE) Germany Mar CPI Saxony M/M: 0.5% v 0.9% prior; Y/Y: 0.5% v 0.3% prior

- (CH) Swiss Mar KOF Leading Indicator (beats): 90.8 v 89.1e

- (ES) Spain Mar Preliminary CPI (beats); Y/Y: -0.7% v -1.1% prior; CPI EU Harmonized Y/Y: -0.7% v -1.2% prior

- (DE) Germany Mar CPI Brandenburg M/M: 0.5 v 0.9% prior; Y/Y: +0.2 v -0.1% prior

- (DE) Germany Mar CPI Hesse M/M: 0.4% v 1.0% prior; Y/Y: 0.2% v 0.1% prior

- (DE) Germany Mar CPI Bavaria M/M: 0.5% v 0.9% prior; Y/Y: 0.5% v 0.0% prior

- (IT) Italy Mar Consumer Confidence Index (inline): 110.9 v 110.9e; Business Confidence (beat): 103.7 v 99.6e; Economic Sentiment: 103.0 v 97.5 prior

- (UK) Feb Net Consumer Credit: £0.7B v £0.9Be; Net Lending Sec. on Dwellings: £1.7 v £1.6Be

- (UK) Feb Mortgage Approvals (beat): 61.8K v 61.5Ke (6-month high)

- (UK) Feb M4 Money Supply M/M: -0.2% v -0.7% prior; Y/Y: -3.2% v -2.2% prior; M4 Ex IOFCs 3M Annualized: 5.0% v 5.5% prior

- (DE) Germany Mar CPI North Rhine Westphalia M/M: 0.5% v 0.8% prior; Y/Y: 0.2% v 0.0% prior

- (PT) Portugal Mar Consumer Confidence Index: -19.2 v -21.2 prior; Economic Climate Indicator: 0.6 v 0.3 prior

- (EU) Euro Zone Mar Business Climate Indicator (beat): +0.23 v +0.18e; Consumer Confidence: -3.7 v -3.7e; Industrial Confidence: -2.9 v -4.0e; Economic Confidence: 103.9 v 103.0e; Services Confidence: 6.0 v 5.2e

- (BE) Belgium Mar CPI M/M: 0.1% v 0.4% prior; Y/Y: -0.4% v -0.4% prior

Fixed Income:

- (MY) Malaysia sold MYR4.0B in 2022 bond; Yield: 3.795%, bid-to-cover: 1.8x

- (DK) Denmark sold total DKK1.1B in 3-month and 6-month Bills (1st successful auction since late Jan)

- (PL) Poland to sell EUR-denominated 12-year bond via syndicate; guidance seen +40bps to mid-swaps

- (IT) Italy Debt Agency (Tesoro) sold total €4.5B vs. €3.5-4.5B indicated in 5-year and 10-year BTP Bonds

- Sells € v €1.5-2.0B indicated range in 1.05% 2019 BTP Bond; Avg Yield: 0.55% v 0.56 prior; Bid-to-cover:1.60 x v 1.59x prior

- Sells € v €2.0-2.5B indicated range in 1.50% 2025 BTP Bonds; avg yield 1.34% v 1.36% prior; bid-to-cover: 1.45x v 1.53x prior

- (IT) Italy Debt Agency (Tesoro) sold €3.0B vs. €2.0-3.0B indicated rabge in new 2022 CCTeu (Floating Rate Bond); Avg Yield: 0.71% v 0.62% prior; Bid-to-cover: x v 1.59x prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

**Equities**

Indices [Stoxx50 +1.2% at 3,722, FTSE 100 Index +0.7% at 6,902, DAX +1.5% at 12,041, CAC-40 +1.1% at 5,087, IBEX-35 +0.7% at 11,511, FTSE MIB +1.0% at 23,210, SMI +0.7% at 9,150, Athens Stock Exchange +1.5% at 492.95, S&P 500 Futures +0.1% at 2,066.00]

