No surprises in Riksbank rate decision

Notes/Observations

- No surprises from central bank rate decision. Both BOJ and Riksbank kept policy steady and maintained current QE purchases. Focus turns to Fed decision on Wed.

- Italy Debt Agency active in session with 5 tranches of issuance (two USD-denominated via syndicate and 3 tranches via regular auctions).

- OPEC+ to hold JMMC technical meeting later today.

- Companies expected to report during the NY morning include Asbury Automotive, Archer-Daniels-Midland, Armstrong World Industries, Centene, Crocs, Ecolab, Fiserv, GE, Corning, Graphic Packaging, Hasbro, JetBlue, Eli Lilly, 3M, MSCI, Paccar, Pulte Group, Polaris, Raytheon Technologies, Sherwin-Williams, Shutterstock, Sensata Technologies, UPS, Waste Management.

Asia:

- Bank of Japan (BOJ) left policy steady (as expected); left Interest Rates on excess Reserves (IOER) unchanged at -0.10% and maintained Yield Control (YCC) at 0.00%.

- BOJ Quarterly Outlook for Economic Activity and Prices raised FY21/22 GDP growth from 3.9% to 4.0% and FY22/23 GDP growth from 1.8% to 2.4%. Cut FY21/22 core CPI from 0.5% to 0.1% while raising FY22/23 core CPI from 0.7% to 0.8%.

- South Korea Q1 Preliminary GDP best expectations (Q/Q: 1.6% v 1.1%e; Y/Y: 1.8% v 1.2%e).

- South Korea President Moon stated that 2021 GDP growth could be more than a mid-to-high 3% area.

Coronavirus:

- Total global cases 147.5M (+0.5% d/d); total death s: 3.12M (+0.4% d/d).

- UK Transport Sec Shapps said to be looking to prepare plans by June 28th that would permit travel to the US, France, Italy, Germany, and other green listed countries through Covid-19 passports.

- CDC is expected to release guidelines for activities fully vaccinated people can resume as early as Tuesday (Apr 27th).

Americas:

- White House econ adviser Deese stated that Biden tax changes would only affect 0.3% of taxpayers or about 500K households in the US.

- Senator Manchin (D-WV) said to want the infrastructure bill split up into two packages to increase the chances of getting bipartisan support.

Energy:

- White House said to be looking to pass a law requiring 80% clean energy from the US power sector by 2030.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 -0.09% at 439.80, FTSE -0.08% at 6,957.88, DAX -0.12% at 15,278.00, CAC-40 -0.04% at 6,272.93, IBEX-35 -0.31% at 8,675.00, FTSE MIB -0.43% at 24,407.50, SMI % at #, S&P 500 Futures %].

Market Focal Points/Key Themes: European indices open lower (with FTSE100 notable exception), but slipped further into the red as the session wore on; better-performing sectors include; financial and real estate sectors among those leading to the downside; energy sector boosted following BP’s better than anticipated results; DSV acquires Agility’s logistics unit; Entain raises bid for Tabcorp; Technip Energies acquires 14% of its shares from TechnipFMC; earnings expected during the upcoming US session include General Electric, UPS, Alphabet and Visa.

Equities

- Energy: BP [BP.UK] +1% (earnings; buyback).

- Financials: UBS [UBSG.CH] -2% (earnings), HSBC [HSBA.UK] +2% (earnings).

- Healthcare: Novartis [NOVNCH] +1% (earnings), Novozymes [NZYMB.DK] +8% (earnings).

- Industrials: DSV Panalpina [DSV.DK] +8% (earnings; buyback; acquisition), ABB [ABBN.CH] +2% (earnings), Norsk Hydro [NHY.NO] -3% (earnings).

Speakers

- Sweden Central Bank (Riksbank) Policy Statement reiterated Repo Rate to remain at the current level in coming years and would continue to purchase assets within the window of QE at SEK700B. Envelop to be fully utilized by end-2021; the size of holding to be maintained until at least end-2022. The reiterated stance that would take time before inflation was more permanently close to the 2% target. The reiterated stance that was possible to cut the Repo Rate, particularly if confidence in the inflation target were under threat.

