EU mid-market update: Most assets rally, led by crypto and metals, as bond yields climb from better than expected nonfarm payrolls.

Notes/observations

- European data surpasses expectations with Germany Industrial Production and Euro Zone Sentix Investor Confidence beating consensus, helping to hold up European indices in the green as equities attempt to pare some of Friday’s selloff.

- US futures are trimming gains following blowout in the nonfarm payrolls which lifted stocks in last session- Little change to macro view as market continues to see most major central banks cutting interest rates in June. Couple of notable rate decisions later in the week, with New Zealand on Tues, Bank of Canada on Weds and ECB on Thurs.

- Asia closed mixed with Shanghai underperforming at -0.7%. EU indices are -0.1% to +0.6%. US futures are -0.1%. Gold +0.3%, DXY +0.1%; Commodity: Brent -0.7%, WTI -0.7%; Crypto: BTC +3.5%, ETH +6.2%.

Asia

- China Mar Foreign Reserves: $3.246T v $3.230Te; Gold reserves: 72.74M v 72.58M troy oz prior (17th straight rise).

- Japan Feb Labor Cash Earnings Y/Y: 1.8% v 1.8%e; Real Cash Earnings Y/Y: -1.3% v -1.4%e.

- Japan Feb Current Account (BOP basis): ¥2.644T v ¥3.078Te.

- Australia Feb Home Loans Value M/M: 1.5% v 2.0%e.

- RBNZ shadow board (NZIER) expected interest rates to stay on hold at 5.50% this week (decision due Wed, Apr 10th NZT).

Global conflict/tensions

- Israel's delegation was given the green light to attend Gaza truce and hostage release talks in Cairo; progress was said to have been made in discussions and agreement on basic points between all parties.

- Israel’s military said it has completed another phase of the Northern Command’s readiness for war. Israeli military Spokesperson noted that it had withdrawn all ground troops from southern Gaza except for one brigade (from 20 prior).

Europe

- Italy Finance Ministry saw 2024 GDP growth ~1.0% and confirmed its would take until at least 2026 to meet EU budget deficit limit of 3%.

- Bank of Italy (BOI) maintained 2024 GDP growth forecast at 0.6% while cutting the 2025 GDP growth from 1.1% to 1.0%.

Americas

- Fed’s Bowman (voter, hawk) noted that would not be comfortable cutting rates until disinflation returned. Added that while not likely, it was possible Fed might have to hike again to cool inflation. Remained willing to hike if inflation progress stalled; Cutting rates too soon risked rebound in inflation pressures.

Energy

- Probability for oil to reach $100/bbl said to be increasing amid supply shocks impacting the market.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.3%, FTSE -0.1%, DAX +0.5%, CAC-40 +0.4%, IBEX-35 -0.1%, FTSE MIB +0.4%, SMI +0.3%, S&P 500 Futures -0.2%].

Market focal points/key themes: European indices open generally mixed and trended into the green as the session progressed; improved risk appetite attributed to beat in German industrial data; better performing sectors include industrials and materials; among sectors inclined to the downside are communication services and consumer discretionary; oil & gas subsector under pressure following perceived easing of tensions in the Middle East; Warner Music drops bid for Believe; no major earnings expected in the upcoming US session.

Equities

- Consumer discretionary: Zalando [ZAL.DE] +5.0% (analyst upgrade).

- Healthcare: Oncopeptides [ONCO.SE] -7.0% to -7.5% (terms for rights issue).

- Industrials: Continental [CON.DE] +1.5-2.0% (analyst upgrade).

- Technology: Atos [ATO.FR] +14.5% (speculation on French govt takeover).

Speakers

- Sweden Central Bank (Riksbank) Gov Thedeen noted that was approaching a situation where the need to conduct a contractionary monetary policy was declining; inflation outlook had improved but risks remain.

- Greece Central Bank cut its 2024 GDP growth from 2.5% to 2.3%.

- Philippines Central Bank Policy Statement reiterated monetary policy to remain tight but ready to adjust as needed. Latest inflation path had shifted slightly higher with risk to outlook tilted to the upside. Growth prospects remained intact over midterm.

- Japan Business Lobby (Keidanren) Chief commented that current JPY currency (yen) weakness was excessive.

- US Treasury Sec Yellen reiterated her concern about weak Chinese household consumption; Saw need for shift in China industrial policy.

Currencies/fixed income

- USD was steady in quiet trade on Monday with focus on upcoming US CPI data on Wed and ECB rate decision on Thurs. Up until the recent US jobs report from Friday. The major central banks all appeared to be prepared to begin easing policy my mid-year. However, now market expectations begin to price that the Fed could lag behind other major central banks on easing measures.

- EUR/USD at 1.0825 with GBP/USD at 1.2620.

- USD/JPY continued to fester below the pivotal 152 level during Asia. BOJ Gov Ueda is set to appear in Parliament on Tuesday afternoon local time in Tokyo. Mary continued to be concerned that Japanese authorities could intervene in the foreign exchange market to stem sharp falls in the yen at any time if the moves were sufficient.

Economic data

- (SE) Sweden SEB Mar Swedish Housing-Price Indicator: 39 v 32 prior.

