TradeTheNews.com Staff
TradeTheNews.com
Notes/Observations
- German May ZEW Survey showing negative impact of higher energy costs is increasingly felt by companies and private households.
- Easing oil prices said to help risk sentiment (softer tone attributed to China lockdown concerns and reports that EU was softening its Russian sanction proposals.
- Upcoming US CPI data on Wed might suggest that peak has already passed.
- Moderate recovery in equities after recent steep selloffs.
Asia
- Japan Mar Household Spending registered its 1st decline in 3 months (Y/Y: -2.3% v -3.3%e).
- Japan Fin Min Suzuki stated that the yield gap was widening due to monetary policy divergence; Reiterated FX stability was important and rapid moves were undesirable; no comments on FX levels.
- BOJ Official Uchida reiterated desirable for FX to reflect the economic fundamentals; rate hike was not desirable for Japan's economy.
- China Vice Premier Li reiterated its stance of a dynamic zero covid policy. Shanghai said to have suspended the last 2 operating subways lines while Beijing to launch new mass COVID testing in at least 3 district on May 10-12th.
Russia/Ukraine
- EU Commission President Von der Leyen noted that she had discussions with Hungary PM Orban which were 'helpful to clarify issues related to sanctions and energy security'; Progress was made but further talks were needed.
- EU Commission said to be planning to issue new joint EU debt to cover Ukraine's short term financing needs over the next 3 months, which is estimated at €15B.
Europe
- UK Brexit negotiator Truss said to have drawn up draft legislation that would unilaterally remove the need for all checks on goods being sent from Britain for use in Northern Ireland. Legislation would also allow businesses in the province to disregard EU rules and regulations and take away the power of the European Court of Justice to rule on issues relating to Northern Ireland.
Americas
- Fed’s Brainard (vice chair): Large price spikes and margin calls from Russia's invasion highlight potential for contagion to large financing institutions - Semi-annual financial stability report.
- US Senate could advance the nomination of Lisa Cook for the Federal Reserve Board of Governors on Tuesday (May 10th).
- Fed's Bostic (non-voter, hawk): Sees two to three 50bps rate hikes as a baseline; Open to adjusting.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
Indices [Stoxx600 +1.07% at 421.94, FTSE +0.85% at 7,278.25, DAX +1.50% at 13,580.83, CAC-40 +1.09% at 6,152.52, IBEX-35 +1.31% at 8,245.85, FTSE MIB +1.67% at 23,214.00, SMI +1.09% at 11,569.30, S&P 500 Futures +1.13%].
Market Focal Points/Key Themes: European indices open higher across the board and remained upbeat as the session progressed; all sectors start the day in the green; sectors leading to the upside include consumer discretionary and industrials; laggard sectors include energy and telecom; oil & gas subsector under pressure after Brent dropped below $110/bbl; Swedish Match confirms in talks of takeover from Philip Morris; earnings expected during the upcoming American session include Alcon, Pirelli, Intel and Warner Music.
Equities
- Consumer staples: Swedish Match [SWMA.SE] +24% (approach from Philip Morris).
- Energy: Tethys Oil [TETY.SE] -11% (earnings).
- Financials: Munich Re [MUV2.DE] +1% (earnings; write downs).
- Healthcare: Bayer [BAYN.DE] +1% (earnings).
- Industrials: Porsche [PAH3.DE] +1.5% (final earnings), Fraport [FRA.DE] -3% (earnings).
- Utilities: Centrica [CNA.UK] +4.5% (trading update).
Speakers
- Ireland PM Martin said to have told UK PM Johnson to avoid any unilateral move on Northern Ireland protocol.
- German ZEW Economists comment that China covid restrictions contributed to deterioration in assessment.
- BBC journalist Parker tweeted: UK government to act "responsibly" with regards to the Northern Ireland protocol and negotiations with the EU.
- BOJ Gov Kuroda stated that private digital assets could cause greater risks going forward if existing regulatory framework was left unchanged. Had yet to decide whether or not the BOJ is to issue a Central Bank Digital Currency (CBDC).
- China Foreign Ministry spokesperson stated that US was trying to hollow out the 'One China" policy (**Note: Comments referred to US editing its ‘US-Taiwan Relations’ page which removed sentence ‘Taiwan is part of China".
- Saudi Oil Min Abdulaziz commented at a conference that all energy sectors were running out of capacity.
