Upcoming US CPI data expected to show growing price pressures

Notes/Observations

- Awaiting key US CPI data; expected to show growing price pressures.

- Trade between the UK and EU partially recovered in February after January's Brexit issues.

Asia:

-(CN) China Mar Trade Balance: $13.8B v $51.2Be; Exports Y/Y: 30.6% v +37.6%e; Imports Y/Y: 38.1% v 24.3%e.

- BOJ Gov Kuroda testified in Parliament and reiterates stance that would take time but believed it wass possible to achieve 2% target. Reiterates BOJ to continue monetary easing for long period of time via YCC, which had been made more sustainable with the Mar Policy review.

- Treasury Sec Yellen said not planning to designate China as a currency manipulator in biannual report. Treasury Dept said to consider scaling back criteria to label a country an FX manipulator.

- US Treasury widely expected to include Taiwan in its semi-annual currency manipulator list after the country met all three criteria.

Europe:

- ECB's Centeno (Portugal):. Need to be careful of premature withdrawal of COVID support measures.

- Bank of France forecasted Q1 GDP to grow 'slightly' q/q.

- More reports that Italy Govt was preparing a new stimulus package worth around €40B. Extra borrowing would probably push this year’s budget deficit above 10% of GDP.

Americas:

- Fed’s Rosengren (non-voter) stated that the economy's likely path suggested rate rise debate was about 2 years off, there was a lot of slack that must be closed, too much uncertainty to be specific on rate rise currently.

- President Biden brought up idea of a $0.05 rise in the gas tax in a recent meeting and the amount of money that would generate for his infrastructure plan.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 +0.24% at 436.28, FTSE -0.13% at 6,880.35 , DAX +0.32% at 15,263.75 , CAC-40 +0.30% at 6,180.12, IBEX-35 +0.13% at 8,544.00 , FTSE MIB +0.38% at 24,553.50, SMI -0.26% at 11,151.73 , S&P 500 Futures +0.01%].

Market Focal Points/Key Themes: European indices open mixed but later moved to trade generally higher; better performing sectors include materials and industrials; telecom and healthcare sectors among those trending to the downside; reportedly Siemens Healthineers considinger selling Ultrasound unit; earnings expected in the upcoming US session include Fastenal and Louis Vuitton.

Equities

- Consumer discretionary: JD Sports Fashion [JD.UK] +2% (earnings).

- Healthcare: Lundbeck [LUN.DK] -8% (trial).

- Industrials: Babcock International [BAB.UK] +25% (business update), Leoni [LEO.DE] +10% (shareholder raises stake).

- Technology: Electrocomponents [ECM.UK] +2% (trading update).

Speakers

- ECB's Villeroy (France) stated that he saw a return of growth to pre-pandemic level by mid-2022 for region. Reiterated view that France to register slight growth in Q1.

- Norway Central Bank (Norges) Gov Olsen stated that the impact of long-term unemployment was a concern. Reiterated stance that sees housing prices slowing in 2021.

- Italy new borrowings in budget could be as much as €50B.

- German Cabinet passed measure to tighten coronavirus restrictions (as anticipated.

- G7 and EU Foreign Ministers issue statement: Express deep concern over Russian troop buildup around Ukraine border. Called on Russia to halt provocations and ease tensions.

- German ZEW Economists commented that stricter lockdown measures have led to a decline in expectations for private consumption.

- NATO Sec Gen Stoltenberg stated that it stood by Ukraine.

- Poland Central Bank member Zyzynski stated that was too early to discuss rate increase.

Currencies/Fixed Income

- USD was slightly weaker in quiet trade on Tuesday as market participants awaited US CPI data. Analysts noted that CPI was expected to show growing price pressure and could further fuel the narrative that the US economy was starting to overheat. Data likely to add to concerns that the Fed's firmly dovish message would be increasingly challenged.

- GBP was firmer in the session to move above 1.3750 level. UK Feb GDP daya returned to growth aided by events that UK govt reached its April 15th coronavirus vaccination target on Monday.

- US 10-year Yield hovering around 1.69%.

Economic data

- (SE) Sweden Mar PES Unemployment Rate: 4.0% v 4.4% prior.

- (UK) Feb Monthly GDP M/M: 0.4% v 0.5%e; 3M/3M: -1.6% v -1.9%e.

