Riksbank hints of H1 rate cut, Japan officials up the ante on verbal intervention

Notes/observations

- Spain Mar CPI ticks higher but core reading did ease.

- Riksbank hints of rate cut in either May or Jun if improvement in inflation continues.

- Japan ups the rhetoric on verbal FX intervention.

Asia

- Australia Feb CPI Y/Y: 3.4% v 3.5%e.

- Australia Feb Westpac Leading Index M/M: +0.1% v -0.1% prior.

- China Feb Industrial Profits Y/Y: 10.2% v 16.8% prior.

- South Korea Apr Business Manufacturing Survey: 73 v 75 prior; Non-Manufacturing Survey: No est v 70 prior.

- Japan Fin Min Suzuk reiterates closely watching FX moves with a ‘high sense of urgency’, would not rule out any steps [including decisive steps**] to respond to disorderly FX moves (**Suzuki previously used the phrase "decisive steps" in autumn 2022 when Japan last intervened in the market to stem weakness in its currency).

- BOJ board member Tamura reiterated likely to maintain accommodative monetary conditions for the time being.

Europe

- UK Mar Lloyds Business Barometer: 42 v 40e.

Americas

- S&P revised outlooks on five US regional banks to negative citing stress in commercial real estate (CRE) markets (Stress in commercial real estate (CRE) markets).

Energy

- Weekly API Crude Oil Inventories: +9.3M v -1.5M prior.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.04% at 510.86, FTSE -0.38% at 7,901.15, DAX +0.11% at 18,418.55, CAC-40 -0.05% at 8,180.64, IBEX-35 +0.43% at 11,039.08, FTSE MIB +0.05% at 34,706.00, SMI -0.06% at 11,673.10, S&P 500 Futures +0.34%].

Market Focal Points/Key Themes: European indices open generally mixed and took on a positive bias through early trading; Norway closed for holiday; among sectors inclined to rise are consumer discretionary and energy; oil & gas subsector supported on press reports of potential oil deficit; sectors trending lower include industrials and real estate; H&M shares are leading gains in Stockholm after earnings beat and March sales color; reportedly DS Smith could receive counteroffer from International Paper; Ascometal discontinues acquisition of certain Swiss Steel assets; no major earnings expected in the upcoming US session.

Equities

- Consumer discretionary: H&M [HMB.SE] +13.5% (earnings; March sales).

- Financials: S4 Capital [SSFOR.UK] -12.0% (earnings), Deutsche Bank [DBK.DE] +4.0% (analyst action).

- Industrials: Diploma [DPLM.UK] +11.5% (acquisition), DS Smith [SMDS.UK] +7.5% (confirms discussions with International Paper; continuing discussions with Mondi), Maersk [MAERSKB.DK] +1.5% (surcharge on all bookings made via Rail from and to Rotterdam).

- Technology: SUSS MicroTec [SMHN.DE] -3.5% (earnings), Playtech [PTEC.UK] +1.5% (earnings).

- Utilities: SSE plc [SSE.UK] +1.0% (guidance).

Speakers

- ECB's Kazaks (Latvia, voter, hawk commented that he did not object to market view of June rate cut; Inflation was slowing and first rate cut was nearing.

- ECB’s Cipollone (Italy) stated that must give recovery a chance as inflation eased; coming closer to dialing back monetary restriction. Awaiting further data before beginning normalization of policy and if the outlook held then should be able to ease swiftly.

- Sweden Central Bank Policy Statement noted that a rate cut could happen in May or June meetings if inflation prospects remained favorable. Risk of inflation becoming entrenched at high levels was continuing to decline. Inflation expectations were firmly anchored and wage increases are moderate.

- Sweden Central Bank updated its Staff Projections which maintained 2024 CPIF at 2.3% but did raise 2025 CPIF from 1.7% to 1.9% (still below target). Projections raised the 2024 Avg GDP from -0.2% to +0.3% (from contraction to growth) while maintaining 2025 Avg GDP at 1.9%. The rate path was lowered for the horizon period.

- German Economic Institutes confirmed to have cut forecast for 2024 GDP growth from 1.3% to 0.1%.

