Euro area industrial production for February

Market Movers

In the US we get data on retail sales in March, which we expect to show control group sales increased by 0.3% m/m. In line with other data, retail sales have been weak in recent months but we expect a rebound as consumers are still optimistic and employment continues to rise. Our base case is that private consumption growth will accelerate in Q2 and Q3 after the slowdown in Q1. We also see the release of the Beige Book in the US.
Bank of Canada is widely expected to keep the policy rate unchanged at 0.50%.
Euro area industrial production for February is due for release today. We expect industrial production to fall in line with the monthly decline of 0.5% for the German figure, which was released last week. The decline in February is likely to be accompanied by a downward revision to the strong print in January as also seen in Germany. In Sweden we have Prospera’s inflation survey and the government’s spring budget. See Scandi Markets.

Selected Market News

The combination of higher oil prices, higher than expected UK inflation data as well as positive US equity markets led to a sell-off in the US fixed income market with 10Y yields rising some 5bp.

This morning the Asian equity markets follow the trend from US equities, boosted by a solid rise in Chinese exports of almost 19% in March as well as rising commodity prices that suggest a rebound is forthcoming in the Chinese economy. The main equity indices gained some 2% to 3% this morning.

As in the US, there has also been a decent rise in government bond yields in Asia with 10Y yields in Japan rising some 2bp-3bp as well as a bearish steepening of the yield curves.

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