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EU:Ahead of that, in Europe, the Norges Bank bank releases its first quarter
lending survey at 0800GMT.
At 0900GMT, Germany's leading economic research institutes joint-economic
forecasts are set to be released in Berlin. At the same time, Switzerland's SNB
board member Fritz Zurbruegg is scheduled to speak on the Eurozone crisis, in
Basel.
Finance ministers of Germany, France, the Netherlands and Sweden are expected on
a panel in Washington from 1900GMT, while EC Vice President Olli Rehn and ECB
Executive Board Member Jorg Asmussen on panel on the way forward in Europe, in
Washington from 2015GMT.
GERMANY: . Egan-Jones Ratings downgraded Germany A+ to A (negative
outlook) late WEDNESDAY."Although Germany's credit metrics are respectable, the
country has exposure to its banks and the weaker EU members", said Egan-Jones.
Germany has significantly exposure to its banking sector because the bank's
large aggregate size measured in assets, said E-J and noted the top five banks
have assets equal to 116% of GDP with Deutsche Bank at 62% of GDP. "Our major
fear is Germany will be expected to provide indirect financial support to weaker
EU banks over the next couple of years to ameliorate asset quality problems and
replace fleeing deposits". Rumour of a German downgrade was doing the rounds
Tuesday but were dismissed as the ratings firm has been barred on ratings
moves/grading for 18 months since January. However, a spokesman for E-J Ratings
said, "under our agreement with the SEC we can rate any sovereign we choose to,
however, for the approximate next 15 months those ratings will not be official
NRSRO qualified ratings. Be that as it may, nothing about our ratings
methodology has changed. There is no ban". As for France, E-J ratings said they
also heard a similar downgrade rumour and "have no comment".
GERMANY: In its annual credit report on Germany, Moody's Investors Service says
that the Aaa sovereign rating, negative outlook, is underpinned by the country's
advanced, diversified and highly competitive economy and its track record of
stability-oriented macroeconomic policies. Moreover, Germany enjoys high levels
of investor confidence, which is reflected in very low debt funding costs.
GERMANY: Moody's added its report on Germany is an annual update to the markets
and does not constitute a rating action.
EUROPE: The FT says up to stg 4 bln is disappearing from the EU budget every
year as officials are still unable to get a grip on fraud, the Telegraph
reports.
ITALY: The FT says the centre-left and centre-right have reportedly reached a
deal on a compromise candidate for President, agreeing on former House of
Deputies speaker, the 80-year old Franco Marini.
UK: UK data is expected at 0830GMT, with the release of the March Retail
Sales numbers. The very cold March weather could well have provided yet
more bad news for the U.K. High Street by persuading shoppers to stay at home.
Analysts are looking for a fall of 0.6% on month.
UK PRESS: UK commodities trader Glencore see wholesale food prices falling
sharply in 2013, the FT reports, as they see bumper crops in both the US and
South America.
US:The U.S. calendar starts at 1230GMT, with the release of the latest weekly
jobless claims numbers.
Initial jobless claims are expected to rise only 4,000 to 350,000 in the April
13 employment survey week after see-sawing in the previous two weeks. Initial
claims were at a level of 341,000 in the March 16 employment survey week.
Also Thursday, G20 finance ministers are set to meet in Washington.
Minneapolis Federal Reserve Bank President Narayana Kocherlakota will deliver a
speech to the Levy Institute in New York at 1300GMT, IMF Managing Director
Christine Lagarde will give a briefing ahead of the IMF meeting in Washington
from 1330GMT.
US data resumes at 1345GMT, with the release of the Bloomberg Comfort Index for
the April 14 week.
At 1400GMT, the April Philly Fed Survey and the March Leading Indicator numbers
will cross the wires.
The Philadelphia Fed index is forecast to hold steady at a reading of 2.0 in
April after rising above zero in March, indicating modest expansion. The Empire
State index fell slightly, but remained above zero. Other regional conditions
data will be released in the coming weeks.
