UK confirms move into a technical recession

Notes/observations

- UK Q4 GDP data confirmed the country’s 1st recession in almost four years.

- Fed officials continue to express need shallower and later rate cuts.

- Markets prepare go into the Easter holiday mode.

Asia

- BOJ Summary of Opinions for March judged that price stability target would be achieved toward the end of the projection period of the January 2024 Outlook Report. MPM would not be a regime shift toward monetary tightening, but rather a part of efforts to achieve the price stability target. (aka saw need to go slow in future rate hikes).

- Australia Mar Consumer Inflation Expectation Survey: 4.3% v 4.5% prior.

- Australia Feb Retail Sales M/M: 0.3% v 0.4%e.

- Australia Feb Private Sector Credit M/M: 0.5% v 0.4%e; Y/Y: 5.0% v 4.9% prior.

- RBNZ's Gov Orr stated that saw signs for more normalized rates on horizon. Conditions to allow cut were becoming more apparent. Core inflation pressures were coming off and inflation expectations moving back to target.

Europe

- SNB Vice Chairman Schlegel commented that lower inflation pressure allowed for rate cut. Reiterated stance that looked at exchange rate closely and intervened on forex when necessary.

Americas

- Fed's Waller (voter, hawk) stated that recent data warranted fewer cuts or a later start to cutting; The risk of waiting to cut was lower than the risk of acting too soon.

- S&P affirmed United States sovereign rating at AA+; Outlook Stable (**Note: Moody's is the only remaining major credit grader to assign the US a top AAA rating].

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 +0.20% at 512.78, FTSE +0.33% at 7,957.94, DAX +0.14% at 18,500.85, CAC-40 +0.46% at 8,242.33, IBEX-35 -0.30% at 11,078.36, FTSE MIB +0.10% at 34,794.00, SMI +0.23% at 11,732.20, S&P 500 Futures -0.04%].

Market Focal Points/Key Themes: European indies open generally higher and stayed upbeat through the early part of the session; bourses of Nordic countries closed for holidays; better performing sectors include consumer discretionary and real estate; among underperforming sectors are financials and industrials; Spirent receives takeover offer from Keysight; UK CMA clears Aviva-AIG Life merger; earnings expected in the upcoming US session include Walgreens Boots Alliance.

Equities

- Consumer discretionary: JD Sports Fashion [JD.UK] +7.5% (trading update; initial outlook), Adidas [ADS.DE] +1.5% (in sympathy with JD Sports), Deutsche Post [DPW.DE] -1.5% (analyst downgrade), Jungheinrich [JUN3.DE] +0.5% (earnings; guidance), Wizz Air Holdings Plc [WIZZ.UK] -1.0% (interview).

- Financials: UBS [UBSG.CH] -0.5% (restates profit lower).

- Industrials: ACS Actividades Construction Y Services [ACS.ES] -4.0% (Texas to review possible termination of SH-288 tollway contract with ACS).

- Telecom: Spirent Communications [SPT.UK] +10.5% (confirms higher offer).

Speakers

- ECB's Panetta (Italy, dove) noted that the conditions for policy loosening were nearing.

- BOE Haskel said to have warned against rushing to cut rates as wage growth remained too high. Believe rate cuts were a long way off as wage growth likely to ease only slowly.

- China confirmed to have scrapped wine tariffs against Australian wine; effective from Mar 29th (Had previously imposed tariffs of up to 200%).

- China PBOC Adviser Huang Yiping commented that the domestic economic was still relatively weak.

Currencies/fixed income

- USD ending the month and quarter on a firm note as Fed officials continued to dial back rate cut expectations. Fed's Waller being the latest in noting that recent US data warranted fewer cuts or a later start to cutting.

- EUR/USD dipped below the 1.08 level.

- GBP/USD slipped to test 1.2610 as UK Q4 GDP data confirmed the country’s 1st recession in almost four years.

- USD/JPY consolidating around 151.30 area after the pair probe the 152 level on Wed, Japanese officials continued state that they would not rule out any options against excessive currency moves.

Economic data

- (FI) Finland Feb House Price Index M/M: +1.4% v -2.6% prior; Y/Y: -5.4% v -5.4% prior.

