March inflation readings surge in Europe

Notes/Observations

- Hotter EU inflation data helping to bolster expectations that the ECB could likely to start raising interest rates this year.

- Markets maintain a positive view on peace talks in Ukraine.

Asia

- Japan Feb Retail Sales M/M: -0.8% v -0.3%e;Y/Y: -0.8% v -0.3%e.

- BOJ Gov Kuroda stated that he had discussed Ukraine and coronavirus situation with PM Kishida; Cost of buying dollars to purchase commodities was one of the main factors behind yen currency weakening and added that the rising US interest rates was also a factor.. PM made no specific requests on Monetary Policy.

Russia/Ukraine

- Ukraine President Zelenskiy stated that signals from Russia talks could be called positive, but these signals did not drown out the explosions of Russia shells.

Europe

- German Council of Economic Advisers said to have cut the 2022 GDP growth estimates to 1.8%; Inflation at 6.1%.

Americas

- Senator Manchin (D-WV) stated that he did not support taxing the unrealized gains of the wealthy [comments follow the release of the President Biden budget]. He also did not support rolling back fossil fuel tax breaks.

Energy

- Weekly API crude oil inventories: -3.0M v -4.3M prior.

Speakers/fixed income/fx/commodities/erratum

Equities

Indices [Stoxx600 -0.70% at 458.86, FTSE +0.04% at 7,540.02, DAX -1.28% at 14,629.93, CAC-40 -0.94% at 6,728.01, IBEX-35 -0.71% at 8,553.65, FTSE MIB -0.57% at 25,164.00, SMI -0.33% at 12,284.51, S&P 500 Futures -0.37%].

Market focal points/key themes: European indices open modestly lower, and trended downward as the session wore on; better performing sectors include energy and telecom; sectors among those leading to the red side include consumer discretionary and financials; oil and gas subsector supported after Brent moved back above $110/bbl; John Menzies confirms receipt of offer from GIL; no major earnings expected in the upcoming US session.

Equities

- Consumer discretionary: Cargotec [CGCBV.FI] +1.5% (strategy update).

- Financials: UBS [UBSG.CH] -1% (new buyback).

- Technology: Electrocomponents [ECM.UK] -1% (guidance; to change name).

- Real Estate: Unibail-Rodamco-Westfield [URW.NL] -0.5% (new targets).

- Materials: Polymetal International [POLY.UK] +15% (business update).

- Utilities: Encavis [ECV.DE] +5% (earnings).

Speakers

- ECB chief Lagarde stated that would see higher inflation in the short term; cutting Russian energy would create costs during transition. Households were becoming more pessimistic and could cut back on spending. Ukraine conflict was eroding confidence in both households and corporate fronts. Could mitigate the economic consequences with the right response.

- ECB's Kazimir (Slovakia): 1st rate hike could happen by end of year and that the ECB wanted to end negative rates in next 12 months.

- ECB’s Muller (hawk, Estonia) stated that the Ukraine conflict meant higher inflation. APP bond buying could end in Q3 with a rate hike coming after that.

- BOE’s Broadbent stated that was doubtful that country had ever experienced an external hit to real national income on this scale.

- Germany Econ Min Habeck stated that gas supplies were safeguarded at this time and experienced no shortages. Gov was declaring an early warning in order to prepare for possible escalation by Russia. Gas crisis measures were preventative in nature. Would not accept any gas supply breach of contract from Russia.

- IMF Chief Georgieva stated that it would be lucky to achieve 2022 global GDP growth of 4.4%.

- Japan Chief Cabinet Sec Matsuno reiterated govt stance that stable FX market was desirable; to keep close watch on forex moves and its impact on the domestic economy.

- Thailand Central Bank Policy Statement noted that the decision to keep policy steady was unanimous. To focus on economic recovery and was prepared to use policy tools as appropriate. Fiscal measures should support economy and noted that the Ukraine war was not affecting the overall economy. Inflation seen accelerating in Q2 and Q3.

- Thailand Central Bank Staff Projections cut its 2022 GDP growth from 3.4% to 3.2% and set 2023 growth at 4.4%. it raised 2022 Headline CPI from 1.7% to 4.9% and set 2023 Headline CPI at 1.7%.

- China Foreign Min Wang stated that relations with Russia continued to develop resiliently.

- China PBoC reiterated stance to further improve the policy framework of RRR and strengthen relending and rediscounting tools for rural sector.

