Norway Central Bank and SNB both keeps policy steady in session

EU Mid-Market Update: Norway Central Bank and SNB both keeps policy steady in session; USD recovers its composure following 'dovish' FOMC

Notes/Observations

- Fed's dot plot shows gentler path of rate; to raise interest rates far more slowly than previously; USD manages to recoup some of its steep losses from late Wed

- SNB keeps policy steady (as expected) but to remain active to counter CHF currency strength if needed

- Norway Central Bank surprises and keeps policy steady, NOK currency soars in the aftermath for its best percentage gain in 7 years against EUR

Economic data

- (JP) Japan Feb Nationwide Dept Sales Y/Y: +1.1 v -2.8% prior (1st rise in 10 months); Tokyo Dept Store Sales Y/Y: 5.3 v 0.7% prior

- (CH) Swiss Feb Trade Balance (CHF): 2.5B v 3.4B prior; Real Exports M/M: -2.8% v +3.1% prior; Real Imports M/M: +3.1% v -0.3% prior

- (CH) Swiss National Bank (SNB) left its Sight Deposit Rate unchanged at -0.75% and maintained the 3-Month Libor Range between -1.25 to -0.25% (as expected)

- (NL) Netherlands Feb Unemployment Rate: 7.1% v 7.2% prior

- (NO) Norway Central Bank (Norges) left its Deposit Rates unchanged at 1.25% (not expected)

Fixed Income:

- None seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

**Equities**

Indices [Stoxx50 +0.1%, DAX flat at 11,921, FTSE 100 +0.4% at 6,972, CAC-40 +0.4% at 5,039, IBEX-35 +0.3% at 11,091, FTSE MIB +0.8% at 22,742, Athens Stock Exchange +0.8%, S&P 500 Futures -0.3% at 2,087]

- Market Focal Points/Key Themes: Equity markets open mixed following FOMC statement; Enel rises on better than expected dividend; Lanxess misses ests, announces job cuts; Siemens sees 'moderate' sales decline in Q2

By Sector

- Technology [PV Cyrstalox Solar PVCS.UK -11% (FY sales declined)]

- Consumer Discretionary [Next NXT.UK -3% (cautious outlook)]

- Stoxx50 Sectors [Utilities +1.9%, Energy +0.9% Basic Materials +0.7%, Technology +0.4%, Financials +0.1%, Telecom flat, Consumer Non-Cyclical flat; Consumer Cyclical -0.2%, Industrials -0.2%]

**Speakers**

- SNB statement reiterated that CHF currency rate remain high and overvalued; to remain active in FX markets if necessary; saw CHF weakening over time. Did not see inflation approaching 2% price stability threshold for entire forecast horizon.

- SNB President Jordan stated that there was no real alternatives to negative rates and would retain the current interest rate level for the time being. He reiterated that negative rates would help to weaken the CHF currency

- Norway Central Bank (Norges) stated that it saw 'prospects' for reduction in key policy rate following the surprise move to hold rates steady today. It forecasted 2018 CPI at 2%

- ECB Economic Bulletin: Asset purchase program has already eased financial conditions

- Swiss SECO Mar Economic Forecasts lowered its 2015 and 2016 growth and inflation outlook citing the stronger CHF currency

- German Chancellor Merkel reiterated her view in Parliament ahead of EU Leader Summit that had yet to overcome the EMU debt crisis. EU must implement structural reforms and did not see any final deal on Greece tonight or on Monday in Berlin. Would not lift sanctions on Russia until conditions of Minsk cease fire had been met

- Kuwait Oil Min Ali al-Omair stated that OPEC had no plans for an emergency meeting but was concerned about recent oil price decline as it impacted its budget

**Currencies***

- USD firmer in early Europe as it tries to regain its composure following the FOMC statement and press conference but 2-way price action risk back in the picture

- EUR/USD tested the 1.0650, lower by 1.3% since Asia's open. The USD had been broadly weaker late Wed with its price action attributed to short-covering following the FOMC press conference. Fed Chair Yellen appeared to show caution on the pace of rate increases despite the removal of 'patient' from its language. Fed economic projections showed a slower pace of future rate hikes. EUR/USD tested above 1.10 just after US equity markets closed on Wed

- The EUR/CHF probed lower in the 1.05 neighborhood after SNB kept its policy steady

