Upcoming US corporate earnings Boeing, PG, EMC, Dow Chemical, General Dynamics, Northrop Grumman.
08:30 (CA) Canada Feb Retail Sales M/M: 0.5%e v 1.3% prior; Retail Sales Ex Auto M/M: 0.5%e v 1.0% prior
9:00 (MX) Mexico Feb Retail Sales Y/Y: +0.4%e v -0.3% prior
09:45 (US) Apr Preliminary Markit Manufacturing PMI: 56.0e v 55.5 prior
10:00 (US) Mar New Home Sales: 450Ke v 440K prior
10:30 (US) Weekly DOE Crude Oil Inventories
10:30 ((PL) EU President Van Rompuy with Poland PM Tusk in Brussels
11:00 (US) Fed to purchase $2.00-2.50B in Notes
11:30 (BR) Brazil Weekly Currency Flow
12:00 (CA) Canada Fin Min Oliver speaks to Montreal Board of Trade
12:00 (CA) Canada to sell 10-Year Bonds
13:00 (US) Treasury to sell 5-Year Notes
EU Equity markets open mixed following Tuesday’s out-sized gain to bleed off after the opening. Kicks-off of earnings season for Spanish Banks. Ericsson lower on weaker than expected results , French defense names decline after results (Safran, Zodiac). Euro Zone advance and opaque PMIs above estimates. Germany PMI’s beat, France misses. Strong enough to throw water on hopes of immediate rate cuts/qe at next ECB meeting. Peripheral bond yields decline/pushed down as Greece is preparing five year bond offering in London.
Russian FM Lavrov drew the line in the sand for the EU /Kiev politcos and said any attack on Russian citizens in Eastern Ukraine would be regarded as an attack on Russia and Russia would respond accordingly.
Russian President Vladimir Putin has shelved a plan to boost government spending to revive the stalling economy, according to three people familiar with the discussions reported the WSJ. The decision came at a closed-door session Tuesday night at which the economy ministry, supported by Mr. Putin’s economic adviser, argued for a rise in spending.
Far-right parties are set to do well in next month’s elections to the European Parliament, a fact that has thrown a spotlight on their links with the Kremlin. A recent study by the Budapest-based Political Capital Institute documents the support that far-right parties in the EU have given to Russian President Vladimir Putin, particularly throughout the Ukraine crisis.These parties affirmed the Kremlin’s viewpoint, that it is the EU and the West, rather than Russia, which are provoking tension and fueling violence in the Eastern European country.Several far-right politicians went to observe the Crimea referendum on re-joining Russia, a vote they said was free and fair although it was denounced as illegitimate by most Western leaders.”There is reason to believe that Russian diplomacy seeks to build party families in Europe,” the study says.It cites numerous examples of far-right parties participating in events attended by or organised by Russian policymakers.A congress held by Italy’s Northern League in December last year, for example, was attended by Austrian, Flemish, Dutch and Swedish far-right leaders as well as Vikto Zubarev, an MP for United Russia, Putin’s party.Hungary’s Jobbik and Greece’s Golden Dawn are both invited to the Russian National Forum organised by a group with close ties to Putin to be held later this year.Admiration for Putin also extends to Europe’s softer right-wing. Nigel Farage, leader of the eurosceptic UK Independence Party, has openly backed Putin as a skillful “operator”.He recently said the Russian President was the current leader he most admired and said the EU had “blood on its hands” for making Ukraine choose between the European Union and Russia.The support by the European parties – some of which are set to top the polls in the May EU vote – adds to an already muddled backdrop of the EU trying to form a unified response to Moscow’s actions in Ukraine. Thus London and Berlin are putting pressure on the USA to do their dirty business in the Ukraine.
Finland has agreed to receive assistance from NATO forces and to maintain military assets such as ships and aircraft by signing a Memorandum of Understanding (MOU) deal similar to that signed by Sweden. Finnish Defense Minister Carl Haglund insisted that the deal is not a step towards NATO membership, likey a dissimulation.
Angela Merkel has been urged to end Germany’s moratorium on fracking as part of a drive to reduce dependency on Russian gas. The call to allow “demonstration projects” in hydraulic fracturing came from European Energy Commissioner Günther Oettinger.
Writing in the Guardian, former French and German ambassadors to the UK, Gerard Errera and Wolfgang Ischinger, argue that “France needs to get closer to Germany on corporate taxation, the level of social security contributions, reform of the labor market, and reduction of public spending.In return, Germany must rethink its position regarding the policy of austerity, the role of the ECB and the sharing of debt.” A trade Germany will happily make but one France will not with Hollande in office.
French PM Manuel Valls on Wednesday will present in detail how to cut public spending by €50bn between 2015 and the end of President Francois Hollande’s term in 2017. Brussels last year gave France a two-year extension to bring its budget deficit down from 4.3% to below 3% in 2015.
Handelsblatt reports that Germany could lose influence within the ECB Governing Council if Lithuania becomes the 19th state to adopt the euro, triggering a change in voting procedure that would see voting rights rotate among 18 national bank governors.
Die Welt reports that the ECB will use a “trick” to help Portugal to return to the markets, by once again adjusting its collateral rules. The change to the rules, released last month, will mean the ECB will continue to accept bonds with a lower rating from the agency DBRS as collateral for its lending operations. Previously, once Portugal had exited its bailout program, its bonds would no longer have been eligible as collateral as they have low ratings from all four rating agencies. This would have reduced demand and made a return to the markets more difficult.
