Awaiting US jobs data

Notes/observations

- Recent Fed speak questions whether rates need to be cut this year; focus on jobs report.

- UK House Prices registered its 1st decline in 6 months.

- Both French & German Feb Industrial Production readings missed consensus.

- On corporate front, Samsung Electronics and LG Electronics announced their preliminary figures, while Apple's supplier Foxconn released its monthly sales numbers and provided with second quarter guidance.

Asia

- South Korea Feb Current Account Balance: $6.9B v $3.0B prior.

- Japan Feb Household Spending Y/Y: -0.5% v -2.9%e.

- Australia Feb Trade Balance (A$): 7.3B v 10.5Be (smallest surplus in 5 months).

- India Central Bank (RBI) left the Repurchase Rate unchanged at 6.50% (as expected).

- BOJ Gov Ueda stated that would adjust level of interest rates in accordance to distance towards sustainably, stably achieving 2% inflation. If FX moves appeared to have impact on wage-inflation cycle in a way that was difficult to ignore then could respond via monetary policy.

- Japan Fin Min Suzuki reiterated govt stance that was watching FX moves with a high sense of urgency. FX level should be determined by the market.

Global conflict/tensions

- Israeli PM Netanyahu stated that Iran had been working against Israel for years, and therefore we were operating against Iran and its proxies. Israel could defend itself and would act according to the principle that we would hurt anyone that hurt us.

- White House stated that a phone call between Biden and Netanyahu concluded after less than 30 mins; Biden emphasized that an immediate Gaza ceasefire was essential and that US policy could change if Israel did not address concerns.

- Israel govt approved reopening of Erez crossing and using Ashdod port to expand flow of aid into Gaza; Move came after pressure from US admin indicating US support for Israel hinged on them protecting civilians and aid workers.

Americas

- Fed's Kashkari (non-voter) commented that needed to see more inflation progress before cut; Question of why rates should be cut if the economy remained strong. He noted that saw 2 rate cuts in his March SEP projection.

- Fed’s Barkin (voter) commented that was still looking for slowdown in reported inflation to sustain and broaden. Early 2024 data less encouraging and raised issue of whether outlook was shifting.

- Fed's Goolsbee (non-voter for 2024) commented that inflation had been moving sideways and if it continued would thus wonder if Fed should cut rates at all this year.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -1.13% at 505.08, FTSE -0.95% at 7,900.40, DAX -1.42% at 18,140.75, CAC-40 -1.32% at 8,044.20, IBEX-35 -1.16% at 10,962.50, FTSE MIB -1.53% at 33,929.00, SMI -1.42% at 11,525.60, S&P 500 Futures +0.30%].

Market focal points/key themes: European indices open lower across the board and remained under pressure through the early part of the session; pullback in equities seen after extended period of gains and projections of slow rate of easing from the ECB after release of minutes; better performing sectors include energy and utilities; among sectors leading the way lower are industrials and consumer discretionary; Experian to acquire Illion; focus on release of US NFP later in the day; reportedly Airbus in discussion with Boeing to split up and acquire their respective operations in Spirit Aerosystems; earnings expected in the upcoming Americas session include The Greenbrier.

Equities

- Consumer discretionary: Delivery Hero [DHER.DE] -3.0% (activist investor stake), Bureau Veritas [BVI.FR] -3.0% (Wendel completes the sale of 9% stake).

- Energy: Shell [SHEL.UK] +0.5% (expects lower results q/q).

- Healthcare: AstraZeneca [AZN.UK] -1.0% (trial data).

- Industrials: Maersk [MAERSKB.DK] +3.0% (to reinstate a route transiting the Panama Canal as drought subsides).

- Technology: ASML [ASML.NL] -1.5% (Samsung prelim results; Foxconn sales jump m/m).

Speakers

- Japan PM Kishida reiterated govt would not rule out any options for action on Forex. Excessive volatility and disorderly price movements could have adverse effect on economy and financial stability. Desirable for FX price action to move stably and reflect fundamentals.

- Bank of Japan (BOJ) said to hold second policy review workshop on May 21st.

- India Central Bank Gov Das STATED THAT THE GOVT WAS Building UP ITS gold reserves.

- US Sec of State Blinken stated that the US welcomed steps by Israel on humanitarian aid to Gaza.

Currencies/fixed income

- Some risk aversion sentiment provided some supp.ort for the USD in the session. Focus will be on US payroll data due out later today. Various Fed speak over the past 24 hours put into question the need for any rate cuts during the course of 2024

- EUR/USD drifted higher in quiet trade around the 1.0840 area by mid-session. Weaker French & German Feb Industrial Production readings had little impact on price action.

- USD/JPY moved away from the 152 level during Asia after BOJ Gov Ueda hinted of additional rate hikes after noting FX moves that appeared to have impact on wage-inflation cycle in a way that was difficult to ignore then could respond via monetary policy.

Economic data

- (DE) Germany Feb Factory Orders M/M: 0.2% v 0.7%e; Y/Y: -10.6% v -10.1%e.

- (DE) Germany Feb Import Price Index M/M: -0.2% v 0.0%e; Y/Y: -4.9% v -4.6%e.

- (UK) Mar Halifax House Price Index M/M: -1.0% v +0.4% prior; Y/Y: 0.3% V 1.7% prior (1st decline in 6 months).

- (HU) Hungary Feb Industrial Production M/M: 3.5% v 0.5%e; Y/Y: +1.4% v -3.0%e.

- (HU) Hungary Feb Retail Sales Y/Y: 1.1% v 2.3%e.

