TradeTheNews.com Staff
TradeTheNews.com
Notes/Observations
- Focus turns to earnings season amid the gradual economic reopening.
Asia:
- Singapore Q1 Advance GDP Q/Q: 2.0% v 1.7%e; Y/Y: +0.2% v -0.5%e.
- Monetary Authority of Singapore (MAS) semiannual monetary policy statement maintained its policy with both width and center of currency band unchanged (Note: 2nd straight pause in the current easing cycle).
- Reserve Bank of New Zealand (RBNZ) left the Official Cash Rate (OCR) unchanged at 0.25% and kept QE bond-buying at NZ$100B (as expected). Reiterated to maintain current monetary settings until confident that inflation and employment targets reached.
Coronavirus:
- Total global cases 137.3M (+1.0% d/d); total deaths: 2.96M (+0.8% d/d).
Europe:
- EU Commission said to see recovery gaining momentum in H2 and that forecasts one month from now will be more optimistic.
- EU Economic Commissioner Gentiloni (Italy) stated that needed to keep and strengthen support at the national level, could see 2021 GDP outlook being increased in May.
- EU to issue the first debt under its NextGenerationEU stimulus in June and will use a platform to begin selling bonds and bills via a network of primary dealers by September.
- BOE chief economist Haldane to step down from role following June meeting.
Americas
- President Biden sent a previously unannounced, unofficial delegation to Taiwan made up of former Sen Dodd (D-CT), former Dep Secretaries of State Armitage and James Steinberg to Taiwan as a signal of commitment to democracy.
- White House spokesperson stated that the Administration was committed to engaging Taiwan and deepening cooperation.
- Fed's Barkin (voter, hawk) stated that was hopeful US was on brink of completing recovery, to see really strong spring and summer in the US. Expects consumer price pressures this year; sees long-term disinflationary forces modulating prices.
- Fed’s Harker (non-voter) expected GDP growth between 5.0-6.0% in 2021 with unemployment falling throughout the year.
Energy:
- Weekly API Crude Oil Inventories: -3.6M v -2.6M prior.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
Indices [Stoxx600 +0.22% at 436.70, FTSE +0.18% at 6,902.90, DAX +0.14% at 15,255.95 , CAC-40 +0.47% at 6,213.00 , IBEX-35 +0.22% at 8,544.00 , FTSE MIB +0.11% at 24,627.50 , SMI +0.23% at 11,149.49 , S&P 500 Futures +0.15%].
Market Focal Points/Key Themes: European indices open modestly higher and stayed in the green as the session progressed; sectors leading to the upside include technology and consumer discretionary; to the downside are telecom and financials; unofficial start of Q1 earnings season; yesterday’s LVMH results bolstering luxury brands; focus on CDC meeting on recommendations for JNJ covid vaccine; earnings expected in the upcoming US session include JP Morgan, Wells Fargo, and Bed Bath and Beyond.
Equities
- Consumer discretionary: LVMH [MC.FR] +2% (sales), EasyJet [EZJ.UK] +3% (trading update), Tesco [TSCO.UK] +3% (earnings).
- Technology: SAP [SAP.DE] +4% (prelim earnings), TomTom [TOM2.NL] +2% (earnings).
Speakers
- ECB's Villeroy (France) reiterated the stance that policy should remain accommodative for the coming years.
- ECB's Guindo (Spain) reiterated the Council view that prepared to adjust all instruments as necessary. Must avoid cliff effects from the premature end to support. Reiterated stance that risks from early withdrawal of policies were higher compared with keeping measures in place.
- EU Commission unveiled its NextGeneration EU Funding Strategy that would raise €800B for Recovery Fund until the end-2026.
- France Fin Min Le Maire maintained the country’s 2021 GDP growth forecast at 5.0%. Financial aid programs should continue until the end of the pandemic and stress that it was urgent for EU to formally ratify financial aid measures to the bloc.
- Italy's 2021 budget deficit to GDP seen between 10-11% range after additional spending.
- BOJ Gov Kuroda reiterated overall assessment that domestic recovery remained in severe state but was picking up as a trend. To continue to seek market stability through easing and continue support for corporate financing. Reiterated stance to persistently continuing easing towards the 2% inflation target and added that prices would begin to rise again with economic recovery.
- IEA Monthly Oil Report raised its 2021 global oil demand growth from 5.5M bpd to 5.7M bpd. It noted that oil prices might be pressured in coming months on supply.
Currencies/Fixed Income
- USD was trading at multi-week lows against the euro and the yen after Tuesday’s US CPI data did not spark wider fears about accelerating inflation and the Fed tapering. US 10-year yields moved lower (**Note: tested 1.70% before the US data) . Dealers also noted that solid demand for Tuesday’s US 30-year bond auction trumped any pickup in inflation.
- EUR/USD probing towards the key 1.20 resistance area. Optimism on the EU growth front was also bubbling. EU Commission was said to see the region’s recovery gaining momentum in H2.
- GBP/USD back above the 1.38 level after hold the key 1.36 support last week.
- USD/JPY was back below the 109 level as US yields were lower compared to day-ago levels.
