– Global inflation data remained hot (Korea, Philippines and Thailand overnight); pressure on central banks to normalize their policies.
– Main European data for March PMI Services in mixed session but in expansion territory (Beats: Germany, euro zone, United Kingdom; Misses: Spain, Italy; online: France).
– The EU could apply new sanctions against Russia; Details may not emerge until Wednesday, April 6.
– RBA expected to tighten monetary policy at upcoming meetings after hawkish stance.
– RBA left the Cash Rate Target unchanged at 0.10% (as expected); removed the word “patient” from its forward guidance; opens the door to a possible rate hike in June.
– South Korea’s March CPI reading records its 12th month above target and the highest annual pace since 2011 (YoY: 4.1% vs. 4.0%e.
– Australia Mar Final PMI Services confirmed its second consecutive expansion (55.6 against 57.9 prelim).
– Japan Mar Final PMI Services confirmed its third consecutive contraction (49.4 against 48.7 prelim).
– Cash labor income in Japan in February 1.2% vs. 0.6%e; Real cash gains Y/Y: 0.0%v -0.7%e.
– Household spending in February in Japan: 1.1% vs. 2.7%e.
– BOJ Gov Kuroda said recent currency moves were “somewhat fast.”
— BOK Lee Hwan-seok (Acting Governor) said inflation could stay at 4% for a while [above 2.0% target]Upside risks to the path of inflation had increased since the February staff projections.
– Hang Seng open closed for holidays; Shanghai Composite opened its doors for the holidays.
– The US Treasury statement announced that it would not allow any USD-denominated debt payments on Russian government accounts with US financial institutions [refered to bonds due 2022 and 2042].
– ECB node (Netherlands): the ECB should act in the event of high inflation; Gradual but timely normalization is needed.
clues [Stoxx600 +0.35% at 463.80, FTSE -0.16% at 7,546.92, DAX +0.30% at 14,561.44, CAC-40 -0.30% at 6,711.29, IBEX-35 +0.72% at 8,582.25, FTSE MIB +0.20% at 25,227.00, SMI +0.04% at 12,346.06, S&P 500 Futures +0.02%].
Market Focal Points/Key Themes: European indices open mixed, but then traded slightly higher; sectors among those trending up are healthcare and technology; while the sectors among those trending lower are Materials and Financials; Atlantic obtains the support of majority shareholders to buy Aareal Bank; KKR will not confirm the offer for Telecom Italia; earnings expected in the upcoming US session include Lindsay.
– Consumer Discretionary: Shop Apotheke [SAE.DE] +8% (sales).
– Finance: Grenke [GLJ.DE] +7.5% (gains).
– Technology: Ams Osram [AMS.CH] -5% (targets), Anoto Group [ANOT.SE] +45% (agreement with Samsung), Darktrace [DARK.UK] -7% (analyst action).
– Sweden Central Bank (Riksbank) Dep Gov Floden said inflation was well above target and should reassess monetary policy at the next meeting.
– The Dombrovskis of the EU said discussions on Russia should include the energy sector; Oil. Coal sanctions were also an option for the commission.
– Russia Deputy Foreign Minister Andrey Rudenko said Russia and Ukraine would continue intensive talks via video conference. Ukrainian President Zelenskiy said: It is possible that there will be no meeting between him and President Putin.
– Central Bank of the Philippines (BSP) Gov Diokno reiterated position that policy normalization (i.e. rate hikes) should begin in the second half of the year.
– President Biden said to extend health insurance subsidies for the uninsured.
– Overall, the major FX price action was subdued in Europe, with the focus remaining on rising bond yields. Inflation readings continued to push central banks to normalize policy.
– EUR/USD drifted higher but hovered around 1.0970 for most of the session. Dealers raised concerns that the EU could implement new sanctions against Russia and put more pressure on the outlook for growth and inflation.
– The AUD currency was firmer overall after the RBA adopted a hawkish tilt in its monetary policy report.
– (RU) Russia Mar Services PMI: 38.1 vs. 46.0e (back to contraction and lowest since May 2020); Composite PMI: 37.7 vs. 42.0e.
– (FI) Finland Preliminary trade balance for February: -1.1 billion euros against -1.0 billion euros before.
– (SE) Sweden Mar Services PMI: 65.3 versus 67.7 before (22nd month of expansion); Composite PMI: 63.1 vs. 65.0 before.
– (FR) France February Industrial production M/M: -0.9%v -0.3%e; Y/Y: 2.4% vs. 2.5%e.
– (FR) France Feb Manufacturing production M/M: -0.5% v +2.2% before; Y/Y: +3.4% vs. -0.6% before.
– (CZ) Czech retail sales in February Y/Y: % vs. 9.6% before; Retail sales (excluding autos) Y/Y: 4.6% vs. 5.0%e.
– (HU) Hungary Feb Industrial production M/M: 1.6% vs. 3.1%e; Y/Y: 4.5% versus 1.8%e.
