Notes/Observations

- ECB to scrap self-imposed issuer limits used in its Pandemic Purchases Program and able to buy bonds with shorter maturities; thus having unlimited firepower to fight the economic fallout from the coronavirus

- Japan govt removes ‘recovery’ from its overall economic assessment for the 1st time in almost 7 years

- G20 leaders are expected to hold video conference later on Thursday (March 26th), Trump and Xi are expected to participate in the video conference

 

Asia:

- Singapore Q1 Advance GDP Q/Q: -10.6% v -8.2%e; Y/Y: -2.2% v -1.4%e
Bank of Korea (BOK): Planning weekly repo operations starting in April; the operations will last for 3-months; To provide an unlimited amount of liquidity through the operations; Today's measure can be called quantitative easing

- Bank of Korea (BOK): Planning weekly repo operations starting in April; the operations will last for 3-months; To provide an unlimited amount of liquidity through the operations; Today's measure can be called quantitative easing (QE)

 

Coronavirus:

- Global cumulative 471.8K (+11.5% d/d); cumulative deaths 21.3K (+12.6% d/d)

 

Europe:

- ECB said to be largely in favor of activating Outright Monetary Transactions (OMT) if necessary; saw Bundesbank unlikely to push back on use of OMT

- ECB's De Cos (Spain): ECB should be open to raising its self-imposed limits on bond purchases; called for Eurobonds as a means to mitigate corona crisis

- ECB clarified that self-imposed issuer limits used in QE will not apply to pandemic emergency purchase program (Reminder: On Mar 18th ECB announced its €750B Pandemic Purchase Program (PPP); to cover private and public sector securities and noted at that time it would consider revising QE limits to extent necessary)

 

Americas:

- US Senate unanimously voted (96-0) to pass the $2.0T coronavirus stimulus bill

- House Speaker Pelosi (D-CA): Optimistic stimulus bill would pass in the House; House Majority Leader Hoyer (D) stated that the House to vote on Friday via voice vote

- President Trump: Large sections of the US could re-open faster than others; Independent Contractors and Self Employed to be eligible for unemployment benefits; To sign relief package the moment it gets to his desk; Open to more stimulus if needed

 

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 -1.76% at 307.86, FTSE -2.44% at 9,664.00, DAX -2.13% at 9,664.00, CAC-40 -1.93% at 4,346.91, IBEX-35 -1.70% at 6,824.38, FTSE MIB -0.83% at 17,100.00, SMI -1.12% at 8,888.50, S&P 500 Futures -1.64%]

Market Focal Points/Key Themes: European indices open lower across the board; energy indices pulld down with crude; financial sector among worse performers; better performers include consumer discretionary; Moody’s downgrades banking system in France, Spain and Italy; FCA allows UK companies additional 2 months to report results; upcoming earnings expected in the US session include Canadian Solar and Signet

 

Equities

- Consumer discretionary: Casino [CO.FR] -4% (earnings), Intu Properties [INTU.UK] -9% (COVID-19 update)

- Industrials: Scout24 [G24.DE] -1% (earnings; to continue buyback)

 

Speakers

- G7 members said to be prepared to support Covid-19 vaccine development and spend several billion dollars on a vaccine

- ECB Economic Bulletin noted that the Council decided on a comprehensive package of monetary policy measures (**Reminder: On Mar 12th ECB left all key rates unchanged (as expected) and announced some new expansionary measure. Increased bond buying from €20B to €120B/month until end of 2020 and announced new LTRO-3 program with rate being 25bps below main refi rate; borrowing could be up to 50% of eligible loans)

- Hungary Fin Min Varga stated that If 2020 budget reserves were not sufficient then would be a mistake to maintain a budget deficit to GDP ratio of 3.0%

- Japan Cabinet Office (Govt) March Monthly Economic Report cut the overall economic assessment and no longer saw the domestic economy in recovery