- Poland Central Bank (NBP) Maslowska stated that could not rule out a hike at end-2024 amid CPI risks.

- Japan Fin Min Suzuki reiterated stance that would take decisive action** if needed on FX; If there any excessive moves and not rule out any options. He added that would not say anything whether MOF would conduct stealth FX intervention.

- IMF Dep Managing Dir Gopinath commented that policy makers should remain vigilant; needed the right mix of monetary and fiscal policy.

- China Pres Xi domestic economy was healthy and sustainable; would not stop reforming.

Currencies/fixed income

- EUR/USD remained listless around the 1.0840 level despite a higher Spanish CPI reading for March. ECB members continue to hint that Jun seemed most probable to enact rate cuts.

- USDJPY approached the 152 level during Asia for its highest level since 1990. Yen weakness was attributed to comments by BoJ board member Tamura noting that that monetary conditions to remain accommodative for some time. The weak yen brought out a plethora of Japanese govt officials commentary on FX. Fin Min Suzuki put a halt to yen weakness for the time being after using the phrase "decisive steps" to quell price speculation. Dealers noted that this phrase was last used back in autumn 2022 when Japan last intervened in the market to stem weakness in its currency. Pair at 151.15 by EU mid-session.

- SEK currency was a tad softer after Riksbank opened the door for either a May or Jun rate cut.

Economic data

- (NL) Netherlands Mar Producer Confidence Index: -4.8 v -4.2 prior.

- (FI) Finland Mar Consumer Confidence: -9.4 v -9.5 prior; Business Confidence: -13 v -11 prior.

- (SE) Sweden Feb Trade Balance (SEK): 9.3B v 13.3B prior.

- (SE) Sweden Feb Household Lending Y/Y: 0.4% v 0.4% prior.

- (NO) Norway Feb Retail Sales M/M: 0.1% v 0.2%e.

- (DK) Denmark Q4 Final GDP Q/Q: 2.6% v 2.0% prelim; Y/Y: 3.5% v 3.1% prelim.

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

- (HU) Hungary Q4 Current Account Balance: -€0.6B v -€0.1Be.

- (HU) Hungary Feb Unemployment Rate: 4.6% v 4.5%e.

- (FR) France Mar Consumer Confidence: 91 v 90e.

- (ES) Spain Mar Preliminary CPI M/M: 0.8% v 0.6%e; Y/Y: 3.2% v 3.1%e.

- (ES) Spain Mar Preliminary CPI EU Harmonized M/M: 1.3% v 1.4%e; Y/Y: 3.2% v 3.3%e; CPI Core Y/Y: 3.3% v 3.4%e.

- (ES) Spain Feb Adjusted Retail Sales Y/Y: 1.9% v 0.5% prior; Retail Sales (unadj) Y/Y: 4.9% v 2.3% prior.

- (TW) Taiwan Feb Leading Monitoring Indicator: 29 v 27 prior.

- (SE) Sweden Central Bank (Riksbank) left the Repo Rate unchanged at 4.00% (as expected); lowered rate path.

- (CH) Swiss Mar Expectations Survey: 11.5 v 10.2 prior.

- (AT) Austria Mar Manufacturing PMI: 42.2 v 43.0 prior (20th straight contraction).

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

- (ES) Spain Jan Current Account Balance: €5.1B v €1.5B prior.

Fixed income issuance

- (IN) India sold total INR340B vs. INR340B indicated in 3-month, 6-month and 12-month bills.

Looking ahead

- (AR) Argentina Mar Consumer Confidence: No est v 36.0 prior.

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

- 05:50 (EU) ECB allotment in 7-day and 3-month USD Liquidity Tender.

- 06:00 (EU) Euro Zone Mar Economic Confidence: 96.2e v 95.4 prior; Industrial Confidence: -9.5e v -9.5 prior; Services Confidence: 7.8e v 6.0 prior; Consumer Confidence (final): No est v -14.9 advance.

- 06:00 (EU) Daily Euribor Fixing.

- 06:00 (EU) ECB, BOE and SNB hold weekly 7-day USD Liquidity Tender.

