Hello
EU: Wednesday's calendar kicks off at 0630GMT, with the release of the French fourth
quarter job creation data and is followed at 0745GFMT, with the release of the
French February HICP data.
Spain's February final HICP numbers are released at 0800GMT nad will be followed
by the release of the March IEA oil market report at 0900GMT.
European Central Bank Governing Council member Jens Weidmann is set to to give a
speech entitled "The Euro Crisis, The Media and Citizens", in Cologne at
0910GMT.
The Eurozone January industrial output data is set for release at 10GMT. At the
same time, German Labour Office head Frank- Juergen Weise delivers a speech at
the Ludwig-Erhard-Lecture of INSM foundation, in Berlin.
EUROZONE: EC President Van Rompuy has sent out the invitation letter the the
next European Council meeting March 14-15 in Brussels.
(
http://www.consilium.europa.eu/uedocs/c ... 136049.pdf)
He says "We must continue to pursue our efforts to maintain stability, translate
all decisions taken to promote growth and competitiveness into concrete action
and results, and give absolute priority to supporting youth employment," and
says this will be the main point on Thursday's agenda. At the conclusion of the
meeting, Van Rompuy says he will propose that the EC adopts its "draft
conclusions, after which the rules for the organization of the proceedings of
euro summits will also be adopted."
GERMANY: The FT notes former German Chancellor Gerhard Schroeder returned to
talk to SPD lawmakers Tuesday, looking to boost party morale. However, Schroeder
said he had no interest in returning to front-line politics.
GREECE: A meet between Greek PM Samaras and Troika officials was postponed for
24 hours Tuesday, with "substantial" differences seen between the parties. The
parties will attempt to meet later Weds.
IRELAND: Ireland has mandated banks for a new syndicated 10-year bond
to be launched in the near future, subject to market conditions, the National
Treasury Management Agency announced late Tuesday. The NTMA mandated Barclays,
Danske Bank, Davy, Goldman Sachs International, HSBC and Nomura as joint lead
managers for the new 10-year transaction, which matures in March 2023. "Further
details of the deal will be announced in due course", the NTMA said.
UK: At 1415GMT, BOE official Andrew Bailey appears before Parliament's Treasury
Select Committee.
UK PRESS: The FT notes that UK investor inflation expectations hit a 4-1/2 year
high Tuesday, as expectations measured by 5 and 10-yr breakevens hit 3.3% - the
highest levels since 2008.
UK PRESS: The Telegraph picks up on comments from fund manager George Godber of
Milton, warning of a bubble building in sovereign bonds equivalent to that seen
in the tech market back in 2000
US: The US calendar gets underway at 1100GMT, with the release of the MBA Mortgage
Index for the March 8 week.
At 1230GMT, US February Retail and Food Sales and the February Import/Export
Price Index data will cross the wires.
Retail sales are forecast to rise 0.5% in February, as motor vehicle sales
improved very modestly in the month. In addition, AAA reported that gasoline
prices rebounded in February after four straight declines. Retail sales are
expected to also rise 0.5% excluding motor vehicle and parts sales.
At 1400GMT, January Business Inventories data will cross the
wires, followed at 1430GMT with the release of the EIA Crude Oil Stocks data for
the March 8 week.
Business inventories are expected to rise 0.5% in January, with factory
inventories already reported up 0.5% and wholesale inventories up 1.2%,
suggesting that analysts expect retail inventories to post another modest gain.
Retail sales rose 0.1% in January before revisions.
Lastly, at 1800GMT, the February monthly Treasury Statement will be released.
The U.S. Treasury is expected to post a $205.0 billion budget gap in February,
smaller than the $231.7 billion gap in February 2012. The fiscal year-to-date
gap through January was running close to $30 billion smallerthan in the same
period a year ago, so this forecast would widen that gap further. There appears
to be no date issue this month, as March 1 was Friday.
