CBR cuts key rate by 300bps after RUB currency rebounded back to pre-conflict levels

EU Mid-Market Update: EU adopts a 5th round of sanctions against Russia, CBR cuts key rate by 300bps after RUB currency rebounded back to pre-conflict levels.

Notes/Observations

- Quiet EU session, no pivotal data releases; equities higher aided by upbeat market sentiment.

- EU adopted a 5th round of sanctions against Russia, including ban on Russian coal imports.

- Russia Central Bank (CBR) cut the Key 1-Week Auction Rate by 300bps to 17.00% as the RUB currency moved back to pre-Ukraine conflict levels.

Asia

- India Central Bank (RBI) left policy steady (as expected). Focus to be on withdrawal of accommodation to keep inflation within target. To use all instruments to defend the economy.

- Former BOJ Director Hayakawa believed that BOJ would likely to adjust policy as soon as July; noted concerns about weak yen currency and concerns among the public about inflation.

Russia/Ukraine

- Russia govt spokesperson Peskov: We have had significant losses of troops in Ukraine, its a tragedy.

- EU said to be supporting Russian coal embargo in fifth round of sanctions.

Europe

- UK companies said to be raising starting salaries at fastest pace on record. Increase reflects huge demand from firms and the impact of rising cost of living.

Americas

- Fed’s Bullard (voter, hawkish dissenter) stated that he was leaning towards supporting 50bps hike at May meeting but would watch data.

- Fed's Evans stated that the unemployment rate was low and that participation could be higher. Fed was raising rates towards neutral by end of 2022 or in early ’23.

Energy

- Japan Trade Min Hagiuda stated that was working towards weaning off Russia.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 +0.95% at 459.34, FTSE +0.90% at 7,620.12, DAX +1.10% at 14,233.55, CAC-40 +1.08% at #, IBEX-35 +1.00% at 8,552.36, FTSE MIB +1.70% at 24,717.00, SMI +0.53% at 12,438.30, S&P 500 Futures +0.24%].

Market Focal Points/Key Themes: European indices open substantially higher across the board and stayed upbeat through the early part of the session; sectors leading to the upside include industrials and technology; underperforming sectors include telecom and real estate; Vivendi will not raise stake in Prisa; Stellantis completes sale of Gefco stake; no major earnings expected in the upcoming US session.

Equities

- Consumer discretionary: Jet2 [JET2.UK] +5.5% (trading update).

- Energy: OMV [OMV.AT] +3% (production update; books impairment).

- Healthcare: Evotec [EVT.DE] +2% (trigger payment), Genmab [GMAB.DK] -5.5% (arbitration lose).

- Industrials: Volvo [VOLVA.SE] +1.5% (notes impact of war in Ukraine).

Speakers

- Germany Fin Min Lindner stated in parliament that govt was acting to prevent a dangerous wage-price spiral with an aim to dampen perceived inflation.

- EU adopted a 5th round of sanctions against Russia, including ban on Russian coal import and banning Russian vessels from EU ports.

- Russian Central Bank post intra-policy decision statement noted that it held open the prospect of further rate reduction at upcoming meetings.

- Japan PM Kishida confirmed the country to ban Russian coal imports and ban the imports of certain Russian products. To freeze assets of Sberbank.

Currencies/Fixed income

- USD holding onto to gains and aided by more recent hawkish Fed speak. Dealers noted that the prospects of swift Fed rate hikes.

Economic data

- (SE) Sweden Feb Maklarstatistik Housing Prices Y/Y: 10% v 11% prior; Apartment Prices Y/Y: 7% v 7% prior.

- (NL) Netherlands Feb Manufacturing Production M/M: -0.4% v -1.5% prior; Y/Y: 10.2% v 7.4% prior; Industrial Sales Y/Y: 5.3% v 2637% prior.

- (NO) Norway Feb Overall GDP M/M: +0.7 v -1.6% prior; GDP Mainland M/M: 0.5% v 1.0%e.

- (NO) Norway Q1 House Price Index Q/Q: 2.4% v 0.8% prior.

- (DK) Denmark Feb Industrial Production M/M: 1.0% v 1.3% prior.

- (RO) Romania Q4 Final GDP Q/Q: -0.1% v -0.1% prelim; Y/Y: 2.4% v 2.4% prelim.

- (JP) Japan Mar Eco Watchers Current Survey: 47.8 v 45.0e; Outlook Survey: 50.1 v 47.5e.

- (ES) Spain Feb Industrial Production M/M: 0.9% v 0.5%e; Y/Y: 3.0% v 1.7%e; Industrial Output NSA (unadj) Y/Y: 3.9% v 4.1% prior.

- (AT) Austria Feb Industrial Production M/M: 2.2% v 4.2% prior; Y/Y: 12.2% v 13.4% prior.

- (HU) Hungary Mar CPI M/M: 1.0% v 1.2%e; Y/Y: 8.5% v 8.8%e.

- (TR) Turkey Central Bank TCMB Apr Expected Inflation Survey: Next 12 Months: 28.4% v 26.4% prior.