– (ES) Spain March Services PMI: 53.4 vs. 54.3e (2nd consecutive expansion); Composite PMI: 53.1 vs. 53.9e.
– (ZA) South Africa Mar PMI (entire economy): 51.4 vs. 50.0e (3rd consecutive expansion).
– (IT) Italy Mar Services PMI: 52.1 vs. 51.5th; (2nd month of expansion) Composite PMI: 52.1 vs. 52.1e.
– (FR) France Mar Final PMI Services: 57.4 vs. 57.4 preliminary (confirmed 12th month of expansion);; Composite PMI: 56.3 vs. 56.2 prelim.
– (DE) Germany Mar Final PMI Services: 56.1 vs. 55.0 preliminary (confirmed 3rd month of expansion);; Composite PMI: 55.1 vs. 54.6 prelim.
– (EU) Eurozone final Services PMI in March: 55.6 vs. 54.8 preliminary (confirmed 12th month of expansion); Composite PMI: 54.9 vs. 54.5 prelim.
– (UK) Mar New Car Registrations Y/Y: -14.3% vs. 15.0% previously.
– (IT) Italy Q4 budget deficit/GDP ratio since the beginning of the year: 7.2% against 8.8% previously.
– (UK) March Final Services PMI: 62.6 vs. 61.0 preliminary; (confirmed 13th month of expansion); Composite PMI: 60.9 vs. 59.7 prelim.
– (United Kingdom) Changes in March official reserves: -1.7 billion dollars against +1.2 billion dollars previously.
Issuance of fixed income securities
– (IDENTIFIER) Indonesia total sold IDR8.15T against IDR9.0T target in Islamic bills and bonds (sukuk).
– (EU) European Union opened its portfolio to sell EUR-denominated NextGeneration (NGEU) green bonds in February 2043 via a syndicate; guidance view +11bps at mid-swaps.
– (ES) Spanish Debt Agency (Tesoro) sold a total of 5.09 billion euros against 4.5 to 5.5 billion euros in the indicated range in 6-month and 12-month bills.
– (UK) BMD sold £3.25 billion in gilts at 0.375% in October 2026; Average return: 1.518% vs. 0.988% before; bid-to-cover: 2.34xv 2.37x front; Tail: 0.5 bps versus 0.3 bps forward.
– (CH) Switzerland sold 536.85 M CHF in 3-month notes; Average return: -0.774% versus -0.782% before.
– (RO) Decision on interest rates of the Central Bank of Romania (NBR): should increase the interest rate by 50bp to 3.00%.
– 05:25 (EU) Daily ECB liquidity statistics.
– 05:30 (HU) The Hungarian Debt Agency (AKK) will sell 3-month bonds.
– 05:30 (DE) Germany to sell 600 million euros of 2030 and 2046 inflation-indexed bonds (Bundei).
– 05:30 (BE) The Belgian Debt Agency (BDA) will sell 3-month bonds.
– 05:30 (EU) ECB allocation under the 7-day Main Refinancing Tender (MRO).
– 05:30 (ZA) South Africa will sell combined bonds of ZAR 3.9 billion in 2032, 2037 and 2040.
– 06:30 (EU) The ESM will sell 1.1 billion euros in 3-month bills.
– 06:45 (US) Libor daily fixing.
– 07:30 (TR) Turkey Tue Real Effective Exchange Rate (REER): None is v 54.78 before.
– 08:00 (UK) Daily Baltic Dry Bulk Index.
– 08:00 (RU) Russia’s announcement on the upcoming OFZ bond issue (held on Wednesday).
– 8:30 a.m. (US) February trade balance: -$88.5 billion vs. -$89.7 billion previously.
– 08:30 (CA) Canada Feb. International merchandise trade (CAD): 3.0 B against 2.6 B before.
– 08:55 (US) Weekly Redbook LFL sales data.
– 09:00 (BR) Brazil Mar PMI Services: No east v 54.7 ahead; Composite PMI: No is v 53.5 before.
– 09:45 (US) Mar Markit Final PMI Services: 58.9ev 59.8 prelim; PMI Composite: No is v 58.5 prelim.
– 10:00 a.m. (US) March ISM services index: 58.4ev 56.5 before.
– 10:00 (MX) Weekly data from Mexico’s international reserve.
– 10:00 a.m. (US) Fed Brainard.
– 4:30 p.m. (US) Weekly API oil inventories.
– 20:00 (CO) Colombia March CPI M/M: 1.0%ev 1.6% before; Y/Y: 8.5%ev 8.0% forward.
– 8:30 p.m. (HK) Hong Kong March PMI (whole economy): no est v 42.9 ahead.
– 21:00 (NZ) New Zealand Mar ANZ Commodity Prices M/M: No east vs. 3.9% prior.
– 9:45 p.m. (CN) China Mar Caixin Services PMI: 49.8ev 50.2 forward; Composite PMI: No is v 50.1 earlier.