EURO-DOLLAR: Closed in NY at $1.3028 after rate had been pressured to session
highs of $1.3074 during the NY session, easing to $1.3015 before edging higher
into the close. Slow trade into Asia with rate easing off to post session lows
at $1.3023 before picking up some demand interest which took it to an eventual
high of $1.3044 ($1.3045 50% $1.3074-15) ahead of the European open. Rate
currently trades around $1.3038 at writing. Recent higher lows seems to be
placing an underlying bid tone back in place, with thoughts at the beginning of
the week looking for a break under $1.2950 seen diminishing. Offers now seen in
place between $1.3070/80, a break to open a move toward $1.3100. A break here to
allow for a move toward $1.3125/35. Support remains at $1.3025/15, the area
covering the Asia low at $1.3023 and the NY pullback lows at $1.3015. French and
Spanish inflation data due up at 0745GMT and 0800GMT respectively with EZ IP at
1000GMT, though more interest to be shown for the Italian bond auction at
1000GMT, results 1010GMT.
EURO-DOLLAR: Rate seen trading with a firm tone in early European trade,
currently pushing up against overnight highs at $1.3045 (50% $1.3075-15). A
break here to open a move toward $1.3052 (61.8%) ahead of stronger interest into
$1.3060 (76.4% and bear channel top). Above here and Tuesday's high at $1.3075
moves back into view, with offers noted between $1.3075/80. Stops then noted
above $1.3080. Support seen back at $1.3025/15.
CABLE: Closed in NY at $1.4905 after rate was able to recover off UK production
react lows of $1.4832, the rate posting recovery highs of $1.4914 ahead of the
close. Rate drifted off to $1.4893 in early Asian trade but dip below the figure
quickly picked up fresh demand which lifted it on to $1.4911. Sterling then
gained a boost, the rate breaking up to $1.4954 on reported short covering,
before it settled back between $1.4932/42 into Europe. Rate was picking up more
demand into early Europe. Following the disappointing release of UK production
data Tuesday the reaction was fairly muted as market was seen sitting short. The
dip provided those positions to be covered with traders now looking for levels
to re enter shorts, the view is still for further downside in cable.
Euro-sterling, which had seen highs Tuesday of stg0.8793, was contained back
between stg0.8720/45 in Asia, the cross seen in recent sessions to reluctantly
push higher on reactive moves, but continues to meet willing sellers into
rallies. This cross selling in turn has been a major provider of cable buoyancy.
Cable bids seen at $1.4900/1.4890, a break to open a deeper move toward
$1.4855/50 ahead of 2013 lows at $1.4832. Resistance $1.4950/60.
YEN: Dollar-yen closed in NY at Y96.02 after recovering off a NY pullback low of
Y95.71, with this recovery turning lower again into early Asia, pressing down to
Y95.74 before fresh demand emerged. Rate pushed up to Y96.10 before turning
lower again, Japanese names noted sellers in this move as rate squeezed on to
Y95.66. Recovery to Y95.85 met heavy Swiss name selling which pressed rate down
to Y95.59, but reported decent demand interest stacked into Y95.50, with macro
also looking to pick up dips below Y95.50, prevented further slippage and
allowed for a recovery to Y95.80 into Europe. Stops are reported through
Y95.40-30, but if triggered expected to meet option linked demand placed ahead
of barriers at Y95.20 and Y95.00. Resistance remains at Y95.00/10. Reports that
one of the smaller opposition parties have objections to dep governor nominee
Nakaso, following on from Tuesday's objection by DPJ to Iwata, seen as minor
stumbling blocks, with Abe's nominations for the BOJ leadership expected to
pass.
JAPAN STOCKS CLOSE: Japan's benchmark stocks are lower Wednesday, running into
profit-taking as the yen regains some ground. The Nikkei 225 was lower by 75.15
points, or 0.61%, at 12239.66. Into the close, the broader-based TOPIX was lower
by 3.69 points at 1032.21. Market breadth indicators saw 92 issue higher, 117
lower and 16 unchanged. Preliminary volume stood at 1.678 bn shares.
