GDP growth across Europe holds up well

EU mid-market update: GDP growth across Europe holds up well; Inflation approaches ECB target slowly; Amazon, Supermicro and AMD tonight.

Notes/observations

- Busy macro and corporate morning saw plethora of European countries report preliminary CPI and GDP figures, including Spain, France, Italy, Germany and Euro Zone. Prints show inflation moderating relatively in line but GDP is healthier than expected, giving ECB less reason to cut rates in June and beyond.

- For the Japanese Yen, despite intervention yesterday, climbs higher as market attempts to test how deep the pockets of BOJ/MOF are.

- Key EU earnings from: Santander, Lufthansa, Mercedes, Volkswagen, Thales, Adidas, Carlsberg, Air France/KLM and Glencore; See below for figures.

- Upcoming US premarket earnings: ADM, AEP, APD, ATI, CCK, ECL, ETN, GLW, KBR, KO, MCD, MMM, MPC PAG, PCAR, SYY, TAP, THC, TKR.

- Asia closed mixed with Nikkei225 outperforming +1.2%. EU indices are -1.1% to +0.3%. US futures are -0.2%. Gold -0.9%, DXY +0.3%; Commodity: Brent +0.3%, WTI +0.3%; Crypto: BTC -0.7%, ETH -3.4%.

Asia

- Japan's top FX diplomat Kanda: Responding to FX '24 hours a day'; Reiterates will take appropriate action as needed; Will hold first Japan-Pacific islands finance ministry meeting.

- Japan PM Kishida: No thought of holding general election.

- BOJ leaves Q2 bond purchase and amount frequency unchanged - press.

- Australia Mar Retail Sales M/M: -0.4%v +0.2%e.

- China Apr Manufacturing PMI (Govt Official): 50.4 v 50.3e; China Apr Caixin PMI Manufacturing: 51.4 V 51.0e (Highest Since Feb 2023).

- China Politburo: China CPC to hold the third plenary meeting this July; Urges sales of ultra-long SCGBs at early date; Economy is improving, but facing challenges; Will flexibly use policy tools, including RRR and interest rates.

- IMF Asia Pacific Dir Srinivasan: Asian Central Banks should focus on fundamentals and domestic conditions rather than Fed moves.

- S&P affirmed South Korea at 'AA/A-1+'; Outlook stable.

- Bank of Korea (BOK) Apr Minutes: Monitoring of FX flows needs to be bolstered.

- Bank of Korea (BOK): Considers buying more gold in the medium to long-term.

- Thailand Central Bank (BoT): Thai baht (THB) volatility has decreased.

Global conflicts/tensions

-China Foreign Ministry: Hamas and Fatah met for talks in Beijing.

Europe

- UK Apr Lloyds Business Barometer: 42 v 42 prior; BRC Shop Price Index Y/Y: 0.8% v 1.3% prior.

- Santander Q1 Net €2.85B v €2.89Be, Rev €15.4B v €13.9B y/y; Affirms FY24 guidance.

- Lufthansa Q1 Net -€734M v -€467M y/y, Rev €7.39B v €7.53Be; Bookings for summer +16% y/y; Notes strong demand even significantly higher than last year for the summer.

- Mercedes Q1 Adj EBIT €3.60B v €3.71Be, Rev €35.9B v €35.6Be; Affirms FY24 outlook.

- Thales Q1 Rev €4.42B v €4.36Be.

- Volkswagen Q1 Op €4.6B v €5.7B y/y, Rev €75.5B v €76.2B y/y; Affirms FY24 guidance.

- Adidas final Q1 €0.96 v €0.53e, Rev €5.46B v €5.44Be +3.5% y/y.

- Carlsberg Q1 Rev 16.4B v 16.9Be; Organic Rev +6.4% y/y v +5.5%e; Affirms FY24 guidance; Announces up to DKK1B share buyback.

- Air France/KLM Q1 Net -€522M v -€461Me, EBITDA €176M v €192Me, Rev €6.65B v €6.59Be.

- Glencore Q1 copper production 239.7K v 244.1K y/y.

Americas

- Argentina Econ Min Caputo: Argentina is discussing a new program with the IMF.

Speakers/fixed income/FX/commodities/erratum

Equities

- Indices [Stoxx600 -0.38% at 506.42, FTSE +0.33% at 8,174.17, DAX -0.53% at 18,035.25, CAC-40 -0.29% at 8,042.07, IBEX-35 -1.12% at 10,976.65, FTSE MIB -0.31% at 34,191.00, SMI -0.29% at 11,299.60, S&P 500 Futures -0.19%].

