Safe havens flows subside as markets review impact of Saudi-Yemen conflict

Notes/Observations

- Japan's Core CPI (ex-3% sales tax hike) edged towards deflation: 0.0% v 0.2% prior as decline in oil prices pushes down inflation; Nationwide CPI slowed to an 11-month low of 2.0% y/y

- Safe Havens flows subside as risk appetite finds some traction as markets review impact of Saudi-Yemen conflict

- France Consumer Confidence rise to best level since Nov 2010

Economic data

- (DE) Germany Feb Import Price Index (beat) M/M: 1.4% v 0.5%e; Y/Y: -3.0% v -3.9%e

- (UK) Mar Nationwide House Prices (miss) M/M: 0.1% v 0.2%e; Y/Y: 5.1% v 5.3%e

- (FI) Finland Mar Consumer Confidence Index: 11.3 v 11.5e; Business Confidence: -7 v -8 prior

- (FR) France Mar Consumer Confidence (inline): 93 v 93e (highest since Nov 2010)

- (HU) Hungary Feb Unemployment Rate: 7.7% v 7.4%e

- (SE) Sweden Feb Retail Sales M/M: 0.2% v 0.3%e; Y/Y: 4.8% v 3.6%e

- (NO) Norway Feb Credit Indicator Growth Y/Y: 5.4% v 5.5%e

- (NO) Norway Feb Retail Sales W/Auto Fuel M/M: 0.9% v 0.5%e

- (NO) Norway Mar Unemployment Rate: 3.0% v 3.0%e

- (IT) Italy Jan Industrial Orders M/M: -3.6% v +4.5% prior; Y/Y: -5.5% v +5.8% prior

- (IT) Italy Jan Industrial Sales M/M: -1.6% v +1.4% prior; Y/Y: -2.5% v +0.9% prior

Fixed Income:

- (ZA) South Africa sold total ZAR250M in I/L 2025, 2038 and 2050 Bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

**Equities**

Indices [Stoxx50 +0.2% at 3,678, FTSE 100 Index -0.1% at 6,886, DAX +0.3% at 11,876, CAC-40 +0.4% at 5,027, IBEX-35 +0.2%% at 11,480, FTSE MIB +0.3% at 22,958, SMI +0.5% at 9,124, Athens Stock Exchange -0.2% at 485.33, S&P 500 Futures -0.1% at 2,046.70]

- Market Focal Points/Key Themes: Tensions in the Middle East following Saudi continued air strikes in Yemen continue to hold market attention; Markets rebound from two days of losses, oil trims gains; Novo Nordisk moves higher after deciding to resubmit NDA for Tresiba, pushed down Sanofi shares at the open.

By Sector

-Consumer Discretionary [Swatch UHR.CH +2.3% (CEO comments)]

-Industrials [Polymetal International POLY.UK -0.8% (reserves update), Kion KGX.DE +3.5% (share placement)]

-Healthcare [Novo Nordisk NOVOB.DK +9.2% (Tresiba resubmission), Sanofi-Adventis SAN.FR -0.2% (rival NDA resubmission)]

-Financials [ICAP IAP.UK +0.9% (considering spin-off)]

Speakers

- ECB's Weidmann (Germany) stated that he did not buy the argument that the Greek debt situation was insurmountable and against expanding the ELA for Greece. The new Greek govt was squandering its trust among member States and added there was not much time to find a solution for Greece

- ECB's Visco (Italy): Risk of deflation in Italy

- BOE's Haldane: There is the scope to globally coordinate macroprudential tools

- BOE's Broadbent: Likelihood for persistent deflation was low but watching for signs that price falls were hitting wage growth. Saw 'good deflation' boosting both demand and output but risk that low inflation could last for longer than expected. Inflation to receive a sizeable kick in coming years

- Greece Econ Min Stathakis: Debt sustainability is the country's main problem. Greek foreclosure law almost ready for submission but would not be a unilateral action. Needed 6 months before bad loan law submission

- Norway Finance Ministry: Norges (central bank) advises no change in counter-cyclical buffer of 1.0%

- Hungary Central Bank Gov Matolcsy stated that he saw the scope for more rate cuts but opposed idea of 0% Base Rate

- Russia PM Medvedev said to order Finance Ministry to submit proposal on creation of Bad Bank by April 3rd

- Russia Fin Min Siluanov: Budget revenue trend to worsen in Q2

Currencies

- USD exhibited strength during the session as market participants reevaluated the Saudi-Yemen conflict. The price action saw safe Havens flows subside and risk appetite gaining some traction

- The EUR/USD approached the 1.0800 level while USD/CHF neared the 0.97 before some minor consolidation.

