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European Market Update: April 4, 2013

Published 04/04/2013, 08:37 AM
Updated 01/01/2017, 02:20 AM
USD/JPY
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UK100
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DE40
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ES35
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IT40
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JP225
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DE
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INGA
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TLIT
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DBKGn
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ALUA
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AIR
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VIV
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TTEF
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PHRA
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DTEGn
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FRAG
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WCHG
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KCOGn
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WIN
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RMV
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DLAR
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RAND
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SEP
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0JYA
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PMCN
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SMI
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HOIL
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CY_old
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BGN
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FR
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DK
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NWJ
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GART
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ILDR
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IC_OLD
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IVANF
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IC
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AG
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TEO
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KU2G
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European PMI Services mixed; Spain bond auction results seen as positive; yen weakens after BOJ's Kuroda delivers on bold easing

Notes/Observations

BoJ announced quantitative and qualitative easing as promised; moves policy target to monetary base from call rate.

Nikkei reversed losses of 1.8% to end session +2.2%; USD/JPY surged 2.5% to above 95.50

Australia Feb Retail Sales beats expectations with largest rise since November 2009.

Fed's Williams (dove, FOMC non-voter): Fed could begin reducing bond buying by the summer and end bond buying in 2013.

North Korea army receives final approval for nuclear attack on US; in return US to send missile defenses to Guam.

Cyprus Fin Min: capital controls extended by 3 days.

German Bundesbank investigating allegations Deutsche Bank hid losses during financial crisis.

Major European PMI Services mixed. Continental Europe disappoints while UK comes in better as country looks to avert a triple-dip recession for noe.

Spain sells more than indicated in 3-tranch bond offering.

France 10-year yield at record low in auction today.

BOE and ECB policy decisions today. Neither are expected to change interest rates in the near term; major focus is on policy biases.

Economic Data

(IE) Ireland March NCB Services PMI: 52.3st v 53.6 prior; lowest since August 2012

(SE) Sweden March PMI Services: 47.3 v 54.2e; first contraction since December 2012

(CZ) Czech February Retail Sales Y/Y: -4.7% v -2.0%e

(DK) Denmark Q4 Final GDP Q/Q: -0.7% v -0.9%e; Y/Y: -0.6% v -1.0%e

(HU) Hungary February Retail Trade Y/Y: -1.4% v -2.0%e

(ES) Spain March Services PMI: 45.3 v 44.3e, 21st straight monthly contraction

(EU) ECB: €233M borrowed in overnight loan facility vs. €746M prior; €139.2B parked in deposit facility vs. €146.2B prior

(IT) Italy March PMI Services: 45.5 v 43.3e

(FR) France March Final PMI Services: 41.3 v 41.9e

(DE) Germany March Final PMI Services: 50.9 v 51.6e

(EU) Euro Zone March Final PMI Services: 46.4 v 46.5e ; PMI Composite: 46.5 v 46.5e

(NO) Norway February Retail Sales Volume M/M: 0.5% v 0.2%e; Y/Y: -0.6% v +2.7% prior

(UK) March PMI Services: 52.4 v 51.5e; highest since Aug 2012)

(EU) Euro Zone February PPI M/M: 0.2% v 0.2%e; Y/Y: 1.3% v 1.4%e

(IC) Iceland February Final Trade Balance (ISK): 7.6B v 7.6B prelim

(CY) Cyprus March Consumer Price Index M/M: 0.7% v 0.2% prior; Y/Y: 1.1% v 1.6% prior

Fixed Income:

(ES) Spain Debt Agency (Tesoro) sold total €4.31B vs. €3.0-4.0B indicated range in 2016, 2018 and 2021 bonds

Sells €3.06B in 3.25% April 2016 Bono; Avg Yield 3.019% v 5.106% prior; Bid-to-cover: 1.86x v 2.38x prior; Max Yield 3.046% v 5.13% prior; Tail 2.7bps

Sells €590M 4.1% July 2018 Bono; Avg yield 3.598% v 4.193% prior; Bid-to-cover: 4.09x v 2.9x prior; Maximum Yield 3.619% v 4.242% prior; Tail: 2.1bps

Sells €660M in 5.5% 2021 Bonos; Avg Yield 4.477% v 5.517% prior; Bid-to-cover: 2.06x v 1.77x prior; Max Yield 4.496% v 5.555% prior; Tail 1.9bps

(FR) France Debt Agency (AFT) sold total €6.97B vs. €6.0-7.0B indicated rate in 2020, 2021 and 2022 Oats

Sold €2.49B in 3.5% April 2020 OAT; Avg Yield 1.26% v 1.46% prior; Bid-to-cover: 2.86x v 1.98x prior

Sold €2.47B in 3.75% April 2021 OAT; avg yield 1.54% v 3.61% prior; Bid-to-cover: 3.0x v 3.1x prior

Sold €2.006B in 2.25% October 2022 OAT; Avg Yield 1.94% (record low) v 2.10% prior; Bid-to-cover: 3.1x v 2.20x prior

(HU) Hungary Debt Agency (AKK) sold total HUF60B in 2016, 2018 and 2023 Bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices: FTSE 100 -0.10% at 6,411, DAX +0.40% at 7,903, CAC-40 +0.80% at 3,783, IBEX-35 +1.4% at 8,017, FTSE MIB +1.3% at 15,402, SMI -0.40% at 7,847, S&P 500 Futures +0.50% at 1,556

European equity markets are trading mostly higher, as traders assess the BoJ's additional easing measures. Markets are wwaiting for the rate decisions from the ECB and BOE, in addition to Friday's US monthly payrolls report. Today's upside has been capped by weaker than expected PMI services data from France and Germany, which offset better data out of Italy, Spain and the U.K. Banks are mostly higher, led by shares of BNP and Santander. Portuguese banks have also outperformed. Resource related firms are mixed, amid the weakness in commodity prices.

UK movers [Wincanton +17% (interim management statement), Darty +11% (to exit Spain), Domino's Pizza +5.5% (13-week sales +12.3%), Rightmove +2% (broker commentary); Heritage Oil -4% (negative ruling in Uganda), De La Rue -2% (broker commentary]

Germany movers [Fraport +4% (broker commentary), Fresenius Medical +4% (stock buyback), Kloeckner +2.5% (broker commentary), Deutsche Telekom +1.5% (Q1 T-Mobile USA metrics); Kuka -4% (broker commentary), Wacker Chemie -1% (broker commentary), Stada -2.5% (broker commentary)]

France movers [Alcatel-Lucent +7% (broker commentary), Publicis +2.5% (broker commentary), Vivendi +1% (new CEO for SFR unit); EADS -1.5% (share placement)]

Italy movers [Telecom Italia +2% (merger speculation); Banca Generali -5% (share placement)]

Switzerland movers [Schmolz+Bickenbach +11% (restructuring plan)]

Portugal movers [Portugal Telecom +4% (broker commentary)]

The Netherlands movers [ING +3.5% (broker commentary), USG +2.5% (asset sale), Randstad +2.5% (acquisition)]

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