- Japan gov said announces travel ban related to 18 countries

- BOJ's Adachi (new Board member) stated that did not see the need for any additional easing at this time; could do more if virus impact was bigger than expected . Could lose price momentum due to virus impact and did have room to deepen negative rates and room to buy JGBs and EFTs

- China Commerce Ministry (MOFCOM) spokesperson Gao Feng: To increase imports of farm goods and foods. External uncertainty was rising for Chinese exports

- India Fin Min Sitharaman: Stimulus package seen around INR1.7T and include cash transfer and food support

- Singapore govt said to allocate another SGD48B in second virus stimulus package with total stimulus now at SGD55B (approx 11% of GDP). Measures to increases 2020 budget deficit to GDP ratio from 2.1% to 7.9%

 

Currencies/ Fixed Income

- USD was softer against the major pairs as policy initiatives by central banks and governments seems to aid the liquidity concerns for the time being.

- USD/JPY was lower as some safe-haven flows returned into the yen as uncertainty about the virus still lingered. Several Far East countries took more steps in terms of restricting movement and travel bans to help curb the spread.

- EUR/USD higher by over 0.5% in the session. WEuro aided by the notion that the ECB will do whatever it took to save the region. Key observation was the ECB announcement to scrap self-imposed issuer limits used in its Pandemic Purchases Program and able to buy bonds with shorter maturities; thus having unlimited firepower to fight the economic fallout from the coronavirus

 

Economic Data

- (FI) Finland Feb Preliminary Retail Sales Volume Y/Y: 2.8% v 3.3% prior

- (FR) France Mar Business Confidence: 95 v 97e; Manufacturing Confidence: 98 v 93e; Production Outlook Indicator: -33 v 0 prior; Own-Company Production Outlook: -4 v +7 prior

- (UK) Feb Retail Sales (ex-auto/fuel) M/M: -0.5% v -0.2%e; Y/Y: 0.6% v 1.1%e

- (UK) Feb Retail Sales (including ex-auto/fuel) M/M: -0.3% v +0.2%e; Y/Y: 0.0% v 0.7%e

- (DE) Germany Apr GfK Consumer Confidence: 2.7 v 7.5e (lowest since May 2009)

- (DK) Denmark Feb Retail Sales M/M: 0.3% v 0.4% prior; Y/Y: 5.6% v 2.2% prior

- (ES) Spain Jan Total Mortgage Lending Y/Y: -1.9% v +16.8% prior; House Mortgage Approvals Y/Y: 6.1% v 43.0% prior

- (SE) Sweden Mar Consumer Confidence: 89.6 v 98.5 prior; Manufacturing Confidence: 100.7 v 104.4 prior; Economic Tendency Survey: 92.4 v 98.7 prior

- (SE) Sweden Feb Trade Balance (SEK): 13.2B v 11.8B prior

- (SE) Sweden Feb Household Lending Y/Y: 5.2% v 5.1% prior

- (HK) Hong Kong Feb Trade Balance (HKD): -38.6B v -50.0Be; Exports Y/Y: +4.3% v -20.0%e; Imports Y/Y: -0.1% v -15.0%e

- (EU) Euro Zone Feb M3 Money Supply Y/Y: 5.5% v 5.2%e

- (ZA) South Africa Feb PPI M/M: 0.4% v 0.3%e; Y/Y: 4.5% v 4.4%e

 

Fixed Income Issuance

- (AT) Austria Debt Agency (AFFA) opened its book to sell EUR-denominated 2023 and 2051 RAGB bonds via syndicate

- (LT) Latvia opened its book to sell EUR-denominated 0.375% Oct 2026 bonds; guidance seen +50bps to mid-swaps

 

Looking Ahead

- 06:00 (EU) Daily Euribor Fixing

- 06:00 (IT) Italy Debt Agency (Tesoro) to sell €2.25-2.75B in Nov 2021 CTZ

- 06:00 (IT) Italy Debt Agency (Tesoro) to sell €500-750M in 2.55% Sept 2041 BTPei

