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– Australia’s RBA left rates unchanged to mark first pause in 11 decisions under current tightening cycle. New Zealand’s RBNZ rate decision up next tonight with consensus for 25bps hike to 5.00%.
– Little corporate and macro news out of Europe during the session. ECB Consumer Expectations Survey lowered 1-year and 3-year inflation expectations and raised economic growth.
– Seeing a notable pick-up in corporate and sovereign fixed income issuance as the new quarter starts.
– Reminder that today is official joining of Finland into NATO.
– With a shortened week for Easter, a gap between earnings season, and no significant catalysts except US Non-Farm Payrolls on Fri (markets closed), likely to see continuation of lighter volume and potential for choppy/sideways moves.
– Indian markets are closed for Mahavir Jayanti. Tomorrow, China and Hong Kong markets will be closed for Ching Ming Festival.
– Asia closed mostly higher with Hang Seng under-performing -0.7%. EU indices are +0.0-0.8%. US futures are flat. Gold 0.0%, DXY -0.1%; Commodity: Brent +0.3%, WTI +0.4%, TTF -4.7%; Crypto: BTC -0.7%, ETH +0.9%.
– Reserve Bank of Australia (RBA) left the Cash Rate Target unchanged at 3.60% (as expected) for its 1st pause in 11 decisions in the current tightening cycle. Recognized that monetary policy operated with a lag. Expected some further tightening might well be needed (Compared to March statement: “Further tightening of monetary policy will be needed”. Path to achieving a soft landing remained a narrow one.
– South Korea Mar CPI data registered its .3%E (slowest annual pace since Mar 2022) (M/M: 0.2% v 0.3% prior; Y/Y: 4.2% v 4.8% prior; CPI Core Y/Y: 4.8% v 4.8% prior).
– Japan sold 10-Year JGB Bonds; Avg Yield: 0.4560% v 0.500% prior; bd-to-cover: 3.77x v 7.55x prior (Mar 1st 2023).
– Former Japan FX Chief Nakao: Reiterates BOJ should review Yield Curve Control under new Governor Ueda.
– Hong Kong and Shanghai markets will be closed for a holiday on Wednesday.
– SNB’s Vice Chair Schlegel reiterated stance that would do everything it can to bring inflation down including hiking interest rates further as well as selling foreign currencies.
– Fed’s Cook (voter) stated that was focused on inflation. Country had very low unemployment and high inflation. Still saw inflation from tight labor market.
– US Treasury Sec Yellen stated that OPEC+ production cuts were very.
– White House noted the govt to continue to work with producers and consumers to ensure growth and lower prices for consumers.
Indices [Stoxx600 +0.38% at 459.44, FTSE +0.11% at 7,681.45, DAX +0.63% at 15,678.40, CAC-40 +0.39% at 7,374.25, IBEX-35 +0.83% at 9,233.52, FTSE MIB +0.17% at 27,225.00, SMI -0.06% at 11,086.50, S&P 500 Futures +0.01%].
Market Focal Points/Key Themes: European indices open modestly high across the board and stayed upbeat through the early hours of the session; better performing sectors include consumer discretionary and financials; underperforming sectors include technology and telecom; Investec unit to merge with Rathbones; no major earnings expected in the upcoming US session.
– Consumer discretionary: Rank Group [RNK.UK] +6.5% (analyst action – cut to Add from Buy at Peel Hunt).
– Consumer staples: L’Oreal [OR.FR] +1.0% (acquisition).
– Energy: Nordex [NDX1.DE] +1.5% (Receives 106MW order with E energija group to supply and install wind turbines).
– Financials: Saga [SAGA.UK] -8.5% (reports FY22).
– Healthcare: Evotec [EVT.DE] +2.0% (analyst action – raised to equal weight at Morgan Stanley).
– Industrials: Renewi [RWI.UK] +1.0% (trading update).
– Technology: Solid State [SOLI.UK] +1.5% (trading update).
– Materials: Glencore [GLEN.UK] +1.5% (commitment to Teck Resources acquisition proposal).
– ECB Consumer Expectations Survey lowered its inflation outlook for the next 12 months from 4.9% to 4.6% and the 3-years outlook from 2.5% to 2.4%.
– German Leading Economic Institutes said to update its Spring Economic outlook. It raised the 2023 GDP from -0.4% (contraction) to +0.3% (growth) while cutting the 2024 GDP growth outlook from 1.7% to 1.5%. It cut the 2023 CPI from 8.8% to 6.0% and set 2024 CPI at 2.4%.
– US Sec of State Blinken noted that would discuss with EU on how to further reduce dependence on Russian energy.
– China PBOC Gov Yi Gang reiterated stance to keep CNY currency (Yuan) and financial system stable.
– South Korea, Japan, US Nuclear envoys to meet on Friday, April 7th.
– World Bank cut India FY23/24 GDP estimate (current fiscal year) from 6.6% to 6.3%.
– USD remained on the defensive following some recent soft US economic data from Monday. The greenback was making multi-month lows against numerous European pairs as markets pared back expectations on how much longer interest rates would need to remain in restrictive territory to tame inflation.
– EUR/USD around 1.0920 by mid-session as recent ECB officials noted that 50bps hike remained on the table at the May meeting.
– GBP/USD was near 1-year highs as the pair approached the 1.25 handle.
– AUD/USD encountered some softness after RBA pause in the current tightening cycle for the 1st time in 11 decision. RBA appeared seem content that inflation had peaked and would now assess the impact of past hikes.
– (DE) Germany Feb Trade Balance: €16.0B v €16.8Be; Exports M/M: 4.0% v 1.8%e; Imports M/M: 4.6% v 1.5%e.