- Market Focal Points/Key Themes: European equities move higher lead by healthcare stocks; comments from China's central bank support indices; energy shares depressed by a potential deal in Iran major shareholder opposes deal between Lafarge and Holcim; Mr Bricolage deal to lapse after franchisee organization refuses to extend deadline

By Sector

- Consumer Discretionary [Dufry DUFN.CH +4.0% (acquisition), Kingfisher KGF.UK +3.1% (halts merger), World Duty Free WDF.IT -8.2% (takeover bid), Yoox YOOX.IT +8.0% (rumors to make acquisition)]

- Industrials [Lafarge LF.FR -1.5% (opposition to deal)]

- Healthcare [Novartis NOVN.CH +1.0% (research agreement)]

- Materials [Holcim HOLN.CH +0.2% (opposition to deal), Randgold RRS.UK +0.6% (resource update)]

- Technology [Quindell QPP.UK +11.8% (asset sale)]

Speakers

- Spain govt wants banks to end all mortgage floors

- Spain Fin Min de Guindos: European economy to surprise on the upside; saw region GDP close to 2.0%. Says Greece exit from EMU is off the table. He saw 2015 Spanish GDP growth over 2.5% with Q1 at 0.8%

- Fitch revised Nigeria outlook to negative from stable; reaffirms BB- sovereign rating

- PBoC financial market unit: Easing mortgage policy (as speculated). Lowered down payment for 2nd mortgages from 60% to 40%

- BOJ Gov Kuroda reiterated view that monetary policy was aimed at price stability and not targeting the JPY currency rate, He reiterated view that If FX was market moving in line with fundamentals then no negative impact on economy.

- Japan PM Abe reiterated view that monetary policy was not aimed at weakening the JPY currency (yen) but target to achieve price stability. Bold monetary easing aimed at ending deflationary mindset.

- Bank of Korea (BOK) Gov Lee: Weak consumption biggest factor holding back the economic recovery. Domestic economy to struggle to escape current difficulties but would gradually improve. Would focus on macro factors in future rate decisions

- Indonesia Central Bank Gov Martowardojo saw mild impact of higher fuel prices on inflation but noted softer commodity prices to offset impacts of higher fuel prices

- National Association for Business Economics (NABE) survey maintained its 2015 GDP outlook at 3.1% and end-2015 Fed Funds Rate (FFR) at 0.75%

- US official: No decisions taken on Iran uranium stockpile but viable options exist

Currencies

- The USD begin the session on firm footing against the major pairs but saw its best levels erode as the morning progressed. The EUR/USD tested 1.0825 as participants ran EUR-sell stop orders and drifted back towards 1.0860 as the NY moorning approached. Key resistance remains at 1.1050 area for the pair. The focus remained on Greece and the list of proposed reforms to avoid a cash crunch for the country

- AUD/USD encountered some into fresh selling pressure during Asia on reports that arguments are now in favor of another RBA rate cut next week

**Political/In the Papers:

- Nigeria elections results awaited between President Goodluck Jonathan against ex-military ruler Muhammadu Buhari (**Note: Nigeria is Africa's most populous nation and largest oil producer. The current election is closest in the country's history)

- France: Franois Hollande suffers heavy defeat in local elections

Looking Ahead

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

- (UK) Parliament dissolved ahead of May 7th General Election

- (CL) Chile Central Bank 1Q monetary policy report (IPOM)

- (EU) EU's Juncker with EU Foreign Min Mogherini in Ukraine

- (GR) Greece Govt promise to submit list of reforms to Eurogroup

- (DE) Germany Mar CPI Baden Wuerttemberg M/M: No est v 0.9% prior; Y/Y: No est v 0.0% prior

- (BR) Brazil Feb Central Govt Budget Balance (BRL): No est v 10.4B prior

- (CL) Chile Central Bank 1Q monetary policy report (IPOM)

- (IT) Italy Debt Agency (Tesoro) to sell combined €3.5-4.5B in 5-year and 10-year BTP Bonds

