TradeTheNews.com Staff
TradeTheNews.com
Notes/Observations
- Recent ECB rhetoric cements market expectations for potential ECB rate hike as soon as July.
- Russia says it has taken Ukraine city of Mariupol.
- Equities higher as optimism from upbeat earnings season.
- Companies due to report during the NY morning include American Airlines, AutoNation, The Blackstone Group, Quest Diagnostics, Danaher, Dow Inc, Freeport-McMoRan, Genuine Parts, Marsh & McLennan, Nucor, Philip Morris, Pentair, Pool Corp, Sonoco Products, AT&T, Union Pacific.
Asia
- New Zealand Q1 CPI Q/Q: 1.8% v 2.0%e; Y/Y: 6.9% v 7.1% e (highest annual pace since 1990).
- China President Xi reiterated view that global economic recovery was weak; calls for coordinated macroeconomic and coronavirus policies among countries. Reiterated that domestic economy was resilient and the sound as long-term term trend had not changed.
- BOJ Gov Kuroda reiterated that important FX reflected fundamentals.
- Senior IMF Official stated that the JPY currency (Yen) recent declines are driven by fundamentals, no reason to change Japan economic policy.
Russia/Ukraine
- Ukraine negotiator Podolyak stated that govt was ready to hold 'special round of negotiations' in Mariupol, without conditions.
Europe
- Greece PM Mitsotakis: Greece to raise minimum wage effective May 1st.
- French President Macron cleared a major hurdle ahead of Sunday's runoff election with a combative performance in a TV debate against far-right candidate Le Pen.
Americas
- Fed's Daly (non-voter, dove): Favors smooth and methodical approach to policy.
- Fed Beige Book noted that inflationary pressures remained strong since last report with companies continuing to pass swiftly rising input costs to consumers.
Speakers/Fixed income/FX/Commodities/Erratumm
Equities
Indices [Stoxx600 +0.29% at 461.42, FTSE -0.21% at 7,613.05, DAX +0.97% at 14,501.20, CAC-40 +1.26% at 6,708.48, IBEX-35 +0.71% at 8,831.59, FTSE MIB -0.13% at 24,846.00, SMI +0.59% at 12,383.10, S&P 500 Futures +0.73%].
Market Focal Points/Key Themes: European indices open mixed with a positive bias and drifted higher as the session progressed; better earnings results seen as catalyst for improved risk appetite; sectors leading to the upside include energy and materials; while sectors trending to the downside include technology and financials; FTSE 100 once again under pressure after results from miners; focus on plethora of regulatory speak following conclusion of IMF-World Bank spring meeting; earnings expected during the upcoming US session include Qualtrics, Sow, AT&T and American Airlines.
Equities
- Consumer discretionary: Anglo American [AAL.UK] -7% (production).
- Consumer staples: Nestle [NESN.CH] +1.5% (earnings).
- Industrials: ABB [ABBN.CH] +5% (earnings; comments on inflation), Meggitt [MGGT.UK] -0.5% (trading update), Antofagasta [ANTO.UK] -7% (production).
- Technology: Rexel [RXL.FR] +5.5% (sales).
- Materials: Akzo Nobel [AKZA.NL] +5.5% (earnings).
Speakers
- ECB’s De Guindos (Spain) stated that a rate hike was possible in July 2022 but would depend on data; Saw no reason why APP bond buying could not end in July.
- ECB's Wunsch (Belgium) stated that was prepared to raise rates in July; policy rates could turn positive in 2022. Would not exclude the need to become restrictive.
- Russia Central Bank (CBR) Gov Nabiullina stated that interest rates to fall as inflation and volatility declined; to consider such action at the next meeting.
- Russia Defense Min Shoigu stated that Russian forces had captured the city of Mariupol but there were still more than 2,000 Ukrainian fighters in Azovstal steel plant.
- President Putin said to order plans for storming the Azovstal and industrial parts of Mariupol to be cancelled. Ordered Mariupol facilities to be blocked so than even 'a fly' could not pass unnoticed.
- Bank of Japan (BOJ) Semi-annual Financial Report noted that the overall system maintained stability.
- Japan Dep Chief Cabinet Dec Kihara: Nothing decided on scale or details of the proposed extra budget (**Note reports circulated that Japan extra budget would be over ¥2.5T).
