Hello
EUROPE: The European calendar gets underway at 0600GMT Tuesday, with the release
of the German February trade balance data. French data starts at 0630GMT, when
the March Banque de France business survey is released, followed at 0645GMT by
the February foreign trade numbers. German Finance Minister Wolfgang Schaeuble
and U.S. Treasury Secretary Jacob Lew, are scheduled to give a joint press
conference after their meeting, in Berlin. Lew is on his second day of a two-day
trip to eurozone capitals. The presser is set for 0830GMT. Also at 0830GMT,
Sweden Riksbank Gov. Stefan Ingves takes part in the Riksdag Finance Committee's
hearing in Stockholm. At 1600GMT, Bundesbank board member Carl-Ludwig Thiele is
to speak about the Bundesbank role in the Eurosystem, in Frankfurt. At the same
time, ECB Executive Board member Joerg Asmussen is to speak, in Nuertingen,
Germany.
SPAIN: Spain PM Rajoy has called for an increase in powers for the ECB, the FT
says, saying he hoped the central bank could be given powers enjoyed by other
global central banks.
GREECE: Greek opposition leader Alexis Tsipras has kept up his rhetoric of
recent days and continues to attack the coalition, calling for fresh election,
eKathimerini reports.
GERMAN PRESS: Germans have made peace with the Euro according to a new survey,
suggests Der Spiegel. Eleven years after the introduction of the Euro, only 27%
want to return to the Deutsche Mark, a new study by the Forsa institute shows.
This is an enormous decrease compared to the previous year in which nearly every
second German would have preferred going back to their original currency.
UK PRESS: Fees charged by mortgage providers have risen to the highest levels in
25 years,. the Times reports, citing a study by Moneyfacts. The paper says
lenders are trying to claw back money as record low interest rates remain.
UK PRESS: The FT notes that UK insurer Prudential is set to re-enter the UK
residential property market, marking a move back to an area in dominated in
pre-1980's Britain. The paper says the Pru is likely to be joined by many other
institutional investors is the residential letting market.
FED: Chairman Bernanke saying economic conditions are clearly still far from
where the Fed would like them to be. At the same time the resilience of the U.S.
banking system has "greatly improved" in the past four years. Yet more
improvement is needed in the area of liquidity and funding, and banks must
reduce their dependence on wholesale funding. The latest round of stress tests
reflect the improvement but test scenarios can't encompass all the risks,
Bernanke says.
NEWS: BERNANKE Q&A: CEN. BANK POLICIES ARE MUTUALLY BENEFICIAL
NEWS: BERNANKE: ADV ECON C.BANKS ENGAGED IN EXPANSIONARY MON POLICY
NEWS: BERNANKE: INTEREST PAID ON RESRVS TO BE PRINCIPAL TOOL IN EXIT
NEWS: BERNANKE: DON'T EXPECT USE ASSET SALES IN SAME MANNER AS IOER
NEWS: BERNANKE: ASSET SALES WILL BE LATE IN FED EXIT PROCESS
NEWS: BERNANKE: STILL PAYING A LOT OF ATTENTION TO EUROPE SITUATION
NEWS: BERNANKE: NO ISSUES OUT THERE THAT ARE OF MAJOR CONCERN
EURO-DOLLAR: Closed in NY at $1.3014 after recovering off a pullback low of
$1.2992. Rate had failed to extend post NFP highs above $1.3040 in NY, the rate
topping out out at $1.3039 before the pullback. Early trade into Asia saw rate
contained within a tight $1.3011/19 range before it picked up demand on the back
of another round of strong yen sales, the continued rise of euro-yen providing
the momentum for traders to target the recent high at $1.3040, barrier at
$1.3050, as well as the stops above. The move extended on to $1.3068 before
momentum faded and rate drifted back toward the broken resistance level at
$1.3040 ahead of Europe (40-dma $1.3037, CTA's like this average). Yen continues
to provide the key directional impetus, the pullback on dollar-yen and euro-yen
from Y99.66 and Y129.94 respectively prompting the mentioned pullback on
euro-dollar. Germany trade balance and C/A due for release at 0600GMT, followed
by BOF business sentiment and French trade data at 0645GMT provide the morning
data interest, with a light US calendar for this afternoon. Offers now seen into
$1.3065/75 with talk of stops $1.3075/80, though sell interest then seen into
$1.3100, more toward $1.3130. Bids $1.3010/00.
