EUROPEAN EQUITY OPEN: Another lacklustre start; US data later today could sway the narrative ahead of the long weekend

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  OVERNIGHT: Wall Street was risk-off, with stocks predominantly lower and havens generally bid after data from ADP showed a sharper than expected slowdown in hiring, while the ISM services data for March disappointed to the downside, fuelling growth concerns (see here for our US wrap). APAC stocks were mostly subdued amid headwinds from the US, while risk appetite was also said to be restricted as we approach the Easter holiday period. China's Caixin Services PMI data showed an acceleration in services activity; in Japan there was some speculation of a potential policy shift by the BoJ soon as the Kuroda era comes to an end this week; US-Sino frictions continued after Taiwan President Tsai met members of the US Congress including House Speaker McCarthy; the RBI surprised with a decision to keep rates unchanged (expectations were for a 25bps hike) (see here for our APAC wrap).


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  EUROPEAN OPEN: Equity indices in Europe open without any firm directional bias as the long weekend approaches; both the broad Stoxx 600 and the narrow Euro Stoxx 50 are currently on course to post small weekly losses, although the situation is likely to be influenced by other macro events stateside (there is the high frequency weekly jobless claims data out later today, which will be eyed in the context of slowing growth dynamics). On the data front, German Industrial Output rose +2.0% M/M in February (exp. 0.1%, prev. 3.7%); ING said noted that German industrial production rose much more than expected in February; "a technical recession has now been avoided, but we're expecting only subdued growth in the months ahead," the Dutch bank said. In the UK, data from Halifax showed house prices grew +0.8% M/M in March, (exp. -0.3%); the building society said data continued to suggest relative stability in the housing market at the start of 2023, though it still expects to see a continued slowdown through the year.


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  STOCK SPECIFICS: In energy, Shell (SHEL LN) said that Q1 adj. corporate loss was due to tax charges, and sees stronger oil product performance and LNG volumes in Q1. Accor (AC FP) was upgraded at Fitch to investment grade with a stable outlook. TotalEnergies (TTE FP) extends French price freeze until filling stations no longer have supply difficulties. Allianz (ALV GY) said it does not plan on renewing its Nord Stream 1 pipeline policy after it expires in late 2023, leaning back on earlier reports this week. On the geopolitical front, Pirelli (PIRC IM) delays shareholder meeting until June 29th amid government review of top shareholder, China's Sinochem. In industrials, IDS' (IDS LN) Royal Mail directors warned the CWU union that nationalisation is not guaranteed if strikes put the company's finances under pressure. Going ex-div today: Barratt Developments (BDEV LN), Reckitt Benckiser Group (RKT LN), F&C Investment Trust (FCIT LN), ConvaTec Group (CTEC LN), Rentokil Initial (RTO LN), Smiths Group (SMIN LN). Our full European equity briefings for April 6th can be accessed here and here.

DAY AHEAD:

• Our full interactive calendar can be accessed here; a pdf version can be accessed here.


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  EUROPEAN DATA/SPEAKERS: The economic docket is thin on Thursday, with only the S&P Global Construction PMI data for March due across the bloc. EU officials' China visit continues (between April 5-7th), our primer for the events can be accessed here.


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  US DATA/SPEAKERS: Ahead of the Good Friday jobs report (our preview is here), there is more labour market data due, with the release of the March Challenger layoffs data, as well as the weekly (and timely) initial jobless claims data; the weekly data does not coincide with the survey periods for the BLS establishment survey, but traders will still be paying close attention, with many fretting about growth dynamics as credit conditions tighten and the economic growth impulse cools. Fed’s Bullard (non-voter, hawkish) will be making remarks in wake of the data; he has generally advocated continued rate hikes, despite the recent banking woes, as the Fed continues its fight to bring inflation down. Elsewhere, Canada will release its labour market report.


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  ENERGY: The EIA will report weekly NatGas inventories, where the consensus expects a draw of 21BCF vs a draw of 47BCF last week.


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  SUPPLY: France will sell between EUR 10-11bln of 2033, 2043, and 2054 debt. US will announce auction sizes for next week’s 3yr, 10yr and 30yr supply.

06 Apr 2023 - 08:10- Fixed IncomeData- Source: Newsquawk