- 06:30 (HU) Hungary Debt Agency (AKK) to sell Bonds (3 tranches)

- 07:00 (BR) Brazil Mar FGV Construction Costs M/M: 0.3%e v 0.4% prior

- 07:00 (BR)) Brazil Central Bank (BCB) Quarterly Inflation Report (QIR)

- 07:30 (CL) Chile Central Bank bi-monthly Traders Survey

- 07:45 (US) Daily Libor Fixing

- 08:00 (UK) Bank of England (BOE) Interest Rate Decision: Expected to leave Interest Rate unchanged at 0.10% and maintain Asset Purchase Target (APT) £635B and maintain Corporate Bond Target at £10B

- 08:00 (CZ) Czech Central Bank (CNB) Interest Rate Decision: Expected to cut Repurchase Rate by 50bps to 1.25%

- 08:00 (MX) Mexico Jan IGAE Economic Activity Index (Monthly GDP) M/M: 0.2%e v 0.2% prior; Y/Y: -0.2%e v +0.7 % prior

- 08:00 (MX) Mexico Feb Unemployment Rate (Seasonally Adj): 3.7%e v 3.7% prior; Unemployment Rate NSA (unadj): 3.6%e v 3.8% prior

- 08:30 (US) Q4 Final GDP (3rd reading) Annualized Q/Q: 2.1%e v 2.1% prelim; Personal Consumption: 1.7%e v 1.7% prelim

- 08:30 (US) Q4 Final GDP Price Index: 1.3%e v 1.3% prelim; Core PCE Q/Q: 1.2%e v 1.2% prelim

- (US) Weekly Initial Jobless Claims: 1.5Me v 281K prior; Continuing Claims: 1.791Me v 1.701M prior

- 08:30 (US) Feb Advance Goods Trade Balance: -$63.4Be v -$65.9B prior (revised from -$65.5B)

- 08:30 (US) Feb Preliminary Wholesale Inventories M/M: -0.2%e v -0.4% prior; Retail Inventories M/M: -0.1%e v 0.0% prior

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

- 08:45 (UK) BOE to buy £1.0B in APF Gilt purchase operation (3-7 years)

- 09:00 (RU) Russia Gold and Forex Reserve w/e Mar 20th: No est v $581.0B prior

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

- 09:15 (CZ) Central Bank Gov Rusnok to hold post Rate Decision press conference

- 09:45 (UK) BOE to buy £1.0B in APF Gilt purchase operation (7-20 years)

- 10:00 (EU) EU Leaders video conference on coronavirus

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

- 10:45 (UK) BOE to buy £1.0B in APF Gilt purchase operation (20+ years)

- 11:00 (US) Mar Kansas City Fed Manufacturing Activity Index: -10e v +5 prior

- 11:30 (US) Treasury to sell 4-week and 8-week bills

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

- 13:00 (US) Treasury to sell 7-Year Notes

- 15:00 (AR) Argentina Q4 Unemployment Rate: No est v 9.7% prior

- 15:00 (AR) Argentina Q4 Current Account Balance: No est v -$1.1B prior

- 15:00 (AR) Argentina Feb Trade Balance: No est v $1.0B prior

- 17:00 (NZ) New Zealand Mar Consumer Confidence Index: No est v 122.1 prior

- 17:00 (KR) South Korea Mar Consumer Confidence: No est v 96.9 prior

- 19:30 (JP) Japan Mar Tokyo CPI Y/Y: 0.3%e v 0.4% prior; CPI (ex-fresh food) Y/Y: 0.45e v 0.5% prior; CPI (ex-fresh food/energy) Y/Y: 0.65e v 0.7% prior

- 21:30 (CN) China Feb Industrial Profits Y/Y: No est v -6.3% prior

- 23:00 (CN) China to sell 3-month Bills

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

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