- WTI oil futures edged towards the $50.00 level, lower by over $1.00/contract while spot Gold tested back below the $1,200/oz, lower by 0.4%

Political/In the Papers:

- (GR) Greece central bank: bank deposits in Greece at lowest level since mid-2005 after declining €8B in Feb with Deposits household & businesses €140.5B v €148.0B m/m

- (UK) According to a poll, 54% saw UK PM Cameron topping opposition Labour candidate Miliband's 46% in the first pre-election televised interview contest

- (US) House passed $3.8T for FY16 GOP budget . Cuts $5.5T budget over 10 years. Senate to vote on its own GOP budget later this week

Looking Ahead

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

- (EU) Lithuania Sovereign Debt Rating Published by Fitch

- (NG) Nigeria Sovereign Debt Rating Published by Fitch

- (PT) Portugal Sovereign Debt Rating Published by Fitch

- (SI) Slovenia Sovereign Debt Rating Published by Fitch

- (AT) Austria Sovereign Debt to Be Rated by S&P

- (CY) Cyprus Sovereign Debt to Be Rated by S&P

- (DK) Denmark Sovereign Debt to Be Rated by S&P

- (FI) Finland Sovereign Debt to Be Rated by S&P

- (EU) Lithuania Sovereign Debt to Be Rated by S&P

- (LX) Luxembourg Sovereign Debt to Be Rated by S&P

- (DK) Denmark Sovereign Debt May Be Published by Moody's

- (EE) Estonia Sovereign Debt May Be Published by Moody's

- (GR) Greece Sovereign Debt May Be Published by Moody's

- (BR) Brazil Mar CNI Consumer Confidence: No est v 100.0 prior

- 06:00 (IT) Italy Jan Retail Sales M/M: +0.1%e v -0.2% prior; Y/Y: -0.3%e v +0.1% prior

- 06:00 (EU) Daily Euribor Fixing

- 06:00 (IT) Italy Debt Agency (Tesoro) to sell €7.0B in 6-month Bills

- 06:00 (FR) France Debt Agency (AFT) announces upcoming Bill/Oat auctions

- 06:30 (US) Fed Vice Chair Fischer in Frankfurt

- 06:30 (SE) Sweden Central Bank (Riksbank) Gov Ingves in Frankfurt

- 07:00 (IE) Ireland Feb Retail Sales Volume M/M: No est v 3.3% prior; Y/Y: No est v 8.9% prior (revised from 8.8%)

- 07:00 (NO) Norway 2Q Bond Issuance Forecast

- 07:10 (UK) DMO to sell combined €4.0B in 1-month, 3-month and 6-month Bills (1.0B, 1.5B and 1.5B respectively)

- 07:30 (IN) India Weekly Forex Reserves w/e Mar 20th: No est v $335.7B prior

- 07:45 (US) Daily Libor Fixing

- 08:00 (BR) Brazil Q4 GDP Q/Q: -0.1%e v +0.1% prior; Y/Y: -0.7%e v -0.2% prior; GDP 4 Quarters Accumulated: 0.0%e v 0.7% prior

- 08:30 (US) Q4 Final GDP Annualized Q/Q: 2.4%e v 2.2% prelim; Personal Consumption: 4.4%e v 4.2% prior

- 08:30 (US) Q4 Final GDP Price Index: 0.1%e v 0.1% prelim; Core PCE Q/Q: 1.1%e v 1.1% prior

- 08:45 (DE) German Fin Min Scheauble at Bundesbank conference in Frankfurt

- 09:15 (US) Baltic Dry Bulk Index

- 10:00 (MX) Mexico Feb Unemployment Rate (Seasonally Adj): 4.4%e v 4.4% prior; Unemployment Rate NSA (Unadj): 4.4%e v 4.5% prior

- 10:00 (MX) Mexico Feb Trade Balance: $0.4Be v -$3.3B prior

- 10:00 (US) Mar Final University of Michigan Confidence: 92.0e v 91.2 prelim

- 10:00 (GR) Greece Fin Min Varoufakis in London

- 10:30 (EU) ECB's SSM chief Nouy at Bundesbank conference in Frankfurt

- 12:00 (CO) Colombia Full Year 2014 GDP: No est v % prior

- 13:00 (US) Weekly Baker Hughes US Rig Count w/e Mar 27th:

- 15:00 (AR) Argentina Jan Economic Activity Index (Monthly GDP) M/M: No est v 0.1% prior; Y/Y: 1.0%e v 0.6% prior

- 15:45 (US) Fed Chair Yellen in SF