- (IT) Italy Debt Agency (Tesoro) to sell €2.0-3.0B in new 2022 CCTeu (Floating Rate Bond)

- 06:00 (PT) Portugal Feb Retail Sales M/M: No est v 6.8% prior; Y/Y: No est v 2.2% prior

- 06:00 (PT) Portugal Feb Industrial Production M/M: No est v 0.8%; Y/Y: No est v -2.1% prior

- 06:00 (IL) Israel to sell 2019, 2024, 2045 Bonds

- 06:45 (US) Daily Libor Fixing

- 07:00 (BR) Brazil Mar FGV Inflation IGPM M/M: 0.9%e v 0.3% prior; Y/Y: 3.1%e v 3.9% prior

- 07:30 (BR) Brazil Central Bank Weekly Economists Survey

- 07:30 (SE) Sweden Fin Min Ansersson on OECD survey

- 08:00 (DE) Germany Mar Preliminary CPI M/M: 0.4%e v 0.9% prior; Y/Y: 0.3%e v 0.1% prior

- 08:00 (DE) Germany Mar Preliminary CPI EU Harmonized M/M: 0.4%e v 1.0% prior; Y/Y: 0.0%e v -0.1% prior

- 08:00 (ZA) South Africa Feb Budget Balance (ZAR): No est v -29.0B prior

- 08:00 (CL) Chile Feb Retail Sales Y/Y: 2.0%e v 1.8% prior

- 08:00 (CL) Chile Feb Manufacturing Index Y/Y: 1.7%e v 1.0% prior

- 08:00 (CL) Chile Feb Total Copper Production: No est v 524.3K tons prior

- 08:00 (DE) German Chancellor Merkel with Finland PM Stubb in Helsinki

- 08:15 (US) Baltic Dry Bulk Index

- 08:30 (US) Feb Personal Income: 0.3%e v 0.3% prior; Personal Spending: +0.2%e v -0.2% prior; Inflation Adjusted Personal Spending: No est v 0.3% prior

- 08:30 (US) Feb PCE Deflator M/M: +0.2%e v -0.5% prior; Y/Y: 0.3%e v 0.2% prior

- 08:30 (US) Feb PCE Core M/M: 0.1%e v 0.1% prior; Y/Y: 1.3%e v 1.3% prior

- 08:30 (CA) Canada Feb Raw Materials Price Index M/M: +0.5%e v -7.7% prior; Industrial Product Price M/M: +5.0%e v -7.7% prior

- 08:50 (FR) France Debt Agency (AFT) to sell combined €5.4-6.6B in 3-month, 6-month and 12-month Bills

- 09:35 (EU) ECB calls for bids in 7-day main Refi

- 09:45 (EU) ECB announces weekly purchases under its covered bond program 3 (CBPP3)

- 10:00 (US) Feb Pending Home Sales M/M: 0.7%e v 1.7% prior; Y/Y: No est v 6.5% prior

- 10:0 (GR) Syriza Cabinet to hold emergency meeting

- 10:30 (US) Mar Dallas Fed Manufacturing Activity: -9.0e v -11.2 prior

- 11:30 (US) Treasury to sell $48B in 3-Month and 6-Month Bills

- 13:30 (MX) Mexico to sell MXN11B in 6-Month Bills

- 16:30 (MX) Mexico Feb YTD Budget Balance (MXN): No est v -91.5B prior

- 17:45 (NZ) New Zealand Feb Building Permits M/M: No est v -3.8% prior

- 19:00 (KR) South Korea Feb Industrial Production M/M: No est v -3.7% prior; Y/Y: No est v 1.8% prior

- 19:00 (KR) South Korea Feb Cyclical Leading Index Change: No est v 1 prior

- 19:05 (UK) Mar GfK Consumer Confidence: No est v 1 prior

- 19:15 (US) Fed Vice Chair Fischer on monetary stability in Georgia

- 23:00 (TH) Thailand Central bank (BOT) to sell 3-month and 6-month Bills

- 23:30 (HK) Hong Kong to sell 3-month and 6-month Bills