Swiss CPI and UK wage demands both at two-and-half-year lows

Notes/observations

- Swiss CPI hits a 2 ½ year low; opens the door for more SNB rate cuts.

- BOE Survey noted UK companies expected to raise their own prices by the least in almost 2 1/2 years (4.1% v 4.3% prior survey).

- Sweden Central Bank (Riksbank) Mar Minutes signaled its preference for cautious easing.

- Major European Services PMIs revised higher (Spain, Italy, France, Germany, Euro Zone all beat consensus); UK did miss expectations.

- Nvidia announced it does see impact on its chip supply following Taiwan earthquake.

Asia

- Australia Mar Final PMI Services: 54.4 v 53.5 prelim (confirmed 2nd month of expansion).

- Australia Feb Building Approvals M/M: -1.9% v +3.0%e.

- New Zealand Feb Building Permits M/M: +14.9% v -8.6% prior.

- Japan Fin Min Suzuki: Reiterates stance that closely watching FX moves with a high sense of urgency.

- Former BOJ Gov candidate Watanabe: Japanese authorities unlikely to intervene unless yen falls 'sharply below' 155 against U.

Americas

- Fed Chair Powell noted that recent data did not change the overall picture; Risks continued to move into better balance. Reiterated stance that did not see rate cuts until we have more confidence on inflation. If the economy evolves as central banks expects, most federal open market committee participants see it as likely appropriate to begin cutting policy rate at some point this year.

- Fed's Kugler (voter) noted that baseline expectation was that further disinflation could be accomplished without a significant rise in unemployment. If disinflation and labor market conditions proceeded some lowering of the policy rate this year would be appropriate.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.20% at 511.04, FTSE +0.37% at 7,967.07, DAX +0.08% at 18,388.55, CAC-40 +0.26% at 8,174.05, IBEX-35 +0.62% at 11,100.50, FTSE MIB +0.16% at 34,536.00, SMI +0.25% at 11,646.20, S&P 500 Futures %].

Market focal points/key themes: European indices open generally higher and trended upward through the early part of the session; improved risk sentiment being attributed to expectations the ECB might ease sooner; among sectors leading the way higher are financials and materials; while sectors such as communication services and consumer discretionary were among the laggards; Saint-Gobain to acquire Bailey Group; UK CMA moves Vodafone-CK Hutchison deal to Phase 3 probe; reportedly L’Oreal looking at buying Amouage; focus on release of US trade data later in the day; earnings expected in the upcoming Americas session include Conagra and Radius Recycling.

Equities

- Consumer discretionary: Entain [ENT.UK] +1.5% (new Chairman), Kering [KER.FR] +0.5% (acquires building).

- Energy: Euronav [EURN.BE] +1.0% (earnings).

- Healthcare: Grifols [GRF.ES] +3.5% (CE mark for assay).

- Industrials: Ferrari [RACE.IT] -0.5% (analyst downgrade).

- Technology: Future PLC [FUTR.UK] +15.0% (trading update), ASML [ASML.NL] +0.5% (Taiwan earthquake impact being assessed), Cirata plc [CRTA.UK] -17.0% (earnings), Gooch & Housego [GHH.UK] +2.5% (trading update).

- Telecom: Telecom Italia [TIT.IT] -2.0% (may be eligible to get back €529M plus interest from Italy govt).

Speakers

- Bank of England (BoE) Decision Maker Panel (DMP) Mar Survey cut the 1-year ahead CPI from 3.3% to 3.2% and cut the 3-year ahead CPI from 2.8% to 2.7%.

- Sweden Central Bank (Riksbank) Mar Minutes noted that Gov Thedeen saw some probability of a cut in May. Policy rate could begin to be cut cautiously with effect from May or June.

- Bank of Japan (BOJ) quarterly Regional Economic Report (Sakura) downgraded assessment for 7 of 9 regions.

- Japan's Rengo Union (largest trade union) FY24 Wage Talks: 3rd round 5.24% v 5.25% in 2nd round.

Currencies/fixed income

- USD continued to be on soft footing in the aftermath of yesterday’s weaker-than-expected US services ISM data. Focus turning to Friday’s non-farm payroll report. Fed Chair Powell on Wed Powell made balanced and familiar remarks noting policymakers would be guided by economic data.

