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TradeTheNews.com EU Mid-Market Update: UK Feb CPI YoY hits fresh record low; German PMI data beats expectations
Tue, 24 Mar 2015 5:40 AM EST
***Notes/Observations***
- Japan Mar Preliminary Manufacturing PMI hit 10-month low: (50.4 v 52.0e)
- China Mar HSBC Manufacturing PMI hits 11-month low (49.2 v 50.4e) with
Employment sub-index at a 6-year low
- German Chancellor Merkel and Greek PM Tsipras pledged to work together to
help resolve Greece's financing crisis but appeared to make little progress on
substance
- Major European Manufacturing PMI data mixed; Germany and Euro Zone beat
expectations and remain in expansion territory while France misses and stays in
contraction
**Economic data***
- (JP) Japan Mar Small Business
Confidence (beats): 49.8 v 48.0e (Highest since March 2014)
- (FI) Finland Feb Unemployment Rate (miss): 10.1% v 9.4%e
- (CZ) Czech Mar Business Confidence: 11.6 v 12.2 prior; Consumer Confidence
Index: 3.3 v 3.3 prior; Composite: 10.0 v 10.4 prior
- (FR) France Mar Preliminary
Manufacturing PMI (miss): 48.2 v 48.5e; Services PMI (beat): 52.8 v
52.5e
- (DE) Germany Mar Preliminary
Manufacturing PMI (beats): 52.4 v 51.5e; Services PMI (beats): 55.3 v
55.0e
- (EU) Euro Zone Mar Preliminary
Manufacturing PMI (beat): 51.9 v 51.5e; Services PMI: 54.3 v 53.9e
- (PL) Poland Feb Unemployment Rate: 12.0% v 12.0%e
- (UK) Feb CPI M/M: 0.3% v 0.3%e; Y/Y:
(miss) 0.0% (record low) v 0.1%e; CPI Core Y/Y: 1.2% v 1.3%e
- (UK) Feb RPI M/M: 0.5% v 0.4%e; Y/Y: 1.0% v 0.9%e; RPI Ex Mortgage Interest
Payments (RPIX) Y/Y: 1.0% v 1.0%e
- (UK) Feb PPI Input M/M: 0.2% v 1.6%e; Y/Y: -13.5% v -12.3%e
- (UK) Feb PPI Output M/M: 0.2% v 0.0%e; Y/Y: -1.8% v -2.0%e
- (UK) Feb PPI Output Core M/M: 0.1% v 0.1%e; Y/Y: 0.2% v 0.4%e
- (UK) Jan ONS House Price Y/Y: 8.4% v 8.9%e
Fixed Income:
- (ES) Spain Debt Agency (Tesoro) opened its book to sell new 15-year I/L Bond
via syndicate; guidance seen +130bps to Spanish Treasuries
- (NL) Netherlands Debt Agency (DSTA) opened its book to sell €7.0B indicated
in 0.25% 2025 DSL Bonds
*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
**Equities**
Indices [Stoxx50 +0.1%, FTSE 100 +0.1% at 7,041, DAX +0.2% at 11,916,
CAC-40 +0.2% at 5,064, IBEX-35 +0.1% at 11,467, FTSE MIB +0.3% at 23,141, SMI
flat at 9,362, Athens Stock Exchange +1%, S&P 500 Futures +0.1% at 2,098]
- Market Focal Points/Key Themes:
Equity markets open lower following Monday's losses, amid continued weakness in
peripheral bonds; DAX pares losses after PMI data, but upside capped amid rise
in Euro (IFO data on Wed); US and UK CPI in focus; Retailer H&M Q1 profits
above ests amid gross margin expansion
By Sector
- Consumer Discretionary [Woseley WOS.UK -2.5% (H1 profits declined);
888 Holdings 888.UK +3% (special dividend), H&M HMB.SE +1% (Q1 profits
above ests)]
- Stoxx50 Sectors [Utilities -0.5%,
Financials -0.2%, Energy -0.2%; Consumer Cyclical +1%, Basic Materials +0.7%,
Technology +0.5%, Consumer Non-Cyclical +0.5%, Industrials +0.3%, Telecom flat
]
**Speakers**
- Greece govt spokesperson: To present reform package to Eurogroup by Monday, Mar
30th at the latest
- EU Working Group to hold call
on Greece on Wed, March 25th
- Norway PM Solberg stated tha
its domestic housing market was not the big threat as some believe
- Fitch: Any potential cut in South
Africa's sovereign rating would be by one notch (**Reminder: On Dec 12th
Fitch affirmed South Africa sovereign rating at BBB; outlook Negative)
- BoJ Gov Kuroda: Not
appropriate to discuss concrete exit strategy now; exit could change depending
on markets and economy
- Japan Fin Min Aso reiterated
govt view that planned implementation of 2nd phase of sales tax hike will not
be delayed unless by extraordinary circumstance