– (ES) Spain Mar Unemployment Change: -48.8K v +2.6K prior (1st decline in 3 months).
– (BR) Brazil Mar FIPE CPI (Sao Paulo) M/M: 0.4% v 0.4% prior.
– (EU) Euro Zone PPI Feb M/M: -0.5% v -0.5%e; Y/Y: 13.2% v 13.3%e.
Fixed income issuance
– (IT) Italy Debt Agency (Tesoro) opened book to sell EUR-denominated 8-year green bond via syndicate; guidance seen +10bps to BTPs
– (CY) Cyprus opened its book to sell EUR-denominated 10-year green bond via syndicate; guidance seen +140bps to mid.
– (DE) Germany State owned KfW bank opened itss book to sell USD-denominated 3-year long note via syndicate; guidance seen +22bps to SOFR mid-swap.
– (SE) Swedish Export Credit Corp (SEK) opened its book to sell EUR-denominated 3-year notes; guidance seen +5bps to mid-swaps.
– (ID) Indonesia sold total IDR9.0T vs. IDR9.0T target in Islamic bills and bonds (sukuk).
– (NL) Netherlands Debt Agency (DSTA) sold €4.43B vs. €3.0-5.0B indicated in new 2.50% Jan 2030 DSL; Avg Yield: 2.563%.
– (UK) DMO sold £2.25B in 1.125% Jan 2039 Gilts; Avg Yield: 3.780% v 3.736% prior; bid-to-cover: 2.58x v 2.42x prior; Tail: 0.2bps v 0.7bps prior.
– (AT) Austria Debt Agency (AFFA) sold total €1.495B vs. €1.495Bindicated in 2033 and 2051 RAGB bonds.
– (RO) Romania Central Bank (NBR) Interest Rate Decision: Expected to leave Interest Rate unchanged at 7.00%.
– 05:15 (UK) BOE’s Tenreyro (dove; dissenter).
– 05:15 (CH) Switzerland to sell 3-month Bills.
– 05:25 (EU) Daily ECB Liquidity Stats.
– 05:30 (DE) Germany to sell combined €600M in I/L 2033 and 2046 Bonds (Bundei).
– 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.
– 05:30 (BE) Belgium Debt Agency (BDA) to sell €1.0B in 3-month bills;
– 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender.
– 05:30 (ZA) South Africa to sell combined ZAR3.9B in 2032, 2035 and 2053 bonds.
– 06:30 (EU) ESM to sell €1.1B in 3-month Bills.
– 06:45 (US) Daily Libor Fixing.
– 07:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).
– 07:15 (SL) Sri Lanka Central Bank (CBSL) Interest Rate Decision: Expected to leave Key Rates unchanged.
– 07:30 (TR) Turkey Mar Real Effective Exchange Rate (REER): No est v 58.73 prior.
– 08:00 (MX) Mexico Mar Domestic Vehicle Sales: No est v 101.9K prior.
– 08:00 (MX) Mexico Feb Leading Indicators M/M: No est v 0.08 prior.
– 08:00 (NZ) New Zealand Mar Corelogic House Prices Y/Y: No est v -8.9% prior.
– 08:00 (UK) Daily Baltic Dry Bulk Index.
– 08:30 (CA) Canada Feb Building Permits M/M: No est v -4.0% prior.
– 08:55 (US) Weekly Redbook LFL Sales data.
– 10:00 (US) Feb JOLTS Job Openings: 10.500Me v 10.824M prior.
– 10:00 (US) Feb Factory Orders: -0.5%e v -1.6% prior; Factory Orders (ex-transportation): 0.0%e v 1.2% prior.
– 10:00 (US) Feb Final Durable Goods Orders: -1.0%e v -1.0% prelim; Durables (ex-transportation): No est v 0.0% prelim; Capital Goods Orders (non-defense/ex-aircraft): No est v 0.2% prelim; Capital Goods Shipments (non-defense/ex-aircraft): No est v 0.0% prelim.
– 10:00 (PT) ECB’s Centeno (Portugal).
– 11:00 (DK) Denmark Mar Foreign Reserves (DKK): No est v 600.0B prior.
– 11:00 (CO) Colombia Feb Exports: $4.0Be v $3.7B prior.
– 12:30 (UK) BOE’s Pill (chief economist).
– 13:30 (US) Fed’s Cook.
– 16:30 (US) Weekly API Oil Inventories.
– 17:00 (KR) South Korea Mar Foreign Reserves: No est v $425.3B prior.
– 18:00 (CL) Chile Central Bank (BCCH) Interest Rate Decision: Expected to leave Overnight Rate Target unchanged at 11.25%.
– 18:15 (US) Fed’s Mester.
– 19:00 (AU) Australia Mar Final PMI Services: No est v 48.2 prelim; PMI Composite: No est v 48.1 prelim.
– 20:01 (IE) Ireland Mar PMI Services: No est v 58.2 prior; PMI Composite: No est v 54.5 prior.
– 20:30 (JP) Japan Mar Final PMI Services: No est v 54.2 prelim; PMI Composite: No est v 51.9 prelim.
– 20:30 (SG) Singapore Mar PMI (Whole economy): No est v 49.6 prior.
– 21:00 (PH) Philippines Mar CPI Y/Y: 8.0%e v 8.6% prior.
– 22:00 (NZ) Reserve Bank of New Zealand (RBNZ) Interest Rate Decision: Expected to raise the Official Cash rate (OCR) by 25bps to 5.00%.
– 22:30 (AU) RBA Gov Lowe.
– 23:30 (TH) Thailand Mar CPI M/M: 0.1%e v -0.1% prior; Y/Y: 3.2%e v 3.8% prior; CPI Core Y/Y: 1.8%e v 1.9% prior.