Notes/observations

-Central Banks double down on inflation focus despite fears of global banking stability with SNB, Norges, Taiwan and Philippines all hiking rates with hawkish tones; central bank demonstrate belief that banking crisis will be contained.

-Bank of England (BOE) expected to hike by 25bps later and likely with most hawkish comments out of all Central Banks today after UK CPI yesterday came in hotter than expected and remaining in double digits.

-US equity markets still recovering from selloff after US Treasury Sec Yellen comments that noted they are not considering insuring all uninsured deposits and not considering a broad increase in deposit insurance. EU banking sector underperforming so far in the session.

-Asia closed mixed with Hang Seng +2.2%. EU indices are mostly lower by -0.4% to -1.0%. US futures are +0.3-1.0%. Gold +1.5%, DXY -0.1%; Commodity: Brent -1.0%, WTI -1.1%, TTF +1.4%; Crypto: BTC -1.7%, ETH -2.0%.

Asia

- RBNZ Chief Economist Conway stressed that if inflation expectations did not fall, then would have to do more on interest rates.

- China’s Evergrande Real Estate confirmed proposed restructuring of offshore debt.

Europe

- ECB's Nagel (Germany) reiterated stance that if inflation developed as projected, further interest rate hikes had to follow in upcoming meetings. Did not see the need to do more to protect EU banks currently but had more in the toolbox if needed.

- UK Parliament voted in favor of 'Stormont Brake' mechanism within Windsor Framework; Amended Northern Ireland Protocol to remain valid (515 in favor, 29 opposed).

Americas

- FOMC raised the Target Range by 25bps to 4.75-5.00% (as expected). Committee anticipatesdthat some additional policy firming might be appropriate (removing reference to "ongoing increases"). US banking system was sound and resilient; Recent banking system developments could result in tighter credit conditions and weigh on economic activity and inflation.

- Fed projections showed there would be one more 25bps hike this year and 75 bps cuts in 2024.

- Fed Chair Powell Q&A psrt of the press conference noted that it did consider a pause at this meeting; Rate cuts this year was not its baseline expectation; Credit tightening could mean less work for rate policy.

- Treasury Sec Yellen testified that taxpayers would not bear the costs related to failed banks; US banking system was sound. Not considering a broad increase in deposit insurance.

- Brazil Central Bank (BCB) left the Selic Target Rate unchanged at 13.75% (as expected). Reiterated stance to weigh steady rates for sufficiently long period, won't hesitate to resume hikes if needed. Reiterated vows to remain vigilant on inflation.

- Bank of Canada (BOC) Mar Summary of Deliberations: All governing council agreed on pausing rates on a conditional basis.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.38% at 445.48, FTSE -0.57% at 7,523.40, DAX -0.20% at 15,186.35, CAC-40 -0.04% at 7,128.33, IBEX-35 -0.15% at 8,995.83, FTSE MIB -0.01% at 26,521.00, SMI -0.90% at 10,685.40, S&P 500 Futures +0.65%].

Market Focal Points/Key Themes: European indices opened lower across the board, but later turned around to trade mixed; better performing sectors include technology and materials; underperforming sectors include financials and health care; Cenkos confirms to be acquired by finnCap; focus on BOE interest rate decision later in the day; earnings expected in the upcoming US session include Accenture, Commercial Metals, Darden Restaurants and General Mills.

Equities

- Consumer discretionary: Ryanair [RYA.IE] -0.5% (talks with Boeing on potential order), PVA TePla [TPE.DE] +0.5% (reports final FY22), CTS Eventim [EVD.DE] -5.0% (reports final FY22).

- Financials: Cenkos Securities [CNKS.UK] +1.5% (to be acquired).

- Healthcare: Sanofi [SAN.FR] +4.5% (Dupixent Phase 3 trial meets primary and all key secondary endpoints), Zur Rose [ROSE.CH] +1.0% (reports FY22).

- Industrials: Meyer Burger Tecnhology [MBTN.CH] +11% (earnings).