- Japan Cabinet Office (Govt) Apr Economic Report raised overall economic assessment as economy was showing signs of picking up as the impact of the virus eased (1st rise in 4 months).
- China Commerce Ministry (MOFCOM) spokesperson stated that would roll out targeted measures to boost consumption. To keep supply chains stable and smooth for importers and exporters.
Currencies/Fixed income
- EUR/USD hit a one-week high above 1.0925 as money markets now priced in three ECB rate hikes in 2022 by a total of 75bps. Session saw more ECB members hint of a possible July rate lift-off as inflation remained at post-Euro launch highs Euro also aided by French President Macron performance in Wednesday evening's TV debate than far-right candidate Le Pen.
- USD/JPY was steady after a recent test at 20-year highs. The 130 level remain the next objective after a senior IMF Official noted that the JPY currency (Yen) recent declines were driven by fundamentals.
- USD/CNY tested 6.47 level as the Yuan currency registered its lowest levels since September. Yuan hampered by slowing Chinese growth expectations and shrinking yield differentials between Chinese and US government bonds (**Note: differential recently fell into negative territory for the first time since 2010).
Economic data
- (NL) Netherlands Apr Consumer Confidence Index: -48 v -39 prior.
- (NL) Netherlands Mar Unemployment Rate: 3.3% v 3.3%e.
- (NL) Netherlands Consumer Spending Y/Y: 13.8% v 11.1% prior.
- (JP) Japan Mar Final Machine Tool Orders Y/Y: 30.0% v 30.2% prelim.
- (NO) Norway Q1 Industrial Confidence: 8.8 v 8.6 prior.
- (DK) Denmark Apr Consumer Confidence Indicator: -20.9 v -14.4 prior.
- (FR) France Apr Business Confidence: 106 v 105e; Manufacturing Confidence: 108 v 104e; Production Outlook Indicator: -5 v -5e; Own-Company Production Outlook: 11 v 6e.
- (FR) France Apr Business Survey Overall Demand: 14 v 24 prior.
- (ES) Spain Feb House transactions Y/Y: 24.0% v 31.0% prior.
- (CH) Swiss Mar M3 Money Supply Y/Y: 0.6% v 1.0% prior.
- (AT) Austria Mar Final CPI M/M: 2.1%v 2.0% prelim; Y/Y: 6.8% v 6.8% prelim.
- (TR) Turkey Apr Consumer Confidence: 67.3 v 72.5 prior.
- (HU) Hungary Central Bank left its One Week Deposit Rate unchanged at 6.15%; as expected.
- (PL) Poland Mar Sold Industrial Output M/M: 18.2% v 12.5%e; Y/Y: 17.3% v 11.6%e.
- (PL) Poland Mar Employment M/M: 0.2% v 0.1%e; Y/Y: 2.4% v 2.4%e.
- (PL) Poland Mar Average Gross Wages M/M: 7.2% v 5.4%e; Y/Y: 12.4% v 10.6%e.
- (PL) Poland Mar PPI M/M: 4.9% v 4.5%e; Y/Y: 20.0% v 18.1%e.
- (PL) Poland Apr Consumer Confidence: -37.2 v -36.0e.
- (HK) Hong Kong Mar Unemployment Rate: 5.0% v 4.8%e.
- (EU) Euro Zone Mar Final CPI Y/Y: 7.4% v 7.5% advance (highest since Euro’s launch); CPI Core Y/Y: 2.9% v 3.0% advance; CPI M/M: 2.4% v 2.5% advance.
- (BE) Belgium Apr Consumer Confidence Index: -14 v -16 prior.
- (CY) Cyprus Mar CPI Harmonized M/M: 1.3% v 0.9% prior; Y/Y: 6.2% v 5.8% prior.
Fixed income issuance
- (ES) Spain Debt Agency (Tesoro) sold total €5.541B vs. €5.0-6.0B indicated range in 2025, 2032 and 2048 bonds.
- Sold €2.38B in 0.00% May 2025 SPGB bonds; Avg Yield: 0.845% v 0.342% prior; Bid-to-cover: 1.36x v 1.69x prior.
