Eurozone PMI services readings mixed but remain in expansion territory

Notes/observations

- European PMI Services data mixed but remain in expansion territory (Beats: UK, Italy, Spain; Misses: France, Germany, Euro Zone); In general, firm readings knocking growth fears away.

- Markets continue to speculate that aggressive Fed monetary tightening is nearing an end after a miss in US JOLTS Job Openings yesterday which tanked USD and saw a shift in Fed rate expectations from 60:40 for 25bps hike to 60:40 for a pause.

- RBNZ delivered a ‘shock and Orr’ 50 bps hike, above 25bps consensus but noted to see a continued slowing in domestic demand and a moderation in core inflation and inflation expectation.

-France Pres Macron and EU Commission Pres Von der Leyen visit Beijing as part of planned state visit.

-Ahead of US Non-Farm Payrolls on Friday, ADP Employment Change later today at 08:15 ET (12:15 GMT).

-Asia closed mixed with NZX50 underperforming at -0.3%. EU indices are -0.3% to +0.5%. US futures are -0.1% to -0.2%. Gold +0.1%, DXY 0.0%; Commodity: Brent -0.1%, WTI -0.2%, TTF -0.6%; Crypto: BTC +1.6%, ETH +4.8%.

Asia

- RBNZ raised the Official Cash rate (OCR) by 50bps to 5.25% (more-than-expected). Noted that the full impact of monetary tightening was yet to be fully realized.

- RBA Gov Lowe stated that the pause in tightening cycle did not imply the process is complete. Reiterated further rate hikes might be needed.

- Japan Mar Final PMI Services: 55.0 v 54.2 prelim (confirms 6th month of expansion, quickest rate of expansion since October 2013).

- Australia Mar Final PMI Services: 48.6 v 48.2 prelim (confirms move back into contraction).

Americas

- Fed's Mester (FOMC voter) stated that inflation remained too high; Reiterated would need to hike rates above 5% and hold them there. Expected inflation to ease to 3.75% by end of year, 2% by 2025.

- Chile Central Bank (BCCH) left the Overnight Rate Target unchanged at 11.25% (as expected) for its 3rd straight pause in the current tightening cycle.

Energy

- Weekly API Crude Oil Inventories: -4.3M v -6.1M prior.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.13% at 456.76, FTSE +0.26% at 7,654.53, DAX -0.41% at 15,539.55, CAC-40 -0.34% at 7,320.15, IBEX-35 +0.43% at 9,222.36, FTSE MIB -0.42% at 26,913.00, SMI -0.18% at 11,053.40, S&P 500 Futures -0.21%].

Market Focal Points/Key Themes: European indices open mixed with a slight bias towards the green, but later the biased turned to the red; better performing sectors include telecom and utilities; underperforming sectors include technology and industrials; Entain acquires 365scores; TotalEnergies reaches deal with Iraqi government on gas growth project; corporate events expected in the upcoming US session include earnings ConAgra and Schnitzer Steel, and Walmart, FedEx capital markets days.

Equities

- Consumer discretionary: Sodexo [SW.FR] +9.0% (reports H1, raises FY23 guidance), Hilton Food Group [HFG.UK] -1.5% (earnings; new CEO), Shop Apotheke [SAE.DE] +7.5% (reports prelim Q1 rev, above estimates), Barry Callebaut [BARN.CH] -1.0% (reports H1 results - misses estimates, appoints new CEO).

- Energy: Nordex [NDX1.DE] -1.0% (successfully places €333M in unsecured green convertible bonds due Apr 2030).

- Financials: Grenke [GLJ.DE] +2.5% (reports Q1 new leasing, above estimates).

- Healthcare: Astrazeneca [AZN.UK] +1.5% (cancer trial data met primary endpoint).

- Industrials: Bauer [B5A.DE] -1.5% (reports final FY22, initial FY23 guidance). Atlas Copco [ATCOA.SE] -1.5% (analyst action - raised to buy at Handelsbanken).

- Technology: Infineon [IFX.DE] -1.5% (Foxconn sales and outlook).

- Materials: K+S Aktiengesellschaft [SDF.DE] -4.5% (analyst action - cut to hold at Stifel Nicolaus).

Speakers

- France President Macron commented from Beijing that he did not believe in decoupling with China as it had a special role in the world.