- Norway Central Bank surprised and keeps policy steady which sent the NOK currency soaring higher in the aftermath for its best percentage gain in 7 years against EUR. The EUR/NOK fell from 8.92 to test under 8.65 as a result before consolidating

**Political/In the Papers:

- (EU) European leaders planning to hold meeting at the request of Greece PM Thursday evening following the summit - press; Merkel, Hollande, Tusk, Juncker, Dijsselbloem, and Tsipras all expected to meet

- (GR) Greek official: Greek bank outflow on Wednesday was far greater than on previous days - Greek press; Wednesday's flight estimated at €350-400M, 5x higher than previous days' avg, largest withdraw since Feb 20th Eurogroup agreement

- (GR) Greece Deputy PM: Greece has a liquidity problem; Needs cooperation from EU partners; A referendum not on the table at the moment

Looking Ahead

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

- (EU) EU Leaders begin 2-day Summit in Brussels

- (PT) Portugal Jan Current Account Balance: No est v €0.1B prior

- 05:50 (FR) France Debt Agency (AFT) to sell combined €7.5-8.5B in 2018, 2020 and 2022 Oats

- 06:00 (EU) Euro Zone Q4 Labour Costs Y/Y: No est v 1.3% prior

- 06:00 (EU) Daily Euribor Fixing

- 06:00 (SE) Sweden to sell I/L Bonds

- 06:15 (EU) ECB Third Targeted Long-Term Refinancing Operation

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

- 06:30 (UK) DMO to sell £2.75B in new Sept 2% 2025 Gilts

- 06:30 (IE) Ireland Debt Agency (NTMA) to sell €500M in 6-month Bills

- 06:50 (FR) France Debt Agency (AFT) to sell combined €1.0-1.5B in 2018, 2019 and 2024 Oatei (Inflation-linked bonds)

- 07:00 (RO) Romania to sell 5.75% 2020 Bonds

- 07:00 (BR) Brazil Mar IGP-M Inflation (2nd Preview): 0.9%e v 0.2% prior

- 07:00 (RU) Russia Gold and Forex Reserve w/e Mar 13th: No est v $356.7B prior

- 07:30 (EU) EU Conservatives Hold Pre-Summit Meeting

- 07:45 (US) Daily Libor Fixing

- 08:30 (US) Initial Jobless Claims: 293Ke v 289K prior; Continuing Claims: 2.40Me v 2.418M prior

- 08:30 (US) Q4 Current Account: -$104.1Be v -$100.3B prior

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

- 09:00 (PL) Poland Central Bank (NBP) March Minutes

- 09:00 (RU) Russia Feb Unemployment Rate: 5.7%e v 5.5% prior

- 09:00 (RU) Russia Feb Real Retail Sales M/M: -2.0%e v -33.6% prior; Y/Y: -5.8%e v -4.4% prior

- 09:00 (RU) Russia Feb Real Disposable Income: -6.3%e v -0.8% prior; Real Wages Y/Y: -8.8%e v -8.0% prior

- 09:00 (RU) Russia Feb Investment In Productive Capacity Y/Y: -8.1%e v 6.3% prior

- 09:15 (US) Baltic Dry Bulk Index

- 09:50 (UK) BOE's Haldane in London

- 10:00 (US) Mar Philadelphia Fed Business Outlook: 7.0e v 5.2 prior

- 10:00 (US) Feb Leading Index: 0.2%e v 0.2% prior

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

- 11:00 (US) Fed's Tarullo (dovish, FOMC voter) testifies in Senate

- 11:00 (US) Treasury announcement on upcoming issuance

- 11:15 (BR) Brazil to sell 2015, 2017 and 2019 Bills

- 11:15 (BR) Brazil to Sell Fixed-rate 2021 and 2025 bonds -F

- 13:00 (US) Treasury to sell 10-Year TIPS Reopening

- 17:00 (CL) Chile Central Bank Interest Rate Decision: Expected to leave Overnight Rate Target unchanged at 3.00%

- 19:50 (JP) Bank of Japan (BOJ) Feb. 17-18 meeting minutes

- 22:10 (AU) RBA Governor Stevens Speech in Melbourne

- 23:30 (HK) Hong Kong to sell 3-Year and 5-Year Notes