EUROPEAN INFLATION: March CPI Preview - Expected To Accelerate
Apr-02 17:49
Swiss March CPI (due 07:30 BST / 08:30 CEST tomorrow) is expected to accelerate by 0.1pp to 0.4% Y/Y. Core inflation is expected unchanged at 0.9%.
- A March CPI print in line with consensus would bring average Q1 inflation in line with the recent SNB conditional inflation forecast of 0.4%.
- The analysts' survey for tomorrow's release appears rather wide, with consensus slightly skewed to the upside, with the average estimate standing at 0.43% and the mode standing at 0.5%.
- UBS give some colour on their 0.4% Y/Y headline estimate: "We expect food inflation to rise 0.6pp to 0% y/y, more than offsetting a 0.6pp decline in energy inflation (to -7% y/y). We expect our definition of core inflation (headline excluding energy and food) to stay unchanged at 1% y/y. We think that on balance the risk to our forecast is skewed to the downside"
- Goldman Sachs meanwhile see mid-term Swiss CPI lower than the SNB, at 0.3% in 2025 and 0.6% in 2026 - which, in conjunction with their assessment of Swiss growth prospects being a bit fragile, led them to re-iterate their call for another 25bp cut at the next meeting in June in a recent note.
- Looking at the FX space, EUR strength today has elevated EURCHF closer to levels of 0.96 - we highlighted the significance of the recent 0.95 breakout point here.
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FED: Musalem Dials Up Focus On Anchoring Inflation Expectations
Mar-03 17:44
St Louis Fed’s Musalem (’25 voter, hawk) has given a speech on the economic and monetary policy outlook, broadly in keeping with prior remarks from Feb 20 – especially on the need to keep policy as “modestly restrictive” – although it did include a greater focus on the need to keep inflation expectations anchored. Some highlights from his speech with full text here:
- “While there has been an uptick in near-term inflation expectations, which I am watching closely, longer-term inflation expectations have broadly remained stable. We have more work to do to achieve price stability.”
- “The outlook for continued solid economic growth looks good, the labor market is healthy, and financial conditions are supportive. But recent data have been weaker than expected, posing some downside risk to growth.”
- “In determining how monetary policy should respond to alternative scenarios, especially when they might involve difficult employment and inflation trade-offs, it will be important that medium- to longer-term inflation expectations remain well anchored.”
PIPELINE: $2.5B Sumitomo Mitsui 4Pt Debt Launched, $3B KFW Expected Tuesday
Mar-03 17:42
- Date $MM Issuer (Priced *, Launch #)
- 03/03 $2.5B #Sumitomo Mitsui $500M 3Y +60, $500M 5Y +75, $1B 5Y SOFR+99, $500M 10Y +90
- 03/03 $1.25B #Virginia Electric $625M 10Y +100, $625M 30Y +120
- 03/03 $1B Alumina PtyLtd 5NC2, 7.5NC3
- 03/03 $Benchmark Synopsys 2Y +60, 3Y +70, 5Y +85, 7Y +95, 10Y +100, 30Y +125
- 03/03 $Benchmark America Honda 3Y +85a, 3Y SOFR, 5Y +100a, 10Y +120a
- 03/03 $Benchmark Duke Energy 2Y +60a, 10Y +110a, 30Y +130a
- 03/03 $Benchmark Columbia Pipelines 10Y +125, 30Y +148
- 03/03 $Benchmark PayPal 3Y +50, 3Y SOFR+67, 10Y +92
- 03/03 $Benchmark MPLX 10Y +155a, 30Y +185a
- 03/03 $Benchmark Tampa Electric 10Y +125a
- 03/03 $Benchmark Nucor 5Y +70, 10Y +95
- 03/03 $Benchmark CME Group 5Y +70a
- 03/03 $Benchmark Humana 10Y +138, 30Y +160
- 03/03 $Benchmark Synchrony Financial 6NC5 +145
- Expected Tuesday:
- 03/04 $3B KFW WNG 2028 +31a
- 03/04 03/03 $750M Chord Enery 8NC3
US STOCKS: Early Equities Roundup: Moderately Weaker/Off Early Highs
Mar-03 17:19
- Stocks are trading moderately weaker ahead midday Monday, consolidating after this morning's data, higher than expected ISM Prices Paid while ISM Mfg, Orders and Employment figures were lower than expected as Treasuries reversed early losses to new session highs.
- Currently, the DJIA trades down 39.5 points (-0.09%) at 43802.42, S&P E-Minis down 1 points (-0.02%) at 5962.5, Nasdaq down 53.4 points (-0.3%) at 18795.89.
- Information Technology and Energy sectors underperformed in the first half, semiconductor makers weighing on the former: Nvidia -4.75% (reportedly as "Singapore is investigating whether Dell Technologies Inc. and Super Micro Computer Inc. servers shipped to Malaysia housed Nvidia Corp. chips barred from China" Bloomberg reprted). Meanwhile, Enphase Energy declined -3.49%, First Solar -3.31% and Broadcom -2.71%.
- Leading laggers in the Energy sector included APA Corp -2.46%, Valero Energy -2.03%, Marathon Petroleum -1.97% and EOG Resources -1.84%.
- On the positive side, Real Estate and Health Care sectors outperformed in the first half, investment trusts buoyed the former with Weyerhaeuser +3.29%, Ventas +1.95% and Host Hotels & Resorts +1.58%. Viatris +4.39%, Teleflex +2.98% and Medtronic +2.48% supported the Health Care sector.
- Expected earnings announcements for Tuesday include Target Corp and AutoZone Inc before the open while Crowdstrike Holdings and Ross Stores report after the close.
