European Highlights Friday 29 April 2016
Asia FX and News –
+ ECB Chief Economist Praet says cutting rates further, deploying negative rates again would require a distinct worsening of the inflation outlook. ~ Expansion
+ NKS: Though BoJ Kuroda played up positives, Thursday's, economic indicators point to a foundering economy that calls his strategy and his unshakable confidence into question. All eyes are on preliminary GDP data on May 18.
+ Straits Times: London has overtaken Singapore as the second-largest offshore centre for yuan clearing. ~ Swift
+ USD/JPY extended losses to just above 107.00 after taking out the previous YTD low at 107.60 with Japan away on holidays. PBoC sets USD/CNY sharply lower at 6.4578 on weaker USD, the USD Index seeing an 8-month low. AUD and NZD both improved against the USD, AUD/NZD finding more sellers to keep AUD/NZD shy of a return to 1.10.
Nikkei and JGBs –
+ Japan closed for Showa Day.
European FX and News –
+ USD/JPY extended its low to 106.88 as the BoJ is kept away, though despite the holiday there Is no doubt that officials are keeping tabs with developments. EUR/JPY matched the 18th Apr low at 121.72.
+ EUR/USD broke above 1.14 to a high at 1.4113, some way short still of the 1.1465 YTD high that was well offered on the original visit. Eurozone data has been better than expected with France and overall EZ GDP beating consensus.
+ Cable started with a bid but saw a sharp dip back below 1.46 and EUR/GBP push back over .7800. The usual end of month ESCB buying will be noted, though we suspect that it's more a case of some caution being seen ahead of the long UK weekend.
+ SNB President Jordan made the usual comments about the CHF being over-valued and kept alive the threat of intervention, all to no great effect as EUR/CHF looks set to break below 1.0950 again.
+ The NZD continues to outpace the AUD, both still well clear of recent lows against the USD. Crude continues to notch new YTD highs, but USD/CAD reluctant to test 1.2500.
+ Familiar levels on EUR/SEK and EUR/NOK, the latter marginally lower to put 1.00 for NOK/SEK back into the discussion, but stalling at .9950 so far.
Bonds and equities –
+ Bunds underperformed early on at the front end on Praet's comments, though paring back the slight bear flattening later in the session. The Gilt curve has flattened under month-end flows.
+ Equities are under water, Eurostoxx off a hefty 1.4%, the Dax-0.8% and FTSE around -0.5%.
+ Australia: PPI in Q2 was -0.2%q/q, +1.2%y/y.
+ Australia: Private Sector Credit in March was +0.4%m/m vs +0.6% expected.
+ Australia: Housing Credit +0.5%m/m in March.
+ NZ: NBNZ Business Outlook +6.2% (Mar)
+ UK: Consumer Confidence in Apr falls to -3 vs 0 in March. Lowest since Dec 2014 -GFK.
+ France: The preliminary estimate for Q1 GDP show a 0.5%q/q expansion, which is just better than the 0.5%q/q markets expected. This follows 0.3%q/q growth in Q4 but the y/y rate has slowed to 1.3%y/y, from 1.4%y/y in Q4.
+ Germany: Retail Sales fell by 1.1%m/m in Mar following -0.3%m/m in Feb (revised from -0.4%m/m increase). The y/y rate has at the same time fallen to 0.7%y/y from 5.5%y/y (revised from 5.4%y/y).
+ France: The preliminary estimate of French April CPI shows a 0.1%m/m increase which has taken the y/y rate down to -0.2%y/y. The harmonised measure meanwhile rose by 0.1%m/m, which has kept the y/y rate stable (prev: -0.1%y/y).
+ France: PPI in Mar is 0.3%m/m (prev: -0.5%m/m) which has taken the y/y to -4.0%y/y (previous -4.2%)
+ France: Consumer Spending rose by 0.2%m/m in Mar, firmer than the -0.4% market expected after Feb's 0.5%m/m increase (revised from 0.6%m/m). This has taken the y/y rate higher to 2.7% from 1.6% in Feb (revised from 1.8%).
+ Swiss: The Swiss KOF economic barometer fell marginally to 102.7 in April from a revised 102.8 in March (revised from 102.5) which was above market expectations of 102.5. This is now the third consecutive month where the barometer has been firmly above the historical average.
