Major European Manufacturing PMIs come in mixed

Notes/Observations

- China April final HSBC Manufacturing PMI data missed expectations to register it its worst reading in a year (48.9 v 49.4e); more speculation of pending rate cuts looming

- Upcoming UK election on Thursday (May 7th) continued to show outcome uncertainties of a likely coalition govt.

- Greek negotiation conducted in an improved atmosphere under new negotiation team with EU bit with little progress on key issues.

- Major European Manufacturing PMIs come in mixed (Germany and Euro Zone beat while France again misses)

Economic data

- (IN) India Apr Manufacturing PMI: 51.3 v 52.1prior (18th month of expansion)

- (SE) Sweden Apr PMI Manufacturing (beat): 55.7 v 53.0e (20th month of expansion)

- (NO) Norway Apr Manufacturing PMI (beat): 50.5 v 49.5e (moves back into expansion)

- (PL) Poland Apr Manufacturing PMI (miss): 54.0 v 54.6e (7th month of expansion)

- (TR) Turkey Apr Manufacturing PMI (miss): 48.5 v 48.6e (4th month of contraction)

- (HU) Hungary Apr Manufacturing PMI: 51.0 v 55.4 prior (21st month of expansion)

- (TR) Turkey Apr CPI (miss, hotter) M/M: 1.6% v 1.4%e; Y/Y: 7.9% v 7.7%e; CPI Core Index Y/Y: 7.0% v 6.7%e

- (TR) Turkey Apr PPI M/M: 1.4% v 1.1% prior; Y/Y: 4.8% v 3.4% prior

- (ES) Spain Apr Manufacturing PMI (miss): 54.2 v 54.5e (17th straight month of expansion)

- (CZ) Czech Republic Apr Manufacturing PMI (miss): 54.7 v 55.8e (23rd month of expansion but lowest since Dec)

- (CH) Swiss Apr PMI Manufacturing (miss): 47.9 v 48.2e (4th straight contraction)

- (IT) Italy Apr Manufacturing PMI (beat): 53.8 v 53.4e (3rd month of expansion and highest since April 2014)

- (FR) France Apr Final Manufacturing PMI (miss): 48.0 v 48.4e (confirms 12th straight month of contraction)

- (DE) Germany Apr Final Manufacturing PMI (beat): 52.1 v 51.9e (confirms 5th straight month of expansion)

- (EU) Euro Zone Apr Final Manufacturing PMI (beat): 52.0 v 51.9e (22nd month of expansion)

- (GR) Greece Apr Manufacturing PMI: 46.5 v 48.9 prior (8th month of contraction and lowest since Jun 2013)

- (NO) Norway Apr Unemployment Rate (miss): 3.0% v 2.9%e

- (EU) Euro Zone May Sentix Investor Confidence (beat): 19.6 v 19.1e

- (DK) Denmark Apr PMI Survey: 53.0 v 58.2 prior

- (ZA) South Africa Apr Kagiso Manufacturing PMI: 45.4 v 47.9e (3rd straight month of contraction)

Fixed Income:

- (PH) Philippines sold total PHP13.0B vs. PHP20B indicated in 3-month, 6-month and 12-month Bills

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

**Equities**

Indices [Stoxx50 +0.2%, FTSE 100 closed, DAX +0.8% at 11,544, CAC-40 +0.3% at 5,062, IBEX-35 +0.4% at 11,428, FTSE MIB +0.4% at 23,126, SMI +0.1% at 9,088, Athens Stock Exchange +0.7%, S&P 500 Futures +0.2% at 2,105]

- Market Focal Points/Key Themes: European equity markets open mixed amid continued steepening in yield curve and lack of corporate news; Markets later trade higher amid euro zone PMI and investor confidence data, some paring of gains in bond yields; Euro zone final April manufacturing PMI generally in line; Syngenta supported by renewed takeover speculation; Key events risks for the week include UK elections (Thursday May 7th), US monthly payrolls (Friday May 8th); China April final PMI below ests

By Sector

- Utilities [EDF EDF.FR -1% (speculated to not raise prices in July)

- Basic Materials/Resources [Syngenta SYNN.CH +7% (takeover speculation)

- Stoxx50 Sectors [Utilities +0.4%, Consumer Non-Cyclical +0.4%, Technology +0.4%, Financials +0.3%, Basic Materials +0.3%, Consumer Cyclical flat; Energy -0.3%, Telecom -0.2%, Industrials -0.1%]

Speakers

- ECB's Constancio (Portugal) reiterated bond buying program working well and had sufficient debt available for ECB to purchase. Euro Zone assets were not overvalued 'in general'. He did see risk 'search for yield' running out of control; Needed to monitor search for yield

- Greece Labour Min Skourletis reiterated intends to meet debt payments and reach deal with lenders. Reiterated govt stance that it would not accept any pension cuts

- Greece Fin Min Varofakis reiterated that speculation about his pending resignation was unfounded

