Economic data picture continues to be constructive

Notes/Observations

- European Manufacturing PMI data continued to paint a brightening picture for the regional recovery; bond yields grinding higher.

- German Retail Sales data handily exceeds consensus.

- Potential QE tapering jitters ahead of Thursday’s BoE meeting.

- UK markets closed for holiday.

- Japan and China markets closed through Weds.

Asia

- Australia Apr Final PMI Manufacturing: 59.7 v 59.6 prelim (confirms 11th month of expansion and a record high).

Coronavirus

- Total global cases 152.5M (+1.6% vs. Fri); total deaths: 3.20M (+1.2% vs. Fri).

Europe

- ECB’s De Guindos (Spain) stated that he saw the regional economy at pre-pandemic level in one year. Could think about phasing out emergency stimulus once the economy picked up and 70% of adult population have been vaccinated.

- EU Trade Commissioner Dombrovskis expressed hope that EU and US could find a resolution to the Boeing/Airbus subsidies dispute.

- PM Johnson said to unveil planning reform and a new state aid regime to be outlined in the Queen's Speech on May 11th.

- PM Johnson said to be prepared to take the SNP to the Supreme Court in order the prevent the SNP unilaterally holding a 2nd ind referendum if they win in the Holyrood elections.

- Fitch affirmed Germany sovereign rating at AAA; outlook Stable.

- Canadian ratings agency DBRS affirmed Italy sovereign rating at BBB (high); trend Negative.

Americas

- Treasury Sec Yellen said President Biden proposed spending plans [infrastructure and families and education plans] will not fuel inflation, cites the spending plans will be phased in gradually over 10 years.

Energy

- National Security Advisor Sullivan stated that the US had yet to reach a deal with Iran (Note: Refutes Iranian reports that the US had reached agreement with Iran to remove economic sanctions).

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 +0.31% at 438.74, FTSE +0.12% at 6,969.81, DAX +0.59% at 15,226.10, CAC-40 +0.35% at 6,291.48, IBEX-35 +0.28% at 8,840.00, FTSE MIB +0.71% at 24,312.50, SMI +0.74% at 11,103.47, S&P 500 Futures +0.46%].

Market Focal Points/Key Themes: European indices open generally higher and stayed in the green as the session progressed; sectors trending to the upside include utilities and consumer discretionary; while energy and financials sectors among those underperforming; UK, Ireland, Greece, Poland and Russia among European bourses closed for holiday; crude prices weighing on energy sector; chipmakers supported following STMIcro results on Friday; KPN confirms rejected offer from EQT/Stonepeak; earnings expected in the upcoming US session include Avis Budget, Lowes, Nutrien and Merck.

Equities

- Healthcare: Siemens Healthineers [SHL.DE] +2% (earnings), GenSight [SIGHT.FR] +4% (trial results), DBV Technologies [DBC.FR] -4% (earnings).

Speakers

- EU said to have proposed to ease restrictions on non-essential travel to the region. To ease restrictions to reflect progress of vaccination campaigns and developments in the epidemiological situation worldwide.

- Iraq Oil Min Jabbar stated that OPEC+ agreement to ease production cuts to help keep oil prices within normal levels with prices staying around $65/barrel.

Currencies/ Fixed income

- USD held onto its recent gains as markets continued to look for clues on the global inflation outlook and policymakers' responses. Dealers noted that participation was thin as holidays took place in Japan, China and UK.

- EUR/USD held above the 1.20 level after some US income and spending data from last Friday aided the greenback. Fed's Kaplan (non-voter; hawkish) also provided some USD strength after he suggested that the Fed should start talking about tapering bond-buying soon. Euro Zone saw its continued stream of good economic numbers with the final PMI Manufacturing data releases.

- GBP/USD focus was on Thursday’s BOE rate decision. Markets pondering whether BOE would follow Bank of Canada’s move into tapering.

- Euro Zone government bond yields continued to grind higher aided by a brightening economic outlook in the region.