Market focal points/key themes: European indices opened generally higher but quickly turned around to trade in the red; Sweden will close early for holiday; among better performing sectors are real estate and energy; sectors inclined to the downside include industrials and financials; oil & gas subsector buoyed after reports Saudi Arabia will raise prices to Asia in June; industrials sector hit after large earnings (Volkswagen, Mercedes-Benz) provided lower than expected results; Intelsat to be acquired by SES; reportedly Barclays to acquire GM credit card partnership from Goldman Sachs; earnings expected in the upcoming US session include Amazon, Eli Lilly, Coca-Cola and AMD.

Equities

- Consumer discretionary: Adidas [ADS.DE] -1.0% (earnings), Lufthansa [LHA.DE] -1.0% (earnings), Air France/KLM [AF.FR] -3.5% (earnings), Carlsberg [CARLB.DK] -1.0% (earnings).

- Energy: Galp [GALP.PT] +2.0% (earnings).

- Financials: HSBC Holdings [HSBA.UK] +2.5% (earnings; CEO to retire), Santander [SAN.ES] -2.5% (earnings).

- Telecom: SES [SESG.FR] -10.5% (acquisition).

- Industrials: Thales [HO.FR] +1.0% (earnings), Volkswagen AG [VOW3.DE] -3.0% (earnings), Stellantis [STLA.NL] -1.5% (earnings), Mercedes-Benz [MBG.DE] -3.5% (earnings), Maersk [MAERSKB.DK] -2.5% (spin-off Svitzer IPO debut).

- Technology: Capgemini [CAP.FR] -1.0% (earnings).

- Materials: Clariant [CLN.CH] +4.5% (earnings), Covestro [1COV.DE] -0.5% (earnings).

Speakers

-Japan's top FX diplomat Kanda: Responding to FX '24 hours a day'; Reiterates will take appropriate action as needed; Will hold first Japan-Pacific islands finance ministry meeting.

-Japan PM Kishida: No thought of holding general election.

-Poland Central Bank (NBP) Kotecki (dove): Core CPI does not allow for rate cuts yet; See June CPI Y/Y at 3%.

Economic data

-(TH) Thailand Mar Manufacturing Production Y/Y: -5.1% v -1.9%e [18th straight decline]; Capacity Utilization: 62.4% v 59.8% prior.

-(NL) Netherlands Apr Preliminary CPI Y/Y: 2.7% v 3.1% prior; CPI EU Harmonized M/M: 1.1% v 0.6% prior; Y/Y: 2.6% v 3.1% prior.

-(FI) Finland Mar Preliminary Retail Sales Volume Y/Y: -0.2% v -2.1% prior.

-(JP) Japan Mar Annualized Housing Starts: 760K v 800Ke; Y/Y: -12.8% v -7.5e; Construction Orders Y/Y: +31.4% v -11.0% prior.

-(FR) France Q1 preliminary GDP Q/Q: 0.2% V 0.1% prior; Y/Y: 1.1% V 0.8% prior.

-(FR) France Mar Consumer Spending M/M: 0.4% v 0.1% prior; Y/Y: 0.5% v -0.7% prior.

-(DK) Denmark Mar Retail Sales M/M: 0.2% v 1.9% prior; Y/Y: 3.7% v 5.9% prior.

-(DE) Germany Mar Retail Sale M/M: 1.8% V 1.4%E; Y/Y: -2.7% V -0.7%E.

-(DE) Germany Mar Import Price Index M/M: 0.4% v 0.2%e; Y/Y: -3.6% v-3.8%e.

-(NO) Norway Mar Credit Indicator Growth Y/Y: 3.5% v 3.5% prior.

-(ZA) South Africa Mar M3 Money Supply Y/Y: 6.9% v 5.7%e; Private Sector Credit Y/Y: 5.2% v 3.4%e.

-(DK) Denmark Mar Unemployment Rate: 2.5% v 2.5% prior; Gross Unemployment Rate: 2.9% v 2.9% prior.

-(HU) Hungary Q1 Preliminary GDP Q/Q: 0.8% v 0.5%e; Y/Y: 1.1% v 1.3%e.

-(HU) Hungary Mar PPI M/M: 0.1% v 0.5% prior; Y/Y: -3.0% v -4.3% prior.

-(FR) France Apr Preliminary CPI M/M: 0.5% V 0.5%E; Y/Y: 2.2% V 2.2%E; CPI EU Harmonized M/M: 0.6% v 0.5%e; Y/Y: 2.4% v 2.2%e (unchanged from prior month).

-(FR) France Mar PPI M/M: -0.2% v -1.7% prior; Y/Y: -7.5% v -5.5% prior.