Currencies/ Fixed income

- Prospect of easing commodity prices amid a potential de-escalation of the war in Ukraine would reduce pressure on the Federal Reserve to aggressively hike rates.

- EUR/USD remained above the 1.11 level and probed 1-month highs near 1.1150 area. Continued evidence of rising prices helping to bolster expectations that the ECB could likely to start raising interest rates this year. Markets brought forward it view of when ECB Deposit Rate moves back to 0.00% to Oct from Dec.

Economic data

- (DE) Germany Mar CPI North Rhine Westphalia M/M: 2.7% v 1.0% prior; Y/Y: 7.6% v 5.3% prior.

- (NL) Netherlands Mar Producer Confidence Index: 8.7 v 8.5 prior.

- (ZA) South Africa Feb M3 Money Supply Y/Y: 6.4% v 5.7%e; Private Sector Credit Y/Y: 3.6% v 3.3%e.

- (SE) Sweden Feb Retail Sales M/M: -0.1% v +3.7% prior; Y/Y: 2.9% v 4.2% prior.

- (ES) Spain Mar Preliminary CPI M/M: 3.0% v 1.3%e; Y/Y: 9.8% v 8.0%e (highest annual pace in almost 4 decades).

- (ES) Spain Mar Preliminary CPI EU Harmonized M/M: 3.9% v 3.2%e; Y/Y: 9.8% v 8.4%e.

- (CH) Swiss Mar KOF Leading Indicator: 99.7 v 101.5e.

- (AT) Austria Feb PPI M/M: 1.2% v 2.4% prior; Y/Y: 18.9% v 18.4% prior.

- (SE) Sweden Mar Consumer Confidence: 73.5 v 80.0e (lowest since 2009); Manufacturing Confidence: 125.0 v 124.3 prior; Economic Tendency Survey: 110.3 v 110.0e.

- (TR) Turkey Mar Economic Confidence: 95.7 v 98.2 prior.

- (TH) Thailand Central Bank (BoT) left the Benchmark Interest Rate unchanged at 0.50% (as expected).

- (DE) Germany Mar CPI Hesse M/M: 2.6% v 0.8% prior; Y/Y: 8.0% v 5.7% prior.

- (DE) Germany Mar CPI Bavaria M/M: 2.8% v 1.2% prior; Y/Y: 7.8% v 5.3% prior.

- (DE) Germany Mar CPI Brandenburg M/M: 2.6% v 0.8% prior; Y/Y: 7.3% v 5.4% prior.

- (DE) Germany Mar CPI Baden Wuerttemberg M/M: 2.0% v 0.8% prior; Y/Y: 6.3% v 4.7% prior.

- (CH) Swiss Mar Expectations Survey: -27.8 v +9.0 prior.

- (IT) Italy Jan Industrial Sales M/M: +2.3% v -2.0% prior; Y/Y: 16.9% v 14.5% prior.

- (PT) Portugal Mar Consumer Confidence Index: -22.1 v -17.1 prior; Economic Climate Indicator: 2.1.

- (MX) Mexico Feb Unemployment Rate NSA (unadj): 3.7% v 3.7%e.

- (EU) Euro Zone Mar Economic Confidence: 108.5 v 108.0e; Industrial Confidence: 10.4 v 8.9e; Services Confidence: 14.4 v 10.0e; Consumer Confidence (final): -18.7 v -18.7 advance.

- (DE) Germany Mar CPI Saxony M/M: 2.4% v 0.9% prior; Y/Y: 7.0% v 4.9% prior.

- (IT) Italy Feb PPI M/M: 0.2% v 12.4% prior; Y/Y: 41.4% v 41.8% prior.

Fixed income issuance

- (IN) India sold total INR vs. INR370B indicated in 3-month, 6-month and 12-month bills.

- (DK) Denmark sold total DKK3.46B in 3-month, 6-month and 9-month bills.

- (SE) Sweden sold SEK5.0B vs. SEK5.0B indicated in 3-month Bills; Avg Yield: -0.2208% v -0.3410% prior; Bid-to-cover: 1.96x v 3.68x prior.

- (IT) Italy Debt Agency (Tesoro) sold total €6.5B vs. €5.5-6.5B indicated range in 5-year and 10-year BTP Bonds.

- Sold €3.0B vs. €2.5-3.0B indicated range in 1.10% Apr 2027 BTP bonds; Avg Yield: 1.46% v 1.07% prior; Bid-to-cover: 1.38x v 1.37x prior (Feb 25th 2022).