- (TH) Thailand end-Mar Foreign Reserves: $241.6B v $244.6B prior.

- (CN) Weekly Shanghai copper inventories (SHFE): 96.6K v 93.1K tons prior.

- (IT) Italy Feb Retail Sales M/M: 0.7% v 0.4%e; Y/Y: 4.3% v 8.4% prior.

- (CZ) Czech Mar Unemployment Rate: 3.4% v 3.5% prior.

- (RU) Russia Narrow Money Supply w/e Apr 1st (RUB): 14.89T v 15.34T prior.

- (TW) Taiwan Mar Trade Balance: $4.7B v $3.9Be; Exports Y/Y:21.3% v 22.4%e; Imports Y/Y: 20.3% v 24.3%e.

- (TW) Taiwan Mar CPI Y/Y: 3.3% v 2.9%e; CPI Core Y/Y: 2.5% v 1.9%e; WPI Y/Y: 13.9% v 11.5% prior.

- (RU) Russia Central Bank (CBR) cut the Key 1-Week Auction Rate by 300bps to 17.00% (intra-policy decision).

- (GR) Greece Mar CPI Y/Y: 8.9% v 7.2% prior; CPI EU Harmonized Y/Y: 8.0% v 6.3% prior.

- (GR) Greece Feb Industrial Production Y/Y: +4.8% v -0.5% prior.

- (HU) Hungary Mar YTD Budget Balance (HUF): -2.309T v -1.434T prior.

Fixed income issuance

- None seen.

Looking ahead

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

- 05:30 (ZA) South Africa Mar Sacci Business Confidence:

- 05:30 (IN) India to sell combined INR320B in 2026, 2028, 2035 and 2051 bonds.

- 05:30 (ZA) South Africa to sell combined ZAR1.2B in I/L 2033, 2038 and 2050 Bonds.

- 06:00 (PT) Portugal Feb Trade Balance: No est v -€1.9B prior.

- 06:00 (IE) Ireland Mar Live Register Monthly Change: No est v -1.4K prior; Live Register Level: No est v 162.8K prior.

- 06:00 (UK) DMO to sell £2.0B in 1-month, 3-month and 6-month bills (£0.5B, £0.5B and £1.0B respectively).

- 06:45 (US) Daily Libor Fixing.

- 07:00 (IN) India announces upcoming bill issuance (held on Wed).

- 07:15 (IT) ECB’s Panetta (Italy).

- 07:30 (IS) Iceland to sell 2024 and 2042 RIKB Bonds.

- 07:30 (IN) India Weekly Forex Reserve w/e Apr 1st: No est v $617.6B prior.

- 07:30 (GR) ECB's Stournaras (Greece) with members Makhlouf (Ireland) and Herodotou (Cyprus).

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

- 08:00 (UR) Ukraine Mar CPI M/M: No est v 1.6% prior; Y/Y: No est v 10.7% prior.

- 08:00 (IS) Iceland Mar Unemployment Rate: No est v 5.2% prior.

- 08:00 (CL) Chile Mar CPI M/M: 1.2%e v 0.3% prior; Y/Y: 8.7%e v 7.8% prior.

- 08:00 (BR) Brazil Mar IBGE Inflation IPCA M/M: 1.4%e v 1.0% prior; Y/Y: 11.0%e v 10.5% prior.

- 08:00 (SL) Sri Lanka Central Bank (CBSL) Interest Rate Decision: Expected to raise Key Rates by 100bps.

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

- 08:00 (IT) ECB's Panetta (Italy; dove):.

- 08:30 (CA) Canada Mar Net Change in Employment: +79.9Ke v +336.6K prior; Unemployment Rate: 5.4%e v 5.5% prior; Full Time Employment Change: +41.7Ke v +121.5K prior; Part Time Employment Change: +38.2Ke v +215.1K prior; Participation Rate: 65.4%e v 65.4% prior; Hourly Wage Rate Y/Y: 3.7%e v 3.3% prior.

- 09:00 (BR) Brazil Mar Vehicle Production: No est v 165.9K prior; Vehicle Sales: No est v 129.3K prior; Vehicle Exports: No est v 41.5K prior.

- 10:00 (US) Feb Final Wholesale Inventories M/M: 2.1%e v 2.1% prelim; Wholesale Trade Sales M/M: 0.8%e v 4.0% prior.

- 12:00 (RU) Russia Mar CPI M/M: 7.8%e v 1.2% prior; Y/Y: 16.9%e v 9.2% prior.

- 12:00 (RU) Russia Mar Core CPI M/M: 8.3%e v 1.0% prior; Y/Y: 17.3%e v 9.7% prior.

- 12:00 (RU) Russia Q4 GDP Y/Y: 4.7%e v 4.3% prior; 2021 Annual GDP (final) Y/Y: No est v 4.7% prelim.

- 12:00 (US) USDA World Agricultural Supply and Demand Estimates (WASDE) Crop Report.

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

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