Corporate earnings in focus

Notes/Observations

- Risk appetite trying to find its groove as more promises from the China’s PBOC of monetary support for economy - Companies due to report during the NY morning include Archer-Daniels Midland, Arch Resources, Avery Dennison, Armstrong World Industries, Centene, D. R. Horton, Ecolab, GE, Corning, Graphic Packaging, JetBlue, 3M, MSCI, Northern Trust, PACCAR, PepsiCo, Polaris, Raytheon, Sherwin-Williams, Sensata Technologies, TransUnion, UPS, Valero Energy, Waste Management.

Asia

- South Korea Q1 Advance GDP (1st of 3 readings) Q/Q: 0.7% v 0.6%e; Y/Y: 3.1% v 2.9%e.

- Japan Mar Jobless Rate registered its lowest level since Apr 2020 (2.6% v 2.7%e).

- Japan Fin Min Suzuki reiterated that there was no truth to report of talks with US on joint FX intervention, rapid FX moves were not desirable. Watching FX moves including weak yen with vigilance. Important to secure ample forex reserves for FX intervention in the future.

- China PBOC stated that prudent monetary policy to increase economic support; China had huge economic growth potential and would increase support for economy via monetary policy.

- IMF official Gulde-Wolf stated that the Asian region faced a "stagflationary" outlook with economic growth being lower than previously expected and inflation being higher. Monetary tightening would be needed in most countries.

Russia/Ukraine

- Russia Foreign Min Lavrov stated that govt to continue contacts with Ukraine President Zelenskiy's team; The danger of nuclear war was serious, real, and should not be underestimated.

Europe

- Goldman Sachs analysts bring forward its 1st ECB rate hike expectation to July (from Sept prior).

Americas

- US Senator Manchin (D-WV) stated that supported ban on Russia uranium imports; explored possibility of energy and climate package with GOP.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 +0.89% at 449.06, FTSE +0.68% at 7,430.65, DAX +1.20% at 14,090.93, CAC-40 +0.83% at 6,503.06, IBEX-35 +0.75% at 8,638.73, FTSE MIB +0.71% at 24,078.00, SMI +0.63% at 12,160.80, S&P 500 Futures -0.15%].

Market Focal Points/Key Themes: European indices open higher across the board and stayed upbeat as the session progressed; sectors among those leading to the upside are materials and financials; laggard sectors include consumer discretionary and health care; oil & gas subsector supported after Brent bounced off $100/bbl; personal goods subsector underperforming after Kantar reported drop in UK grocery sales; Cyprus closed for holiday; earnings expected during the US session include 3M, Pepsico, General Electric and Michelin.

Equities

- Consumer discretionary: AB Foods [ABF.UK] -5% (trading update).

- Financials: UBS Group [UBSG.CH] +2% (earnings), HSBC [HSBA.UK] -3% (earnings), Santander [SAN.ES] -0.5% (earnings).

- Healthcare: Novartis [NOVN.CH] +1% (earnings).

- Industrials: Maersk [MAERSKB.DK] +6% (earnings), SSAB [SSABA.SE] +0.5% (earnings), Faurecia [EO.FR] -1.5% (earnings).

- Telecom: Orange [ORA.FR] +0.5% (earnings).

Speakers

- ECB's Kazaks (Latvia, hawk) stated the preferred the first rate hike to occur in July with 2-3 rate hikes being priced by markets as seen being quite reasonable.

- UK DMO raised its FY22/23 net financing requirement by £13.8B to £161.7B; to schedule 4 additional auctions.

- Japan PM Kishida stated that govt compiled relief package size at ¥13.2T to cushion blow from rising raw material costs.

- Japan Cabinet released details of ¥6.2T of the relief package. Noted that funding sources to include reserve funds and additional budget. The additional budget to provide ¥2.7T of funding and measures included raising gasoline price subsidy to ¥35.

- US Defense Sec Austin stated that NATO could can do more to help Ukraine defend itself.

- German Defense Min Lambrecht announced to increase support for Ukraine to €2B; Confirmed to send 50 Gepard tanks to Ukraine.

- Russia and Belarus forces to hold joint drills of air forces and anti-missile forces in Belarus.

- Transnistrian leadership said to soon take decisions for defense of Moldova's breakaway region of Transnistria interests.

Currencies/Fixed income

- USD continued its firm tone with dealers citing continued concerns over economic growth momentum slowdown.

- EUR/USD moved below the 1.07 level for fresh 2-year lows. Pair could not find any upside momentum despite speculation the ECB could hike rates as soon as July. Dealer continued to point that ECB to move much slower than the Fed in raising interest rates. Also dealers noted faces the EU faced a risk of high inflation combined with weaker economic growth, or stagflation.