Economic data
- (NL) Netherlands Feb Trade Balance: €5.4B v €4.9B prior (revised from €5.0).
- (FI) Finland Mar CPI M/M: 0.2% v 0.4% prior; Y/Y: 1.3% v 0.9% prior.
- (ES) Spain Mar Final CPI M/M: 1.0% v 1.0%e; Y/Y: 1.3% v 1.3%e.
- (ES) Spain Mar Final CPI EU Harmonized M/M: 1.9% v 1.9%e; Y/Y: 1.2% v 1.2%e.
- (ES) Spain Mar CPI Core M/M: 0.4% v 0.0% prior; Y/Y: 0.3% v 0.3% prior.
- (SE) Sweden Mar CPI M/M: 0.2% v 0.0%e; Y/Y: 1.7% v 1.6%e; CPI Level: 339.54 v 339.09e.
- (SE) Sweden Mar CPIF M/M: 0.2% v 0.1%e; Y/Y: 1.9% v 1.8%e.
- (SE) Sweden Mar CPIF (ex-energy) M/M: 0.3% v 0.2%e; Y/Y: 1.4% v 1.3%e.
- (UK) Q4 Unit Labor Costs Y/Y: 7.2% v 5.8% prior.
- 05:00 (EU) Euro Zone Feb Industrial Production M/M: -1.0% v -1.2%e; Y/Y: -1.6% v -1.4%e%e.
Fixed income Issuance
- (SK) Slovakia Debt Agency (Ardal) opened its book to sell EUR-denominated 15-year bond via syndicate; guidance seen +12bps to mid-swaps; order book over €3.6B.
- (DK) Denmark sold total of DKK3.04B in 3-month, 6-month, 9-month and 12-month bills (**Note: rejected all bids in 3 of the 4 tranches).
- (SE) Sweden sold total of SEK17.5B vs. SEK17.5B indicated in 3-month and 9-month bills.
- (NO) Norway sold NOK3.0B vs. NOK3.0B indicated in 1.25% 2031 Bonds; Avg Yield: 1.460% v 1.289% syndicate; bid-to-cover: 3.13x.
- 05:00 (UK) DMO sold £600M in 0.125% Mar 2051 inflation-linked Gilt (UKTi); Real Yield: -1.979%; bid-to-cover: 2.31x.
Looking Ahead
- (EU) Daily ECB Liquidity Stats.
- 05:15 (CH) Switzerland to sell 2029, 2034, and 2045 Bonds.
- 05:30 (DE) Germany to sell €1.5B in 1.25% Aug 2048 Bunds.
- 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills.
- 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays).
- 06:00 (CZ) the Czech Republic to sell 2027, 2031 and 2036 bonds.
- 06:45 (US) Daily Libor Fixing.
- 07:00 (US) MBA Mortgage Applications w/e Apr 9th: No est v -5.1% prior.
- 07:00 (IL) Israel Mar CPI M/M: 0.5%e v 0.3% prior; Y/Y: 0.1%e v 0.0% prior.
- 07:00 (ZA) South Africa Feb Retail Sales M/M: +1.2%e v -1.6% prior; Y/Y: -1.8%e v -3.5% prior.
0- 07:00 (RU) Russia to sell 2028 and 2031 OFZ bonds.
- 07:45 (EU) ECB chief Lagarde.
- 07:45 (IT) ECB's Panetta (Italy) in European Parliament.
- 08:00 (UK) Weekly PM Question time in House.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Mar Import Price Index M/M: 0.9%e v 1.3% prior; Y/Y: 6.4%e v 3.0% prior; Import Price Index (ex-petroleum) M/M: 0.5%e v 0.5% prior.
- 08:30 (US) Mar Export Price Index M/M: 1.0%e v 1.6% prior; Y/Y: No est v 5.2% prior.
- 09:45 (UK) BOE to buy £1.48B in APF Gilt purchase operation (7-20 years).
- 10:30 (US) Weekly DOE Oil Inventories.
- 10:30 (UK) BOE's Haskel participates in Webinar.
- 12:00 (US) Fed Chair Powell at Economic Club of Washington.
- 12:00 (CA) Canada to Sell C$4 Billion of 0.75% 2026 Bonds.
- 13:00 (DE) ECB's Schnabel (Germany) speaks in Webinar.
- 14:00 (US) Federal Reserve Beige Book.
- 14:30 (US) Fed’s Williams participates in a Moderated Discussion.
- 15:00 (US) Fed’s Clarida on Policy Framework.
- 16:00 (US) Fed’s Bostic.
- 18:45 (NZ) New Zealand Mar Food Prices M/M: No est v -0.9% prior.
- 21:00 (AU) Australia Apr Consumer Inflation Expectation: No est v 4.1% prior.
- 21:30 (AU) Australia Mar Employment Change: +35.0Ke v +88.7K prior; Unemployment Rate: 5.7%e v 5.8% prior; Full Time Employment Change: No est v +89.1K prior; Part Time Employment Change: No est v -0.5K prior; Participation Rate: 66.1%e v 66.1% prior.
- 22:00 (KR) Bank of Korea (BoK) Interest Rate Decision: Expected to leave 7-Day Repo Rate unchanged at 0.50%.
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