- (UK) Feb Industrial Production M/M: 1.0% v 0.5%e; Y/Y: -3.5% v -4.5%e.

- (UK) Feb Manufacturing Production M/M: 1.3% v 0.5%e; Y/Y: -4.2% v -5.1%e.

- (UK) Feb Construction Output M/M: 1.6% v 0.5%e; Y/Y: -4.3% v -2.1%e.

- (UK) Feb Index of Services M/M: 0.2% v 0.6%e; 3M/3M: -1.9% v -2.3%e.

- (UK) Feb Visible Trade Balance: -£16.4B v -£10.5Be; Overall Trade Balance: -£7.1B v -£2.4Be; Trade Balance Non EU: -£10.7B v -£4.6B prior.

- (RO) Romania Mar CPI M/M: 0.4% v 0.4% prior; Y/Y: 3.1% v 3.2%e.

- (CZ) Czech Mar CPI M/M: 0.2% v 0.3%e; Y/Y: 2.3% v 2.4%e.

- (CZ) Czech Feb Export Price Index Y/Y: 4.5% v 3.8% prior; Import Price Index Y/Y: 2.1% v 0.4% prior.

- (TR) Turkey Feb Industrial Production M/M: 0.1% v 0.0%e; Y/Y: 8.8% v 8.0%e.

- (IT) Italy Feb Industrial Production M/M: 0.2% v 0.6%e; Y/Y: -0.6% v -2.1%e; Industrial Production NSA (unadj) Y/Y: -1.3% v -7.8% prior.

- (CZ) Czech Feb Current Account Balance (CZK): 24.4B v 28.4Be.

- (DE) Germany Apr ZEW Current Situation Survey: -48.8 v -54.1e; Expectations Survey: 70.7 v 79.0e.

- (EU) Euro Zone Apr ZEW Expectations Survey: 66.3 v 74.0 prior.

Fixed income Issuance

- (AT) Austria Debt Agency (AFFA) opened its book to sell EUR-denominated 4-year and 50-year RAGB bonds via syndicate.

- (ES) Spain Debt Agency (Tesoro) opened its to sell EUR-denominated 15-year SPGB bond via syndicate; guidance seen +18bps to July 2035 SPGB.

- (NL) Netherlands Debt Agency (DSTA) opened its book to sell €4.0-6.0B in new 0% 2038 Jan DSL Bonds; order book over €13B.

- (ID) Indonesia sold total IDR24.2T in bills and bonds.

- (ES) Spain Debt Agency (Tesoro) sold total €6.74B vs. €6.0-7.0B indicated range in 6-month and 12-month bills.

- (UK) DMO sold £1.0B in 1.625% Oct 2071 Gilts; Avg Yield: 1.117% v 0.741% prior; bid-to-cover: 2.23x v 2.32x prior; Tail: 0.8bps v 0.2bps prior.

- (IT) Italy Debt Agency (Tesoro) sold total €7.75B vs. €6.0-7.75B indicated range in 3-year, 5-year and 15-year BTP bonds.

- Sold €4.0B vs. €3.5-4.0B indicated range in 0.00% Apr 2024 BTP; Avg Yield: -0.17% v -0.22% prior Bid-to-cover: 1.38x v 1.6x prior (Mar 11th 2021)

- Sold €1.75B vs. €1.0-1.75B indicated range in1.60% Jun 2026 BTP bonds; Avg Yield: 0.12% v 1.36% prior; Bid-to-cover: 1.55x v 1.79x prior.

- Sold €2.0B vs €1.5-2.0B in 0.95% Mar 2037 BTP; Avg Yield: 1.26% v 1.05% prior; bid-to-cover: 1.47x v 1.53x prior.

Looking Ahead

- (EU) Daily ECB Liquidity Stats.

- 05:30 (ZA) South Africa Feb Total Mining Production M/M: 0.4%e v 4.5% prior; Y/Y: -3.4%e v -6.2% prior; Gold Production Y/Y: No est v -14.1% prior; Platinum Production Y/Y: No est v.

-14.5% prior.

- 05:30 (DE) Germany to Sell €700M in 0.1% Apr 2033 inflation-linked Bonds (Bundei).

- 05:30 (BE) Belgium Debt Agency (BDA) to sell ê1.8-2.2B in 3-month and 12-month bills.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

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

- 05:30 (ZA) South Africa to sell combined ZAR4.8B in 2031, 2037 and 2044 bonds.

