Flat market awaits fresh catalyst as Easter holidays approach

Notes/observations

- Quiet weekend of news with little change to macro narrative since Friday. Worth noting however, ECB’s Scicluna spoke about a potential April rate cut, but likely just keeping door open as other members and data focuses on June.

- EU and US chip related stocks trade lower after China reportedly blocks use of Intel and AMD chips in govt computers; EU defense stocks given lift from Moscow terror attack over the weekend.

- Japan’s top FX diplomat Kanda comments about current weakness of JPY (yen) did little to strengthen it, trades sideways against US dollar.

- Asia closed mixed with Nikkei225 under-performing at -1.1%. EU indices are -0.3% to +0.1%. US futures are -0.1% to -0.2%. Gold 0.0%, DXY +0.3%; Commodity: Brent +0.7%, WTI +0.8%; Crypto: BTC +2.9%, ETH +2.1%.

Asia

- China Fin Min Lan Foan stated that the govt was confident and capable of achieving full year economic development goals.

- Japan Currency Chief Kanda: Reiterates stance that recent FX moves are not reflecting the fundamentals. Watching FX rates with a strong sense of urgency.

- Australia Treasurer Chalmers should maintain power to override RBA rate decisions; cites recommendation from the Coalition and Greens.

Europe

- ECB’s Centeno (Portugal) stated that was at the end of this inflationary process; Policy must and would follow inflation reality.

- ECB's Scicluna (Malta): An April rate cut is not impossible or even improbable.

- Italy govt said to be targeting 2024 growth around 1.0%, above economists estimates.

- S&P affirmed Germany sovereign rating at AAA; Outlook Stable.

- Fitch revised the United Kingdom (and BOE) outlook to Stable from Negative; Affirmed 'AA-'sovereign rating.

- Canadian ratings agency DBRS affirmed France sovereign rating at 'AA' (high); Outlook Stable.

Americas

- Fed’s Bostic (dove, voter) commented that he now expected just 1 rate cut in 2024; Less confident on inflation than in Dec.

- Senate passed a $1.2T spending bill on Saturday morning, averting a partial government shutdown.

Speakers/fixed income/fx/commodities/erratum

Equities

Indices [Stoxx600 -0.02% at 509.54, FTSE -0.03% at 7,928.25, DAX +0.08% at 18,228.05, CAC-40 +0.02% at 8,153.67, IBEX-35 -0.13% at 10,928.97, FTSE MIB +0.39% at 34,479.00, SMI -0.23% at 11,625.50, S&P 500 Futures -0.12%].

Market focal points/key themes: European indices open modestly higher, but quickly reverted to take on a negative bias in the early part of the session; Cyprus and Greece closed for holidays; better performing sectors being led by telecom and industrials; while consumer discretionary and communication services sectors among those trending lower; Atos shareholder OnePoint opposes sale of units; reportedly Unilever to sell most of its nutrition units; no major earnings expected in the upcoming US session.

Equities

- Consumer discretionary: Kingfisher [KGF.UK] +1.0% (results, guidance), Delivery Hero [DHER.DE] -2.0% (CFO to join Wise), Inditex [ITX.ES] -1.0% (analyst downgrade).

- Financials: Direct Line Insurance [DLG.UK] -4.5% (Ageas SA/NV announces no new offer will be made).

- Real Estate: Leg Immobilien [LEG.DE] +3.5% (analyst upgrade), Tag Immobilien [TEG.DE] -1.5% (analyst downgrade).

- Materials: Ferrexpo [FXPO.UK] +11.0% (Ukraine subsidiary update).

- Technology: Atos [ATO.FR] +2.0% (shareholder OnePoint opposes sale plan).

- Utilities: Pennon Group [PNN.UK] -2.0% (trading update).

Speakers

- Hungary Econ Min Nagy stated that needed to 'fine tune' measures to reach revised 2024 deficit target. Export markets were much weaker than we expected.

- Poland Fin Min Domanski saw moderate food price growth on VAT hike.

Currencies/fixed income

- USD was steady in quiet trading on Monday.

- For the most part on the global rate outlook the Fed, ECB and BOE all seem to have the 1st potential cut coincide with their Jun meetings.

