The remaining policy rates were left unchanged

Market movers today

• Today’s calendar is fairly light in terms of data releases. In the US University of Michigan consumer confidence for April is due for release. We expect it to have declined to 78.5 from 80.0 in March, whereas consensus is for a small increase to 83.0.

• In the euro-area a big 3Y LTRO repayment could attract some attention after excess liquidity yesterday dropped below EUR100bn for the first time since 2011.

• Focus will also be on Q1 earnings reports with among others Ford Motors releasing earnings results today.

Selected market news

Tensions have been rising in eastern Ukraine and the crisis seems to constantly evolve. Yesterday, Russia's Defence Minister Sergei Shoigu said military exercises involving land and air forces had begun along the Ukrainian border as a response to the Ukraine military actions against the pro-Russian separatists in Slavyansk. Last night, US secretary of state John Kerry launched a verbal attack on Russia’s activities in eastern Ukraine and said that the world was ready with further sanctions if Moscow did not take steps to de-escalate a crisis. Despite the ongoing escalation of the crisis, there has been no significant market reaction so far. US equity markets closed with minor gains supported by a series of positive earnings surprises and the larger-than-expected increase in durable goods orders released yesterday.

Yesterday, Danmarks Nationalbank increased the rate on certificates of deposits by 15bp to 0.05% and thus ended the period of negative interest rates in Denmark. The remaining policy rates were left unchanged. Following the return to a positive rate on certificates of deposits, the current account ceiling was reduced to DKK38.5bn from DKK67.4bn. The move follows the recent weakening of the krone on the back of increased negative carry on short EUR/DKK positions, which the central bank at first hand has tried to curb through intervention in the FX market. The recent action by the central bank will likely be sufficient to bring back EUR/DKK to a more comfortable level closer to the central rate.

Last night, Fitch revised Italy's outlook to Stable from Negative and at the same time affirmed Italy's long-term ratings at 'BBB+'. The revision reflects a significant improvement in sovereign financing conditions since mid-2012. S&P affirmed France’s Aa/A-1+ ratings with a stable outlook.

Japan CPI excluding fresh food (the measure that Bank of Japan uses, which excludes the impact from the consumption tax hike in April) rose 1.3% y/y in March. We expect inflation to start declining slightly from May possibly dropping below 1% y/y again during the autumn. In our view, this will eventually force the Bank of Japan to ease again.