Ukraine meets all conditions for IMF loan

EU Market Update: Q1 results continue positively, EU excess liquidity falls; Ukraine meets all conditions for IMF loan

Notes/Observations

- Euro Area excess liquidity falls below €100B; first time since 2011

- German IFO Survey was mixed but Business Climate beat expectations and rose MoM (111.2 v 110.4e); data provides fuel for ECB hawks to defend stance against additional stimulus

- ECB's Draghi reiterated his post rate press conference remarks at a banking conference in Amsterdam

- AstraZeneca Reports Q1 Core $1.17 v $1.21e, R$6.42B v $6.37Be; notes a strong pipeline

- Heineken reported Q1 rev lower y/y; organic beer volume and rev growth were higher y/y

- Unilever reported Q1 Rev in line at €11.4B, raised dividend 6%; homecare segment saw largest growth, a regions reported growth, Europe showing the smallest

- (CN) China State Economist Fan: Growth facing downward pressure; looking for new ways to stabilize growth

- National Bank of Greece is testing investor demand for 5-year senior bond; guidance seen at mid-to-high 4% range - press

- (FR) France Fin Min: Increasing exports is more important currently that raising domestic demand

- (CH) Swiss National Bank (SNB)'s Danthine: High mortgage lending puts economy in danger zone

- (UR) Ukraine Central bank: Have met all conditions for IMF loan

- (NZ) New Zealand Central Bank (RBNZ) again raises its Official Cash Rate by 25bps to 3.00%

Equities

- Market Focal Points/Key Themes: Equity markets opened higher following the losses seen on Wed, Shares of Alstom and Telekom Austria supported by takeover speculation, Spanish banks report declines in Q1 bad loan ratios (Sabadell, CaixaBank), Apple results support chipmakers.

- Indices: Stoxx50 +0.7%, FTSE 100 +0.6% at 6,711, DAX +0.7% at 9,611, CAC-40 +0.9% at 4,489, IBEX-35 +0.7% at 10,499, FTSE MIB +1.1% at 21,910, SMI flat at 8,445, S&P 500 Futures +0.4% at 1,880]

By Sector

- Consumer Discretionary [Unilever UNA.NL -1% (Q1 sales in line)]

- Industrials [Alstom ALO.FR +12% (M&A speculation), Technip TEC.FR +6% (reaffirmed outlook), Schneider Electric SU.FR +5% (Q1 sales above ests), Bouygues EN.FR +4% (tracking gains in Alstom), Wartsila WRT1V.FI +3% (Q1 results above ests), Chemring CHG.UK +3.5% (asset sale); Sacyr SYV.ES -2% (priced capital raise)

- Telecom [Telekom Austria TKA.AT +6.5% (agreement with America Movil), Mobistar MOBB.BE +4.5% (Q1 results above ests)]

- Basic Resources/Materials [Air Liquide AI.FR +2.5% (reaffirmed targets), Anglo American AAL.UK +2.5% (Q1 copper production +18%)]

- Healthcare [AstraZeneca AZN.UK +3% (reaffirmed outlook, declined comment on M&A speculation), Novozymes NZYMB.DK +3% (Q1 results above ests), Novartis NOVN.CH -0.8% (Q1 results in line)]

- Financials [Sabadell SAB.ES +4% (Q1 bad loan ratio declined)]

- Utilities [Suez Environmental SEV.FR -1.5% (Q1 profits declined y/y)]

- Stoxx50 sectors [Basic Materials +2%, Industrials +1.1%, Energy +1%, Financials +0.9%, Telecom +0.8%, Technology +0.7%, Consumer Cyclical +0.2%; Utilities -0.3%, Consumer Non-Cyclical -0.1%]

Currencies/Fixed Income

- FX markets continued to be locked within tight ranges. Dealers noted that ECB speakers would provide another opportunity to clarify the central bank's stance on QE. The slightly better German IFO Business climate provided fuel for ECB hawks to defend stance against additional stimulus. EUR/USD holding at 1.3830 ahead of the US morning. Key resistance still seen at 1.3870 area. A sustained move above that opens the door to test the psychological 1.40 handle