- 06:00 (US) Mar NFIB Small Business Optimism Index: 98.0e v 95.8 prior.

- 06:00 (IL) Israel Mar Consumer Confidence: No est v 105 prior.

- 06:00 (PT) Portugal Mar Final CPI M/M: No est v 1.4% prelim; Y/Y: No est v 0.5% prelim.

- 06:00 (PT) Portugal Mar Final CPI EU Harmonized M/M: No est v 1.5% prelim; Y/Y: No est v 0.1% prelim.

- 06:00 (FI) Finland to sell combined €1.0B in 6-month and 9-month Bills.

- 06:30 (EU) ESM to sell 12-month Bills.

- 06:45 (US) Daily Libor Fixing.

- 07:00 (CZ) Czech Central Bank to comment on CPI data.

- 08:00 (PL) Poland Feb Current Account Balance: €1.6Be v €3.3B prior; Trade Balance: €1.1Be v €0.9B prior; Exports: €20.5Be v €19.2B prior; Imports: €19.4Be v €18.3B prior.

- 08:00 (BR) Brazil Feb Retail Sales M/M: +0.8%e v -0.2% prior; Y/Y: -2.5%e v -0.3% prior.

- 08:00 (BR) Brazil Feb Broad Retail Sales M/M: +1.8%e v -2.1% prior; Y/Y: -4.2%e v -2.9% prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:30 (US) Mar CPI M/M: 0.5%e v 0.4% prior; Y/Y: 2.5%e v 1.7% prior.

- 08:30 (US) Mar CPI (ex-food/energy) M/M: 0.2%e v 0.1% prior; Y/Y: 1.5%e v 1.3% prior.

- 08:30 (US) Mar CPI Index NSA: 264.680e v 263.014 prior; CPI Core Index SA: 270.970e v 270.299 prior.

- 08:30 (US) Mar Real Avg Hourly Earning Y/Y: No est v 3.4% prior; Real Avg Weekly Earnings Y/Y: No est v 4.1% prior.

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

- 09:00 (EU) Weekly ECB Forex Reserves.

- 09:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

- 09:45 (UK) BOE to buy £1.48B in APF Gilt purchase operation (over 20-years).

- 10:00 (MX) Mexico Weekly International Reserve data.

- 10:30 (FR) ECB’s Villeroy (France).

- 10:30 (CA) Canada to sell 3-month, 6-month and 12-month bills.

- 12:00 (US) Fed’s Harker on the economic outlook.

- 12:00 (US) Fed’s Daly participates in an event on Racism and the Economy.

- 13:00 (US) Treasury to sell $24B in 30-Year Bonds Reopening.

- 16:00 (US) Fed’s Mester, Bostic, and Rosengren participate in event on Racism and the Economy.

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

- 17:00 (KR) South Korea Mar Import Price Index M/M: No est v 3.8% prior; Y/Y: No est v -0.8% prior.

- 17:00 (KR) South Korea Mar Export Price Index M/M: No est v 0.2% prior; Y/Y: No est v 3.1% prior.

- 18:45 (NZ) New Zealand Feb Net Migration: No est v 0.6K prior.

- 19:00 (KR) South Korea Mar Unemployment Rate: 3.9%e v 4.0% prior.

- 19:50 (JP) Japan Feb Core Machine Orders M/M: +2.5%e v -4.5% prior; Y/Y: 2.4%e v 1.5% prior.

- 20:00 (SG) Singapore Q1 Advance GDP Q/Q: 1.7%e v 3.8% prior; Y/Y: -0.5%e v -2.4% prior.

- 20:00 (SG) Monetary Authority of Singapore (MAS) semiannual monetary policy statement.

- 20:30 (AU) Australia Apr Westpac Consumer Conf Index: No est v 111.8 prior.

- 21:10 (JP) BOJ Outright Bond Purchase Operation for 1~3 Years; 3~5 Years and 5~10 Years maturities.

- 22:00 (NZ) Reserve Bank of New Zealand (RBNZ) Interest Rate Decision: Expected to leave Official Cash Rate (OCR) unchanged at 0.25%.

- 23:00 (KR) South Korea Mar Total Household Lending (KRW): No est v 1.003T prior.

- 23:00 (CN) China to sell 2-year and 5-year upsized Bonds.