German Apr ZEW Survey mixed

Notes/Observations

- German Apr ZEW survey mixed but optimistic that global environment not as bad as anticipated

- Some ECB members said to doubt any growth rebound in 2019

Asia:

- RBA Apr Minutes reiterated its stance that there was not a strong case for near term adjustment in rates and discussed scenario where rate cut would be appropriate. Rate cut would be appropriate if inflation stayed low while unemployment trended up.

- China PBoC Open Market (OMO) injected CNY40B in 7-day reverse repos for its first operation in 18 sessions Japan Econ Min Motegi stated that trade talks with US were 'frank and good'

Europe:

-  ECB's Villeroy (France): Data pointed to much weaker H1 growth than has been forecast

Americas:

- Fed's Rosengren (moderate, voter): Fed was waiting to see evidence that inflation would reach 2% target; unemployment falling, did not expect recession; Balance sheet asset allocation would be topic in future FOMC discussions

- Fed Evans (dove, voter): if activity softened more than expected or inflation was too low, policy might be left on hold or loosened

- President Trump: on China trade, we're going to win either way; we either win by getting a deal or we win by not getting a deal

- House Speaker Pelosi (D-CA): if there was any weakening of Good Friday Accords, there would be no chance for a US-UK trade agreement post-Brexit

 

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 +0.31% at 389.24, FTSE % at #, DAX +0.72% at 12,106.59, CAC-40 +0.15% at 5,516.92, IBEX-35 +0.26% at 9,522.18, FTSE MIB +0.24% at 21,944.50, SMI +0.65% at 9,575.50, S&P 500 Futures +0.36%]

Market Focal Points/Key Themes: European Indices trade higher across the board trading towards the highs of today following strength in Asia overnight and in particularly the Shanghai Composite which rose over 2% and stronger US Index futures. On the corporate front shares of Swedish traded Beijer Ref trades over 15% higher after a beat on the top and bottom line and up beat outlook; Zalando also rises sharply after guiding Q1 EBIT above consensus. VAT Group, JD Sports, Ashmore and Flow Traders are among other notable names rising on earnings. Galliford Try declines sharply after warnings FY19 profits to be below forecasts, while Hays Plc and Telit Communications also decline on earnings. Lufthansa shares reverse earlier losses after guiding Q1 EBIT loss on rising fuel costs and overcapacity in Europe. In other news Tele Columbus gains after confirming its in very early stages of evaluating Fiber options while Singulus Tech gains on additional orders. Looking ahead notable earners include UnitedHealth, BlackRock, Johnson & Johnson and Bank of America among others.

 

Equities

- Consumer discretionary: Lufthansa [LHA.DE] n/c, Air France-KLM [AF.FR] n/c (Lufthansa prelim results), Zalando [ZAL.DE] +% (prelim results), Galliford Try [GFRD.UK] -17% (profit warning), Hays [HAS.UK] -3.5% (trading update), JD Sports Fashion [JD.UK] +5% (earnings)

- Financials: Unicredit [UCG.IT] +2% (US sanctions probe), Ashmore [ASHM.UK] +3% (AUM stats)

- Materials: Eramet [ERA.FR] +11% (authorisation)

- Industrials: Beijer Ref [BEIJB.SE] +17% (earnings), Rolls-Royce [RR.UK] n/c (CEO comments on outlook)

- Technology: Tele Columbus [TC1.DE] +14% (evaluating strategic options)

- Telecom: Telit Communications [TCM.UK] -4% (earnings)

 

Speakers

- Several ECB policymakers said to doubt projections for growth rebound in H2 2019

- EU's Tusk reiterated that Brexit extension was flexible. EU 27 must keep an open mind on Brexit

- EU's Juncker reiterates that EU was prepared for all Brexit scenarios - even a no-deal outcome. UK had the time and space to overcome the Brexit impasse

- German ZEW Economists: Improvement in sentiment was largely based on hope that the global economic environment would develop less poorly than previously envision. Domestic economic data pointed to weak development

- China Finance Ministry official: Q1 fiscal revenue growth was within a reasonable range; fiscal spending +15% y/y. VAT cuts to put pressure on fiscal revenues but expected the 2019 growth target to be achieved. Q1 fiscal revenue +6.2% y/y; spending +15.0% y/y

 

Currencies/Fixed Income

- Major European pairs FX price action remained subdued.

- EUR/USD was softer just ahead of the NY morning after reports circulated that some ECB members were said to doubt any growth rebound in 2019. pair lower by 0.1% at 1.1290.