- Sold €1.46B in 5.75% July 2032 SPGB; Avg Yield: 1.737% v 0.358% prior; Bid-to-cover: 1.30x v 1.68x prior.
- Sold €1.70B in 2.70% Oct 2048 SPGB bonds; Avg Yield: 2.289% v 1.256% prior; Bid-to-cover: 1.36x v 1.59x prior.
- (FR) France Debt Agency (AFT) sold total €10.989B vs. €10.5-11.0B indicated range in 2025, 2027 and 2030 Bonds.
- Sold €3.645B in 0.00% Feb 2025 Oat; Avg Yield: +0.58% v -0.08% prior; Bid-to-cover: 3.83x v 2.52x prior.
- Sold €4.450B in 0.00% Feb 2027 Oat; Avg Yield: 0.88% v 0.32% prior; bid-to-cover: 2.49x v 2.44x prior.
- Sold €2.894B in 2.50% May 2030 Oat; Avg Yield: +1.12% v -0.19% prior; Bid-to-cover: 2.12x v 2.66x prior.
- (IE) Ireland Debt Agency (NTMA) sold €750M vs. €750M indicated in 6-month bills; Avg Yield: -0.410% v -0.565% prior; Bid-to-cover: 1.8x v 2.0x prior.
Looking ahead
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (PL) Poland to sell 2024, 2027, 2031, 2032 bonds (5 tranches).
- 05:30 (HU) Hungary Debt Agency (AKK) to sell bonds.
- 05:50 (FR) France Debt Agency (AFT) to sell €1.0-1.5B in 2031, 2036 and 2053 inflation linked bonds (Oatei).
- 06:00 (CZ) Czech Republic to sell CZK10B indicated in 1-month bills.
- 06:45 (US) Daily Libor Fixing.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Apr Philadelphia Fed Business Outlook: 21.4e v 27.4 prior.
- 08:30 (US) Initial Jobless Claims: 180Ke v 185K prior; Continuing Claims: 1.46Me v 1.475M prior.
- 08:30 (US) Weekly USDA Net Export Sales.
- 09:00 (RU) Russia Gold and Forex Reserve w/e Apr 15th: No est v $609.4B prior.
- 10:00 (US) Mar Leading Index: 0.3%e v 0.3% prior.
- 10:00 (EU) Euro Zone Apr Advance Consumer Confidence: -20.0e v -18.7 prior.
- 10:30 (US) Weekly EIA Natural Gas Inventories.
- 11:00 (CO) Colombia Feb Trade Balance: -$1.1Be v -$1.7B prior; Total Imports: No est v $6.1B prior.
- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.
- 12:30 (UK) BOE Gov Bailey.
- 13:00 (US) Fed Chair Powell with ECB chief Lagarde on IMF panel.
- 13:00 (US) Treasury to sell 5-Year TIPS.
- 15:00 (AR) Argentina Feb Economic Activity Index (Monthly GDP) M/M: No est v -0.5% prior; Y/Y: No est v 5.4% prior.
- 18:00 (NL) Netherlands Mar House Price Index M/M: No est v 0.4% prior; Y/Y: No est v 20.2% prior.
- 19:00 (AU) Australia Apr Preliminary PMI Manufacturing: No est v 57.7prior; PMI Services: No est v 55.6 prior; PMI Composite: No est v 55.1 prior.
- 19:01 (UK) Apr GfK Consumer Confidence: -33e v -31 prior.
- 19:30 (JP) Japan Mar National CPI Y/Y: 1.2%e v 0.9% prior; CPI Ex-fresh food (core) Y/Y: 0.8%e v 0.6% prior; CPI Ex-fresh food/energy (core-core) Y/Y: -0.8%e v -1.0% prior.
- 20:30 (JP) Japan Apr Preliminary PMI Manufacturing: No est v 54.1 prior; PMI Services: No est v 49.4 prior; PMI Composite: No est v 50.3 prior.
- 22:30 (JP) Japan to sell 3-Month Bills.
- 23:30 (TH) Thailand Mar Customs Trade Balance: -$0.1Be v +$0.1B prior; Exports Y/Y: 5.6%e v 16.2% prior; Imports Y/Y: 11.0%e v 16.8% prior.
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