USD continues to soften as timeline for Fed rate hike gets re-evaluated

Notes/Observations

- USD continues to soften as timeline for Fed rate hike gets re-evaluated

- Market participant look to Washington where officials gather for the IMF meeting

- UK jobs data continues its improving trend

Economic data

- (JP) Japan Mar Consumer Confidence Index (beats): 41.7 v 41.3e (4th straight month of improvement)

- (CZ) Czech Mar PPI Industrial (beat) M/M: 0.5% v 0.1%e; Y/Y: -2.9% v -3.3%e

- (CH) Swiss Feb Real Retail Sales Y/Y: -2.7% v -0.3% prior

- (EU) Euro Zone Feb Current Account (Seasonally Adj): €26.4B v €30.4B prior; Current Account NSA (unadj): €13.8B v €8.3B prior

- (UK) Mar Jobless Claims Change (miss): -20.7K v -29.5Ke; Claimant Count Rate (inline): 2.3% v 2.3%e

- (UK) Feb Average Weekly Earnings (miss) 3M/Y: 1.7% v 1.8%e; Weekly Earnings (ex Bonus) 3M/Y: 1.8%v 1.7%e

- (UK) Feb ILO Unemployment Rate 3M/3M: 5.6% v 5.6%e; Employment Change 3M/3M: +248K v +170Ke

- (EU) Mar CPI (inline) M/M: 1.1% v 1.1%e; Y/Y: -0.1% v -0.1%e; CPI Core Y/Y: 0.6% v 0.6%e

Fixed Income:

- None seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

**Equities**

Indices [Stoxx50 -0.1%, FTSE 100 +0.3% at 7,079, DAX -0.2% at 11,980, CAC-40 +0.1% at 11,527, IBEX-35 -0.7% at 11,528, FTSE MIB -0.5% at 23,484, SMI -0.1% at 9,393, Athens Stock Exchange +0.6%, S&P 500 Futures -0.2% at 2,097]

- Market Focal Points/Key Themes: Equity markets open mostly lower following Thursday's declines, amid concerns related to Greece and wider peripheral spreads; Declines led by periphery; Swiss firms Syngenta and Nestle report weaker sales amid negative fx impact; Swedish industrial SKF misses ests; Final euro zone CPI and US March CPI in focus; Upcoming US industrial earnings (GE, Honeywell)

By Sector

- Basic Materials/Resources [Syngenta SYNN.CH -3% (Q1 sales below ests, negative fx impact)

- Consumer Staples [Nestle NESN.CH flat (Q1 pricing +2.5%)]

- Consumer Discretionary [Accor AC.FR +2% (Q1 sales rose)]

- Industrials [SFK SKFB.SE -4% (Q1 results below ests); Plastic Omnium POM.FR +1% (reaffirmed 2018 sales target)]

- Technology [Osram OSR.DE +4% (raised outlook)]

- Stoxx50 Sectors [Technology -0.4%, Industrials -0.4%, Utilities -0.2%, Consumer Non-Cyclical -0.1%, Energy -0.1%; Financials +0.1%, Basic Materials +0.1%, Telecom flat, Consumer Cyclical flat]

Speakers

- Greece banking units overseas said to have been asked to exit Greek sovereign debt. Central banks in southeastern European countries (in cooperation with the ECB) had given the instructions. The order relates to Greek government bonds and T-bills and also relates to deposits in parent Greek banks and loans to lenders based in Greece. The move by the central banks was aimed at supporting their national banking systems if there was a Greek accident or contagion.

- Czech Central Bank Vice-Gov Hampl stated that he was still not personally convinced negative rates are a reasonable method but chances of raising the EUR/CZK currency floor from the 27.00 area had risen. Inflation to remain low into H1 2016 due to oil prices

- Sweden Central Bank (Riksbank)saw a greater need for further control on household debt noting that amortization rules were still insufficient given risks

- Russia Dep Fin Min Oreshkin stated that end-2015 CPI could be under 11% if RUB currency (Ruble) stabilizes

- Japan New Komeito (coalition) party to allow LDP to submit casino bill

- China Premier Li said to urged banks to increase support for real economy

Currencies

- USD continued to trade softer following a spat run of softer US economic data that has readjust the probability of a Fed tightening as soon as June and Sept odds were lower. The EUR/USD was back above the 1.08 handle while the GBP/USD posted 3-week highs under under the 1.50 level.

The USD/JPY pair was below the 119 handle and this weighed upon the Nikkei-225 Index.

- German and French 10-year yields continue to head for new record lows on intra-Euro Zone safe haven flows

Political/In the Papers:

- (EU) ECB's Praet (Belgium): No discussion about tapering QE took place at Wed's ECB meeting; Confident QE was needed until Sept 2016.

