More central bank actions and stimulus measures over the past 24 hours to counter virus impact

Notes/Observations

- Global central bank easing and stimulus measures continue (Policy: MAS eased; Stimulus: Australia, Japan)

- Germany Mar CPI decelerated

Asia:

- Singapore Monetary Authority (MAS): semiannual monetary policy eased its policy for the 2nd straight meeting as it reduced the slope of its currency band to zero

- Singapore Q1 Advance GDP QoQ: -10.6% v -8.1%e; YoY: -2.2% v -1.5%e

- China PBoC cuts the 7-Day Reverse Repo Rate by 20bps to 2.20% in a policy signal (Note: 3rd such cut since Nov and largest in almost 5 years)

- China PBOC adviser Ma Jun stated that the Reverse Repo rate cut to help lower financing costs. The timing of cut was in consideration of domestic work resumption, global virus situation, deterioration in external economic environment; Rate cut showed China steps up countercyclical adjustment

- Japan PM Abe stated that govt to announce "huge, powerful" measures that would include fiscal stimulus, monetary steps and tax breaks for companies as part of stimulus package, amount to exceed the total amount put together in response to 2008 crisis

Coronavirus:

- Global cumulative (vs Friday) 722,435 (+35.6%); cumulative deaths 33,997 (+41.2%)

Europe:

- Fitch cut United Kingdom sovereign rating one notch to AA- from AA; outlook Negative

- Moody's cuts South Africa sovereign rating from Baa3 to Ba1 (junk status); outlook Negative

Americas:

- President Trump extended the voluntary national shutdown and social-distancing guidelines related to coronavirus until April 30th (2-week extension

 

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 -1.12% at 307.42, FTSE -1.42% at 5,433.00, DAX -0.40% at 9,594.00, CAC-40 -1.43% at 4,289.11, IBEX-35 -1.85% at 6,652.50, FTSE MIB -0.29% at 16,784.50, SMI -0.42% at 8,959.00, S&P 500 Futures -0.40%]

Market Focal Points/Key Themes: European indices open higher but almost immediately turned negative; theme of various countries pledging further stimulus packages; financial and energy among underperformers; Telecom and utilities among better performers; ECB instructed banks to freeze dividends and buybacks; upcoming earnings expected during the US session include Cal-Maine Foods

 

Equities

- Consumer discretionary: EasyJet [EZJ.UK] -9% (grounds entire fleet), Ted Baker [TED.UK] -12% (CEO appointment)

- Financials: Hammerson [HMSO.UK] -12% (COVID-19 update), ABN AMRO Bank [ABN.NL] -9% (Q1 outlook)

- Industrials: ABB [ABBN.CH] -6% (COVID-19 update)

 

Speakers

- ECB's De Guindos (Spain): In support of coronavirus bonds. Joint issuance of Eurobonds was one instrument to fight the coronavirus but not the only one and not the most effective. ECB to do everything possible to defend the Euro and make sure it had the best possible tools to do so

- EU's Sassoli: ESM lending should be unconditional

- Italy Econ Minister Gualtieri: Europe would need a great Marshall plan to relaunch its economy after the virus emergency

- Poland govt official stated that he planned Presidential vote for May 10th cannot be held

- Hungary Central Bank: Counter-cyclical capital buffer to remain at 0% (zero) for longer

- German Council of Economic Advisors saw the looming recession being the worst since 2009 with 2020 GDP contraction between 2.8% to 5.4% before growing by 4.9% in 2021. Believed that traditional stimulus was not very promising. Government could support recovery by maintaining entrepreneurial capacity where possible, stabilizing incomes, using time during period of restrictions to support recovery

- German VDMA Engineering association: Almost one in two companies suffer from serious or noticeable supply chain disruptions

- Japan Chief Cabinet Sec Suga noted there was no truth to rumor of emergency declaration set for Wed, Apr 1st. WHO meeting unrelated to any declaration of emergency;

- Japan govt said to increase its JGB bond issuance by ¥16T from July to fund the stimulus (**Note: On Dec 18th Japan PM Abe stated that the 2020/21 fiscal year would see the 8th consecutive year of reducing bond issuance (set to sell ¥128.8T in FY20/21 vs. ¥129.4T in current fiscal year)

 

Currencies/Fixed Income

- USD was firmer against the major pairs on safe-haven flows as fears of global recession seems imminent as the coronavirus pandemic remained serious.