- EUR/USD moving above 1.0850 level during the session as upward revisions in Euro area PMI Services data pushed the pair to 2-week highs. Major European Services PMIs revised higher with Spain, Italy, France, Germany, Euro Zone all beat consensus.

- CHF currency was softer as CPI data continued to cool. Dealers noted that SNB could be tempted to cut rates faster than currently expected as a result of sub-target inflation readings.

- USD/JPY staying below the key 152 level. Dealers noted Japanese financial officials would likely threaten more verbal intervention if ¥152 was again tested again,

Economic data

- (CH) Swiss Mar CPI M/M: 0.0% v 0.3%e; Y/Y: 1.0% v 1.3%e; CPI Core Y/Y: 1.0% v 1.2%e.

- (CH) Swiss Mar CPI EU Harmonized M/M: -0.1% v +0.2% prior; Y/Y: 1.1% v 1.4%e.

- (SE) Sweden Mar PMI Services: 53.9 v 51.2 prior; PMI Composite: 52.8 v 50.6 prior.

- (HU) Hungary Feb Preliminary Trade Balance: €1.7B v €0.6B prior.

- (ES) Spain Mar Services PMI: 56.1 v 55.5e (7th month of expansion); Composite PMI: 55.3 v 54.4e.

- (ZA) South Africa Mar PMI (whole economy): 48.4 v 50.8 prior (moves back into contraction).

- (IT) Italy Mar Services PMI: 54.6 v 53.1e (3rd month of expansion); Composite PMI: 53.5 v 52.0e.

- (FR) France Mar Final Services PMI: 48.3 v 47.8 prelim (confirmed 10th straight contraction); Composite PMI: 48.3 v 47.7 prelim.

- (DE) Germany Mar Final Services PMI: 50.1 v 49.8 prelim (1st expansion in 6 months); Composite PMI: 47.7 v 47.4 prelim.

- (EU) Euro Zone Mar Final Services PMI: 51.5 v 51.1 prelim (confirmed 2nd month of expansion); Composite PMI: 50.3 v 49.9 prelim.

- (UK) Mar New Car Registrations Y/Y: 10.4% v 14.0% prior.

- (UK) Mar Final Services PMI: 53.1 v 53.4 prelim (confirmed 5th month of expansion); Composite PMI: 52.8 v 52.9 prelim.

- (UK) Mar Official Reserves Changes: $2.3B v $0.6B prior.

- (EU) Euro Zone Feb PPI M/M: -1.0% v -0.6%e; Y/Y: -8.3% v -8.5%e.

- (CY) Cyprus Mar CPI M/M: 0.4% v 0.9% prior; Y/Y: 1.2% v 1.8% prior.

Fixed income issuance

- (ES) Spain Debt Agency (Tesoro) sold total €6.063B vs. €5.5-6.5B indicated range in 2029, 2034 and 2039 SPGB bonds.

- Sold €2.186B in 3.50% May 2029 SPGB bonds; Avg Yield: 2.848% v 2.857% prior; Bid-to-cover: 1.73x v 1.79x prior.

- Sold €2.132B in 3.25% Apr 2034 SPGB bonds; Avg Yield: 3.191% v 3.162% prior; bid-to-cover: 1.81x v 2.22x prior.

- Sold €1.745B in 3.9% July 2039 SPGB bonds; Avg Yield: 3.531% v 3.630% prior; bid-to-cover: 1.56x v 1.46x prior.

- (ES) Spain Debt Agency (Tesoro) sold €506M vs. €250-750M indicated range in 2.05% Nov 2039 inflation-linked bonds; Real Yield: 1.329% v 1.381% prior; Bid-to-cover: 2.02x v 2.35x prior.

- (FR) France Debt Agency (AFT) sold total €11.995B vs. €11.0-12.5B indicated range in 2033, 2039, 2055 and 2060 Bonds.

- Sold €6.571B in 3.50% Nov 2033 Oat; Avg Yield: 2.87% v 2.79% prior; Bid-to-cover: 1.88x v 2.88x prior.

- Sold €2.258B in 1.75% Jun 2039 green Oat; Avg Yield: 3/09% v 3.10% prior; Bid-to-cover: 2.41x v 2.46x prior.

- Sold €1.670B in 3.25% May 2055 Oat; Avg Yield: 3.38%; Bid-to-cover: 2.76x.