-(ES) Spain Q1 Preliminary GDP Q/Q: 0.7% V 0.4%E; Y/Y: 2.4% V 1.9%E.

-(CH) Swiss Apr KOF Leading Indicator: 101.8 v 102.0e.

-(CZ) Czech Q1 Preliminary GDP Q/Q: 0.5% v 0.4%e; Y/Y: 0.4% v 0.3%e.

-(TR) Turkey Mar Trade Balance: -$7.3B v -$7.5Be.

-(AT) Austria Apr Preliminary CPI M/M: 0.1% v 0.5% prior; Y/Y: 3.5% v 4.1% prior.

-(AT) Austria Mar PPI M/M: -0.8% v -0.3% prior; Y/Y: -6.3% v -6.4% prior.

-(AT) Austria Q1 GDP Q/Q: 0.2% v 0.0% prior; Y/Y: -1.3% v -1.4% prior.

-(DE) Germany Apr Net unemployment change: +10.0K V +8.0KE; unemployment claims rate: 5.9% V 5.9%E.

-(DE) Germany Q1 Preliminary GDP Q/Q: 0.2% V 0.1%E; Y/Y: -0.2% V -0.2%E (1st positive Q/Q print since Q4 2022).

-(PL) Poland Apr Preliminary CPI M/M: 1.0% v 1.1%e; Y/Y: 2.4% v 2.5%e.

-(IT) ITALY Q1 Preliminary GDP Q/Q: 0.3% V 0.1%E; Y/Y: 0.6% V 0.3%E.

-(CZ) Czech Mar M2 Money Supply Y/Y: 6.9% v 8.0% prior.

-(NO) Norway Central Bank (Norges) May Daily FX Purchases: 550M v 350M prior.

-(TR) Turkey Mar Foreign Tourist Arrivals Y/Y: 15.7% v 22.7% prior.

-(TW) Taiwan Q1 Advance GDP (1st reading) Y/Y: 6.5% v 6.0%e.

-(UK) Mar mortgage approvals: 61.3K V 61.5KE (highest since Sept 2022).

-(UK) Mar NET consumer credit: £1.6B V £1.5BE; NET lending: £0.3B V £1.5BE.

-(PT) Portugal Q1 Preliminary GDP Q/Q: 0.7% v 0.4%e; Y/Y: 1.4% v 2.1% prior.

-(UK) Mar M4 Money Supply M/M: 0.7% v 0.6% prior; Y/Y: +0.5% v -1.0% prior; M4 (ex-IOFCs) 3-month Annualized: 3.1% v 4.4% prior.

-(PT) Portugal Apr Preliminary CPI M/M: 0.5% v 2.0% prior; Y/Y: 2.2% v 2.3% prior.

- CPI EU Harmonized M/M: 1.0% v 2.3% prior; Y/Y: 2.3% v 2.4%e.

-(HK) Hong Kong Mar Budget Balance (HKD): +18.1B v -22.5B prior.

-(HK) Hong Kong Mar M3 Money Supply Y/Y: -0.4% v 0.1% prior; M2 Money Supply Y/Y: -0.4% v 0.1% prior; M1 Money Supply Y/Y: -11.4% v -10.7% prior.

-(GR) Greece Feb Retail Sales Value Y/Y: -9.8% v -9.6% prior; Retail Sales Volume Y/Y: -3.8% v -2.3% prior.

-(EU) Eurozone Apr advance CPI estimate Y/Y: 2.4% V 2.4%E; CPI core Y/Y: 2.7% V 2.6%E (lowest since Feb 2022); CPI M/M: 0.6% v 0.6%e.

-(EU) Eurozone Q1 advance GDP Q/Q: 0.3% V 0.1%E; Y/Y: 0.4% V 0.2%E.

-(IT) Italy Apr preliminary CPI M/M: 0.2% V 0.3%E; Y/Y: 0.9% V 1.0%E; CPI EU Harmonized M/M: 0.6% v 0.6%e; Y/Y: 1.0% v 1.1%e.

Fixed income issuance

-Philippines sold PHP27.5B vs. PHP30.0B indicated in 7-Year bonds; Avg Yield: 7.058% v 6.299% prior, bid-to-cover:1.34 x v 1.34x prior.

-Netherlands debt agency (DSTA) SOLD €2.5B VS. €1.5-2.5B indicated range in new 2.5% July 2034 bonds; AVG yield: 2.828% (no prior history).

-(ID) Indonesia sold total IDR21.5T vs. IDR23.0T target in bills and bonds.

-(UK) DMO sold £4.0B in new July 2029 gilts; AVG yield: 4.251% V 3.928% prior; bid-to-cover: 3.21X V 3.48X PRIOR; TAIL: 0.8BPS V 0.3BPS prior (Mar 26th 2024 under 4.5% Jun 2028 GILT).