- Philippine Central Bank (BSP) gov
Tetangco: To continue using mix of tools to address risks and still had
room to make policy adjustments
**Currencies***
- The USD maintained a soft tone as dealers took note of recent 'dovish' Fed
talk. The conclusion at this time is that monetary policy adjustment
would be gradual, if not distant
- EUR/USD probed back towards the 1.10 neighborhood aided by mostly improving
PMI data in Europe (particular German reading)
- USD/CHF at 3-week low testing 0.9625
**Political/In the Papers:
- (GR) German Chancellor Merkel noted that discussions with Greek PM centered
around the Euro, as well as bilateral issues. She noted that Germany could not
offer any liquidity by itself, liquidity is to be provided by the entirety of
the Eurogroup
- (US) Fed's Williams (dove, FOMC voter): Mid-year to be time to start rate
hike debate; A rise in US Dollar has a large effect on forecasts, should hike
rate this year despite strong Dollar
- (US) Fed Vice Chair Stanley Fischer: Fed likely to raise rates before year
end and could be driven by a multiple of factors
**Looking Ahead***
All times listed for economic events are denominated in Eastern Standard Time
(Add 4 hours for GMT equivalent)
- (IR) Iran nuclear talks continue in Lausanne
- (NG) Nigeria Central Bank Interest Rate Decision: Expected to leave Key Rate
unchanged at 13.00%
- 06:00 (SE) Sweden Central Bank (Riksbank) Gov Ingves in Parliament
- 06:00 (US) Fed's Bullard (moderate, non voter) in London
- 06:00 (EU) Daily Euribor Fixing
- 06:30 (HU) Hungary Debt Agency (AKK)
to sell 3-month Bills
- 06:15 (EU) ECB allotment in 7-Day Main Refinancing Tender
- 06:15 (CH) Switzerland to sell 3-month Bills
- 07:00 (TR) Turkey to sell 2025 Bonds
- 07:45 (US) Daily Libor Fixing
- 07:45 (US) Goldman Economist Chain Store Sales
- 08:00 (SE) Sweden Central Bank (Riksbank) Gov Ingves in Parliament
- 08:00 (CL) Chile Feb PPI M/M: No est v -3.8% prior
- 08:30 (US) Feb CPI M/M: +0.2%e v
-0.7% prior; Y/Y: -0.1%e v -0.1% prior
- 08:30 (US) Feb CPI Ex Food and Energy M/M: 0.1%e v0.2% prior; Y/Y: 1.7%e v
1.6% prior
- 08:55 (US) Weekly Redbook Sales
- 09:00 (BR) Brazil Central Bank Gov Tombini in Senate
- 09:00 (US) Jan FHFA House Price Index
M/M: 0.5%e v 0.8% prior
- 09:00 (HU) Hungary Central Bank Rate (NBH) Interest Rate Decision:
Expected to cut Base Rate by 20bps to 1.90%
- 09:15 (US) Baltic Dry Bulk Index
- 09:30 (BR) Brazil Feb Current Account Balance: -$7.5Be v -$10.7B prior;
Foreign Direct Investment (FDI): $3.2Be v $4.0B prior
- 09:45 (US) Mar Preliminary Markit Manufacturing PMI: 54.6e v 55.1 prior
- 10:00 (US) Feb New Home Sales: 464Ke
v 481K prior
- 10:00 (US) Mar Richmond Fed Manufacturing Index: 3e v 0 prior
- 10:00 (BE) Belgium Mar Business Confidence: -7.5e v -8.3 prior
- 10:00 (EU) Weekly ECB Forex Reserves
- 10:00 (HU) Hungary Central Bank Gov Matolcsy post rate decision statement
- 10:15 (UK) Chancelor Osborne in Parliament on budget
- 10:30 (FR) ECB's Noyer (France)
- 11:00 (PT) ECB's Costa (Portugal) in Parliament
- 11:00 (MX) Mexico Weekly International Reserves
- 11:15 (BR) Brazil to sell I/L 2019, 2023, 2035 and 2055 Bonds
- 11:30 (US) Treasury to sell 4-Week
Bills
- 12:00 (UR) Ukraine to sell 2-Year Bonds
- 13:00 (US) Treasury to sell $26B in
2-Year Notes
- 13:30 (BR) Brazil Feb Total Federal Debt (BRL): No est v 2.247T prior
- 16:30 (US) Weekly API Oil Inventories
- 17:45 (NZ) New Zealand Feb Trade Balance (NZD): 325Me v 56M prior
- 19:00 (KR) South Korea Q4 Final GDP Q/Q: No est v 0.4% prelim; Y/Y: No est v
2.7% prelim
- 20:30 (AU) RBA's Financial Stability Review
- 23:00 (CN) China to sell 3-Year Bonds
- 23:00 (TH) Thailand to sell THB14B in 2025 Bonds
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