Economic data

- (DE) Germany Mar Retail Sales M/M: 7.7% v 3.0%e; Y/Y: +11.0% v -0.2%e.

- (AU) Australia Apr Commodity Index: 116.1 v 112.4 prior.

- (SE) Sweden Apr PMI Manufacturing: 69.1 v 63.7 prior (11th month of expansion).

- (NL) Netherlands Apr Manufacturing PMI: 67.2 v 64.7 prior (9th straight expansion).

- (HU) Hungary Apr Manufacturing PMI: 50.8 v 51.0e (1st expansion in 3 months).

- (TR) Turkey Apr PMI Manufacturing: 50.4 v 52.6 prior (11th month of expansion).

- (TR) Turkey Apr CPI M/M: 1.7% v 1.8%e; Y/Y: 17.1% v 17.3%e; CPI Core Index Y/Y:17.8 % v 18.4%e.

- (TR) Turkey Apr PPI M/M: 4.3% v 3.5%e; Y/Y: 35.2% v 33.1%e.

- (ES) Spain Apr Manufacturing PMI: 57.7 v 59.0e (3rd month of expansion).

- (CH) Swiss Apr PMI Manufacturing: 69.5 v 66.5e (9th straight expansion).

- (CZ) Czech Republic Apr PMI Manufacturing: 58.9 v 59.0e (8th straight expansion and highest since Jan 2018).

- (IT) Italy Apr Manufacturing PMI: 60,7 v 61.0e (10th month of expansion and record high).

- (FR) France Apr Final Manufacturing PMI: 58.9 v 59.2e (confirmed 5th month of expansion).

- (DE) Germany Apr Final Manufacturing PMI: 66.2 v 66.4e (confirmed 10th month of expansion).

- (EU) Euro Zone Apr Final Manufacturing PMI: # v 63.3e (confirmed 10th month of expansion and record high).

- (NO) Norway Apr PMI Manufacturing: 59.1 v 60.5 prior (8th month of expansion).

- (CH) Swiss weekly Total Sight Deposits (CHF): 701.4B v 701.7B prior; Domestic Sight Deposits: 634.0B v 633.3B prior.

- (BR) Brazil Apr FIPE CPI (Sao Paulo) M/M: 0.4% v 0.4%e.

- (HK) Hong Kong Q1 Advance GDP Q/Q: 5.3% v 0.7%e; Y/Y: 7.8% v 3.6%e 72.0 v 67.6 prior (2nd straight expansion).

- (ZA) South Africa Apr Manufacturing PMI: 56.2 v 57.4 prior (12th month of expansion).

Fixed income issuance

- None seen.

Looking ahead

- (US Apr Total Vehicle Sales data in session.

- 05:20 (EU) Daily ECB Liquidity Stats.

- 05:30 (DE) Germany to sell combined €6.0B in 3-month and 9-month Bubills.

- Sells €B vs. €3.0B indicated in 3-month BuBills; Avg Yield: % v -0.6372% prior; Bid-to-cover: x v 2.07x prior (Apr 6th 2021).

- Sells €B vs. €3.0B indicated in 9-month BuBills; Avg Yield: % v -0.6472% prior; Bid-to-cover: x v 1.55x prior (Apr 6th 2021).

- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €2.0-4.0B in 3-month and 6-month bills.

- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).

Bonds

- 06:00 (IL) Israel to sell bonds.

- 06:00 (RO) Romania to sell Bonds; Avg Yield: % v % prior; bid-to-cover: x v x prior.

- 06:45 (US) Daily Libor Fixing.

- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 08:00 (CZ) Czech Apr Budget Balance (CZK): No est v -125.2B prior.

- 08:00 (UK) No Daily Baltic Dry Bulk Index (UK holiday).

- (ZA) South Africa Apr Naamsa Vehicle Sales Y/Y: No est v 31.8% prior.

- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).

- 08:00 (ES) Spain Debt Agency (Tesoro) announces size of issuance for upcoming auctions (bills and bonds).