- Sweden Central Bank (Riksbank) Gov Ingves virtual post rate decision press conference noted that monetary policy needed to remain very expansive; the economic picture had brightened.

- BOE entered into an agreement with the Bank for International Settlements (BIS) for providing liquidity for sterling during any future periods of market stress.

- EU Commission President Von Der Leyen commented ahead of an EU Parliament vote on Brexit that it was important to make the agreement work. EU-UK trade agreement would give tools required to ensure compliance with Brexit obligations. European Parliament vote might be the foundation for a strong UK-EU link Finland PM Marin noted that coalition talks could go wither way; to continue dialogue but stressed it needed a functioning majority coalition.

- BOJ Gov Kuroda post rate decision press conference reiterated its overall economics assessment that the domestic economy was picking up as a trend but uncertainty remained due to pandemic. Recovery aided by foreign demand and fiscal measures. Consumer spending to remain at low level due to covid but added the virtuous cycle from income to spending was beginning to work. CPI to be negative for a while but saw prices returning to growth. Noted cheaper cellphone charges to weigh upon CPI between 0.5-1.0% in FY21/22. Still believed that the 2% inflation target was reachable; had to be patient and continue with powerful monetary easing. The confirmed belief that 2% inflation target unlikely to be achieved during his term; target likely to be achieved in 2024 or later. Would not change JGB purchases unless the yield range is challenged.

- OPEC+ was said to see oil inventories move below the OECD 5-year average throughout the H2 of 2021. Forecasted 2021 oil inventories at 70M barrels below the OECD 5-year average (prior view was 20M barrels below).
- Vague report circulating that Saudi Arabia flagged vessel 'NCC DAMMAM' off Yanbu Port was attacked (no details provided).

Currencies/Fixed Income

- USD recovered from its recent string of losses and registered first time in three days. The focus was turning to the Fed rate decision on Wed.

- EUR/USD drifted away from the 1.21 level in quiet trade. Pair at 1.2065 by mid-session.

- USD/JPY yen unmoved after BOJ kept its policy steady. BOJ Gov Kuroda confirmed that a 2% inflation target was unlikely to be achieved during his term and likely be achieved in 2024 or later. Pair trading at 108.33 by mid-session.

- EUR/SEK was holding above the 10.13 level as Riksbank kept its policy steady and maintained its.

Economic data

- (FI) Finland Apr Consumer Confidence: +3.8 v -3.0 prior; Business Confidence: 9 v 4 prior.

- (FI) Finland Mar Preliminary Retail Sales Volume Y/Y: 5.8% v 4.7% prior.

- (DK) Denmark Mar Retail Sales M/M: 19.8% v 2.9% prior; Y/Y: +22.4% v -4.9% prior.

- (SE) Sweden Central Bank (Riksbank) left Repo Rate unchanged at 0.00% (as expected).

- (SE) Sweden Mar Trade Balance (SEK): 4.1B v 6.0B prior.

- (SE) Sweden Mar PPI M/M: 1.1% v 1.5% prior; Y/Y: 3.8% v 1.3% prior.

- (SE) Sweden Mar Unemployment Rate: 10.0% v 9.7% prior; Unemployment Rate (seasonally adj): 9.5% v 8.8%e; Trend Unemployment Rate: 9.1% v 9.0% prior.

- (IT) Italy Apr Consumer Confidence Index: 102.3 v 101.8e; Manufacturing Confidence: 105.4 v 102.1e; Economic Sentiment: 97.3 v 94.2 prior.

- (TW) Taiwan Mar Monitoring Indicator: 40 v 40 prior.

- (HK) Hong Kong Mar Trade Balance (HKD): -27.0BB v -37.5Be; Exports Y/Y: 26.4% v 15.8%e; Imports Y/Y: 21.7% v 15.5%e.