OPTIONS: FX: Option expiries for today's 1000ET cut (updated),
* Euro-dollar; $1.2825, $1.2950, $1.3050, $1.3100, $1.3110, $1.3120
* Dollar-yen;
Y95.00(large), Y96.00, Y96.50
* Cable;
$1.4925(large), $1.5000, $1.5175, $15250
* Euro-Swiss; Chf1.2310, Chf1.2350
* Aussie; $1.0200, $1.0250, $1.0270, $1.0300
* Kiwi; $0.8260
* Sterling-Canada; C$1.5500
EUROZONE ISSUANCE: Germany and Italy come to the eurozone sovereign bond market
Wednesday with Ireland also seen possibly opening its order books for its new
syndicated 10-year bond, where mandate was announced late Tuesday and said to be
launched in the near future, subject to market conditions. Germany re-opens its
2-year 0.25% Mar 2015 Schatz issue for up to E5.0bln and Italy taps 3-year
benchmark 2.75% 2015 BTP for between E2.5bn-E3.5bn, recently issued 15-year
4.75% Sep 2028 BTP for between E1.5bn-E2.0bn and floater June 2017 CCTeu & Apr
2018 CCTeu for up to E1.75bln combined size. Overall, sovereign bond issuance in
the eurozone this week is expected to slow down to E16.73bln vs E18.16bln last
week. As a recap, The Dutch State Treasury Agency (DSTA) kicked off issuance on
Tuesday with re-opening of its 3-year benchmark 0.00% Apr 2016 DSL issue for
E3.48bl. Also on Tuesday, Germany re-opens its 10-year linker 0.1% 2023 Bundei
for up to E1.0bln. In terms of reinvestment flows, redemption payment from
Germany for E18.0bln and coupon payments from Italy E1.7bln, Austria E1.4bln,
Ireland E0.6bln, Germany E0.3bln -- turns net cash flow positive to the tune of
E5.3bln vs -E16.6bln last week.
EUROZONE T-BILL ISSUANCE: Eurozone sovereign T-bill issuance has been completed
for this week, with E27.619bln allocated by Germany, France, Spain, Italy and
Belgium compared to E16.608bln allotted last week. To recap, on Monday Germany
sold E3.24bln 6-month Sep 11 Bubill at average yield 0.0103%. In the afternoon,
France sold E3.999 3-month Jun 6 BTF at average yield 0.015%, E1.798bln 6-month
Aug 8 BTF at average yield 0.029% and E1.995bln 12-month Mar 6 BTF at average
yield 0.088%. On Tuesday Spain sold E1.977bln 6-month Sep 20 Letra at average
yield 0.794% and E3.855bln 12-month Mar 14, 2014 Letra at average yield 1.363%.
Italy sold E7.75bln 12-month Mar 14, 2014 at average yield 1.28%. Belgium sold
E1.68bln 3-month Jun 20 TC at average yield 0.044% and E1.325bln 12-month Mar
13, 2014 TC at average yield 0.128%. T-bill issuance is expected to pick up next
week with plans from Netherlands, France, Spain, Greece, ESM, Portugal and
Ireland, and is expected to total E19.0bln.