- (FR) France Feb Industrial Production M/M: 0.2% v 0.4%e; Y/Y: -0.8% v -0.1%e.

- (FR) France Feb Manufacturing Production M/M: 0.9% v 1.2%e; Y/Y: -0.3% v +0.2% prior.

- (ES) Spain Feb Industrial Production M/M: 0.7% v 0.2%e; Y/Y: +1.5% v -0.4%e; Industrial Output (unadj) Y/Y: 4.1% v 4.0% prior.

- (CH) Swiss Mar SECO Consumer Confidence: -38.0 v -41.0e.

- (CH) Swiss Mar Foreign Currency Reserves (CHF): 715.1B v 677.8B prior.

- (AT) Austria Mar Wholesale Price Index M/M: -0.7% v +1.2% prior; Y/Y: -2.0% v -2.1% prior.

- (CZ) Czech Feb Retail Sales (ex-auto) Y/Y:1.6 % v 2.3%e.

- (MY) Malaysia end-Mar Foreign Reserves: $113.8B v $114.3B prior.

- (IN) India Forex Reserve w/e Mar 29th: $645.6b v $642.6B prior.

- (DE) Germany Mar Construction PMI: 38.3 v 39.1 prior.

- (RU) Russia Narrow Money Supply w/e Mar 29th (RUB): 18.06T v18.12 T prior.

- (TH) Thailand Mar Foreign Reserves w/e Mar 29th: $223,4B v $223.6B prior.

- (UN) FAO Mar World Food Price Index: 118.3 v 117.0 prior (1st rise in 8 months).

- (UK) Mar Construction PMI: # v 49.9e.

- (EU) Euro Zone Feb Retail Sales M/M: -0.5% v -0.4%e; Y/Y: -0.7% v -0.8%e.

- (IT) Italy Q4 YTD Budget Deficit to GDP Ratio: 7.2% v 7.8% prior.

Fixed income issuance

- None seen.

Looking ahead

- (UR) Ukraine Mar Official Reserve Assets: No est v $37.1B prior.

- (MX) Mexico CitiBanamex Survey of Economists.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (IN) India to sell combined INR380B in 2026, 2034 and 2063 bonds.

- 05:30 (ZA) South Africa to sell combined ZAR1.0B in I/L 2031, 2033 and 2046 Bonds.

- 06:00 (UK) DMO to sell £5.0B in 1-month, 3-month and 6-month bills (£0.5B, £2.0B and £2.5B respectively).

- 07:00 (BR) Brazil Mar FGV Inflation IGP-DI M/M: -0.4%e v -0.4% prior; Y/Y: -4.1%e v -4.0% prior.

- 07:30 (BR) Brazil Feb Nominal Budget (Overall) Balance (BRL): -105.6Be v +22.2B prior; Primary Budget Balance: -49.0Be v +102.1B prior; Net Debt % GDP: 60.1%e v 60.0% prior.

- 07:30 (IN) India announces upcoming bill issuance (held on Wed).

- 08:00 (PL) Poland Mar Official Reserves: No est v $188.0B prior.

- 08:00 (MX) Mexico Mar Vehicle Production: No est v 318.7K prior; Vehicle Exports: No est v 282.6K prior.

- 08:00 (CL) Chile Feb Nominal Wage Y/Y: No est v 6.5% prior.

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

- 08:30 (US) Mar Change in Nonfarm Payrolls: +213Ke v +275K prior; Private Payrolls: +170Ke v +223K prior; Change in Manufacturing Payrolls: 0Ke v -4K prior.

- 08:30 (US) Mar Unemployment Rate: 3.8%e v 3.9% prior; Underemployment Rate: No est v 7.3% prior; Labor Force Participation Rate: No est v 62.5% prior.

- 08:30 (US) Mar Average Hourly Earnings M/M: 0.3%e v 0.1% prior; Y/Y: 4.1%e v 4.3% prior; Average Weekly Hours: 34.3e v 34.3 prior.

- 08:30 (CA) Canada Mar Net Change in Employment: +25.0Ke v +40.7K prior; Unemployment Rate: 5.9%e v 5.8% prior; Full Time Employment Change: No est v +70.6K prior; Part Time Employment Change: No est v -29.9K prior; Participation Rate: No est v 65.3% prior; Hourly Wage Rate M/M: 5.0%e v 4.9% prior.

- 09:00 (RU) Russia Mar Official Reserve Assets: No est v $582.6B prior.

- 09:00 (PL) Polish Central Bank (NBP) Gov Glapinski post rate decision press conference.

- 09:30 (TR) Turkey Mar Cash Budget Balance (TRY): No est v -198.3B prior.

- 10:00 (CA) Canada Mar Ivey Purchasing Managers Index (seasonally adj): No est v 53.9 prior; PMI (unadj): No est v 56.3 prior.

- 12:00 (RU) Russia Q4 Preliminary GDP (2nd of 3 readings) Y/Y: 5.3%e v 5.5% advance; Overall 2023 Annual GDP Y/Y: No est v 3.6% advance.

- 12:00 (EU) Potential sovereign ratings after European close.

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

- 15:00 (US) Feb Consumer Credit: $15.7Be v $19.5B prior.

- 19:00 (CO) Colombia Mar CPI M/M: 0.7%e v 1.1% prior; Y/Y: 7.4%e v 7.7% prior.

- 19:00 (CO) Colombia Mar CPI Core M/M: 0.7%e v 1.2% prior; Y/Y: 8.8%e v 9.2% prior.