- (FI) Finland Feb Final Retail Sales Volume Y/Y: -3.7 v -2.9% prelim.

- 02:00 (ZA) South Africa Feb M3 Money Supply Y/Y: 5.7% v 6.6% prior; Private Sector Credit Y/Y: 3.3% v 3.2%e.

- (UK) Q4 Final GDP Q/Q: -0.3% v -0.3% prelim; Y/Y: -0.2% v -0.2% prelim (confirms UK entering a technical recession).

- (UK) Q4 Final Private Consumption Q/Q: -0.1% v -0.1% prelim; Government Spending Q/Q: +0.1% v -0.3% prelim; Gross Fixed Capital Formation Q/Q: 0.9% v 1.4% prelim; Exports Q/Q: -0.8% v -2.9% prelim; Imports Q/Q: -0.3% v -0.8% prelim.

- (UK) Q4 Final; Total Business Investment Q/Q: 1.4% v 1.5% prelim; Y/Y: 2.8% v 3.7% prelim.

- (UK) Q4 Current Account Balance: -£21.2B v -£21.4Be.

- (DE) Germany Feb Retail Sales M/M: -1.9% v +0.4%e Y/Y: +1.7% v -0.8%e.

- (FI) Finland Jan Final Trade Balance: -€0.1B v -€0.1B prelim.

- (SE) Sweden Feb Retail Sales M/M: 0.5% v 0.2% prior; Y/Y: 0.3% v -1.9% prior.

- (TR) Turkey Mar Economic Confidence: 100.0 v 99.0 prior.

- (HU) Hungary Jan Average Gross Wages Y/Y: 14.7% v 14.0%e.

- (CH) Swiss Mar KOF Leading Indicator: 101.5 v 102.0e.

- (CH) Swiss Q4 Foreign Exchange Transactions (CHF): -22.7B v -37.6B prior.

- (AT) Austria Feb PPI M/M: -0.3% v -1.0% prior; Y/Y: -6.4% v -7.2% prior.

- (CZ) Czech Q4 Final GDP Q/Q: 0.4% v 0.2% prelim; Y/Y: +0.2% v -0.2% prelim.

- (HK) Hong Kong Feb Budget Balance HKD: -22.5B v 41.4B prior.

- (HK) Hong Kong Feb M3 Money Supply Y/Y: +0.1% v -0.7% prior; M2 Money Supply Y/Y: +0.1% v -0.7% prior; M1 Money Supply Y/Y: -10.7% v -13.7% prior.

- (DE) Germany Mar Unemployment Change: +4.0K v +10.0Ke; Unemployment Claims Rate: 5.9% v 5.9%e.

- (EU) Euro Zone Feb M3 Money Supply Y/Y: 0.4% v 0.3%e.

- (IT) Italy Mar Consumer Confidence: 96.5 v 97.6e; Manufacturing Confidence: 88.6 v 87.8e; Economic Sentiment: 97.0 v 95.9 prior.

- (CZ) Czech Feb M2 Money Supply Y/Y: 8.0% v 8.4% prior.

- (ZA) South Africa Feb PPI M/M: 0.5% v 0.9%e; Y/Y: 4.5% v 5.0%e.

Fixed income issuance

- None seen

Looking ahead

- 06:00 (EU) Daily Euribor Fixing.

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

- 06:30 (IN) India Feb Fiscal Deficit (INR): No est v 1.203T prior.

- 06:30 (BE) Belgium Mar CPI M/M: No est v 0.7% prior; Y/Y: No est v 3.2% prior.

- 06:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills.

- 07:00 (IT) Italy Feb PPI M/M: No est v -2.5% prior; Y/Y: No est v -14.0% prior.

- 07:00 (IE) Ireland Feb Retail Sales Volume M/M: No est v 0.5% prior; Y/Y: No est v 2.7% prior.

- 07:00 (PT) Portugal Mar Preliminary CPI M/M: No est v 0.0% prior; Y/Y: No est v 2.1% prior.

- 07:00 (PT) Portugal Mar Preliminary CPI EU Harmonized M/M: No est v 0.2% prior; Y/Y: No est v 2.3% prior.

