Notes/Observations
As expected, the FOMC left its interest rates unchanged, and will continue to purchase treasuries and MBS at current pace. The Fed did see downside risks to economic outlook, and prepared to increase or decrease the pace of bond purchases
Another weak manufacturing PMI reading out of China.
China Premier Li Keqiang said to have requested a study to seek sustainable economic growth and could lower official GDP target in cleanup after Wen era to 7.0% from 7.5%
Major European PMI Manufacturing data shows slight improvement from preliminary readings but all in contraction territory; Swiss PMI did regained the 50 level
Hungary sells record low yields at its 3-year, 5-year and 10-year bond sale
ECB rate decision the main focus On Wednesday an unnamed ECB official appeared to signal a rate cut is in store. Lots of room for a disappointment if there is no ECB action
Economic Data
(IN) India Apr Markit PMI Manufacturing: 51.0 v 52.0 prior; lowest reading since Nov 2011
(SE) Sweden Apr Swedbank PMI Survey: 49.6 v 51.0e, 3-month low
(HU) Hungary Apr PMI: 51.7 v 55.5 prior
(TR) Turkey Apr Manufacturing PMI: 51.3 v 52.3 prior
(PL) Poland Apr Manufacturing PMI:46.9 v 47.8e, approx 4-year low
(EU) ECB: €20.0M borrowed in overnight loan facility vs. €17.0M prior; €120.8B parked in deposit facility vs. €119.1B prior
(ES) Spain Apr Manufacturing PMI: 44.7 v 44.6e (24th straight contraction)
(CZ) Czech Republic Apr Manufacturing PMI: 49.5 v 49.1 prior
(CH) Swiss Apr PMI Manufacturing: 50.2 v 49.0e
(IT) Italy Apr PMI Manufacturing: 45.5 v 45.0e; 21st straight monthly contraction
(FR) France Apr Final PMI Manufacturing: 44.4 v v 44.4e; 14th straight reading in contraction territory
(DE) Germany Apr Final PMI Manufacturing: 48.1 v 47.9e; lowest since Dec and confirms first contraction in 5 months
(EU) Euro Zone Apr Final PMI Manufacturing: 46.5 v 46.5e
(GR) Greece Apr Manufacturing PMI: 45.0 v 42.1 prior; (highest since July 2011, 44th straight month of contraction
(IT) Italy Mar PPI M/M: 0.0% v -0.1%e; Y/Y: 0.0% v -0.1%e
(NO) Norway Mar Credit Indicator Growth Y/Y: 6.1% v 6.2%e
(DE) VDMA: March plant and equipment orders Y/Y: -4%
(UK) Apr PMI Construction: 49.4 v v 48.0e
(HK) Hong Kong Mar Retail Sales Value Y/Y: 9.8% v 14.7%e; Retail Sales Volume Y/Y: 10.2% v 13.4%e
(ZA) South Africa Apr Kagiso PMI: 50.5 v 48.7e
(CY) Cyprus Apr Consumer Price Index M/M: -0.5% v +0.7% prior; Y/Y: -0.3% v +1.1% prior
Fixed Income:
(FR)) France Debt Agency (AFT) sold total €7.93B v €7.0-8.0B indicated in 2021, 2023 and 2032 Oats
Sold €990M in 3.25% Oct 2021 OAT, Avg Yield 1.42% v 2.85% prior; Bid-to-cover: 2.5x v 2.90x prior
Sold €4.015B in new 1.75% 2023 Oat; Avg Yield 1.81% v 1.94% prior (record low); Bid-to-cover: 2.0 v 3.1x prior
Sold€2.92B in 5.75% Oct 2032 OAT; Avg Yield 2.50% v 2.84% prior; Bid-to-cover: 3.2x v 2.24x prior
(SE) Sweden sold SEK3.5B in 1.5% 2023 Bonds; Yield: 1.6070% v 1.8490% prior; bid-to-cover: 1.73x v 1.63x prior
(HU) Hungary Debt Agency (AKK) sold HUF67.5B in 2016, 2018 and 2023 Bonds (record low yields for all three issues)
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
FTSE 100 -0.30% at 6,433, DAX +0.10% at 7,924, CAC-40 -0.30% at 3,844, IBEX-35 +0.40% at 8,451, FTSE MIB -0.30% at 16,712, SMI -0.30% at 7,880, S&P 500 Futures +0.10% at 1,580
. European equity markets are trading mixed, as traders assess earnings report and await the upcoming ECB rate decision. Germany's DAX has seen slight outperformance supported by earnings from Infineon, Lufthansa, Metro and BMW. European banks are mostly lower, as UK banks underperformed (RBS due to report quarterly earnings on Friday).
UK movers [BG +2.5% (Q1 profits above ests), Shell +0.50% (Q1 profits above ests); Imagination Technologies -16% (issued profit warning), Avocet Mining -7.5% (Q1 production declined y/y), Inmarsat -6% (Q1 profits declined), Randgold -4.5% (Q1 profits declined y/y), Millenium & Copthorne -3% (Q1 profits declined y/y)]
Germany movers [Infineon +6.5% (Q1 results above ests, positive outlook), Lufthansa +4% (reaffirmed outlook), Metro +2.5% (Q1 results above ests), BMW +2% (Q1 EBIT above ests, reaffirmed forecast), Beiersdorf +2% (Q1 margins improved, reaffirmed outlook), Hugo Boss +1% (reaffirmed outlook); ThyssenKrupp -3% (concerns related to sale of CSA unit), Siemens -0.40% (Q1 sales below ests, cut outlook)]
France movers [Cap Gemini +3.5% (reaffirmed FY outlook); Sanofi -2% (Q1 sales below ests)]
Switzerland movers [ Swisscom -1% (Q1 results below ests)]
The Netherlands movers [DSM -1% (Q1 sales below ests)]