- UAE Energy Min Mazrouei stated that the oil market appeared to be balanced. Political issues that cause 'chaos' was something outside of what was discussed at OPEC not siding with anyone.
- IAEA Dir Grossi stated that remained hopeful for an Iran nuclear agreement within a reasonable timeframe.
Currencies/Fixed income
- USD was retracing some of its recent strength with markets focused on the upcoming US CPI data. The current market consensus expectations suggest that perhaps peak has already passed on the inflation front. Some pause now creeping into the market that perhaps the Fed may not need to rais=se interest rates anywhere near as much as policy makers or the consensus of economists predicted.
- EUR/USD at 1.0560 area by mid-session. Dealers noted that the key support remained intact for now but headwinds still persist as the recent spike in energy and food prices to keep expectations that the Euro Zone was susceptible to stagflation.
- GBP/USD back above the 1.2330 level but Brexit concerns continue to percolate.
- USD/JPY retreated from recent 20-year highs and at 130.05 by mid-session.
Economic data
- (NL) Netherlands Apr CPI M/M: 0.3% v 0.2%e; Y/Y: 9.5% v 9.5%e.
- (NL) Netherlands Apr CPI EU Harmonized M/M: 0.4% v 0.4%e; Y/Y: 11.2% v 11.2%e.
- (NL) Netherlands Mar Manufacturing Production M/M: -0.2 v -0.2% prior; Y/Y: 7.2 v 10.4% prior; Industrial Sales Y/Y: 23.6 v 23.6% prior.
- (FI) Finland Mar Industrial Production M/M: -1.2% v 0.5% prior; Y/Y: 2.6% v 3.4% prior.
- (NO) Norway Apr CPI M/M: 1.2% v 0.6% prior; Y/Y: 5.4% v 4.7%e.
- (NO) Norway Apr CPI Underlying M/M: 0.9% v 0.6%e; Y/Y: 2.6% v 2.4%e.
- (NO) Norway Apr PPI (including oil) M/M: -7.2% v +16.9% prior; Y/Y: 66.4% v 79.4% prior.
- (DK) Denmark Apr CPI M/M: 1.6% v 0.6% prior; Y/Y: 6.7% v 5.4% prior.
- (DK) Denmark Apr CPI EU Harmonized M/M: 1.8% v 0.7% prior; Y/Y: 7.4% v 6.0% prior.
- (AT) Austria Mar Industrial Production M/M: -1.1% v +0.2% prior; Y/Y: 3.7% v 8.6% prior.
- (CZ) Czech Apr CPI M/M: 1.8% v 0.9%e; Y/Y: 14.2% v 13.3%e.
- (CZ) Czech Mar Export Price Index Y/Y: 13.2% v 10.4% prior; Import Price Index Y/Y: 19.2% v 14.0% prior.
- (CZ) Czech Mar Retail Sales (ex-auto) Y/Y: 5.4% v 5.8%e.
- (HU) Hungary Apr CPI M/M: 1.6% v 1.2%e; Y/Y: 9.5% v 8.9%e.
- (TR) Turkey Mar Unemployment Rate: 11.5% v 11.1% prior.
- China Apr Passenger Vehicle sales 1.06M units, -35.7% y/y.
- (IT) Italy Mar Industrial Production M/M: 0.0% v -1.5%e; Y/Y: 3.0% v 1.4%e; Industrial Production NSA (unadj) Y/Y: 3.8% v 3.4% prior.
- (IT) Bank of Italy Banks and Money Monthly Statistics: Apr Gross Non-performing Loans (NPLs): €41.7B v €41.9B prior.
- (DE) Germany May ZEW Current Situation Survey: -36.5 v -35.0e; Expectations Survey: -34.3 v -43.5e.
- (EU) Euro Zone May ZEW Expectations Survey: -29.5 v -43.0 prior.
- (GR) Greece Apr CPI Y/Y: 10.2% v 8.9% prior; EU Harmonized Y/Y: 9.1% v 8.0% prior.
- (GR) Greece Mar Industrial Production Y/Y: 7.9% v 4.8% prior.
Fixed income issuance
- (ID) Indonesia sold total IDR7.76T vs. IDR20.0T target in bills and bonds.
- (NL) Netherlands Debt Agency (DSTA) sold €2.515B vs. €2.0-3.0B indicated range in 0% Jan 2026 DSL Bonds; Avg Yield: +0.761% v -0.329% prior.