The index of leading indicators is expected to rise 0.1% in March after a
matching 0.5% gains in the previous two months. Positive contributions are
expected from rising stock price and slightly lower initial claims. These should
be offset by a short factory workweek, a decline in the ISM new orders index,
and lower consumer expectations.
Federal Reserve Gov. Sarah Bloom Raskin is scheduled to deliver a speech to the
Levy Institute at 1600GMT.
At 2030GMT, the US money supply for the April 8 week are due for release.
Lastly, at 2130GMT, Treasury Under Secretary for Domestic Finance Mary Miller
will give a speech to the Levy Institute
EURO SUMMARY: Closed in NY at $1.3030 after rate had been driven lower on
reaction to ECB official comments suggesting a rate cut could be considered
depending on circumstances (BBK Weidman, a known hawk), the rate dropping from
around $1.3200 to NY lows of $1.3002 before recouping some lost ground into the
close. Rate traded early Asia between $1.3030/40, dipping to $1.3021 on reaction
to euro-yen sales. A bounce back in the cross took euro-dollar to session highs
of $1.3061 before it dropped back to $1.3040 ahead of the European open.
Market
remains wary of headline reactions, with today's start to the G20 meeting in
Washington likely to prompt some comment, though early reports suggest that
Japan will not be singled out for its recent moves that have devalued the yen. A
fairly light data calendar in the Eurozone today, with main attention to be
focussed on US weekly jobless claims at 1230GMT and Phila Fed at 1400GMT.
Several speakers also noted in the US session as the IMF and World Bank meet
alongside G20. Bids $1.3020, stronger into $1.3000 with stops below. However, if
stops triggered to meet stronger demand at $1.2990, with larger stops through
$1.2970. Offers $1.3060/70, stops above.
STERLING SUMMARY: Closed in NY at $1.5240 after rate had been pressed lower
through Wednesday, initially on reaction to release of weak UK jobs data, and
then tracked euro-dollar's stronger downside correction, the rate touching a
session low of $1.5217 from earlier, pre data highs around $1.5360. Rate traded
between $1.5237/45 through the early part of the Asian session, dipping to
$1.5233 on reaction to euro-yen sales before tracking this crosses' recovery
with rate able to step its way to highs of $1.5256 before drifting off to
$1.5245 into the European open. The initial negative sterling reaction to data
saw euro-sterling spike to stg0.8637 but the euro-dollar sell off overtook
cable's downside move allowing the cross to drop back to stg0.8535, closing NY
around stg0.8550. The recovery extended to stg0.8562 in Asia, opening Europe
around stg0.8555.
UK retail sales due up at 0830GMT to cause some reaction
(-0.6% m/m ex-fuel forecast), with market also expected to be wary of headline
comment as G20 begins its meeting in Washington, along with the World Bank and
IMF. Cable demand seen at $1.5230, with further interest seen into $1.5200,
stops below. Resistance $1.5265/75.
YEN SUMMARY: Dollar-yen closed in NY at Y98.18, having recovered off a session
low of Y97.21, with early Asia extending this move to Y98.28 before meeting
resistance at the NY recovery high. Fix supply and early equity negativity
weighed back on this early move, with triggered stops through Y97.80 taking rate
to lows of Y97.63 before fresh demand emerged. Rate was driven to a high of
Y98.37 as equities recovered, with a well received JGB auction also noted
providing support. Rate reversed off highs, dropping back to Y97.82 before
edging back toward Y98.00 into Europe. Strong demand noted from several
directions at the Y97.50 level, more into Y97.20 with stops below. Resistance
Y98.50 and into Y99.00. Asian traders have noted good interest in 1W (Apr25)
Y100.00 yen puts at 14.0 ahead of next week's BOJ meeting, with Apr26 (BOJ day)
Y98.00 strikes also of note. Euro-yen was recovering off a NY low of Y126.45,
closing at Y127.80, with Asia extending this move to Y128.10 in opening trade
before fix supply countered. Rate dropped back to Y127.17 before fresh demand
emerged into the dip which took rate on to an overnight high of Y128.45. Rate
dropped back to Y127.54 before recovering to Y127.90 ahead of Europe.