- Technology: Prosus [PRX.NL] +4.5% (Tencent's rally; analyst action - raised to buy from hold at Investec), Siltronic [WAF.DE] -2.0% (analyst action - cut to hold at Jefferies).

- Materials: Stora Enso [STERV.FI] +3.5% (analyst action).

Speakers

- ECB's Muller (Estonia) stated that inflation was a bigger problem than the rise in borrowing costs.

- ECB's Stournaras (Greece) stated that it should make any pre-commitments on rates. Stressed that target was headline inflation and not core inflation. Inflation remained a problem hh.

- SNB Policy Statement reiterates stance that could not exclude more rate hikes in the future. It also reiterated stance that was prepared to intervene in currency-markets if needed. It saw stronger second-round inflation effects.

- SNB Quarterly Staff Projections raised the 2023 GDP growth forecast from 0.5% to 1.0. It raised the 2023 CPI from 2.4% to 2.6% and also raised the 2024 CPI outlook from 1.8% to 2.0% (takes it to target)

- SNB President Jordan post rate decision press conference reiterated view that could not rule out additional rate hikes or be active in FX markets. Measures taken by Federal govt, FINMA and SNB have put a halt to the financial crisis.

- Norway Central Bank Policy Statement noted that it would continue to hike rates with the next likely move seen in May. Stressed that if the NOK currency (Krone) proved weaker than projected or economy pressures persisted, a higher policy rate than projected would be needed to bring inflation down. Inflation was markedly above target.

- Norway Central Bank Staff Projections raised the 2023 Rate path from 3.0% to 3.3%, raised the 2024 Rate path from 2.9% to 3.5% and raised the 2025 Rate path from 2.5% to 3.2%. It raised the 2023 Underlying CPI (core) from 5.2% to 5.6% and also raised the 2024 Underlying CPI from 3.5% to 3.8%.

- Norway Central Bank Gov Bache post rate decision press conference noted that it had not yet seen full effects of rate hikes. Stressed that inflation was clearly above target.

- Germany Finance Ministry Q2 debt issuance maintained its planned quarterly issuance at €126B.

- Philippines Central Bank Policy Statement noted that further monetary policy action was deemed necessary and prepared to respond to address inflation risks. It noted that future moves to be data-dependent. Inflationary expectations increased slightly for 2023 with balance of risks to inflation tilted to the upside.

- China Commerce Ministry (MOFCOM) spokesperson Shu Jueting stated that US tariffs had seriously interfered with normal developments of bilateral trade. Stressed that US should lift all tariffs asap.

- Taiwan Central Bank Policy Statement reiterated stance to adjust monetary policy to maintain price and financial stability. It noted that the decision to hike was unanimous. H1 economic growth to slow due to exports and weak investment. To closely watch for possible impact from banking crisis in US and Europe.

Currencies/fixed income

- USD remained on soft footing in the aftermath of the FOMC rate decision. Overall the markets viewed the outcome as a ‘dovish’ hike with the language. Greenback responded to dropped language about "ongoing increases" being needed in favor of "some additional" hikes. Various analysts have lowered the terminal rate for the Fed to 5.00%.

- EUR/USD tested 7-week highs at 1.0930 before consolidating. ECB speak continued to be hawkish and suggesting a policy divergence to the ’dovish’ Fed outlook..

- CHF was a tad stronger after the SNB rate hike. And the reiteration of its forward guidance that could not exclude more rate hikes in the future.

Economic data

- (DK) Denmark Mar Consumer Confidence: -23.1 v -25.1 prior.

- (TR) Turkey Mar Consumer Confidence: 80.1 v 82.5 prior.

- (PH) Philippines Central Bank (BSP) raised the Overnight Borrowing rate by 25bps to 6.25% (as expected).

- (TW) Taiwan Feb Industrial Production Y/Y: -8.7% v -10.0%e.

- (ZA) South Africa Q1 BER Consumer Confidence: -23 v -8 prior.

- (TW) Taiwan Central Bank (CBC) raised the Benchmark Interest Rate by 12.5bps to 1.875%, not expected.

- (CH) Swiss National Bank (SNB) raised the Policy Rate by 50bps to 1.50% (as expected).