- (ES) Spain Debt Agency (Tesoro) sold total €1.93B vs. €1.5-2.5B indicated range in 3-month and 9-month Bills.
- (AT) Austria Debt Agency (AFFA) sold total €1/38BB vs. €1.38B indicated in 2028 and 2032 RAGB bonds.
- (UK) DMO sold £2.25B in 0.875% July 2033 Gilts; Avg Yield: 1.951%; bid-to-cover: 2.37x; Tail: 1.6bps.
Looking ahead
- (SE) Sweden Central Bank (Riksbank) Parliamentary hearing on monetary policy 2021.
- (FR) Bank of France Apr Industrial (Business) Sentiment: 103e v 103 prior.
- (MX) Mexico Apr ANTAD Same-Store Sales Y/Y: No est v 8.8% prior.
- (RO) Romania Central Bank (NBR) Interest Rate Decision: Expected to raise Interest Rates by 75bps to 3.75%.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.
- 05:30 (DE) Germany to sell €3.0B in 0% Apr 2027 BOBL.
- 05:30 (BE) Belgium Debt Agency (BDA) to sell 3-month and 12-month bills.
- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO) (prior €549.0M with 17 bids recd).
- 05:30 (ZA) South Africa to sell combined ZAR3.9B in 2030, 2035 and 2048 bonds.
- 06:00 (US) Apr NFIB Small Business Optimism Index: 92.9e v 93.2 prior.
- 06:00 (PT) Portugal Mar Trade Balance: No est v -€2.2B prior.
- 06:00 (FI) Finland to sell 6-month and 9-month bills.
- Sells € vs. €B indicated in 6-month bills; Avg Yield: % v -0.400% prior; Bid-to-cover: x v 1.13x prior (Apr 11th 2022).
- Sells € vs. €B indicated in 9-month bills; Avg Yield: % v -0.310% prior; Bid-to-cover: x v 1.40x prior (Apr 11th 2022).
- 06:30 (EU) ESM to sell €1.1B in 12-Month Bills; Avg Yield: % v -0.164% prior; Bid-to-cover: x v 2.8x prior (Apr 12th 2022).
- 06:45 (US) Daily Libor Fixing.
- 07:00 (CZ) Czech Central Bank to comment on recent CPI data.
- 07:00 (TR) Turkey to sell Bonds.
- 07:40 (US) Fed’s Williams.
- 08:00 (IS) Iceland Apr Unemployment Rate: No est v 4.9% prior.
- 08:00 (BR) Brazil Mar Retail Sales M/M: 0.5%e v 1.1% prior; Y/Y: 2.3%e v 1.3% prior.
- 08:00 (BR) Brazil Mar Broad Retail Sales M/M: -0.4%e v +2.0% prior; Y/Y: 2.7%e v 0.3% prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (UR) Ukraine Apr CPI M/M: No est v 4.5% prior; Y/Y: No est v 13.7% prior.
- 08:30 (CL) Chile Central Bank Economists Survey.
- 08:55 (US) Weekly Redbook LFL Sales data.
- 09:00 (EU) Weekly ECB Forex Reserves.
- 09:00 (EU) ECB weekly QE bond buying update.
- 09:15 (US) Fed’s Barkin.
- 10:00 (BR) Brazil Apr Vehicle Production: No est v 184.8K prior; Vehicle Sales: No est v 146.8K prior; Vehicle Exports: No est v 38.9K prior.
- 10:00 (MX) Mexico Weekly International Reserve data.
- 10:00 (DE) ECB’s Nagel (Germany).
- 11:30 (US) President Biden to comment on inflation.
- 13:00 (US) Fed’s Waller.
- 13:00 (US) Treasury to sell 3-Year Notes.
- 13:20 (ES) ECB’s de Guindos (Spain).
- 15:00 (AR) Argentina Mar Wages M/M: No est v 3.1% prior.
- 15:00 (US) Fed’s Mester.
- 16:30 (US) Weekly API Oil Inventories.
- 19:00 (KR) South Korea Apr Unemployment Rate: 2.8%e v 2.7% prior.
- 20:30 (AU) Australia May Consumer Confidence Index: No est v 95.8 prior.
- 21:30 (KR) Korea Central Bank to sell KRW900B in 1-Year Bonds.
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