Looking Ahead

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

- G20 Finance Ministers, Central Bankers meet in Washington

- (US) World Bank and International Monetary Fund (IMF) hold spring Meeting

- ECB Officials attend IMF Spring meetings in Washington

- (IL) Israel Apr CPI Forecast: No est v 1.2% prior

- (IL) Israel Mar M1 Money Supply Y/Y: No est v 39.3% prior

- (IS) Iceland to sell 6.5% 2031 Bonds

- (UK) DMO to sell combined £3.0B in 1-month, 3-month and 6-month Bills (0.5B, 1.0B and 1.5B respectively)

- (IN) India to sell combined INR160B in 2020, 2024, 2032 and 2043 bonds

- (ZA) South Africa to sell I/L 2038, 2046 and 2050 Bonds

- 06:45 (US) Daily Libor Fixing

- 07:00 (BR) Brazil Apr IGP-M Inflation (2nd Preview): 1.1%e v 0.8% prior

- 07:30 (TR) Turkey Central Bank TCMB Survey of Expectations

- 07:30 (IN) India Weekly Forex Reserves

- 08:00 (IS) Iceland Mar Unemployment Rate: No est v 3.6% prior

- 08:00 (IT) Bank of Italy Quarterly Economic Bulletin

- 08:00 (BR) Brazil Apr IBGE Inflation IPCA-15 M/M: 1.0%e v 1.2% prior; Y/Y: 8.2%e v 7.9% prior

- 08:00 (PL) Poland Mar Average Gross Wages M/M: 4.3%e v 1.0% prior; Y/Y: 3.4%e v 3.2% prior

- 08:00 (PL) Poland Mar Employment M/M: 0.1%e v 0.0% prior; Y/Y: 1.2%e v 1.2% prior

- 08:15 (US) Baltic Dry Bulk Index

- 08:30 (US) Mar CPI M/M: 0.3%e v 0.2% prior; Y/Y: 0.1%e v 0.0% prior

- 08:30 (US) Mar CPI Ex Food and Energy M/M: 0.2%e v 0.2% prior; Y/Y: 1.7%e v 1.7% prior

- 08:30 (US) Mar CPI NSA: 236.153e v 234.722 prior; CPI Core Index SA: 236.165e v 240.247 prior

- 08:30 (US) Mar Real Avg Weekly Earnings Y/Y: No est v 2.6% prior

- 08:30 (CA) Canada Mar CPI M/M: 0.6%e v 0.9% prior; Y/Y: 1.0%e v 1.0% prior; Consumer Price Index: 126.2e v 125.4 prior

- 08:30 (CA) Canada Mar CPI Core M/M: 0.3%e v 0.6% prior; Y/Y: 2.1%e v 2.1% prior

- 08:30 (CA) Canada Mar CPI (Seasonally Adj) M/M: 0.3%e v 0.2% prior; CPI Core (Seasonally Adj) M/M: 0.1%e v 0.1% prior

- 08:30 (CA) Canada Feb Retail Sales M/M: +0.5%e v -1.7% prior; Retail Sales Ex Auto M/M: +0.7%e v -1.8% prior

- 08:30 (CA) Canada Feb Int'l Securities Transactions: No est v C$5.7B prior

- 09:00 (RU) Russia Mar Unemployment Rate: 5.9%e v 5.8% prior

- 09:00 (RU) Russia Mar Real Retail Sales M/M: +7.2%e v -4.0% prior; Y/Y: -8.7%e v -7.7% prior

- 09:00 (RU) Russia Mar Investment in Productive Capacity Y/Y: -7.1%e v -6.5% prior

- 09:00 (RU) Russia Mar Real Disposable Income: -1.5%e v -0.6% prior

- 09:00 (RU) Russia Mar Real Wages Y/Y: -10.1%e v -9.9% prior

- 10:00 (US) Apr Preliminary University of Michigan Confidence: 93.7e v 93.0 prior

- 10:00 (US) Mar Leading Index: 0.3%e v 0.2% prior

- 11:30 (EU) Potential Rating Agency commentary on European sovereigns on Friday includes Norway, Russia Slovakia

- 13:00 (US) Weekly Baker Hughes Rig Count data

- 13:00 (UR) Ukraine Feb Industrial Production Y/Y: No est v 2.9% prior

- 15:00 (AR) Argentina Mar National Urban CPI M/M: No est v 0.9% prior; Y/Y: No est v 18.0% prior

- 15:00 (AR) Argentina Mar Wholesale Price Index M/M: No est v 0.2% prior; Y/Y: No est v 16.8% prior