- Sold €1.456B in 4.00% Apr 2060 Oat; Avg yield: 3.33% v 3.51% prior; Bid-to-cover: 2.76x v 2.17x prior.

- (UK) DMO sold £3.75B in 4.625% Jan 2034 Gilts; Avg Yield: 4.015% v 3.927% prior; bid-to-cover: 3.33x v 3.61x prior; Tail: 0.7bps v 0.2bps prior.

Looking ahead

- (PL) Poland Central Bank (NBP) Interest Rate Decision: Expected to leave Base Rate unchanged at 5.75%.

- (RO) Romania Central Bank (NBR) Interest Rate Decision: Expected to leave Interest Rates unchanged at 7.00%.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 06:00 (IE) Ireland Mar Unemployment Rate: No est v 4.2% prior.

- 06:00 (FI) Finland to sell 2032 and 2042 Bonds via ORI auction.

- 07:00 (ZA) South Africa Feb Electricity Consumption Y/Y: No est v 1.6% prior; Electricity Production Y/Y: No est v 0.8% prior.

- 07:30 (EU) European Central Bank's account of the March meeting.

- 07:30 (US) Mar Challenger Job Cuts: No est v 84.6K prior; Y/Y: No est v 8.8% prior.

- 07:30 (BR) Brazil Feb Current Account Balance: -$3.5Be v -$5.1B prior; Foreign Direct Investment (FDI): $6.6Be v $8.7B prior.

- 07:30 (TR) Turkey Mar Real Effective Exchange Rate (REER): No est v 58.55 prior.

- 07:30 (SE) Sweden Central Bank (Riksbank) Bunge.

- 08:00 (MX) Mexico Mar Consumer Confidence: No est v 47.0 prior.

- 08:00 (MX) Mexico Feb Leading Indicators M/M: No est v 0.09 prior.

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

- 08:30 (US) Initial Jobless Claims: 214Ke v 210K prior; Continuing Claims: 1.81Me v 1.819M prior.

- 08:30 (US) Feb Trade Balance: -$67.5Be v -$67.4B prior.

- 08:30 (CA) Canada Feb Int’l Merchandise Trade (CAD): 0.7Be v 0.5B prior.

- 08:30 (US) Weekly USDA Net Export Sales.

- 09:00 (RU) Russia Gold and Forex Reserve w/e Mar 29th: No est v $590.1B prior.

- 10:00 (US) Fed's Harker.

- 10:30 (US) Weekly EIA Natural Gas Inventories.

- 11:00 (MX) Mexico Central Bank (Banxico) Mar Minutes.

- 11:00 (CO) Colombia Feb Exports: $4.0Be v $3.7B prior.

- 11:30 (US) Treasury to sell 4-Week and 8-Week Bills.

- 12:15 (US) Fed's Barkin.

- 12:45 (US) Fed's Goolsbee.

- 14:00 (BR) Brazil Mar Trade Balance: $7.0Be v $5.4B prior; Exports: $27.9Be v $23.5B prior; Imports $21.5Be v $18.1B prior.

- 14:00 (US) Fed's Mester.

- 14:00 (US) Fed's Kashkari.

- 17:00 (US) Fed's Paese.

- 19:00 (KR) South Korea Feb Current Account Balance: No est v $3.0B prior; Balance of Goods (BoP): No est v $4.2B prior.

- 19:30 (JP) Japan Feb Household Spending Y/Y: -2.9%e v -6.3% prior.

- 20:30 (AU) Australia Feb Trade Balance (A$): 10.5Be v 11.0B prior; Exports M/M: No est v 1.6% prior; Imports M/M: No est v 1.3% prior.

- 20:30 (HK) Hong Kong Mar PMI (Whole Economy): No est v 49.7 prior.

- 21:00 (PH) Philippines Mar CPI M/M: 0.3%e v 0.6% prior; Y/Y: 3.8%e v 3.4% prior.

- 22:00 South Korea to sell KRW0.1T in 10-year inflation-linked bonds.

- 23:00 (ID) Indonesia Mar Foreign Reserves: No est v $144.0B prior.

- 23:30 (TH) Thailand Mar CPI M/M: 0.1%e v 0.2% prior; Y/Y: -0.4%e v -0.8% prior; CPI Core Y/Y: 0.4%e v 0.4% prior.

- 23:30 (JP) Japan to sell 3-Month Bills.