- German Leading Economic Institutes updated its Spring Economic outlook which saw the economy avoiding a recession. It raised the 2023 GDP from -0.4% (contraction) to +0.3% (growth) and cut the 2023 CPI from 8.8% to 6.0%.

- Finland PM Marin said to step down as her party's leader following election defeat.

- France Labour Union (CFDT) Head: Talks were unsuccessful with PM Borne; Pension reform must be withdrawn; Protests to continue.

Currencies/fixed income

- USD continued to be on soft footing as continued weak US economic data in the past few session bolstered views that the Fed might be near the end of itstightening cycle. US Index at a fresh two-month low Focus turning to Friday's key employment report.

- EUR/USD was approaching the 1.10 area aided by stronger Services PMI data for the region.

- GBP/USD again tested the 1.25 level before consolidating its gains.

- USD/JPY at 131.40.

Economic data

:- (DE) Germany Feb Factory Orders M/M: 4.8% v 0.3%e; Y/Y: -5.7% v -9.3%e.

- (DK) Denmark Feb Current Account (DKK): 29.3B v 28.9B prior; Trade Balance (ex-shipping): 8.4B v 10.8B prior.

- (DK) Denmark Feb Industrial Production M/M: +3.7% v -10.0% prior.

- (RU) Russia Mar Services PMI: 58.1 v 53.1 prior; Composite PMI: 56.8 v 53.1 prior.

- (NO) Norway Feb Industrial Production M/M: -0.1% v -8.3% prior; Y/Y: -6.0% v -6.6% prior.

- (NO) Norway Feb Manufacturing Production M/M: 0.0% v 1.0% prior; Y/Y: +1.5% v -0.7% prior.

- (HU) Hungary Feb Industrial Production M/M: +0.3% v -5.1% prior; Y/Y: -4.6% v -1.5%e.

- (SE) Sweden Mar PMI Services: 48.6 v 45.6 prior; PMI Composite: 47.8 v 45.9prior.

- (FR) France Feb Industrial Production M/M: 1.2% v 0.5%e; Y/Y:+1.3% v -0.1%e.

- (FR) France Feb Manufacturing Production M/M: 1.3% v 0.3%e; Y/Y: +2.2% v -0.7% prior.

- (ES) Spain Feb Industrial Production M/M: 0.6% v 0.4%e; Y/Y: -0.4% v +0.2%e; Industrial Output (unadj) Y/Y: -0.8% v +1.4% prior.

- (CZ) Czech Feb Retail Sales (ex-auto) Y/Y: -6.4% v -7.0%e.

- (ES) Spain Mar Services PMI: 59.4 57.5e (5th straight expansion and highest since Nov 2021); Composite PMI: 58.2 v 56.0e.

- (ZA) South Africa Mar PMI (whole economy): 49.7 v 51.0e (moves back into contraction).

- (IT) Italy Mar Services PMI: 55.7 v 53.7e (3rd straight expansion); Composite PMI: 55.2 v 53.2e.

- (FR) France Mar Final Services PMI: 53.9 v 55.5 prelim (confirmed 2nd month of expansion); Composite PMI: 52.7 v 54,.0 prelim.

- (DE) Germany Mar Final Services PMI: 53.7 v 53.9 prelim (confirmed 3rd straight expansion); Composite PMI: 52.6 v 52.6 prelim.

- (EU) Euro Zone Mar Final Services PMI: 55.0 v 55.6 prelim (confirmed 3rd straight expansion); Composite PMI: 52.7 v 54.1 prelim prior.

- (UK) Mar New Car Registrations Y/Y: 18.2% v 26.2% prior.

- (IT) Italy Q4 YTD Budget Deficit to GDP Ratio: 8.0% v 8.8% prior.

- (UK) Mar Final Services PMI: 52.9 v 52.8 prelim (confirmed 2nd month of expansion); Composite PMI: 52.2 v 52.2 prelim.

- (UK) Mar Official Reserves Changes: +$3.3B v -$3.4B prior.

- (IT) Italy Feb Retail Sales M/M: -0.1% v +1.7% prior; Y/Y: 5.8% v 6.0% prior.

- (IS) Iceland Q1 Unemployment Rate: % v 3.3% prior.

- (NO) Norway Q1 House Price Index Q/Q: % v -0.9% prior.

Fixed income issuance

- (IN) India sold total INR320B vs. INR320B indicated in 3-month, 6-month and 12-month bills.

