EU data barrage; focus whether ECB will add to its stimulus measures

Notes/Observations

- Binge of EU data showed coronavirus pandemic already had an impact on the regional economy; focus on ECB and whether the central bank will add to its stimulative measures

- EU inflation beat expectations but lower from month-ago level (France, Spain, Italy and Euro Zone)

- German Apr Net Unemployment surged by +373K to take its Unemployment Rate up to 5.8%; Italy Mar Unemployment defied logic and declined to 8.4% vs. 10.5%e

- France and Spanish GDP data registered larger-than-expected contractions for Q1

Asia:

- Japan Mar Preliminary Industrial Production M/M: -3.7% v -5.0%e; Y/Y: -5.2% v -7.4%e

- China Apr Manufacturing PMI (Govt Official): 50.8 v 51.0e

- RBA refrained from schedule bond buying operation (1st time)

Coronavirus:

- Global Total cases 3,193,961 (+2.5%); Total deaths: 227.6K (+4.8%)

Europe:

- UK PM Johnson to chair cabinet meeting and press conference on coronavirus on Thursday, Apr 30th Speculation he will remain cautious whether to lift lockdown measures

Americas:

- FOMC left Interest Rate Range unchanged between 0.00-0.25% range (as expected) in an unanimous vote (10-0): Target Interest Rate to remain unchanged until economy had weathered the recent events and was on track to achieve economic and inflation goals. Stressed that Fed was committed to use its full range of tools to support the economy.

- Fed Chair Powell post rate decision press conference noted that he expected the unemployment rate to surge into double digits at next month's data. Depth of downturn was uncertain and to depend on virus and policy response. Believe there would be a need to do more from both the fiscal and monetary policy side

- President Trump believed China's handling of Covid-19 crisis was proof they were trying him lose 2020 election

Mid-East/Energy:

- Norway Oil Min confirmed that it would cut oil production, cutting 250K bpd in June (Note: cut output by 13% for the 1st time in 18 years)

- IEA Chief Birol stated that OPEC+ needed to consider additional production cuts as global storage could be full by mid-June

- US Treasury Sec: White House looking into possibility of storing another several hundred million barrels of oil

 

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 -0.34% at 345.92, FTSE -0.24% at 6,100.80, DAX -0.21% at 11,083.98, CAC-40 +0.14% at 4,677.57, IBEX-35 -0.05% at 7,052.00, FTSE MIB -0.67% at 17,945.50, SMI -0.55% at 9,811.00, S&P 500 Futures +0.10%]

Market Focal Points/Key Themes: European indices open higher across the board, but moved lower in action attributed to poor earnings performance; consumer discretionary sector lead to the upside; lagging sectors include financials and energy; general risk-on environment after Gilead announced positive anti-covid medication study results; CEconomy approved for German government-backed financing'; Flutter expects to complete acquisition of TSG by next week; earnings expected in upcoming US session include Twitter, Dow Chemical, Cigna and Visa

 

Equities

- Consumer discretionary: Astrazeneca [AZN.UK] +2% (vaccine partnership), Sainsbury [SBRY.UK] -3% (earnings)

- Energy: Royal Dutch Shell [RDSA.NL] -5% (earnings; cuts dividend)

- Financials: Societe Generale [GLE.FR] -4% (earnings), Lloyds Banking Group [LLOY.UK] -2% (earnings), Swiss Re [SREN.CH] -3% (earnings)

- Healthcare: Astrazeneca [AZN.UK] +2% (vaccine partnership)

- Industrials: Safran [SAF.FR] +4% (sales), BASF [BAS.DE] -2% (earnings)

- Telecom: Nokia [NOKIA.FI] +3% (earnings), Orange [ORA.FR] +1% (earnings)

 

Speakers

- Italy PM Conte noted that Italy not free of pandemic yet and could not return to normality at this time. Believed a full and simultaneous reopening of the economy would risk a spike in contagion. Italy to pass €25B stimulus package and setting aside €15B to help companies

- Italy govt said to pass decree on use of apps on personal data. Covered the use of data on Covid-19 apps and the govt hoped to release the tracking app within the coming weeks

- Germany Public Health RKI Institute President Wieler stated was working on new rules to broaden virus testing. Estimated the R-number for speed of virus reproduction at 0.76