- 07:00 (CA) Canada Mar CFIB Business Barometer: No est v 54.9 prior.

- 07:00 (BR) Brazil Central Bank Quarterly Inflation Report (QIR).

- 07:00 (UK) DMO to sell £5.5B in 1-month, 3-month and 6-month bills (£0B, £B and £B respectively).

- 07:00 (RO) Romania to sell RON500M in 7.2% Oct 2026 bonds.

- 07:30 (IN) India Feb Eight Infrastructure (Key) Industries: No est v 3.6% prior.

- 07:45 (JP) Japan PM Kishida.

- 08:00 (ZA) South Africa Feb Trade Balance (ZAR): +9.0Be v -9.4B prior.

- 08:00 (ZA) South Africa Feb Monthly Budget Balance (ZAR): -7.5Be v -54.7B prior.

- 08:00 (BR) Brazil Feb National Unemployment Rate: 7.8%e v 7.6% prior.

- 08:00 (CL) Chile Feb Unemployment Rate: 8.6%e v 8.4% prior.

- 08:00 (CL) Chile Feb Retail Sales Y/Y: 3.5%e v 2.2% prior; Commercial Activity Y/Y: No est v 2.9% prior.

- 08:00 (CL) Chile Feb Manufacturing Production Y/Y: 5.1%e v 6.5% prior; Industrial Production Y/Y: 6.2%e v 3.6% prior; Total Copper Production: No est v 435.6K prior.

- 08:30 (US) Q4 Final GDP Annualized Q/Q: 3.2%e v 3.2% prelim; Personal Consumption: 3.0%e v 3.0% prior

- 08:30 (US) Q4 Final GDP Price Index Q/Q: 1.6%e v 1.6% prelim; Core PCE Q/Q: 2.1%e v 2.1% prelim.

- 08:30 (US) Initial Jobless Claims: 212Ke v 210K prior; Continuing Claims: 1.82Me v 1.807M prior.

- 08:30 (CA) Canada Jan GDP M/M: 0.4%e v 0.0% prior; Y/Y: 0.8%e v 1.1% prior.

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

- 09:00 (RU) Russia Gold and Forex Reserve w/e Mar 22nd: No est v $594.3B prior.

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

- 09:30 (UR) Ukraine Q4 GDP Q/Q: No est v 0.7% prior; Y/Y: 7.3%e v 9.3% prior.

- 09:45 (US) Mar Chicago Purchase Manager’s Index (PMI): 46.0e v 44.0 prior.

- 10:00 (US) Mar Final University of Michigan Confidence: 76.5e v 76.5 prelim.

- 10:00 (US) Feb Pending Home Sales M/M: +1.5%e v -4.9% prior; Y/Y: No est v -6.8% prior.

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

- 11:00 (US) Mar Kansas City Fed Manufacturing Activity: -4e v -4 prior.

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

- 13:30 (FR) ECB’s Villeroy (France).

- 19:00 (KR) South Korea Feb Industrial Production M/M: +0.5%e v -1.3% prior; Y/Y: 4.0%e v 12.9% prior; Cyclical Leading Index Change: No est v # prior.

- 19:30 (JP) Japan Mar Tokyo CPI Y/Y: 2.5%e v 2.5% prior (revised from 2.6%); CPI (ex-fresh food) Y/Y: 2.4%e v 2.5% prior; CPI (ex-fresh food, energy) Y/Y: 2.9%e v 3.1% prior.

- 19:30 (JP) Japan Feb Jobless Rate: 2.4%e v 2.4% prior; Job-To-Applicant Ratio: 1.27e v 1.27 prior.

- 19:50 (JP) Japan Feb Retail Sales M/M: 0.6%e v 0.2% prior (revised from 0.8%); Y/Y: 2.9%e v 2.1% prior (revised from 2.3%); Dept. Store, Supermarket Sales Y/Y: No est v 3.3% prior.

- 19:50 (JP) Japan Feb Preliminary Industrial Production M/M: +1.3%e v -7.5% prior; Y/Y: -2.7%e v -1.5% prior.

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