- (DK) Denmark sold total DKK2.15B in 2025 and 2052 Bonds.

- (SE) Sweden sold total SEK10.0B vs. SEK10.0B indicated in 3-month Bills; Avg Yield: 3.328% v 3.127% prior; Bid-to-cover: 1.74x v 2.03x prior.

- (UK) DMO sold £3.5B in 0.50% Jan 2029 Gilts; Avg Yield: 3.497% v 3.597% prior; bid-to-cover: 2.67x v 2.20x prior; Tail: 0.2bps v 2.2bps prior.

Looking ahead

- 05:15 (UK) BOE’s Tenreyro (dove; dissenter).

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (DE) Germany to sell €4.0B in 2.1% Nov 2029 Bund.

- 05:30 (GR) Greece Debt Agency (PDMA) to sell €625M in 3-month Bills.

- 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays).

- 06:00 (IE) Ireland Mar Unemployment Rate: No est v 4.3% prior.

- 06:00 (EU) EU Commission to sell combined €2.5B in 3-month and 6-month bills.

- 06:45 (US) Daily Libor Fixing.

- 07:00 (RU) Russia OFZ Bond auction (if any).

- 07:00 (US) MBA Mortgage Applications w/e Mar 31st: No est v 2.9% prior.

- 07:00 (CO) Colombia Mar CPI M/M: 1.0%e v 1.7% prior; Y/Y: 13.3%e v 13.3% prior.

- 07:00 (CO) Colombia Mar Core M/M: No est v 1.7% prior; Y/Y: No est v 10.9% prior.

- 07:00 (UK) Weekly PM Question time in House.

- 08:00 (MX) Mexico Mar Consumer Confidence: 44.5e v 44.8 prior.

- 08:00 (MX) Mexico Jan Gross Fixed Investment M/M: 1.2%e v 2.7% prior; Y/Y: 8.4%e v 9.4% prior.

- 08:00 (MX) Mexico Mar CPI M/M: 0.3%e v 0.6% prior; Y/Y: 6.9%e v 7.6% prior.

- 08:00 (MX) Mexico Mar CPI Core M/M: 0.5%e v 0.6% prior; Y/Y: 8.1%e v 8.3% prior.

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

- 08:15 (US) Mar ADP Employment Change: +210Ke v +242K prior.

- 08:30 (US) Feb Trade Balance: -$68.8Be v -$68.3B prior.

- 08:30 (CA) Canada Feb Int’l Merchandise Trade (CAD): 1.7Be v 1.9B prior.

- 09:00 (BR) Brazil Mar Services PMI: No est v 49.8 prior; Composite PMI: No est v 49.7 prior.

- 09:00 (CL) Chile Feb Nominal Wage Y/Y: No est v 11.1% prior.

- (PL) Poland Central Bank (NBP) Interest Rate Decision: Expected to leave Base Rate unchanged at 6.75%.

- 09:45 (US) Mar Final S&P/Markit Services PMI: 53.8e v 53.8 prelim; Composite PMI: 53.3e v 53.3 prelim.

- 10:00 (US) Mar ISM Services Index: 54.4e v 55.1 prior; Prices Paid: No est v 65.6 prior.

- 10:30 (US) Weekly DOE Oil Inventories.

- 11:30 (US) Treasury to sell 17-Week Bills.

- 12:00 (CA) Canada to sell 10-year bonds.

- 15:00 (AR) Argentina Feb Industrial Production Y/Y: No est v 6.3% prior; Y/Y: No est v 2.6% prior.

- 20:30 (HK) Hong Kong Mar PMI (whole economy): No est v 53.9 prior.

- 21:00 (NZ) New Zealand Mar ANZ Commodity Price M/M: No est v 1.3% prior.

- 21:30 (AU) Australia Feb Trade Balance (A$): 11.2Be v 11.7B prior; Exports M/M: No est v +1.0% prior; Imports M/M: No est v +5.0% prior.

- 21:30 (AU) Reserve Bank of Australia (RBA) Financial Stability Review.

- 21:45 (CN) China Mar Caixin PMI Services: 55.0e v 55.0 prior; PMI Composite: No est v 54.2 prior.

- 22:00 (JP) Japan Mar Tokyo Avg Office Vacancies: No est v 6.2% prior.

- 23:30 (JP) Japan to sell 6-Month Bills.

- 23:35 (JP) Japan to sell 30-Year JGB Bonds.