Economic data

- (UK) Mar Public Finances (PSNCR): -£2.4B v +£2.3B prior; Net Borrowing: £17.3B v £19.2Be; PSNB (ex-banking groups): 18.1£B v £20.0Be; Central Government NCR: £18.7B v £1.6B prior.

- (CH) Swiss Mar Trade Balance (CHF): 3.0B v 6.0B prior; Real Exports M/M: -8.2% v +7.7% prior; Real Imports M/M: +1.2% v -0.9% prior; Watch Exports Y/Y: 11.8% v 24.5% prior.

- (ZA) South Africa Feb Leading Indicator: 127.2 v 127.3 prior.

- (HU) Hungary Feb Average Gross Wages Y/Y: 31.7% v 14.0%e.

- (TH) Thailand Mar Customs Trade Balance: +$1.5B v -$0.1Be; Exports Y/Y: 19.5% v 3.6%e; Imports Y/Y: 18.0% v 9.2%e.

- (PL) Poland Mar Unemployment Rate: 5.4% v 5.4%e.

Fixed income issuance

- (IT) Italy Debt Agency (Tesoro) sold €2.75B vs. €2.25-2.75B indicated range in 0.00% Nov 2023 BTP bonds; Avg Yield: 0.48% v 0.14% prior; bid-to-cover: 1.60x v 1.73x prior.

- (IT) Italy Debt Agency (Tesoro) sold €1.0B vs. €0.75-1.0B indicated range in 0.65% May 2026 I/L Bonds (BTPei); Real Yield: -1.52% v -1.18% prior; Bid-to-cover: 1.44x v 2.12x prior.

Looking ahead

- 05:15 (CH) Switzerland to sell 3-month Bills.

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

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).

- 05:30 (ZA) South Africa to sell combined ZAR3.9B in 2030, 2035 and 2044 bonds.

- 06:45 (US) Daily Libor Fixing.

- 07:00 (BR) Brazil Apr FGV Construction Costs M/M: No est v 0.7% prior.

- 07:00 (MX) Mexico Feb Retail Sales M/M: 0.8%e v 0.6% prior; Y/Y: 5.7%e v 6.7% prior.

- 07:30 (BR) Brazil Central Bank Weekly Economists Survey.

- 08:00 (HU) Hungary Central Bank ( MNB) Interest Rate Decision: Expected to raise Base Rate by 100bps to 5.40%.

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

- 08:15 (FR) ECB’s Villeroy (France).

- 08:30 (US) Mar Preliminary Durable Goods Orders: +1.0%e v -2.1% prior; Durables (ex-transportation): +0.6%e v -0.6% prior; Capital Goods Orders (non-defense/ex-aircraft): +0.4%e v -0.2% prior; Capital Goods Shipments (non-defense/ex-aircraft): 0.5%e v 0.3% prior.

- 08:30 (US) Mar Philadelphia Fed Non-Manufacturing Index: No est v 32.4 prior.

- 08:55 (US) Weekly Redbook LFL Sales data.

- 09:00 (US) Feb FHFA House Price Index M/M: 1.5%e v 1.6% prior.

- 09:00 (US) Feb S&P/Case-Shiller House Price Index (20-City) M/M: 1.50%e v 1.79% prior; Y/Y: 19.20%e v 19.10% prior.

- 09:00 (US) Feb S&P/Case-Shiller House Price Index (overall) YoY: No est v 18.84% prior 19.17% prior.

- 09:00 (EU) Weekly ECB Forex Reserves.

- 09:00 (EU) ECB weekly QE bond buying update.

- 09:00 (HU) Hungary Central Bank post rate decision statement.

- 10:00 (US) Apr Consumer Confidence: 108.2e v 107.2 prior.

- 10:00 (US) Apr Richmond Fed Manufacturing Index: 9e v 13 prior.

- 10:00 (US) Mar New Home Sales: 768Ke v 772K prior.

- 10:00 (MX) Mexico Weekly International Reserve data.

- 13:00 (US) Treasury to sell 2-Year Notes.

- 15:00 (AR) Argentina Feb Shop Center Sales Y/Y: No est v 22.7% prior; Supermarket Sales Y/Y: No est v 4.2% prior.

- 16:30 (US) Weekly API Oil Inventories.

- 17:00 (KR) South Korea Apr Consumer Confidence: No est v 103.2 prior.

- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 96.8 prior.

- 21:30 (CN) China Mar Industrial Profits Y/Y: No est v 4.2% prior.

- 21:30 (AU) Australia Q1 CPI Q/Q: 1.7%e v 1.3% prior.