- (HK) Hong Kong Feb CPI Composite Y/Y: 1.7% v 2.4%e.

- (NO) Norway Central Bank (Norges) Interest Rate Decision: Expected to raise Deposit Rate by 25bps to 3.00%.

- (PL) Poland Feb Unemployment Rate: 5.5% v 5.5% prior.

Fixed income issuance

- (IN) India sold total INR390B vs. INR390B indicated in 3-month, 6-month and 12-month bills.

Looking ahead

- 06:00 (AT)) ECB's Holzmann (Austria).

- 06:00 (EU) Daily Euribor Fixing.

- 06:00 (SE) Sweden to sell I/L Bonds.

- 06:25 (EU) Daily ECB Liquidity Stats.

- 06:30 (HU) Hungary Debt Agency (AKK) to sell bonds.

- 06:55 (US) Daily Libor Fixing.

- 07:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to leave One-Week Repo Rate unchanged at 8.50%.

- 07:00 (RO) Romania to sell RON500M in 3.5% Nov 2025 Bonds.

- 08:00 (UK) Bank of England (BoE) Interest Rate Decision: Expected to raise Bank Rate by 25bps to 4.25%.

- 08:00 (UK) BOE Mar Minutes.

- 08:00 (MX) Mexico Jan Retail Sales M/M: 0.8%e v 0.1% prior; Y/Y: 3.1%e v 2.5% prior.

- 08:30 (US) Q4 Current Account Balance: -$213.2Be v -$217.1B prior.

- 08:30 (US) Feb Chicago Fed National Activity Index: 0.10e v 0.23 prior.

- 08:30 (US) Initial Jobless Claims: 198Ke v 192K prior; Continuing Claims: 1.69Me v 1.684M prior.

- 08:30 (US) Weekly USDA Net Export Sales.

- 09:00 (RU) Russia Gold and Forex Reserve w/e Mar 17th: No est v $573.3B prior.

- 09:00 (UK) Daily Baltic Dry Bulk Index.

- 10:00 (US) Feb New Home Sales: 650Ke v 670K prior.

- 10:30 (US) Weekly EIA Natural Gas Inventories.

- 11:00 (US) Mar Kansas City Fed Manufacturing Activity Index: -2e v 0 prior.

- 11:00 (EU) Euro Zone Mar Advance Consumer Confidence: -18.2e v -19.0 prior.

- 11:00 (UK) BOE’s Mann.

- 11:30 (US) Treasury to sell 4-Week and 8-Week Bill.

- 12:00 (IE) ECB’s Lane (Ireland, chief economist).

- 13:00 (US) Treasury to sell 10-Year TIPS Reopening.

- 15:00 (AR) Argentina Jan Supermarket Sales Y/Y: No est v -2.0% prior; Shop Center Sales Y/Y: No est v 2.2% prior.

- 18:00 (AU) Australia Mar Preliminary PMI Manufacturing: No est v 50.5 prior; PMI Services: No est v 50.7 prior; PMI Composite: No est v 50.6 prior.

- 19:30 (JP) Japan Feb National CPI Y/Y: 3.3%e v 4.3% prior; CPI Ex-Fresh Food (Core) Y/Y: 3.1%e v 4.2% prior; CPI Ex-Fresh Food/Energy (Core-Core) Y/Y: 3.4%e v 3.2% prior.

- 20:00 (AU) Australia to sell A$500M in 4.25% Apr 2026 bonds ; Avg Yield: % v 3.455% prior; bid-to-cover: x v 4.22x prior.

- 20:01 (UK) Mar GfK Consumer Confidence: No est v -38 prior.

- 20:30 (JP) Japan Mar Preliminary PMI Manufacturing: No est v 47.7 prior; PMI Services: No est v 54.0 prior; PMI Composite: No est v 51.1 prior.

- 21:30 (ES) ECB’s De Cos (Spain).

- 22:35 (CN) China to sell 7-year and 50-year Bond.

- 22:35 (CN) China to sell 3-month Bills.

- 23:30 (JP) Japan to sell 3-Month Bills.

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