- EUR/USD was lower by 0.9% to move back below the 1.11 level. As expected the Germany Mar State CPIs decelerated

- GBP/USD was lower by 0.7% in the aftermath of UK's sovereign downgrade late last week due to the impact of coronavirus on government finances and economic activity - USD/CHF was higher by 0.5% at 0.9560 area. Weekly Swiss sight deposit data suggested that the SNB appeared to have intervened heavily in currency markets last week as data registered its biggest rise in five years - USD/ZAR tested the 18 handle in the aftermath of South Africa's sovereign rating being cut to junk by Moody's.

 

Economic Data

- (NL) Netherlands Mar Producer Confidence Index: 0.2 v 3.7 prior

- (ZA) South Africa Feb M3 Money Supply Y/Y: 7.7% v 6.7%e; Private Sector Credit Y/Y: 5.1% v 5.2%e

- (DE) Germany Mar CPI Saxony M/M: 0.1% v 0.5% prior; Y/Y: 1.6% v 2.0% prior

- (ES) Spain Mar Preliminary CPI M/M: -0.3% v -0.1% prior; Y/Y: 0.1% v 0.4%e

- (ES) Spain Mar Preliminary CPI EU Harmonized M/M: 0.7% v 1.0%e; Y/Y: 0.2% v 0.4%e

- (CH) Swiss Mar KOF Leading Indicator: 92.9 v 85.0e

- (ES) Spain Feb Adjusted Retail Sales Y/Y: 1.8% v 1.7% prior; Retail Sales Y/Y: 5.5% v 0.9% prior

- (AT) Austria Feb PPI M/M: -0.5% v +0.2% prior; Y/Y: -0.8% v -0.3% prior

- (DE) Germany Mar CPI Brandenburg M/M: 0.2% v 0.5% prior; Y/Y: 1.4% v 1.6% prior

- (DE) Germany Mar CPI Hesse M/M: -0.3% v +0.6% prior; Y/Y: 1.2% v 1.9% prior

- (DE) Germany Mar CPI Bavaria M/M: 0.0% v 0.7% prior; Y/Y: 1.2% v 1.7% prior

- (DE) Germany Mar CPI Baden Wuerttemberg M/M: 0.1% v 0.4% prior; Y/Y: 1.4% v 1.6% prior

- (CH) Swiss Weekly Total Sight Deposits (CHF): 620.5B v 608.8B prior Domestic Sight Deposits: 529.0B v 512.4B prior (**Insight: SNB appeared to have intervened heavily in currency markets last week as data registered its biggest rise in five years)

- (UK) Feb Net Consumer Credit: £0.9B v £1.1Be; Net Lending: £4.0B v £4.0Be

- (UK) Feb Mortgage Approvals: 73.5K v 68.5Ke (highest since Apr 2016)

- (UK) Feb M4 Money Supply M/M: 0.3% v 0.7% prior; Y/Y: 4.9% v 4.7% prior; M4 Ex IOFCs 3M Annualized: 4.1% v 5.6% prior

- (DE) Germany Mar CPI North Rhine Westphalia M/M: 0.0% v 0.5% prior; Y/Y: 1.4% v 1.8% prior

- (PT) Portugal Mar Consumer Confidence Index: -9.9 v -8.1 prior; Economic Climate Indicator: 1.8 v 2.2 prior

- (EU Euro Zone Mar Economic Confidence: 94.5 v 91.6e; Industrial Confidence: -10.8 v -12.6e; Services Confidence: -2.2 v -5.0e; Consumer Confidence (final): -11.6 v -11.6 advance

Fixed Income Issuance

- (IN) India sold total INR250B vs. INR250B indicated in 3-month, 6-month and 12-month bills

- (DK) Denmark sold total DKK1.28B in 3-month. 6-month, 9-month and 12-month Bills

- (NO) Norway sold NOK3.0B vs. NOK3.0B indicated in 3-month bills; Avg Yield: 0.24% v 1.46% prior; Bid-to-cover: 1.94x v 2.23x prior

- (SK) Slovakia Debt Agency (Ardal) sold total €146.5M in 2028, 2030 and 2047 bonds

 

Looking Ahead

- (MX) Mexico Feb YTD Budget Balance: No est v €40.8B prior

- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays)

- 06:00 (PT) Portugal Feb Industrial Production M/M: No est v 0.5% prior; Y/Y: No est v 2.0% prior