- (CH) Swiss Mar Unemployment Rate: 2.4% v 2.3%e; Unemployment Rate (seasonally adj): 2.3% v 2.2%e.

- (DE) Germany Feb Industrial Production M/M: 2.1% v 0.5%e; Y/Y: -4.9% v -6.8%e.

- (DE) Germany Feb Trade Balance: €21.4B v €25.0Be; Exports M/M: -2.0% v -0.5%e; Imports M/M: +3.2% v -1.2%e;

- (SE) Sweden Mar Budget Balance (SEK): -0.3BB v +74.3B prior.

- (NO) Norway Feb Industrial Production M/M: -4.3% v +2.2% prior; Y/Y: %1.8 v 8.3% prior.

- (NO) Norway Feb Manufacturing Production M/M: -1.1% v 0.0% prior; Y/Y: -2.2% v -0.4% prior.

- 02:00 (FI) Finland Feb Preliminary Trade Balance: -€0.7B v -€0.1B prior.

- (DK) Denmark Feb Industrial Production M/M: +1.6% v -3.5% prior.

- (ZA) South Africa Mar Gross Reserves: $62.3B v $61.7B prior; Net Reserves: $57.5B v $56.7B prior.

- (AU) Australia Mar Foreign Reserves (A$): $89.7B v 90.5B prior.

- (CZ) Czech Feb Industrial Output Y/Y: 1.5% v 1.9%e; Construction Output Y/Y: +3.6% v -5.5% prior.

- (CZ) Czech Feb National Trade Balance (CZK): 34.6B v 8.9Be.

- (TR) Turkey Feb Industrial Production M/M: 3.2% v 0.3% prior; Y/Y: 11.5% v 8.1%e.

- (PH) Philippines Central Bank (BSP) left Overnight Borrowing Rate unchanged at 6.50% (as expected) for its 4th straight pause in the current tightening cycle.

- (CH) Swiss Weekly Total Sight Deposits (CHF): 460.9B v 456.8B prior; Domestic Sight Deposits: 452.1B v 448.1B prior.

- (EU) Euro Zone Apr Sentix Investor Confidence: -5.9 v -8.5e.

- (IS) Iceland Mar Preliminary Trade Balance (ISK): -33.3B v -20.5B prior.

- (SG) Singapore Mar Foreign Reserves: $368.5B v $357.4B prior.

Fixed income issuance

- (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 3-month bills; Avg Yield: 4.41% v 4.58% prior; Bid-to-cover: 2.65x v 2.50x prior.

Looking ahead

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

- 05:30 (DE) Germany to sell combined €4.0B in 3-month and 9-month BuBills.

- 05:30 (EU) European Union to sell combined €5.0B in 2030 and 2034 bonds.

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

- 06:00 (IE) Ireland Mar Live Register Monthly Change: No est v -2.1K prior; Live Register Level: No est v 174.6K prior.

- 06:00 (SE) Sweden Central Bank (Riksbank) Gov Thedeen.

- 06:00 (IL) Israel to sell combined ILS3.05B in 2027, 2029, 2035, 2037 and 2052 bonds.

- 07:00 (IS) Iceland to sell 3-month and 6-month Bills.

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

- 07:00 (RO) Romania to sell RON400M in 12-month bills.

- 07:00 (RO) Romania to sell RON300M in 7.9% Feb 2038 bonds.

- 08:00 (PL) Poland Central Bank (NBP) Mar Minutes (2 decisions ago)

- 08:00 (CL) Chile Mar CPI M/M: 0.6%e v 0.6% prior; Y/Y: 3.9%e v 4.5% prior.

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

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

- 08:30 (CL) Chile Mar Trade Balance: $1.9Be v $1.5B prior; Exports: No est v $7.6B prior; Imports: No est v $6.0B prior; Copper Exports: No est v $3.5B prior.

- 08:30 (CL) Chile Mar International Reserves: No est v $46.6B prior.

- 09:00 (IL) Israel Central Bank (BOI) Interest Rate Decision: Expected to leave Base Rate unchanged at 4.50%.

- 09:00 (FR) France Debt Agency (AFT) to sell €5.8-7.4B in 3-month, 6-month and 12-month bills.

- 09:00 (BR) Brazil Mar Vehicle Production: No est v 189.7K prior; Vehicle Exports: No est v 30.7K prior; Vehicle Sales: No est v 165.2K prior.

- 11:00 (US) NY Fed Mar 1-year Inflation Expectations Survey: No est v 3.0% prior.

- 11:15 (CH) SNB President Jordan, BIS's Carstens in Zurich.

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

- 13:00 (SE) Sweden Central Bank (Riksbank) Gov Thedeen.

- 16:00 (US) Weekly Crop Progress Report.

- 18:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 82.8 prior.

- 19:01 (UK) Mar BRC LFL Sales Y/Y: 1.8%e v 1.0% prior.

- 20:30 (AU) Australia Apr Westpac Consumer Confidence: No est v 86.0 prior.

- 21:30 (AU) Australia Mar NAB Business Confidence: No est v 0 prior; Business Conditions: No est v 10 prior.

- 23:30 (JP) Japan to sell 6-Month Bills.

- 23:35 (JP Japan to sell 5-Year JGB Bonds.

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