An INSA poll for Bild has found that 81% of Germans do not consider the eurozone crisis to be over compared with 7% who do. The poll also found that 34% of Germans believe that Greece is on the road to recovery compared with 39% who believe the country has not done enough to reform its economy.
Eurostat has today released the not to be trusted data showing debt and deficit levels in Europe at the end of 2013. Government debt reached 92.6% of GDP in the eurozone (up from 90.7% in 2012), while the deficit level fell from 3.7% of GDP in 2012 to 3% in 2013.
When the Eurogroup meets on 5 May, Greece is set to ask its eurozone partners for permission to gradually reduce corporation tax rates, Ekathimerini reports. The proposal is part of a bigger long-term growth plan agreed on Tuesday by the two coalition parties New Democracy and PASOK.
UKIP’s recent bad headlines, featuring adultery allegations and dubious expense claims, have not affected its poll ratings. A weekend poll put Labour top on 30 percent, UKIP – a eurosceptic party – second on 27 percent, and the Conservatives third on 22 percent. The Liberal Democrats polled just eight percent.
Gold and market rigging thug Mervyn King, former governor of the Bank of England and now Lord King of Lothbury, has received another honor to add to his lengthening list of gongs since swapping central banking for academia. He has been named a Knight Companion of the Noble Order of the Garter. Members get to wear blue velvet robes and black velvet hats with white plumes at a lunch with the Queen every year, and also have a coat of arms displayed in St. George’s Chapel at the Queen’s Windsor Castle residence. He got his Garter for listening to her cousin Jacob Rothschilds and doing what he was told to do, no more, and no less.
(EU) Euro Zone Apr Preliminary Markit Eurozone Manufacturing PMI: 53.3 v 53.0e; Services PMI: 53.1 v 52.5e; Composite PMI: 54.0 v 53.0e
(FR) France Apr Preliminary Markit Manufacturing PMI: 50.9 v 51.9e; Services PMI: 50.3 v 51.3e; Composite PMI: 50.5 v 51.8 prior
(DE) Germany Apr Preliminary Markit Manufacturing PMI: 54.2 v 53.8e; Services PMI: 55.0 v 53.3e; Composite PMI: 56.3 v 54.0e
Ericsson Reports Q1 Net SEK2.12B v SEK2.23Be, Op SEK2.6B v SEK3.5Be, Rev SEK47.5B v SEK50.8Be; both gross and op margins increased. Sales supported by mobile broadband. ARM Holdings Reports Q1 Pretax £97.1M v £96Me, Op Profit £76.3M v £64.9M y/y, Rev £186.7M v £170.3M y/y; Expects semiconductor industry to improve in H2.
Consumer Staples [Associated British Foods ABF.UK +8% (H1 profits above ests, raised dividend)]
Basic Material Resources [Antofagasta ANTO.UK -6% (ex-dividend)]
Industrial [Safran SAF.FR -2% (Q1 sales below ests)]
Utilities [Drax Group DRX.UK -9% (contract update), Centrica CNA.UK -1% (ex dividend)]
Telecom [Ericsson ERICB.SE -4% (Q1 results below ests)]
Energy [Vopak VPK.NL -7% (cautious outlook)]
Technology [Melexis MELE.BE +10% (raised outlook); Arm Holdings ARM.UK -2% (weakness in Q1 royalty sales)]
Stoxx50 sectors [Technology -0.8%, Industrials -0.7%, Telecom -0.4%, Utilities -0.2%, Consumer Cyclical -0.2%; Financials +0.4%, Basic Materials +0.1%, Consumer Non-Cyclical +0.1%, Energy flat]
(EU) Euro Zone 2013 Govt Debt/GDP Ratio: 92.6% v 90.7% prior (record amount)
(PT) Portugal PM Coelho: Portugal growth prospects are more robust at this time; country is now able to finance itself in the market – comments from Lisbon
(PT) Portugal Year-to-Date Budget Report
(FR) France to update its growth forecasts
(PT) Portugal Debt Agency (IGCP) to sell €750M in 10-year bonds
(UK) BOE minutes saw downward pressure on the inflation front
(UK) BOE voted 9-0 (unanimous) to leave Interest Rates unchanged at 0.50%
; voted 9-0 (unanimous) to maintain Asset Purchase Target at £375B
(UK) Mar Public Finances (PSNCR): £15.7B v £17.0Be; PSNB ex Interventions: £6.7B v £11.0Be; Public Sector Net Borrowing: £4.9B v £8.5Be
Rates and Auctions
(EU) ECB €138M borrowed in overnight loan facility vs. €301.0M prior; €26.6B parked in deposit facility vs. €30.1B prior – Daily Eurosystem Liquidity Conditions
(GR) National Bank of Greece preparing for 5-yr bond offering (longest dated since 2009); Bank of America Merrill Lynch, Citigroup, Goldman Sachs, HSBC and Morgan Stanley meeting with possible buyers in London .Press
(RU) Russia to sell combined RUB20B in 2019 and 2023 OFZ bonds
(RU) Russia Central Bank (CBR) again adjusted the floating Ruble corridor by 5 kopecks to 36.35-43.35 in dollar/euro basket
(HU) Hungary switch-auction for bonds
(CZ) Czech Republic to sell 2019, 2025 and 2036 bonds
(PL) Poland to sell combined PLN6-10B in 2016 and 2018 Bonds