- 08:30 (CA) Canada Mar MLI Leading Indicator M/M: No est v 0.2% prior.

- 08:30 (CL) Chile Mar Economic Activity Index (Monthly GDP) M/M: -1.0%e v +0.9% prior; Y/YU: 4.3%e v 2.2% prior.

- 09:00 (FR) France Debt Agency (AFT) to sell €5.4-6.6B in 3-month, 6-month and 12-month bills.

- Sells €B vs. €2.8B indicated in 3-month bills; Avg Yield: % v -0.627% prior; Bid-to-cover: x v 3.31x prior.

- Sells €B vs. €1.7B indicated in 6-month bills; Avg Yield: % v -0.629% prior; bid-to-cover: x v 4.29x prior.

- Sells €B vs. €2.1B indicated in 12-month bills; Avg Yield: % v -0.623% prior; Bid-to-cover: x v 3.47x prior.

- 09:00 (SG) Singapore Apr Purchasing Managers Index (PMI): 50.9e v 50.8 prior; Electronics Sector Index: No est v 50.6 prior..

- 09:00 (BR) Brazil Apr PMI Manufacturing: No est v 52.8 prior.

- 09:30 (CA) Canada Apr Manufacturing PMI: No est v 58.5 prior.

- 09:45 (US) Apr Markit Final Manufacturing PMI: 60.7e v 60.6 prelim.

- 09:45 (EU) ECB weekly QE bond buying update.

- 10:00 (US) Apr ISM Manufacturing: 65.0e v 64.7 prior; Prices Paid: 86.1e v 85.6 prior.

- 10:00 (US) Mar Construction Spending M/M: +1.7%e v -0.8% prior.

- 10:00 (MX) Mexico Mar Total Remittances: $3.8Be v $3.2B prior.

- 10:00 (MX) Mexico Central Bank Economist Survey.

-10:30 (MX) Mexico Apr PMI Manufacturing: No est v 45.6 prior.

- 11:00 (DK) Denmark Apr Foreign Reserves (DKK): No est v 446.5B prior.

- 11:00 (CO) Colombia Apr PMI Manufacturing: No est v 52.4 prior.

- (NZ) New Zealand Apr CoreLogic House Prices Y/Y: No est v 16.1% prior.

- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.

- 12:00 (IT) Italy Apr New Car Registrations Y/Y: No est v 497.2% prior.

- 13:00 (MX) Mexico Apr IMEF Manufacturing Index: 51.1e v 50.7 prior; Non-Manufacturing Index: 53.0e v 52.8 prior.

- 14:00 (BR) Brazil Apr Trade Balance: $11.4Be v $15B prior; Total Exports: $27.0Be v $24.5B prior; Total Imports: $15.6Be v $23.0B prior.

- (IT) Italy Apr Budget Balance: No est v -€26.8B prior.

- (AR) Argentina Apr Government Tax Revenue (ARS): No est v 763.9B prior.

- 16:00 (US) Weekly Crop Progress Report.

- 18:00 (CO) Colombia Central Bank Apr Minutes.

- 19:00 (KR) South Korea Apr CPI M/M: 0.0%e v 0.1% prior; Y/Y: 2.1%e v 1.5% prior; CPI Core Y/Y: 1.2%e v 1.0% prior.

- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 112.4 prior.

- 20:01 (IE) Ireland Apr PMI Manufacturing: No est v 57.1 prior.

- 20:30 (VN) Vietnam Apr PMI Manufacturing: No est v 53.6 prior.

- 21:30 (AU) Australia Mar Trade Balance: A$8.3Be v A$7.5B prior; Exports M/M: +4%e v -1% prior; Imports M/M: +9%e v +5% prior.

- 23:30 (HK) Hong Kong to sell 3-month and 6-month bills.

Tues

- 00:30 (AU) RBA Interest Rate Decision: Expected to leave Cash Rate Target unchanged at 0.10% and maintain 3-year Yield Target at 0.10%.