- Turkey Central Bank (CBRT) Gov Uysal Quarterly Inflation Report press conference stated that saw a marked slowdown in domestic economy in Q2. Lower commodity prices helped to offset the impact from the weak TRY currency (Lira). Saw an economic recovery in H2 following the coronavirus outbreak Turkey Central Bank (CBRT) Quarterly Inflation Report (QIR) cut its 2020 CPI from 8.2% to 7.4% while maintaining the 2021 CPI forecast at 5.4%

- Russia said to consider a money-printing mechanism to support its bond buying in order to help cover a growing budget deficit

- BOJ Gov Kuroda stated in parliament that it could announce a new lending facility before the next schedule policy decision in June

- Taiwan Central Bank Mar Minutes: If virus outbreak continued to spread then more rate cuts could occur. Did limited scope for future monetary policy action

- China Foreign Ministry spokesperson Geng Shuang stated that it stood ready to discuss fast-track entry with other nations (**Note: would not disclose which nations). South Korea must apply for fast-track entry. Had no interest in interfering in US elections; hoped some people don't China into the elections

- IEA Chief Birol stated that he saw only a gradual, slow recovery of oil demand. Saw production declines in US, Canada and North Sea and added that non-Opec+ oil cuts could match OPEC+ numbers

 

Currencies/Fixed Income

- EUR/USD saw its slight gains erode as various European GDP and unemployment data was released in the session. The parade of EU data showed coronavirus pandemic already was having an impact on the regional economy inflation, unemployment and growth. Focus turns to the ECB and whether the central bank would add to its firepower and add to its stimulative measures. Pair at 1.0870 by mid-session.

 

Economic Data

- (FR) France Q1 Preliminary GDP Q/Q: -5.8% v -4.0%e; Y/Y: -5.4% v -3.6%e

- (DE) Germany Mar Retail Sales M/M: -5.6% v -8.0%e; Y/Y: -2.8% v -4.8%e

- (NO) Norway Mar Credit Indicator Growth Y/Y: 4.7%v 4.9% prior

- (RU) Russia Apr PMI Manufacturing: 31.3 v 40.5e (12th straight contraction)

- (FI) Finland Feb Final Trade Balance: -€0.8B v -€0.8B prelim

- (ZA) South Africa Mar M3 Money Supply Y/Y: 9.5% v 7.5%e; Private Sector Credit Y/Y: 7.8% v 4.0%e

- (DK) Denmark Mar Unemployment Rate (Seasonally Adj): 3.6% v 3.1% prior; Gross Unemployment Rate: 4.1% v 3.7% prior

- (CH) Swiss Mar Real Retail Sales Y/Y: -5.6% v +0.3% prior

- (FR) France Apr Preliminary CPI M/M: +0.1% v -0.2%e; Y/Y: 0.4% v 0.2%e

- (FR) France Apr Preliminary CPI EU Harmonized M/M: +0.1% v -0.3%e; Y/Y: 0.5% v 0.1%e

- (FR) France Mar PPI M/M: -1.7% v -0.9% prior; Y/Y: -2.7% v -1.2% prior

- (FR) France Mar Consumer Spending M/M: -17.9% v -5.8%e; Y/Y: -18.1% v -6.0%e

- (ES) Spain Q1 Preliminary GDP Q/Q: -5.2% v -4.3%e; Y/Y: -4.1% v -3.2%e

- (ES) Spain Apr Preliminary CPI M/M: 0.3% v 0.2%e; Y/Y: -0.7% v -0.6%e

- (ES) Spain Apr Preliminary CPI EU Harmonized M/M: 0.4% v 0.2%e; Y/Y: -0.6% v -0.8%e

- (CH) Swiss Apr KOF Leading Indicator: 63.5 v 63.5e

- (AT) Austria Q1 Preliminary GDP Q/Q: -2.5% v +0.2% prior; Y/Y: -2.7% v +1.0%

- (AT) Austria Mar PPI M/M: -0.9% v -0.4% prior; Y/Y: -1.5% v -0.7% prior

- (TR) Turkey Mar Trade Balance: -$5.4B v -$5.4Be

- (HU) Hungary Feb Final Trade Balance: €1.1B v €1.1B prelim

- (HU)) Hungary Feb Average Gross Wages Y/Y: 0.1% v 8.5%e

- (CN) Weekly Shanghai copper inventories (SHFE): 231.0K v 259.0K tons prior

- (TH) Thailand Mar Current Account Balance: $0.7B v $2.4Be; Overall Balance of Payment (BOP): $B v -$0.6B prior; Trade Account balance: $2.3B v $5.4B prior; Exports Y/Y: -2.2% v 3.6% prior; Imports Y/Y: +4.4% v -7.8% prior