- AUD currency remained on soft footing after Apr RBA Minutes maintained its dovish bias and actually discussed scenarios where rate cut would be appropriate. AUD/USD lower by 0.3% to trade under 0.7150 area.

 

Economic Data

- (FI) Finland Feb GDP Indicator WDA Y/Y: 1.7% v 2.1% prior

- (CZ) Czech Mar PPI Industrial M/M: 0.5% v 0.3%e; Y/Y: 3.8% v 3.7%e

- (TR) Turkey Feb Industrial Production M/M: 1.3% v 0.3%e; Y/Y: -5.1% v -6.7%e

- (UK) Mar Jobless Claims Change: +28.3K v +26.7K prior; Claimant Count Rate: 3.0% v 2.9% prior

- (UK) Feb Average Weekly Earnings 3M/Y: 3.5% v 3.5%e; Weekly Earnings (ex-Bonus) 3M/Y: 3.5% v 3.4%e

- (UK) Feb ILO Unemployment Rate: 3.9% v 3.9%e; Employment Change 3M/3M: +179K v +181Ke

- (EU) Euro Zone Construction Output M/M: +3.0% v -0.8% prior; Y/Y: +5.2% v -0.1% prior

- (EU) Euro Zone Apr ZEW Expectations Survey: +4.5 v -2.5 prior

- (DE) Germany Apr ZEW Current Situation Survey: 5.5 v 8.5e; Expectations Survey: 3.1 v 0.5e

**Fixed Income Issuance**

- (NL) Netherlands Debt Agency (DSTA) sold €1.51B vs. €1.0-2.0B indicated range in 0.25% July 2029 DSL bond; Avg Yield: 0.238% v 0.555% prior

- (IN) India sold total INR200B vs. INR200B in 3-month, 6-month and 12-month bills

- (ID) Indonesia sold total IDR6.06T vs. IDR6.0T target in 6-month Islamic Bills, 2-year, 4-year, and 15-year Project-based Sukuk (PBS)

 

Looking Ahead

- 05:30 (UK) Weekly John Lewis LFL Sales data

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

- 05:30 (HU) Hungary Debt Agency (AKK) to sell in 3-month Bills

- 05:30 (UK) DMO to sell £2.25B in 1.75% Sept 2037 Gilt

- 05:40 (UK) BOE allotment in 6-month GBP-enhanced liquidity repo operation (ILTR)

- 06:00 (IL) Israel Q4 Final GDP Annualized: No est v 3.0% prelim

- 06:00 (IL) Israel Mar Trade Balance: No est v -$1.6B prior

- 06:00 (IE) Ireland Feb Trade Balance: No est v €7.2B prior

- 06:30 (EU) ESM to sell €2.5B in 6-month bills

- 06:45 (US) Daily Libor Fixing

- 07:45 (US) Weekly Chain Store Sales data

- 08:00 (PL) Poland Mar CPI Core M/M: 0.3%e v 0.2% prior; Y/Y: 1.3%e v 1.0% prior

- 08:00 (BR) Brazil Feb PPI Manufacturing M/M: No est v -0.7% prior; Y/Y: No est v 7.8% prior

- 08:00 (UK) Baltic Bulk Index

- 08:00 (RU) Russia announces upcoming OFZ Bond issuance

- 08:30 (CA) Canada Feb Int'l Securities Transactions (CAD): No est v 28.4B prior

- 08:30 (CA) Canada Feb Manufacturing Sales M/M: -0.1%e v +1.0% prior

- 08:55 (US) Weekly Redbook Retail Sales data

- 09:00 (EU) Weekly ECB Forex Reserves

- 09:15 (US) Mar Industrial Production M/M: 0.2%e v 0.0% prior (revised from 0.1%); Capacity Utilization: 79.2%e v 79.1% prior (revised from 78.2%); Manufacturing Production: +0.1%e v -0.4% prior

- 09:45 (UK) BOE to buy £1.15B in APF Gilt purchase operation (15+ years)

- 09:50 (AT) ECB's Nowotny (Austria) in NY

- 10:00 (US) Apr NAHB Housing Market Index: 63e v 62 prior

- 10:00 (MX) Mexico weekly International Reserve data

- 10:30 (NZ) Fonterra Global Dairy Trade Auction

- 13:00 (IE) ECB's Lane (Ireland, in-coming chief economist)

- 14:00 (US) Fed's Kaplan (dove, non-voter)

- 15:00 (AR) Argentina Mar National CPI M/M: 4.1%e v 3.8% prior; Y/Y: No est v 51.3% prior

- 16:30 (US) Weekly API Oil Inventory data