EURO-DOLLAR: Fundamental levels (orders, options, technicals)
$1.3130 Medium offers
$1.3100/15 Strong offers/$1.3114 38.2% $1.3711-1.2745
$1.3080 Strong offers/Stops
$1.3074/75 Tech, 76.4% of $1.2877-1.3711, Mar 5 high
$1.3066 Intraday high Asia
$1.3047 ***Current market rate at 0528GMT Tuesday
$1.3010 Intraday low Asia
$1.3005 US close Monday
$1.2994 US low Monday
$1.2969 Pullback low in Europe, off $1.3006
$1.2960/50 Medium demand/$1.2954 61.8% $1.2901-1.3040/Stops
$1.2935/30 Medium demand/Stops
$1.2900 Strong demand on approach/$1.2901 Fri Apr5 low
$1.2897 Tech 200-dma
$1.2890 Stops
CABLE: Closed in NY at $1.5257 after rate had been pressured lower through the
NY session, breaking back under $1.5300 before finding a base at $1.5239. The
recovery into the close continued in Asia, aided again by sterling-yen demand,
which took rate to highs of $1.5279. Rate eased off to $1.5264 but met further
demand interest into the dip which allowed it to recover to $1.5270/75 into
Europe. The early recovery extension in Asia was tempered as euro-sterling
extended its recovery through the NY high of stg0.8532 to stg0.8560. However,
the pullback from this high provided cable with some buoyancy in its Asian after
noon pullback, the cross easing back toward stg0.8540, though it was seen
meeting demand in this area. As has been the recent situation, any sterling
euphoria often becomes victim to poor data. Today we have IP/Mfg out at 0830GMT,
alongside trade numbers. However, Monday's sterling pullback could be seen as
market positioning for such an event, therefore a surprise set of strong data
could provide a bigger reaction. Support seen from $1.5255 through to $1.5240, a
break to open a deeper move toward $1.5210/00. Resistance $1.5280/85, a break to
open a move back toward $1.5300 ahead of $1.5320/25.
YEN: Monday's large Y98.50 option expiry provided an anchor into early NY trade,
but once the cut had passed it allowed for another round of yen sales which
allowed rate to break Y99.00, extending the move into the NY close to Y99.38.
Asia took over the baton and drove the rate on to Y99.66, though traders in that
centre said US names were the stand out buyers. Offers placed ahead of barrier
interest at Y99.75 (also 50% Y124.14-75.35) said to have aided resistance, with
further barrier interest then noted into Y100.00. However, one major US bank has
suggested that resistance ahead of Y100.00 may not be as strong as some may
think, noting that Ichimoku traders have set their sights on the Y100.70 level.
Macro and CTA selling emerged to take rate off highs, trading back to Y99.09
before meeting fresh demand, though this interest was only able to lift it back
to Y99.50. Rate settled between Y99.15/35 ahead of Europe. Euro-yen tracked the
moves, extending its own recent recovery to a high of Y129.94 before faltering
ahead of Y130.00, with sell interest seen from option players, along with
exporter supply. Rate eased to Y129.33 ahead of the European open with this
corrective pullback looking set to extend in early trade.
JAPAN STOCKS CLOSE: Japan's benchmark stocks are trading little changed Tuesday,
but unable to hold the early session best levels. The Nikkei 225 was lower by
0.24 points, or 0.00%, at 13192.35. Into the close, the broader-based TOPIX was
higher by 0.30 points at 1102.04. Market breadth indicators saw 129 issue
higher, 85 lower and 11 unchanged. Preliminary volume stood at 2.56 bn shares.
OIL: US commercial crude oil stocks data are expected to show an increase of 1.4
million barrels for the week ended April 5, Platts says citing its poll of
analysts. The American Petroleum Institute (API) will release its weekly report
at 4:30 p.m. ET (2030 GMT), while the US EIA is to release its weekly data at
10:30 a.m. ET (1430 GMT) Wednesday. "EIA data show US crude stocks - at 388.624
million barrels for the most recent reporting week ended March 29 - are at a
near-23-year high, with the major difference between now and then being the fact
that in 1990, US crude oil production was on its way down, while currently US
crude production is above 7 million barrels per day (b/d) and likely to keep
rising," Platts says.