- (DE) Germany Apr Net Unemployment Change: +373.0K v +74.5Ke; Unemployment Claims Rate: 5.8% v 5.2%e

- (TW) Taiwan Q1 Preliminary GDP Y/Y: 1.5% v 1.7%e - (IT) Italy Mar Preliminary Unemployment Rate: 8.4% v 10.5%e

- (NO) Norway Central Bank (Norges) May Daily FX Purchases (NOK): -2.1B v -2.0B prior

- (PL) Poland Apr Preliminary CPI M/M: % v -0.1%e; Y/Y: % v 3.4%e

- (CZ) Czech Mar M2 Money Supply Y/Y: % v 7.9% prior

- (ES) Spain Feb Current Account Balance: +€1.3B v -€1.7B prior

- (PT) Portugal Apr Preliminary CPI M/M: 0.6% v 1.4% prior; Y/Y: 0.1% v 0.0% prior

- (PT) Portugal Apr Preliminary CPI EU Harmonized M/M: 1.0% v 1.6% prior; Y/Y: 0.1% v 0.1% prior

- (EU) Euro Zone Q1 Advance GDP Q/Q: -3.8% v -3.8%e; Y/Y: -3.3% v -3.4%e

- (EU) Euro Zone Apr Advance CPI Estimate Y/Y: 0.4% v 0.1%e; CPI Core Y/Y: 0.9% v 0.7%e

- (EU) Euro Zone Mar Unemployment Rate: 7.4% v 7.8%e

- (IT) Italy Apr Preliminary CPI M/M: 0.0% v -0.3%e; Y/Y: +0.1% v -0.3%e

- (IT) Italy Apr Preliminary CPI EU Harmonized M/M: 0.5% v 0.0%e; Y/Y: 0.0% v -0.3%e

- (GR) Greece Feb Retail Sales Value Y/Y: 3.5% v 6.2% prior; Retail Sales Volume Y/Y: 4.7% v 7.8% prior

- (BE) Belgium Mar Unemployment Rate: 5.3% v 5.2% prior

Fixed Income Issuance

- (IN) India sold total INR230B vs. INR190B indicated in 2024, 2033 and 2050 bonds

 

Looking Ahead

- 05:30 (SL) Sri Lanka Apr CPI Y/Y: 5.1%e v 5.4% prior

- 06:00 (IT) Italy Q1 GDP Q/Q: -5.4%e v -0.3% prior; Y/Y: -5.4%e v +0.1% prior

- 06:00 (PT) Portugal Mar Industrial Production M/M: No est v -2.8% prior; Y/Y: No est v 1.0% prior

- 06:00 (IE) Ireland Mar Retail Sales Volume M/M: No est v -4.3% prior; Y/Y: No est v -0.3% prior

- 06:00 (IL) Israel Mar Unemployment Rate: No est v 3.4% prior

- 06:00 (CZ) Czech Republic to sell 12-month bills

- 06:45 (US) Daily Libor Fixing

- 07:00 (MX) Mexico Q1 Preliminary GDP Q/Q: -1.5%e v -0.1% prior; Y/Y: -2.0%e v -0.5% prior

- 07:00 (MX) Mexico Feb Gold Production: No est v 6.6K kilograms prior; Silver Production: No est v 297.8K prior; Copper Production: No est v K prior

- 07:30 (IN) India Mar Eight Infrastructure (Key) Industries: No est v 5.5% prior

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

- 07:45 (EU) ECB Interest Rate Decision: Expected to leave the Main 7-Day Refinancing Rate unchanged at 0.00%; Leave Marginal Lending Facility at 0.25%; Leave Deposit Facility Rate unchanged at -0.50%

- 07:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (3-7 years)

- 08:00 (BR) Brazil Mar National Unemployment Rate: 12.5%e v 11.6% prior

- 08:00 (BR) Brazil Mar PPI Manufacturing M/M: No est v 0.5% prior; Y/Y: No est v 5.7% prior

- 08:00 (ZA) South Africa Mar Trade Balance (ZAR): 9.5Be v 14.2B prior

- 08:00 (ZA) South Africa Mar Monthly Budget Balance (ZAR): -22.0Be v +2.2B prior