Fixed income Issuance

- (IT) Italy Debt Agency (Tesoro) opened its book to sell USD-denominated 3-year and 30-year bonds.

- (UK) DMO opened its book to sell new 1.25% July 2051 Gilt via syndication; guidance seen +1.5bps to Gilts; order book over £57B.

- (ID) Indonesia sold total IDR28.1T vs. IDR30.0T target in bills and bonds.

- (IT) Italy Debt Agency (Tesoro) sold €3.75B vs. €3.25-3.75B indicated range in 0.00% Nov 2022 CTZ; Avg Yield: -0.300% v -0.390% prior; bid-to-cover: 1.37x v 1.42x prior.

- (IT) Italy Debt Agency (Tesoro) sold total €1.75B vs. €1.0-1.75B indicated range in inflation-linked 2026 and 2051 BTP Bonds (BTPei).

Looking Ahead

- (EU) Daily ECB Liquidity Stats.

- (IL) Israel Mar Leading 'S' Indicator M/M: No est v 0.4% prior.

- (RO) Romania Mar M3 Money Supply Y/Y: No est v 17.4% prior.

- 05:20 (CH) Switzerland to sell 3-month Bills 0.778% prior.

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

- 05:30 (DE) Germany to sell €4.0B in new 0.25% Nov 2028 Bunds.

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

- 06:00 (FR) France Q1 Total Jobseekers: No est v 3.574M prior.

- 06:00 (UK) Apr CBI Retailing Reported Sales: +10e v -45 prior; Total Distribution Reported Sales: No est v -28 prior.

- 06:00 (ES) ECB's De Cos (Spain).

- 06:45 (US) Daily Libor Fixing.

- 07:00 (BR) Brazil Apr FGV Construction Costs M/M: 1.3%e v 2.0% prior.

- 07:00 (MX) Mexico Mar Trade Balance: $3.5Be v $2.7B prior.

- 08:00 (HU) Hungary Central Bank (MNB) Interest Rate Decision: expected to leave Base Rate unchanged at 0.60%; Expected to leave Overnight Deposit Rate unchanged at -0.05%.

- 08:00 (BR) Brazil Mid-Apr IBGE Inflation IPCA-15 M/M: 0.7%e v 0.9% prior; Y/Y: 6.2%e v 5.5% prior.

- 08:00 (UK) EU-UK press conference on Trade Agreement.

- 08:00 OPEC JMMC meeting.

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

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

- 09:00 (US) Feb FHFA House Price Index M/M: 1.0%e v 1.0% prior.

- 09:00 (US) Feb S&P/Case-shiller 20-City) House Price Index M/M: 1.10%e v 1.20% prior; Y/Y: 11.80%e v 11.10% prior; Overall House Price Index Y/Y: No est v 11.22% prior.

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

- 09:00 (HU) Hungary Central Bank Gov Matolcsy post rate decision Statement.

- 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 (US) Apr Consumer Confidence Index: 113.0e v 109.7 prior.

- 10:00 (US) Apr Richmond Fed Manufacturing Index: 22e v 17 prior.

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

- 13:00 (US) Treasury to sell 2-year and 7-year Notes.

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

- 17:00 (KR) South Korea Apr Consumer Confidence: No est v 100.5 prior.

- 19:01 (UK) Apr BRC Shop Price Index Y/Y: No est v -2.4% prior.

- 19:50 (JP) Japan Mar Retail Sales M/M: 0.6%e v 3.1% prior; Y/Y: 4.6%e v -1.5% prior.

- 19:50 (JP) Japan Mar Dept. Store, Supermarket Sales Y/Y: no est v -4.7% prior.

- 21:30 (AU) Australia Q1 CPI Q/Q: 0.9%e v 0.9% prior; Y/Y: 1.4%e v 0.9% prior.

- 21:30 (AU) Australia Preliminary March Merchandise Trade.

- 23:35 (JP) Japan to sell 2-Year JGB Bonds.