JAPAN STOCKS CLOSE: Japan's benchmark stocks are trading higher Thursday. The
Nikkei 225 was lower by 162.82 points, or 1.22%, at 13,220.07. Into the close,
the broader-based TOPIX was lower by 9.02 points at 1126.99. Market breadth
indicators saw 40 issue higher, 175 lower and 10 unchanged. Preliminary volume
stood at 2.625 bn shares.
OPTIONS: FX: Option expiries for today's 1000ET cut,
* Euro-dollar; $1.2900, $1.$1.2905, $1.2910,
$1.2925(large), $1.2930, $1.2950,
$1.2960, $1.3000, $1.3015,
$1.3145(large)
* Dollar-yen; Y97.00, Y97.50, Y98.00, Y98.50, Y99.90, Y100.00
* Cable; $1.5050, $1.5200
* Sterling-Cad; C$1.5675
* Dollar-Swiss; Chf0.9330, Chf0.9450
* Euro-Swiss; Chf1.2230
* Aussie; $1.0490, $1.0550
* Kiwi; $0.8500
EUROZONE T-BILL ISSUANCE: Ireland will be the final Eurozone sovereign to come
to the T-bill market on Thursday, with plans to issue E500mln new 3-month Jul
22, 2013 T-bill. To recap T-bill issuance so far this week, on Monday
Netherlands sold E1.46bln 3-month DTC at average yield -0.027%, and E1.37bln
6-month DTC at average yield -0.011%. France sold E3.998bln 3-month BTF at
average yield 0.011%, E1.997bln 6-month BTF at average yield 0.027% and
E1.697bln 12-month BTF at average yield 0.060%. On Tuesday Spain sold E1.191bln
6-month Letra at average yield 0.53% and sold E3.878bln 12-month Letra at
average yield 1.235%. Greece sold E1.625bln 13-week T-bill at average yield
4.05%. Belgium sold E1.406bln 3-month TC at average yield 0.015% and E1.602bln
12-month TC at average yield 0.08%. On Wednesday Portugal sold E250mln 3-month
T-bill at average yield 0.743% and E1.5bln 12-month T-bill at average yield
1.394%. Slovenia sold E1.109bln 18-month T-bill at average price 94.089.
EUROZONE ISSUANCE: France & Spain come to the eurozone sovereign bond market
Thursday for up to E14.0bln. Overall, sovereign bond issuance in the eurozone
this week is now estimate to come in around E35.59bln after Italy has placed
E17.056bln in a new BTP Italia bond - a four year government bond indexed to
domestic inflation -- and compares to E23.7bln sold last week. France taps the
2-year benchmark 0.25% Nov 2015 OAT and 5-year benchmark 1.00% May 2018 OAT for
between E7.0bln-E8.0bln. In addition, France taps 0.45% July 2016 BTANi, 0.10%
July 2021 OATi and 1.85% July 2027 OATei issues for between E1.0bln-E1.5bln.
Also on Thursday, Spain taps 3.30% 2016 Bono, 4.50% 2018 Bono, 5.40% 2023
Obligacion bonds for up to E4.5bln. As a recap, Slovakia tapped 4.625% 2017
SLOVGB219 and the 3.00% 2023 SLOVGB225 for E157.3mln and E376mln, respectively.
On Wednesday, Germany re-opened its 10-year benchmark 1.50% Feb 2023 Bund issue
for up to E4.0bln. In terms of reinvestment flows, redemptions are due from
Italy E16.7bln, Germany E11.0bln, Ireland E5.62bln and Greece E2.72bln and
coupon payment also from Ireland E1.26bln, Italy E1.14bln, Germany for E0.89bln,
Finland E0.64bln, Portugal E0.58bln, Netherlands E0.11bln, Greece E0.01bln.
