Quite session in Europe – BoE's Mann believe markets pricing in too many rate cuts

Quiet session as global rate outlook currently views the Fed, ECB and BOE all shaving their 1st potential cut coincide with their Jun meetings.

Asia

- South Korea Mar Consumer Confidence: 100.7 v 101.9 prior.

- Australia Mar Westpac Consumer Confidence: 84.4 v 86.0 prior.

- Japan Feb PPI Services Y/Y: 2.1% v 2.1% prior.

- Japan Fin Min Suzuki reiterated view that was important that FX moved stably, rapid moves were undesirable. Closely watching FX with a high sense of urgency.

Global conflict/tensions

- US Central Command stated that a Chinese owned and operated oil tanker that was carrying Russian oil was been hit by the Houthis.

Europe

- German Economic Institutes updated its economic outlook and cut 2024 GDP growth forecast to 0.1%, saw 2025 GDP growth at 1.4%.

- German Chancellor Scholz said to have signaled that he was open to discuss reforming Germany’s budget rules.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.19% at 508.90, FTSE -0.15% at 7,905.42, DAX +0.09% at 18,283.85, CAC-40 -0.13% at 8,141.23, IBEX-35 +0.23% at 10,977.50, FTSE MIB +0.22% at 34,714.00, SMI +0.07% at 11,645.00, S&P 500 Futures +0.28%].

Market focal points/key themes: European indices open mixed and failed to gain direction through the early part of the session; light trading attributed to shortened week and lack of newsflow; among better performing sectors are financials and consumer discretionary; sectors inclined to the downside include materials and energy; Repsol and Bunge enter JV; reportedly Spanish government takes 3% stake in Telefonica; focus on release of US durable goods orders later in the day; corporate events expected in the upcoming Americas session include earnings from McCormick and TD Synnex, as well as Adobe’s investor day.

Equities

- Consumer discretionary: Asos [ASC.UK] +3.5% (trading update), Ocado Group [OCDO.UK] +2.5% (trading update), Flutter Entertainment [FLTR.UK] +3.5% (earnings).

- Consumer staples: Carrefour [CA.FR] -2.0% (repurchases stake).

- Industrials: Siemens [SIE.DE] +0.5% (affirms outlook), John Wood Group [WG.UK] -4.0% (earnings), Wacker Neuson [WAC.DE] -2.0% (earnings).

- Technology: Atos [ATO.FR] -7.0% (earnings; restructuring).

Speakers

- BOE's Mann commented on her change in rate hike status that it was time to move from a rate hike. She noted that changing dynamics in labor market helped her decision. She added that markets were pricing in too many rate cuts and that the curve was easing monetary policy at this time.

- ECB's Muller (Estonia, hawk stated that was getting to the point where rate cut could begin. Data might confirm inflation trend for Jun meeting.

- France Stats Agency (ISTAT): 2023 Public Debt to GDP ratio at 110.6% vs. 109.7% target.

- France Fin Min Le Maire stated that was determined to get budget deficit to GDP under 3.0% in 2027.

- Swiss KOF Institute Spring Economic Forecast cut the 2024 GDP from 1.7% to 1.2% while maintaining the 2025 GDP at 1.8%. Forecats also cut 2024 CPI from 1.7% to 1.6% while raising the 2025 CPI from 1.0% to 1.1% (both years below SNB 2% inflation target).

- Sweden NIER Think Tank updated its economic outlook which cut 2024 GDP growth from 1.0% to 0.8% while raising the 2024 Headline Inflation from 1.7% to 1.9%. It saw the Riksbank cutting rates in Jun.

- Poland Central Bank's Tyrowicz commented that domestic inflation might fall below 2.5% in March.

- China Commerce Ministry (MOFCOM) stated it was studying a detailed consumption goods trade-in policy. o gradually improve share of EVs in auto sales.

- North Korea issued a statement noting that any Leader Summit with Japan was not in its interest.

Currencies/fixed income

- FX saw little price action on limited macro events during the session. As noted on Monday the lack of FX volatility due to the global rate outlook the Fed, ECB and BOE all seem to have the 1st potential cut coincide with their Jun meetings.

- EUR/USD steady around 1.0850.

- GBP/USD hovering around 1.2650 area.

- USD/JPY at 151.25 with the 152 area providing strong resistance as Japanese officials continue some verbal intervention.

Economic data

- (NL) Netherlands Mar Producer Confidence Index: -4.2 v -4.2 prior.

- (FI) Finland Feb Unemployment Rate: 7.8% v 8.3% prior.

- (DE) Germany Apr GfK Consumer Confidence: -27.4 v -28.0e.

- (SE) Sweden Feb PPI M/M: 0.0% v 0.3% prior; Y/Y: -1.3% v -2.3% prior.

- (DK) Denmark Feb Retail Sales M/M: +2.2% v -1.2% prior; Y/Y: 6.6% v 0.9% prior.

- (ZA) South Africa Jan Leading Indicator: 110.8 v 111.3 prior.

- (ES) Spain Q4 Final GDP Q/Q: 0.6% v 0.6% prelim; Y/Y: 2.0% v 2.0% prelim.

- (ES) Spain Jan Total Mortgage Lending Y/Y: -11.3% v -14.3% prior; Mortgage Approvals Y/Y: -10.3% v -17.0% prior.