Looking ahead

- 05:30 (DE) Germany to sell €3.0B in 2.1% Apr 2029 BOBL.

- 05:30 (BE) Belgium Debt Agency (BDA) to sell 3-month bills.

- 05:30 (ZA) South Africa to sell combined ZAR3.75B in 2031, 2035 and 2037 bonds.

- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).

- 05:30 (EU) ECB allotment in 3-month LTRO tender.

- 06:00 (IL) Israel to sell combined ILS2.95B in 2027, 2029, 2033, 2034, 2035 and 2051 bonds.

- 06:00 (PT) Portugal Mar Retail Sales M/M: No est v 0.7% prior; Y/Y: No est v 0.7% prior.

- 06:00 (IT) Italy Mar Hourly Wages M/M: No est v 5.1% prior; Y/Y: No est v 7.9% prior.

- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 07:30 (IN) India Mar Eight Infrastructure (Key) Industries: No est v 6.7% prior.

- 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

- 08:00 (ZA) South Africa Mar Trade Balance Rand (ZAR): No est v 14.0B prior.

- 08:00 (ZA) South Africa Mar Monthly Budget Balance (ZAR): No est v +20.8B prior.

- 08:00 (MX) Mexico Q1 Preliminary GDP Q/Q: No est v 0.1% prior; Y/Y: No est v 2.5% prior.

- 08:00 (BR) Brazil Mar National Unemployment Rate: No est v 7.8% prior.

- 08:00 (CL) Chile Mar Retail Sales Y/Y: No est v 3.9% prior.

- 08:01 (NZ) New Zealand Apr CoreLogic House Prices Y/Y: No est v 0.1% prior.

- 08:30 (US) Q1 Employment Cost Index 1.0%e v 0.9% prior.

- 08:30 (CA) Canada Feb GDP M/M: No est v 0.6% prior; Y/Y: No est v 0.9% prior.

- 08:55 (US) Weekly Redbook LFL Sales data.

- 09:00 (US) Feb FHFA House Price Index M/M: No est v -0.1% prior.

- 09:00 (US) Feb S&P/CoreLogic House Price Index (20-City) M/M: No est v 0.1% prior; Y/Y: No est v 6.59% prior; House Price Index (overall) Y/Y: No est v 6.03% prior.

- 09:00 (CL) Chile Mar Unemployment Rate: No est v 8.5% prior.

- 09:00 (CL) Chile Mar Manufacturing Production Y/Y: No est v 8.8% prior; Industrial Production Y/Y: No est v 7.9% prior; Total Copper Production: No est v 420.2K prior.

- 09:00 (CL) Chile Mar Commercial Activity Y/Y: No est v 1.9% prior.

- 09:45 (US) Apr Chicago Purchase Manager’s Index (PMI): No est v 41.4 prior.

- 10:00 (US) FOMC begins Two-Day Meeting.

- 10:00 (US) Apr Consumer Confidence: 104.0e v 104.7 prior.

- 10:01 (AU) Australia Apr CoreLogic House Price Index M/M: No est v 0.1% prior.

- 10:30 (US) Apr Dallas Fed Services Activity: No est v -5.5 prior.

- 11:00 (MX) Mexico Mar Net Outstanding Loans (MXN): No est v 6.031T prior.

- 14:00 (CO) Colombia Central Bank Interest Rate Decision: Expected to cut Overnight Lending Rate.

- 16:30 (US) Weekly API Oil Inventories.

- 17:00 (NZ) Reserve Bank of New Zealand (RBNZ) Bi-Annual Financial Stability Report.

- 18:45 (NZ) New Zealand Q1 Unemployment Rate: No est v 4.0% prior; Employment Change Q/Q: No est v 0.4% prior; Y/Y: No est v 2.4% prior; Participation Rate: No est v 71.9% prior; Avg Hourly Earnings Q/Q: No est v 0.5% prior; Private Wages (inc overtime) Q/Q: No est v 1.0% prior; Private Wages (exc overtime) Q/Q: No est v 1.0% prior.

- 19:00 (AU) Australia Apr Final PMI Manufacturing: No est v 49.9 prelim.

- 20:00 (KR) South Korea Apr Trade Balance: $4.3Be v $4.3B prior; Exports Y/Y: No est v 3.1% prior; Imports Y/Y: No est v -12.3% prior.

- 20:01 (IE) Ireland Apr PMI Manufacturing: No est v 49.6 prior.

- 20:30 (JP) Japan Apr Final PMI Manufacturing: No est v 49.9 prelim.