SPAIN AUCTION PREVIEW: Spain's Tesoro Publico taps its 3-year benchmark 3.30%
July 2016 Bono, 5-year benchmark 4.50% Jan 2018 Bono and 10-year benchmark 5.40%
Jan 2023 Obligacion issues issues Thursday for combined size of between
E3.5bln-E4.5bln. The auction comes amid recent tightening in Spain/Italy spreads
in the wake of decent demand for BTP Italia bond and strong redemption/coupon
payments in the eurozone. Traders once again expect decent demand from domestic
accounts and comes in wake of strong 6-/12-month T-bill sales earlier this week.
In addition, the Tesoro has made strong progress in its issuance plans and if it
sells the full indicative size then it will have achieved around 54% of its
gross funding programme. For comparison purposes, the 3.30% July 2016 Bono is
trading at 2.82% and this is the first tap of this issue that was sold on Apr 4
for E3.06bln at an average yield of 3.09% and covered 1.86. The 4.50% Jan 2018
Bono trades at 3.31% mid-yield and was last sold on Mar 21 for E1.03bln at avg
yield 3.56%, cover 3.58. The 5.40% Jan 2023 Obligacion trades at 4.65% mid-yield
and was last sold on Mar 21 at an average yield of 4.90% and covered 1.89 times.
Auction results due around 0840GMT.
FRANCE AUCTION PREVIEW: The Agence France Tresor (AFT) taps the 2-year benchmark
0.25% Nov 2015 OAT and 5-year benchmark 1.00% May 2018 OAT on Thursday for
between E7.0bln-E8.0bln. This is the first tap of the 0.25% Nov 2015 OAT issue
that was first sold on Mar 21 for E5.0bln at an average yield of 0.32% and
covered 2.34 times. The issue currently trades at 0.234% mid-yield. The 1.00%
May 2018 OAT issue trades at 0.738% mid-yield and was last sold on Mar 21 for
E2.99bln at an average yield of 0.89% and then covered 2.54 times. Semi-core EMU
bonds have performed strongly in recent sessions on talk of strong Japanese
buying post BoJ QE move and also underpinned by speculation of an ECB rate cut
in coming months. In addition, the auctions are seen underpinned by strong
redemption from France for E23.61bln and coupon payments for E16.9bln due on Apr
25. The OAT auction results are due after bidding close at 0900GMT. In addition,
AFT also taps linker issues that includes the 0.45% July 2016 BTANi, 0.10% July
2021 OATi and 1.85% July 2027 OATei issues for between E1.0bln-E1.5bln.
Linker
auction results are due at 0950GMT.
EUROZONE: Timeline of key events in the eurozone for next few weeks:
- Apr 18/19 G20 FinMin & Central Bank Governors' meeting
- Apr 18 First round of Italian presidential election
- Apr 18 EU Rehn, ESM Regling, EU Dijsselbloem in Washington
- Apr 18 Spain sells 2016-/2018-/2023 Bonds for between E3.5bln-E4.5bln
- Apr 18 Ireland sells 3-month T-bill for E500mln
- Apr 18 Ireland bond redemption for E5.62bln
- Apr 18 Germany's leading economic research institute joint economic forecasts
- Apr 19/21 IMF/World Bank Spring meetings
- Apr 19 Greek zero coupon bond redemption E2.716bln
- Apr 19 Portugal T-bill redemption for E1.145bln
- Apr 19 Spain T-bill redemption for E7.656bln
- Apr 22 EMU 1st release 2012 general Govt deficit and debt
- Apr 22 Ireland T-bill redemption for E500mln
- Apr 23 Spain 3-/9-month T-bill auctions
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