- (SE) Sweden Mar Consumer Confidence: 87.5 v 83.0prior; Manufacturing Confidence: 98.7 v 98.4 prior; Economic Tendency Survey: 93.1 v 90.7 prior.

- (HK) Hong Kong Feb Trade Balance (HK$): -41.7B v -31.0Be; Exports Y/Y: -0.8% v +2.0%e; Imports Y/Y: -1.8% v -1.0%e.

- (IS) Iceland Mar CPI M/M: 0.8% v 1.3% prior; Y/Y: 6.8% v 6.6% prior.

Fixed income issuance

- (ID) Indonesia sold total IDR22.6T vs. IDR24.0T target in bills and bonds.

- (NL) Netherlands Debt Agency (DSTA) sold €1.975B vs. €1.5-2.0B indicated range i 0.0% Jan 2029 DSL Bonds; Avg Yield: 2.544% v 2.43% prior.

- (DK) Denmark sold total DKK400M in 3-month and 6-month bills.

- (ZA) South Africa sold total ZAR3.9B vs. ZAR3.9B indicated in 2037, 2040 and 2048 bonds.

Looking ahead

- (NG) Nigeria Central Bank (CBN) Interest Rate Decision: Expected to raise Interest Rates by 175bps to 24.50%.

- 06:00 (EU) Daily Euribor Fixing.

- 06:00 (UK) DMO to sell £3.0B in 4.5% Jun 2028 Gilts.

- 06:00 (AT) Austria Debt Agency (AFFA) to sell combined €2.0B in 3-month and 6-month Bills.

- 06:00 (IT) Italy Debt Agency (Tesoro) to sell combined €8.5B in 3-month and 6-month Bills.

- 06:00 (PL) Poland to sell 2026, 2029 and 2033 Bonds.

- 06:25 (EU) Daily ECB Liquidity Stats.

- 06:30 (CH) Switzerland to sell 3-month Bills.

- 06:30 (DE) Germany to sell €1.0B in 0% Oct green 2025 BOBL.

- 06:30 (DE) Germany to sell €1.0B in 2.30% Feb 2033 green Bunds.

- 06:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

- 06:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).

- 07:00 (IL) Israel Jan Manufacturing Production M/M: No est v -2.7% prior.

- 07:00 (BR) Brazil Central Bank (BCB) Mar Minutes.

- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.

- 08:00 (BR) Brazil Mar IBGE Inflation IPCA-15 M/M: 0.3%e v 0.8% prior; Y/Y: 4.1%e v 4.5% prior.

- 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

- 08:15 (CA) Bank of Canada (BOC) Rogers.

- 08:30 (US) Mar Philadelphia Fed Non-Manufacturing Activity: No est v -8.8 prior.

- 08:30 (US) Feb Preliminary Durable Goods Orders: +1.2%e v -6.2% prior; Durables (ex-transportation): +0.4%e v -0.4% prior; Capital Goods Orders (non-defense/ex-aircraft): 0.1%e v 0.0% prior; Capital Goods Shipments (non-defense/ex-aircraft): 0.0%e v 0.9% prior.

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

- 09:00 (US) Jan FHFA House Price Index M/M: 0.3%e v 0.1% prior.

- 09:00 (US) Jan S&P/CoreLogic House Price Index (20-City) M/M: 0.20%e v 0.21% prior; Y/Y: 6.60%e v 6.13% prior; House Price Index (overall) Y/Y: No est v 5.53% prior.

- 09:00 (HU) Hungary Central Bank (MNB) Interest Rate Decision: Expected to cut Base Rate by 75bps to 8.25%.

- 09:00 (UK) Daily Baltic Dry Bulk Index.

- 10:00 (US) Mar Consumer Confidence: 106.8e v 106.7 prior.

- 10:00 (US) Mar Richmond Fed Manufacturing Index: -5e v -5 prior.

- 10:00 (HU) Hungary Central Bank (MNB) post rate decision statement.

- 10:30 (US) Mar Dallas Fed Services Activity: No est v -3.9 prior.

- 13:00 (US) Treasury to sell 5-Year Notes.

- 15:00 (AR) Argentina Jan Economic Activity Index (Monthly GDP) M/M: No est v -3.1% prior; Y/Y: -6.3%e v -4.5% prior.

- 15:00 (EU) ECB’s Lane (Ireland, chief economist).

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

- 17:00 (KR) South Korea Apr Business Manufacturing Survey: No est v 75 prior; Non-Manufacturing Survey: No est v 70 prior.

- 19:30 (AU) Australia Feb Westpac Leading Index M/M: No est v -0.1% prior.

- 20:00 (NZ) New Zealand Mar ANZ Business Confidence: No est v 34.7 prior; Activity Outlook: No est v 29.5 prior.

- 20:01 (UK) Mar Lloyds Business Barometer: 40e v 42 prior.

- 20:30 (AU) Australia Feb CPI Y/Y: 3.5%e v 3.4% prior.

- 21:00 (JP) BOJ’s Tamura.

- 21:30 (CN) China Feb Industrial Profits Y/Y: No est v 16.8% prior; Industrial Profits YTD Y/Y: No est v -2.3% prior.

- (NZ) New Zealand Government Budget Policy Statement.

- 23:00 (TH) Thailand to sell combined THB41B in 2027 and 2055 bonds.

- 23:35 (JP) Japan to sell 40-year JGB Bonds.