- 06:00 (PT) Portugal Feb Retail Sales M/M: No est v 2.6% prior; Y/Y: No est v 4.3% prior

- 06:00 (IL) Israel to sell combined ISL1.25B in 2022, 2025, 2026, 2029 and 2030 bonds

- 06:00 (IS) Iceland to sell 1,-month, 3-month and 9-month Bills

- 06:45 (US) Daily Libor Fixing

- 07:00 (BR) Brazil Mar FGV Inflation IGPM M/M: 1.1%e v 0.0% prior; Y/Y: 6.7%e v 6.8% prior

- 07:00 (IN) India announces details of upcoming bond sale (held on Fridays)

- 07:25 (BR) Brazil Central Bank Weekly Economists Survey

- 08:00 (DE) Germany Mar Preliminary CPI M/M: 0.0%e v 0.4% prior; Y/Y: 1.3%e v 1.7% prior

- 08:00 (DE) Germany Mar Preliminary CPI EU Harmonized M/M: 0.1%e v 0.6% prior; Y/Y: 1.4%e v 1.7% prior

- 08:00 (UK) Daily Baltic Dry Bulk Index

- 08:00 (ES) Spain Debt Agency (Tesoro) size announcement on upcoming issuance

- 08:50 (FR) France Debt Agency (AFT) to sell €4.8-6.0B in 3-month, 4-month, 6-month and 12-month bills

- 09:30 (BR) Brazil Feb Central Govt Budget Balance (BRL): -18.0Be v +44.1B prior

- 09:45 (EU) ECB weekly QE bond buying update

- 10:00 (US) Feb Pending Home Sales M/M: -2.0%e v +5.2% prior; Y/Y: 6.0%e v 6.7% prior

- 10:30 (US) Mar Dallas Fed Manufacturing Activity Index: -10.0e v +1.2 prior

- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills

- 14:00 (CO) Colombia Central Bank Mar Minutes

- 15:00 (AR) Argentina Jan Economic Activity Index (Monthly GDP) M/M: No est v 0.2% prior; Y/Y: No est v -0.3% prior

- 17:00 (NZ) New Zealand Government 8-Month Financial Statements

- 17:00 (KR) South Korea Apr Manufacturing Business Survey: No est v 69 prior; Non-Manufacturing Business Survey: No est v 68 prior

- 17:45 (NZ) New Zealand Feb Building Permits M/M: No est v -2.0% prior

- 18:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 72.2 prior

- 19:00 (KR) South Korea Feb Industrial Production M/M: -1.6% v -1.3% prior; Y/Y: +3.0%e v -2.4% prior

- 19:01 (UK) Mar GfK Consumer Confidence: -15e v -7 prior

- 19:01 (UK) Mar Lloyds Business Barometer: No est v 23 prior

- 19:30 (JP) Japan Feb Jobless Rate: 2.4%e v 2.4% prior; Job-To-Applicant Ratio: 1.47e v 1.49 prior

- 19:30 (JP) Japan Feb Retail Sales M/M: -1.5% v +1.5% prior (revised from 0.6%); Y/Y: -1.5%e v -0.4% prior

- 19:30 (JP) Japan Feb Dept. Store, Supermarket Sales Y/Y: -1.6%e v -1.5% prior (revised from -1.4%)

- 19:30 (JP) Japan Feb Preliminary Industrial Production M/M: 0.0%e v 1.0% prior

- 20:00 (NZ) New Zealand Mar Business Confidence: No est v -19.4 prior; Activity Outlook: No est v 12.0 prior

- 20:30 (AU) Australia Feb Private Sector Credit M/M: 0.3%e v 0.3% prior; Y/Y: 2.6%e v 2.5% prior

- 21:00 (CN) China Mar Offical Manufacturing PMI: 45.0e v 35.7 prior; Non-manufacturing PMI: 42.0e v 29.6 prior; Composite PMI: No est v 28.9 prior

- 22:00 (SG) Singapore Feb M1 Money Supply Y/Y: No est v 5.3% prior; M2 Money Supply Y/Y: No est v 5.8% prior

- 22:30 (KR) South Korea to sell KRW 2.9T in 30-year Bond

- 23:00 (TH) Thailand Central Bank to sell combined THB90B in 3-month and 6-month bills

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

- 23:35 (JP) Japan to sell 2-Year JGB Bonds