OPTIONS: FX: Option expiries for today's 1000ET cut,
* Euro-dollar; $1.2950, $1.3000, $1.3050, $1.3060
* Dollar-yen; Y97.00, Y98.00, Y98.75, Y99.00, Y99.25,
Y100.00(large)
* Cable; $1.5225, $1.5300
* Sterling-yen; Y151.00
* Dollar-Swiss; Chf0.9300
* Euro-Swiss; Chf1.2210
* Aussie; $1.0325, $1.0330, $1.0350, $1.0380, $1.0400, $1.0450
EUROZONE ISSUANCE: Sovereign bond issuance in the eurozone this week is
scheduled from Belgium, Germany, Italy along with the Netherlands and is now
expected to total E14.5bln vs E15.28bln sold last week. The Austrian Federal
Financing Agency (AFFA) has cancelled its auction on Tuesday and said it will
instead open a new line of bond by syndication in April. Risk is on a new
10-year benchmark RAGB bond and books are likely to open as early as this week.
In addition, the EFSF risks coming to the market with a new 5-year syndicated
deal. The Dutch State Treasury Agency is due to tap its 20-year benchmark 2.50%
2033 DSL on Tuesday for between E1.5bln-E2.5bln. On Wednesday, Germany re-opens
its 2-year benchmark 0.25% 2015 Schatz issue for up to E5.0bln. On Thursday,
Italy sells a new benchmark 3-year 2.25% 2016 BTP for between E3.0bln-E4.0bln,
tap 15-year 4.75% 2028 BTP for between E1.5bln-E2.0bln and tap its floater June
2017 CCTeu for between E1.0bln-E1.5bln. On Friday, Belgium is due to conduct its
ORI auction, yet to confirm. In terms of reinvestment flows, redemption from
Germany for E17.0bln and coupon payment also from Germany for E1.7bln -- turns
net cash flow positive to the tune of E3.9ln vs -E15.0bln last week.
EUROZONE T-BILL ISSUANCE: Greece and the ESM both come to the Eurozone sovereign
T-bill market Tuesday. Greece will be first up with plans to issue E1.0bln new
26-week Oct 11, 2013 T-bill. Later in the morning session the ESM plan to issue
a new 3-month Jul 11, 2013 Bill for up to E2.0bln. Still to come on Wednesday
Italy plan to issue a new 3-month Jul 12, 2013 BOT for E3.0bln and issue new
12-month Apr 14, 2014 for E8.0bln. To recap on auctions so far this week, on
Monday, Germany sold E3.49bln 6-month Oct 16 Bubill at average yield -0.0002%.
In the afternoon, France sold E3.698 3-month Jul 4 BTF at average yield 0.013%,
E1.496bln 6-month Sep 5 BTF at average yield 0.029% and E1.999bln 12-month Apr 3
BTF at average yield 0.067%.
DUTCH AUCTION PREVIEW: The Dutch State Treasury Agency (DSTA) re-opens its
20-year benchmark 2.50% Jan 2033 DSL issue Tuesday for between E1.5bln-E2.5bln
indicative size. The 20-year DSL yield trading at 2.231% mid-yield -- near
richest level since Dec 31, following recent duration yield grab by Japanese
investors into semi-core EGBs. Traders expect decent demand given the next
auction from the Netherlands is not scheduled until May 14, as the DSTA isn't
due to hold an auction on Apr 23. The auction today adds to the E8.014bln
currently outstanding and this 20-year DSL issue was last sold on Sep 25, 2012,
thus not comparable. Overall, the DSTA has made a strong start in its issuance
programme, having so far sold E20.74bln worth of DSL bonds and achieved around
41.5% of its 2013 capital market issuance target, according to MNI calculations.
Auction results are due around 0820GMT.