- Sold €3.5B vs. €3.0-3.5B indicated range in 0.95% Jun 2032 BTP; Avg Yield: 2.14% v 1.81% prior; bid-to-cover: 1.31x v 1.37x prior.

Looking ahead

- (BR) Brazil Feb Central Govt Budget Balance (BRL): -17.9Be v +76.5B prior.

- (MX) Mexico Feb YTD Budget Balance (MXN): No est v -58.8B prior.

- (BE) Belgium Mar CPI M/M: No est v 0.6% prior; Y/Y: No est v 8.0% prior.

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

- 05:30 (GR) Greece Debt Agency (PDMA) to sell €625M in 26-week Bills.

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

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

- 05:30 (HU) Hungary Debt Agency (AKK) switch auction.

- 06:45 (US) Daily Libor Fixing.

- 07:00 (BR) Brazil Mar FGV Inflation IGPM M/M: 1.3%e v 1.8% prior; Y/Y: 14.2%e v 16.1% prior.

- 07:00 (US) MBA Mortgage Applications w/e Mar 25th: No est v -8.1% prior.

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

- 07:00 (RU) Russia cancelled planned OFZ Bond issuance.

- 08:00 (DE) Germany Mar Preliminary CPI M/M: 1.6%e v 0.9% prior; Y/Y: 6.2%e v 5.1% prior.

- 08:00 (DE) Germany Mar Preliminary CPI Harmonized M/M: 1.9%e v 0.9% prior; Y/Y: 6.8%e v 5.5% prior
2.1 prior.

- 08:00 (ZA) South Africa Feb Monthly Budget Balance (ZAR): -0.6Be v -65.9B prior.

- 08:00 (CL) Chile Feb Unemployment Rate: 7.4%e v 7.3% prior.

- 08:00 (BE) ECB's Wunsch (Belgium) in Parliament.

- 08:15 (US) Mar ADP Employment Change: +450Ke v +475K prior.

- 08:30 (US) Q4 Final GDP Annualized (3rd reading) Q/Q: 7.0%e v 7.0% prelim; Personal Consumption: 3.1%e v 3.1% prelim.

- 08:30 (US) Q4 Final GDP Price Index: 7.1%e v 7.1% prior; Core PCE Q/Q: 4.0%e v 5.0% prior.

- 09:00 (UR) Ukraine to sell Bonds.

- 09:15 (US) Fed’s Barkin at event.

- 10:15 (IT) ECB’s Panetti in Parliament.

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

- 12:00 (RU) Russia Feb Unemployment Rate: 4.5%e v 4.4% prior.

- 12:00 (RU) Russia Jan Real Wages Y/Y: 2.9%e v 3.6% prior.

- 12:00 (RU) Russia Feb Real Retail Sales Y/Y: 4.2%e v 3.6% prior.

- 17:00 (KR) South Korea Apr Business Manufacturing Survey: No est v 93 prior; Non-Manufacturing Survey: No est v 84 prior.

- 19:00 (KR) South Korea Feb Industrial Production M/M: -0.2%e v +0.2% prior; Y/Y: 4.5%e v 4.3% prior.

- 19:01 (UK) Mar Lloyds Business Barometer: No est v 44 prior.

- 19:50 (JP) Japan Feb Preliminary Industrial Production M/M: +0.5%e v -0.8% prior; Y/Y: +0.8%e v -0.5% prior.

- 20:30 (AU) Australia Feb Job Vacancies Q/Q: No est v 18.5% prior.

- 20:30 (AU) Australia Feb Building Approvals M/M: +5.0%e v -27.9% prior.

- 20:30 (AU) Australia Feb Private Sector Houses M/M: No est v -17.5% prior.

- 20:30 (AU) Australia Feb Private Sector Credit M/M: 0.6%e v 0.6% prior; Y/Y: 7.9%e v 7.6% prior.

- 21:30 (CN) China Mar (govt official) Manufacturing PMI: 49.8e v 50.2 prior; Non-manufacturing PMI: 50.3e v 51.6 prior; Composite PMI: No est v 51.2 prior.

- 22:00 (SG) Singapore Feb M2 Money Supply Y/Y: No est v 2.8% prior M1 Money Supply Y/Y: No est v 9.6% prior.

- 23:35 (JP) Japan to sell 2-Year JGB Bonds.