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European Market Update: April 18, 2013

Published 04/18/2013, 06:49 AM
Updated 01/01/2017, 02:20 AM
Italy delegates begins process to select a President; UK Retail Sales weaker than expected; Spain bond auction results solid as borrowing cost fall


G20 Draft to affirm commitment to avoid competitive devaluations; will withhold direct criticism of Japan's policies.

US Treasury Sec Lew proposes the G20 avoids 'beggar thy neighbor' policies.

Brazil Central Bank hikes Selic Target Rate for first time in nearly two years to fight inflation.

BoJ to raise CPI forecast; May set Spring 2015 goal for a 2% inflation target.

Egan-Jones: Downgrades Germany 1 notch to A from A+ (Note: firm is not currently recognized for Sovereign ratings by the Nationally Recognized Statistical Rating Organization (NRSRO)

Italy Parliament and Regional delegates meet, launch process of electing a President.

Portugal Opposition leader: tells PM and Troika he disagrees with austerity policy; need growth.

PBOC Vice Gov Yi: China FX band will widen more in the future (Note currently at 1%)

Spain's 3-tranche bond offering was solid with lower borrowing costs, and again selling above the indicated range; 10-year auction yield lowest since September 2012

France sells 5-year Oats at a record low yield of 0.73%.

German Parliament approves Cyprus Bailout package (as expected)

Economic Data

(JP) Japan Mar Nationwide Dept. Sales Y/Y: 3.9% v 0.3% prior; Tokyo Dept. Store Sales Y/Y: 6.4% v 2.5% prior

(HU) Hungary Feb Avg Gross Wages Y/Y: 2.7% v 2.8%e

(NL) Netherlands Mar Unemployment Rate: 8.1% v 7.7% prior

(IS) Israel Mar Money Supply: 15.5% v 12.9% prior

(IS) Israel Apr Inflation Forecast: 1.8% v 1.8% prior

(ES) Span Feb Bank bad loan ratio 10.39% v 10.78% prior

(UK) Mar Retail Sales Ex Auto Fuel M/M: -0.8% v -0.6%e; Y/Y: 0.4% v 0.9%e

(UK) Mar Retail Sales w/Auto Fuel M/M: -0.7% v -0.6%e; Y/Y: -0.5% v -0.2%e

(HK) Hong Kong Mar Unemployment Rate: 3.5% v 3.4%e

(IT) Italy Feb Current Account: -€1.6B v -€4.6B prior

(PL) Central/Eastern European Apr ZEW Indicator: 29.5 v 49.9 prior

Fixed Income:

(ES) Spain Debt Agency (Tesoro) sold total €4.71B vs. €3.5-4.5B indicated range in 2016, 2018 and 2023 Bono bonds

Sold €1.381B 1.381Bin 3.3% April 2016 Bono; Avg Yield 2.792% v 3.019% prior; Bid-to-cover: 2.84x v 1.86x prior; Max Yield 2.819% v 3.046% prior

Sold €2.04B in Jan 4.5% 2018 Bono Bond; Avg Yield 3.257% v 3.557% prior; Bid-to-cover: 2.52x v 3.6x prior; Maximum Yield 3.286% v 3.579% prior

Sold €1.29B in 5.4% 2023 bonds; Avg Yield 4.612% (lowest since Sept) v 4.898% prior; Bid-to-cover: 2.58x v 1.9x prior; Max Yield 4.632% v 4.919% prior

(FR) France Debt Agency (AFT) sold total €7.91B vs. €7.0-8.0B indicated range in 2015 and 2018 OATs

Sold €4.334B in 0.25% Nov 2015 Oats; Avg Yield 0.24% v 0.32% prior; Bid-to-cover: 2.24x v 2.3x prior

Sold €3.577B in 1.0% 2018 Oat; Avg Yield 0.73% (Record Low) v 1.12% prior; Bid-to-cover: 2.24x v 2.54x prior

(IN) India sold total INR150B vs. INR150B indicated in 2020, 2022, 2032 and 2042 bonds

(HU) Hungary Debt Agency (AKK) sold HUF62.5B in 2016, 2018 and 2028 Bonds

(IE) Ireland Debt Agency (NTMA) sold €500M vs. €500M indicated in 3-month Bills; Avg Yield: 0.195% v 0.240% prior; Bid-to-cover: 4.76x v 3.4x prior

(UK) DMO sold £2.25B in 3.25% 2044 Gilts; Avg Yield: 3.121% v 3.4185% prior; Bid-to-cover:1.69 x; Tail: 0.3bps



FTSE 100 +0.30% at 6,264, DAX +0.60% at 7,549, CAC-40 +0.90% at 3,632, IBEX-35 +0.90% at 7,870, FTSE MIB +1% at 15,531, SMI +0.40% at 7,561, S&P 500 Futures +0.30% at 1,550

European equity markets are mostly higher, as the DAX has seen a slight recovery following Wednesday's sharp losses. Switzerland's SMI index has underperformed due to declines in Nestle shares. The FTSE 100 has also lagged, amid mixed trading in mining companies. In terms of the banking sector, outperformers include Deutsche Bank (underperformed in prior session) and French banks. U.K. banks have lagged. U.S. companies due to report earnings later today include Freeport McMoran, Morgan Stanley, Nokia, Pepsi, Philip Morris and UnitedHealth.

U.K. movers [Filtronic +14% (raised guidance), Debenhams +7% (H1 LFL sales +3.1% y/y),Glaxo +2.5% (FDA panel approval), Tullow Oil +2% (broker commentary), GKN +2% (reaffirmed forecast) ;NCC Group -13% (profit warning), New World Resources -9% (withdrew FY outlook), ENRC -5% (concerns about possible probe), Diageo -1% (Q3 sales growth below ests)]

Germany movers [Infineon +2.5% (broker commentary); Solar World -30% (FY12 losses), SGL Carbon -7.5% (profit warning), Wacker Chemie -3.5% (broker commentary), Vossloh -1% (broker commentary), HannoverRe -1% (broker commentary)]

France movers [Plastics Omnium +3.5% (Q1 sales rose y/y), Remy Cointreau +2.5% (FY13 organic growth +12.7%), Carrefour flat (Q1 sales in line); Sodexo -8.5% (H1 organic growth slowed)]

Italy movers [Prysmian -2.5% (broker commentary)]

The Netherlands movers [Akzo Nobel -3% (Q1 results below ests)]

Switzerland movers [Syngenta +3% (Q1 sales above ests); Nestle -1% (organic sales growth below ests)]

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