- Italy PM Renzi stated the believed that concrete measures on domestic bad loans will be taken in coming weeks

- Germany said to raise 2015 forecast for tax revenue from €641B to €648-649B

- Norway Central Bank (Norges) said to back FSA mortgage loan proposals

- Bank of Korea (BOK) Gov Lee stated that he had concerns regarding Korea's exports decline, but would not adjust rates just for exports

- Indonesia Fin Min Brodjonegoro stated that it would not tap bond market to cover any budget shortfall. Tax amnesty might help increase revenues. Targeted 2015 Budget deficit to GDP ratio between 2.5-2.9% range; 2.3% would be fine

Currencies

- EUR/USD moved into the lower end of recent range in thin trading with UK dealers out for a bank holiday as Euro Zone manufacturing PM slowed in April. The range 1.1070 to 1.1300 area continued to hold.

- GBP/USD saw recent gains evaporate ahead of Thursday UK election which continued to show outcome uncertainties of a likely coalition govt. GBP/USD traded at 1.5145 mid-session after approaching the 1.55 handle late last week.

- Tuesday's RBA decision provided a headwind for the AUD currency with AUD/USD at 0.7830 just ahead of the NY morning. The pair did test 0.80 last week but analysts were now leaning for RBA to cut rates in its decision on Tuesday (tomorrow).

**Political/In the Papers:

- (GR) Progress observed in Greek debt talks after Fin Min Varoufakis sidelined from negotiations

Looking Ahead

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

- (RO) Romania Apr International Reserves: No est v $34.3B prior

- (ZA) South Africa Apr Naamsa Vehicle Sales Y/Y -0.9%e v 0.0%prior

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

- 07:30 (CL) Chile Central Bank Meeting Minutes

- 08:00 (CZ) Czech Apr Budget Balance (CZK): No est v 19.9B prior

- 08:00 (DE) German Chancellor Merkel with Czech PM Sobotka

- 08:00 (ES) Spain Debt Agency (Tesoro) announces size of upcoming auctions

- 08:50 (FR) France Debt Agency (AFT) to sell combined €5.3-6.5B in 3-month, 6-month and 12-month Bills

- 09:00 (BR) Brazil Apr Manufacturing PMI: No est v 46.2 prior

- 09:00 (MX) Mexico Mar Leading Indicators M/M: No est v -0.09 prior

- 09:00 (MX) Feb Gross Fixed Investment: 2.5%e v 7.3% prior

- 09:00 (SG) Singapore Apr Purchasing Managers Index: 49.5e v 49.6 prior; Electronics Sector Index: 50.0e v 50.1 prior

- 09:35 (EU) ECB calls for bids in 7-Day Main Refinancing Tender

- 09:45 (EU) ECB announces Covered-Bond Purchases

- 09:45 (US) Apr ISM New York: No est v 50.0 prior

- 10:00 (US) Mar Factory Orders: 2.0%e v 0.2% prior; Factory Orders (ex-transportation): No est v 0.8% prior

- 10:00 (US) Mar Durable goods revisions

- 10:00 (MX) Mexico Mar Total Remittances: $2.2Be v $1.8B prior

- 10:30 (MX) Mexico Apr Manufacturing PMI: No est v 53.8 prior

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

- 12:00 (IT) Italy Apr New Car Registrations Y/Y: No est v 15.1% prior

- 12:00 (IT) Italy Apr Budget Balance: No est v -€19.6B prior

- 12:25 (US) Fed's Evans speaks on Economy and Monetary Policy in Indiana

- 12:30 (DE) German Fin Min Schaeuble speaks at Discussion on Europe Since World War II

- 13:00 (MX) Mexico Apr IMEF Manufacturing Index: 51.6e v 51.4 prior; Non-Manufacturing Index: 49.8e v 49.3 prior

- 14:00 (BR) Brazil Apr Trade Balance Monthly: $0.2Be v $0.5B prior; Total Exports: $15.0Be v $17.0B prior; Total Imports: $14.9Be v $16.5B prior

- 15:10 (US) Fed's Williams speaks at Pacific Community Ventures Luncheon

- 16:00 (US) Crop Condition Report

- 17:00 (CO) Colombia Apr PPI Domestic M/M: No est v % prior; Y/Y: No est v % prior

- 17:30 (AU) RBA CIO Girn speech in Sydney

- 20:30 (TW) Taiwan Apr CPI Y/Y: -0.7%e v -0.6% prior; WPI Y/Y: -7.9%e v -8.6% prior

- 21:00 (PH) Philippines Apr CPI M/M: +0.3%e v -0.1% prior; Y/Y: 2.4%e v 2.4% prior; CPI Core Y/Y: 2.7%e v 2.7% prior

- 21:30 (AU) Australia Mar Trade Balance: -A$1.0B v -A$1.3B prior

- (AU) RBA Interest Rate Decision (early Tues)