- 06:00 (SE) Sweden to sell SEK3.5B in 1.75% Nov 2033 Bonds;

- 06:00 (IT) Italy Debt Agency (Tesoro) to sell €7.0-8.25B in 5-year and 10-year BTP Bonds (3 tranches).

- 06:00 (IT) Italy Debt Agency (Tesoro) to sell €1.0-1.5B in Oct 2031 CCTeu (floating rate notes).

- 06:00 (GR) Greece Debt Agency (PDMA) to sell 6-month bill.

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

- 06:30 (UK) Bank of England financial policy committee minutes.

- 06:30 (DE) Germany to sell €3.0B in 2.4% Nov 2030 Bunds.

- 06:30 (RU) Russia OFZ Bond auction.

- 07:00 (US) MBA Mortgage Applications w/e Mar 22nd: No est v -1.6% prior.

- 07:00 (BR) Brazil Mar FGV Inflation IGPM M/M: -0.2%e v -0.5% prior; Y/Y: -4.0%e v -3.8% prior.

- 07:00 (PT) Portugal Mar Consumer Confidence: No est v -24.4 prior; Economic Climate Indicator: No est v 1.7 prior.

- 07:30 (CL) Chile Central Bank Traders Survey.

- 08:00 (MX) Mexico Feb Unemployment Rate: 2.8%e v 2.9% prior; Unemployment Rate (seasonally adj): No est v 2.8% prior.

- 08:00 (MX) Mexico Feb Trade Balance: -$1.6Be v -$4.3B prior.

- 08:00 (UK) Weekly PM Question time in House.

- 08:30 (NL) ECB’s Elderson (Netherlands).

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

- 09:00 (ZA) South Africa Central Bank (SARB) Interest Rate Decision: Expected to leave Interest Rates unchanged at 8.25%.

- 10:00 (US) Revisions to Wholesale Sales and Inventories.

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

- 11:00 (MX) Mexico Feb Net Outstanding Loans (MXN): No est v 6.009T prior.

- 11:00 (CO) Colombia Feb National Unemployment Rate: No est v 12.7% prior; Urban Unemployment Rate: 11.7%e v 12.4% prior.

- 11:30 (US) Treasury to sell 2-Year FRN Reopening.

- 11:30 (US) Treasury to sell 17-Week Bills.

- 12:00 (RU) Russia Feb Industrial Production Y/Y: 5.3%e v 4.6% prior.

- 12:00 (CA) Canada to sell 10 Year Bonds.

- 13:00 (BR) Brazil Jan Total Formal Job Creation: +235.0KeKe v +180.4K prior.

- 13:00 (US) Treasury to sell 7-Year Notes.

- 15:00 (AR) Argentina Jan Wages M/M: No est v 8.9% prior.

- 17:00 (NZ) New Zealand Mar ANZ Consumer Confidence: No est v 94.5 prior.

- 18:00 (US) Fed’s Waller.

- 19:50 (JP) BOJ Summary of Opinions for March.

- 20:00 (AU) Australia Mar Consumer Inflation Expectation Survey: No est v 4.5% prior.

- 20:01 (UK) Mar Lloyds Business Barometer: No est v 42 prior.

- 20:30 (AU) Australia Feb Retail Sales M/M: 0.4%e v 1.1% prior.

- 20:30 (AU) Australia Feb Private Sector Credit M/M: 0.4%e v 0.4% prior; Y/Y: No est v 4.9% prior.

- 20:30 (AU) Australia Feb Q4 Job Vacancies Q/Q: No est v -0.7% prior.

- 21:10 (JP) BOJ Outright Bond Purchase Operation for 3~5 Years; 5~10 Years and 10~25 Years maturities.

- 21:00 (NZ) New Zealand to sell combined NZ$500M in 2029 and 2034 bonds.

- 22:00 (SG) Singapore Feb M2 Money Supply Y/Y: No est v 5.3% prior; M1 Money Supply Y/Y: No est v 6.3% prior; Deposits and Balances (Residents outside Singapore) (S$): No est v 592.9B prior.