- USD/CNY currency pair traded above 6.25 (first time since 2012)

Economic Data

- (CH) Swiss Mar Trade Balance (CHF): 2.1B v 2.3B prior; Real Exports M/M: -1.2% v -1.9% prior; Real Imports M/M: -4.5% v -0.7% prior

- (FI) Finland Mar PPI M/M: -0.5% v 0.1% prior; Y/Y: No est v -2.3% prior

- (FI) Finland Mar Unemployment Rate: 9.5% v 9.3%e

- (FR) France Apr Business Confidence: 94 v 96e; Manufacturing Confidence: 100 v 100e; Production Outlook Indicator: -15 v -12e; Own-Company Production Outlook: 9 v 9 prior; Business Survey Overall Demand: +7 v +1 prior

- (CZ) Czech Apr Business Confidence: 9.9 v 10 prior; Consumer Confidence Index: -3.8 v -5.5 prior; Composite: 7.1 v 6.9 prior

- (EU) ECB €100M borrowed in overnight loan facility vs. €138.0M prior; €23.2B parked in deposit facility vs. €26.6B prior - Daily Eurosystem Liquidity Conditions

- (NL) Netherlands Feb Consumer Spending Y/Y: -1.2% v -1.7% prior

- (NL) Netherlands Apr Producer Confidence Index: 0.3 v 1.1 prior

- (DE) Germany Apr IFO Business Climate: 111.2 v 110.4e; Current Assessment: 115.3 v 115.6e; Expectations Survey: 107.3 v 105.8e

- (PL) Poland Mar Unemployment Rate: 13.5% v 13.6%e

- (PL) Poland Mar Retail Sales M/M: 12.5% v 15.3%e; Y/Y: 3.1% v 5.9%e

- (IT) Italy Mar Non-EU Trade Balance: €2.7B v €1.4B prior

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)

- 06:00 (UK) Apr CBI Industrial Reported Sales: 17e v 13 prior

- 06:00 (IE) Ireland Mar PPI M/M: No est v -0.2%e; Y/Y: No est v -1.7% prior

- 06:45 (US) Daily Libor Fixing

- 07:00 (RO) Romania to sell RON800M in Bills

- 07:00 (RO) Romania to sell RON500M in Bonds

- 07:00 (RU) Russia Gold and Forex Reserve w/e Apr 18th: No est v $ prior

- 07:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to leave Key Rates unchanged: Expected to leave Benchmark Repurchase Rate unchanged at 10.00%; Expected to leave Overnight Lending Rate unchanged at 12.00%; Expected to leave Overnight Borrowing Rate unchanged at 8.00%

- 07:30 (TR) Turkey Apr Real Sector Confidence: No est v 108.6 prior

- 07:30 (TR) Turkey Apr Capacity Utilization: No est v 73.1% prior

- 08:00 (CL) Chile Mar PPI M/M: No est v -0.3% prior

- 08:15 (US) Baltic Dry Bulk

- 08:30 (US) Mar Durable Goods Orders: 2.0%e v 2.2% prior; Durables Ex Transportation: 0.6%e v 0.1% prior (revised from 0.2%; Capital Goods Orders Non-defense/Ex-Aircraft: +1.5%e v -1.4% prior (revised from -1.3%); Capital Goods Shipments Non-defense/Ex-Aircraft: 1.0%e v 0.6% prior (revised from 0.5%); Ex Defense: No est v % prior

- 08:30 (US) Initial Jobless Claims: 315Ke v 304K prior; Continuing Claims: 2.75Me v 2.739M prior

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

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

- 11:00 (US) Apr Kansas City Fed Manufacturing Activity: 8e v 10 prior

- 11:00 (US) Treasury 2-year FRN-note announcement

- 11:00 (US) Fed to purchase $0.45-0.70B in Notes

- 11:00 (BR) Brazil to sell 2015, 2016 and 2018 Bills

- 12:15 (PT) ECB's Constancio (Portugal) in Madrid

- 13:00 (US) Treasury to sell $29B in 7-Year Notes