+ Spain: The preliminary values for Q1 GDP showed a 0.8%q/q expansion following 0.8%q/q growth in Q4. The y/y rate fell slightly lower to 3.4% from 3.5% in Q4.
+ Norway: NAV unemployment rate fell to 3.1% in April from 3.3% in March which was below market expectations of 3.3%. The number of registered unemployed persons fell by 1041 from April 2015 to a total 84,636.
+ Norway: C2 credit growth falls to 4.9% in Mar.
+ UK: The BoE measure of Net Consumer Credit shows a £1.9bn increase in March, up notably from the £1.4bn in February (revised from £1.3bn), which is much firmer than market expectations for £1.3bn and marks the fastest rate in over a decade.
+ UK: Mortgage Lending has surged to £7.4bn after the £3.6bn in February (mkt: £3.7bn), bringing total net lending to £9.3bn (prev: £4.9bn). This is the fastest rate of mortgage lending since 2007 and was spurred on by changed to the stamp duty tax which sparked a frenzy for buy-to-let properties.
+ UK: The Lead-Indicator Mortgage Approvals fell to 71.4k in March (mkt: 74.2k) from 71.4k previously (revised from 73.9k) and the 62k registered last year (+15.2%y/y).
+ UK: M4 Broad Lending Flows fell by 0.4%m/m in March (prev: 0.9%m/m) which has taken the y/y rate lower to 1.6%y/y (prev: 2.2%y/y, revised from 2.2%y/y).
+ Eurozone: flash April HICP falls to -0.2% y/y
+ Eurozone: The first estimate of Q1 GDP shows growth of 0.6%q/q, (Q4: 0.3%q/q) which is firmer than mkt expectations for 0.4%q/q. The y/y rate has in turn remained unchanged at 1.6%y/y, better that the 1.4% markets expected.
+ Eurozone: The Harmonised Unemployment Rate fell to 10.2% in March from 10.4% in February (revised from 10.3%), which is better than market consensus for 10.3% (4cast: 10.2%).
+ Italy: flash Apr HICP -0.3% y/y, CPI -0.4% y/y
Still To Be Released -
10:00 GMT - IT: PPI (Mar) % y/y (Prev: -4.1)
12:30 GMT - CA: GDP (Feb) 4cast: -0.5% m/m (Mkt: -0.2 Prev: 0.6)
12:30 GMT - CA: Industrial product price index (Mar) % m/m (Mkt: 0.5 Prev: -1.1)
12:30 GMT - CA: Raw Materials Price Index (Mar) % m/m (Mkt: 3.7 Prev: -2.6)
12:30 GMT - US: Core PCE Price Index (Mar) 4cast: 0.1% m/m (Mkt: 0.1 Prev: 0.1)
12:30 GMT - US: Employment cost index (Q1) 4cast: 0.6% q/q (Mkt: 0.6 Prev: 0.6)
12:30 GMT - US: Personal income (Mar) 4cast: 0.4% m/m (Mkt: 0.3 Prev: 0.2)
12:30 GMT - US: Personal spending (Mar) 4cast: 0.1% m/m (Mkt: 0.2 Prev: 0.1)
13:00 GMT - BE: GDP (Prelim.) (Q1) % q/q (Prev: 0.2)
13:00 GMT - BE: GDP (Prelim.) (Q1) % y/y (Prev: 1.3)
13:45 GMT - US: Chicago PMI (Apr) 4cast: 52.5 (Mkt: 52.6 Prev: 53.6)
14:00 GMT - US: Univ of Mich Sent. (Final) (Apr) 4cast: 90.5 (Mkt: 90 Prev: 89.7)
Events & Auctions:
UK: UK Sovereign debt to be rated by S&P
GR: Market Holiday - Good Friday (Orthodox)
JP: Market Holiday - Showa Day
10:30 GMT - US: Fed's Kaplan Speaks in London
11:00 GMT - UK: 181day bills auction - GBP 2.00 Bn (Act)
11:00 GMT - UK: 28day bills auction - GBP 0.50 Bn (Act)
11:00 GMT - UK: 90day bills auction - GBP 1.00 Bn (Act)
12:00 GMT - UK: BoE's Cunliffe Speaks in Brussels