- USD/JPY at 151.30 as the yen currency remains a carry trade despite the recent BOJ rate hike.

- PBOC' daily FX setting saw a higher-than-expected yuan fixing and displace speculation that it sought a weaker currency.

Economic data

- (NL) Netherlands Q4 Final GDP Q/Q: 0.4%e v 0.3% prelim; Y/Y: -0.4%e v -0.5% prelim.

- (FI) Finland Feb PPI M/M: -0.2% v +0.3% prior; Y/Y: -5.1% v -5.4% prior.

- (ES) Spain Feb PPI M/M: -2.3% v 0.2% prior; Y/Y: -8.2% v -3.9% prior.

- (ZA) South Africa Q1 BER Consumer Confidence: -15 v -17 prior.

- (CZ) Czech Mar Consumer Confidence: 99.9 v 95.5e; Business Confidence: 93.0 v 89.9 prior; Composite Confidence: 94.2 v 90.6 prior.

- (CZ) Czech Jan Export Price Index Y/Y: -1.2% v -2.4% prior; Import Price Index Y/Y: -4.0% v -6.2% prior.

- (TW) Taiwan Feb Industrial Production Y/Y: -1.1% v 0.0%e.

- (CH) Swiss Weekly Total Sight Deposits (CHF): 469.2B v 469.2B prior; Domestic Sight Deposits: 460.8B v 461.0B prior.

- (PL) Poland Feb Unemployment Rate: 5.4% v 5.4%e.

Fixed income issuance

- Noone seen.

Looking ahead

- (UR) Ukraine Central Bank (NBU) Mar Minutes.

- 06:00 (EU) ECB chief Lagarde.

- 06:00 (EU) Daily Euribor Fixing.

- 06:25 (EU) Daily ECB Liquidity Stats.

- 06:30 (EU) ECB’s Holzmann (Austria).

- 06:30 (DE) Germany to sell combined €4.0B in 6-month and 12-month BuBills.

- 07:00 (BR) Brazil Mar FGV Construction Costs M/M: 0.3%e v 0.2% prior.

- 07:00 (UK) Mar CBI Retailing Reported Sales: -14e v -7 prior; Total Distribution Reported Sales: No est v 5 prior.

- 07:00 (IL) Israel to sell combined ILS2.95B in 2027, 2028,2029, 2031, 2033 and 2051 bonds.

- 07:00 (RO) Romania to sell RON500M in 7.20% May 2027 bonds.

- 08:30 (US) Feb Chicago Fed National Activity Index: -0.34e v -0.30 prior.

- 08:25 (US) Fed's Bostic participates in Moderated Conversation.

- 09:00 (UK) Daily Baltic Dry Bulk Index.

- 10:00 (US) Feb New Home Sales: 675Ke v 661K prior.

- 10:00 (FR) France Debt Agency (AFT) to sell €5.9-7.5B in 3-month, 6-month and 12-month bills.

- 10:15 (UK) BOE’s Mann.

- 10:30 (US) Mar Dallas Fed Manufacturing Activity: -11.5e v -11.3 prior.

- 10:30 (US) Fed’s Cook.

- 10:45 (UK) BOE Gilt sale operation.

- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.

- 13:00 (US) Treasury to sell 2-Year Notes.

- 15:00 (AR) Argentina Q4 Current Account: No est v -$6.1B prior.

- 17:00 (KR) South Korea Mar Consumer Confidence: No est v 101.9 prior.

- 18:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 81.8 prior.

- 19:30 (AU) Australia Mar Westpac Consumer Confidence: No est v 86.0 prior.

- 19:50 (JP) Japan Feb PPI Services Y/Y: 2.1%e v 2.1% prior.

- 22:00 (SL) Sri Lanka Central Bank (CBSL) Interest Rate Decision: Expected to leave Key Rates unchanged.

- 22:30 (KR) South Korea to sell KRW800B in 20-year Bonds.

- 23:00 (TH) Thailand Feb Customs Trade Balance -$0.7Be v -$2.8B prior; Exports Y/Y: 4.3%e v 10.0% prior; Imports Y/Y: 3.5%e v 2.6% prior.

- 23:00 (TH) Thailand Central Bank to sell THB60B in 3-month bills.