GREECE T-BILL AUCTION PREVIEW: Greece's Public Debt Management Agency (PDMA) is
planning to issue E1.0bln new 26-week Oct 11, 2013 T-bill Tuesday. The auction
comes at a slightly testing time, with last weeks MNI sources story that the
next loan tranche maybe delayed due to preconditions not being met, and Monday's
newswire reports of the postponement of the merger between National Bank of
Greece and Eurobank. With the Greek banks still needing to raise capital and
shares once again falling, this could have a negative impact on the auction. The
PDMA will once again allocate an extra 30% of amount auctioned, in non-comp bids
and a further 30% in second day bids, to bring total amount to be issued to
E1.6bln. At the last 26-week T-bill on Mar 5, the PDMA sold E1.1375bln at
average yield of 4.25% and covered 1.64 times. There will be a E1.6bln T-bill
redemptions on Apr 12, which is seen underpinning demand at the auction.
Results
due to be announced around 0910GMT.
GILT AUCTION PREVIEW: The UK Debt Management Office (DMO) kicks off its
financial year 2013-/14 Remit and taps its 10-year benchmark 1.75% Sep 2022 Gilt
issue Thursday for Stg3.5bln. This is the seventh tap of this issue that was
first launched in June and current auction takes the total size outstanding to
Stg28.287bln. The issue trades at 1.696% mid-yield and trading near richest
level since Sep 2012. Overall, most strategists expect decent demand given this
is the last tap of this 10-year Gilt before a new Sep 2023 Gilt is launched on
June 11 by the DMO, which will be the last medium dated Gilt sale for this
quarter. In addition, whilst the 1.75% 2022 Gilt isn't the CTD into the June
Gilt futures contract, it is part of the deliverability basket and results are
expected to come in line with previous results. This issue was last sold on Feb
21 for Stg2.25bln at yield 2.147%, impressive bid-to-cover ratio of 2.25 times
and tail 0.1bps. Prior to this it was sold on Dec 11 for Stg3.25bln at yield of
1.803%, bid-to-cover ratio of 1.69 times and tail 0.3bps.
Auction results are
due around 0935GMT.
EUROZONE: Timeline of key events in the eurozone for next few weeks:
- Apr 8/9 US Treasury Secretary Lew meets Schaeuble, Moscovici
- Apr 9 EU Van Rompuy/Barroso meets Slovenian PM Bratusek
- Apr 10 Italy sells 3-/12-month T-bills for up to E11.0bln
- Apr 11 Eurogroup meeting in Dublin
- Apr 11 Spanish March Target 2 data and central bank lending figures
- Apr 11 Italy sells new 3Y BTP, taps 15Y BTP, floater CCTeu for up to E7.5bln
- Apr 12/13 Informal ECOFIN meeting in Dublin
- Apr 12 Italy T-bill redemption for E8.8bln
- Apr 15/16 Economist 17th Roundtable with Government of Greece
- Apr 15 Italy joint session of parliament called to elect new President
- Apr 15 Italy bond redemption of 4.25% 2013 BTP for E16.7bln
- Apr 16 Spain 6-/12-month T-bill auctions
- Apr 16/17 IMF publishes Global Financial Stability Report
- Apr 18/19 G20 FinMin & Central Bank Governors' meeting
- Apr 19 Greek zero coupon bond redemption E2.716bln
US: Timeline of some upcoming key events in the US:
- Apr 09 Tsy Lew meets w/ German and French FinMins in Berlin and Paris
- Apr 09 Fed Lacker (non-voter) on TBTF in Richmond at 0930ET
- Apr 09 Outright Tsy Coupon Purch 02/15/2036-02/15/2043 $1.25-$1.75bn
- Apr 09 UST auctions 4wk, 52wk at 1130ET
- Apr 09 UST auctions $32Bn 3y at 1300ET
- Apr 10 Pres Obama to release FY2014 budget
- Apr 10 Fed Kocherlakota (non-voter) at Atlanta Fed conf at 0830ET
- Apr 10 Fannie Mae to announce Benchmark Note issuance
- Apr 10 UST auctions $21Bn 9y, 10m reopen at 1300ET
- Apr 10 Fed Fisher (non-voter) in El Paso, TX at 1300ET
- Apr 10 IMF Lagarde at Econ Club in NY at 1300ET
- Apr 10 FOMC minutes from Mar 19-20 at 1400ET
- Apr 10 Mar Treasury Statement at 1400ET