ITALY AUCTION PREVIEW: Italy's Dipartimento del Tesoro conducts its regular
mid-month BTP auctions Wednesday, which includes tap of the floater June 2017
CCTeu and Apr 2018 CCTeu issues for between E1.0bln-E1.75bln, tap of 3-year
benchmark 2.75% Dec 2015 BTP for between E2.5bln-E3.5bln and tap of the 15-year
benchmark 4.75% Sep 2028 BTP for between E1.5bln-E2.0bln indicative sizes. This
is the first litmus test for the Italian bond market in the wake Fitch downgrade
by 1 notch to BBB+ (negative outlook). The auction comes after Tuesday's
lacklustre 12-month T-bill auction and uncertainties surrounding Italian
election continuing to prevail along with modest concession. That said, the
E1.7bln worth of coupon payment from Italy is seen underpinning demand. In terms
of comparison, the June 2017 CCTeu was last sold on Feb 13 for E1.43bln at an
avg yield 2.55% and covered 1.39 times. The Apr 2018 CCTeu was last sold in Dec
2011 and therefore not comparable. The 2.75% Dec 2015 BTP was also last sold on
Feb 13 for E3.45bln at avg yield 1.30% and covered 1.37 times. This is the first
tap of the 15-year 4.75% Sep 2028 BTP that was last sold via syndication on Jan
15 for E6.0bln at yield 4.805%.
Results are due around 1010GMT.
GERMAN AUCTION PREVIEW: The Deutsche Finanzagentur re-opens its 2-year benchmark
0.25% Mar 2015 Schatz issue Wednesday for up to E5.0bln. This is the first tap
of this issue and adds to the E5.0bln currently outstanding. The issue trades at
0.07% mid-yield -- above recent rich level of 0.022%. The key factor
underpinning demand is the E18.0bln redemption from Germany due on Mar 15 and
also fact that historic results have been solid. At the inaugural auction on Feb
13, E4.301bln was alloted at an average yield of 0.21% and then covered 1.77
times, with the Buba retaining 13.98% of the sale. Prior to this, the old 0.00%
Dec 2014 Schatz was sold on Jan 2 and E4.148bln was alloted at an average yield
of 0.01% and covered 1.5 times, with the Buba retaining 17% of the sale. The
average cover ratio of the last 5-auctions is 1.814 times. This issue is due to
be re-opened again in Apr for up to E5.0bln before a new June Schatz issue is
launched in May for up to E5.0bln.
Auction results due shortly after bidding
closes at 1030GMT.
EUROZONE: Timeline of key events in the eurozone for next few weeks:
- Mar 13 ECB 3-year LTRO repayment settlement
- Mar 13 ECB start of reserve maintenance period
- Mar 13 Italy sells 2015-/2028 BTP, 2017-/2018 CCTeu for up to E7.25bln
- Mar 14/15 European Council Summit
- Mar 14 ECB publishes monthly bulletin for March
- Mar 14 Italy T-bill redemption for E8.685bln
- Mar 15 Bank of Portugal to publish official bulletin
- Mar 15 Spain Q4 labour cost survey
- Mar 15 Spain T-bill redemption for E12.259bln
- Mar 15 First meeting of Italy Chamber & Senate (within 2-3 weeks of vote)
- Mar 18 Election of Presidents of each legislative chamber
- Mar 19 Spain sells 12-/18-month T-bills
- Mar 20 Deadline for Italy chambers to elect a speaker
US: Timeline of key events in the US for the next few days:
- TBD Obama admin likely to release budget in late March
- Mar 13 Treasury Cpn Purch Feb 15 2036-Feb 15 2043 $1.25-$1.75B
- Mar 13 UST auctions $21b 9y,11m reopen at 1300ET
- Mar 13 Feb Tsy Statement, est $205Bn at 1400ET
- Mar 14 Treasury Cpn Purch May 15 2020-Feb 15 2023 $2.75-$3.50B
- Mar 14 Oversight and Investigations Subcomm on FSOC and TBTF at 1000ET
- Mar 14 UST announces 3/6m bills, 10-yr TIPS reopen at 1100ET
- Mar 14 Pres Obama to attend Senate GOP lunch
- Mar 14 UST auctions $13b 29y,11m reopen at 1300ET
- Mar 14 Fed releases latest capital adequacy results for 18 largest finl
institutions at 1630ET
- Mar 14 Money Supply (M2) at 1630ET
- Mar 14 Fed releases results from its overall Comprehensive Capital Analysis
and Review at 1630ET
- Mar 15 Jan Tsy Intl Capital System at 0900ET