- 08:00 (NO) Norway Apr Unemployment Rate: No est v 10.7% prior

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

- 08:30 (US) Mar Personal Income: -1.5%e v +0.6% prior; Personal Spending: -5.0%e v +0.2% prior; Real Personal Spending (PCE): -5.7%e v +0.1% prior

- 08:30 (US) Mar PCE Deflator M/M: -0.3%e v +0.1 % prior; Y/Y: 1.3%e v 1.8% prior

- 08:30 (US) Mar PCE Core M/M: -0.1%e v +0.2% prior; Y/Y: 1.6%e v 1.8% prior

- 08:30 (US) Initial Jobless Claims: 3.50Me v 4.427M prior; Continuing Claims: 19.48Me v 15.976M prior

- 08:30 (US) Q1 Employment Cost Index: 0.6%e v 0.7% prior

- 08:30 (CA) Canada Feb GDP M/M: 0.2%e v 0.1% prior; Y/Y: 2.2%e v 1.8% prior

- 08:30 (CA) Canada Mar Industrial Product Price M/M: No est v -0.5% prior; Raw Materials Price Index M/M: No est v -4.7% prior

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

- 08:30 (EU) ECB chief Lagarde post rate decision press conference

- 08:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (7-20 years)

- 09:00 (RU) Russia Gold and Forex Reserve w/e Apr 24th: No est v $569.7B prior

- 09:00 (CL) Chile Mar Unemployment Rate: 8.5%e v 7.8% prior

- 09:00 (CL) Chile Mar Retail Sales Y/Y: -6.8%e v +4.5% prior; Commercial Activity Y/Y: No est v 3.9% prior

- 09:00 (CL) Chile Mar Industrial Production Y/Y: -3.6%e v +5.6% prior; Manufacturing Production Y/Y: -3.0%e v +3/7% prior; Total Copper Production: No est v 451.6K tons prior

- 09:45 (US) Apr Chicago Purchaser Managers (PMI): 37.7e v 47.8 prior

- 09:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (20+ years)

- 10:00 (MX) Mexico Mar Net Outstanding Loans (MXN): No est v 4.710T prior

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

- 11:00 (CO) Colombia Mar National Unemployment Rate: No est v 12.2% prior; Urban Unemployment Rate: 12.7%e v 11.5% prior

- 11:00 (CO) Colombia Mar Exports: $2.5Be v $3.0B

- 13:00 (BR) Brazil Mar Primary Budget Balance (BRL): -25.8Be v -20.9B prior; Nominal Budget Balance: -65.5Be v -49.4B prior; Net Debt to GDP Ratio: 53.3%e v 53.5% prior

- 15:00 (US) Mar Agricultural Prices Paid; Prices Received

- 15:00 (AR) Argentina Feb Wages M/M: No est v 6.0% prior

- (CO) Colombia Central Bank Interest Rate Decision: Expected to cut Overnight Lending Rate by 50bps to 3.25%

- (MX) Mexico Mar YTD Budget Balance (MXN): No est v B prior

- 18:00 (NZ) New Zealand Apr Consumer Confidence Index: No est v 106.3 prior

- 18:30 (AU) Australia Apr Performance of Manufacturing Index: No est v 53.7 prior

- 19:00 (AU) Australia Apr Final PMI Manufacturing: No est v 45.6 prelim

- 19:30 (JP) Japan Apr Tokyo CPI Y/Y: 0.2%e v 0.4% prior; CPI Ex-Fresh Food Y/Y: 0.1%e v 0.4% prior; CPI Ex-Fresh Food/ Energy Y/Y: 0.5%e v 0.7% prior

- 20:00 (AU) Australia Apr CoreLogic House Price Index M/M: No est v 0.7% prior

- 20:00 (KR) South Korea Apr Trade Balance: $1.0Be v $4.6B prior (revised from $5.0B); Exports Y/Y: -23.0%e v -0.7% prior (revised from -0.2%); Imports Y/Y: -14.5%e v +0.3% prior (revised from -0.3%)

- 20:01 (IE) Ireland Apr PMI Manufacturing: No est v 45.1 prior

- 20:30 (JP) Japan Apr Final PMI Manufacturing: No est v 43.7 prelim

- 21:30 (AU) Australia Q1 PPI Q/Q: No est v 0.3% prior; Y/Y: No est v 1.4% prior

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