Sold:

Eur 1.310 bln  of 4.25% Oct 2017 OAT , cover 3.267 (from 4.12), yield 1.96% (from 1.91%)

Eur 4.319 bln of 3% April 2022 OAT,  cover 2.564 (2.19), yield 2.98% (2.91%)

Eur 1.575 bln of 3.5% April 2026 OAT, cover 2.371(2.17), yield 3.46% (3.3%)

Eur 1.235 bln of 4.5% April 2041 OAT, cover 2.7, yield 3.79%

Slightly worse yields but take up was at the top end of the target amount

Spain’s IBEX down close to a full percent. European bank stocks unpopular. 

New session low for EUR/USD at 1.3110.

French/German 10 year govt bond yield spread has widened out to 122 bps from the 116 I jotted down first thing as we await French auction results due out 09:00 GMT.  Infact any minute.

From the 390 I jotted down first thing.

Italian/German 10 year govt bond yield spread widens out to 361 bps from early 356.

Nothing major, but as I mentioned yesterday something to keep an eye on.

EUR/USD has slipped to session low 1.3122.

The bids at 108.00 that held throughout the Asian session have just given way to a  bunch of stops  which has knocked the cross to 107.80.There’s some tech support  towards 107.70/75, with some stronger bids down at 107.50. Below here lie more stops.

USD/JPY’s been dragged down with it but there are apparently some good bids in the 82.10/20 from a multitude of  names including importers, sovereigns, major US banks and corporates.

There’s also layered bids down to 81.80, but a break there will trip sell stops. Offers start from 82.35 up to 82.50, some stops just above  with larger offers up at 82.90/00

–Feb manufacturing output -1% m/m; -1.4% y/y
–Feb industrial production +0.4% m/m; -2.3% y/y

LONDON (MNI) – Manufacturing output growth fell at its fastest pace
for ten months in February, increasing the likelihood that the sector
remained in recession in the first quarter, figures from National
Statistics showed Thursday.

The figures show a renewed weakening in the manufacturing sector
with the level of output now at is lowest level since July 2010, meaning
the sector hasn’t grown for more than a year and half.

Manufacturing output fell 1% on the month and was down 1.4% on the
year, below the median forecast for a rise of 0.2% on the month and 0.2%
on the year. The earlier reported rise of 0.1% between December and
January was also revised downwards to show a fall of 0.3%.

A rise in manufacturing output of anything less than 0.7% in March
will leave the sector mired in recession.

A large rise in utilities and oil and gas output meant industrial
production rose 0.4% on the month — oil and gas extraction rose 4.6% on
the month and utilities output was up 6.1%. This was actually a little
higher than the median for a 0.3% rise, although the January data were
revised lower to show a fall of 0.6% on the month against the previously
estimated 0.4% drop.

This means that the impact of the data on Q1 GDP is only a touch
lower than analysts had expected. Still, it would take a rise of more
than 0.5% on the month in March to stop the industrial sector having a
negative impact on quarterly Q1 GDP growth.

This week’s data from the CIPS manufacturing PMI survey showed the
main index rose to 52.1 in March the highest for ten months. This
suggests we may see a bounceback in output next month, but for now the
manufacturing data make gloomy reading.

–London newsroom 4420 7862 7491 email: puglow@marketnews.com

[TOPICS: MT$$$$,M$B$$$,MABDS$]

UK DATA: Feb manufacturing output -1% m/m; -1.4% y/y
–Feb industrial production +0.4% m/m; -2.3% y/y
————————————————————————
Manufacturing output growth fell at its fastest pace for 10 months
in Feb, way below the median for a small rise on the month. This
increases the likelihood the sector remained in recession in Q1 with the
level of output at its lowest since July 10. The earlier reported rise
of 0.1% in Jan was also revised down to -0.3% A rise in output of
anything less than 0.7% in Mar will leave the sector in recession. A
large rise in utilities and oil and gas output meant industrial
production rose 0.4% m/m, above the 0.3% median, although Jan data were
revised dn to -0.6% m/m vs -0.4% before. This means that the impact of
the data on Q1 GDP is only a touch lower than analysts had expected.
Still, it would take a rise of more than 0.5% on the month in Mar to
stop the industrial sector having a negative impact on Q1 GDP growth.

A shocker of a number  and the biggest drop since April last year

Feb Industrial Output  +0.4%m/m (exp +0.3%), -2.3% y/y

Cable’s off around 20 pips to 1.5870 on the release

Seems the EUR/AUD slip from o/n highs around 1.2815 is propping up the AUD/USD in Europe this morning. Sean mentioned seeing some demand as well under 1.0300 from real money types which is keeping the pair  steady above 1.0280. Offers are sitting up at 1.0310/20 with  buy stops on abreak of 1.0320.

There are more bids from 1.0250 down to 1.0240 from a variety of names including sovereigns, funds and possible semi-official names, but sell  stops are primed for a break of 1.0240.

Also worth watching is GBP/AUD  which was sold off from 1.5500 in the Far East to recent lows of  1.5408. With the BOE announcement at 1100GMT on the horizon which is likely to be unchanged and QE remaining at £325 bln, and the talk of a RBA cut next month , this pairing could well be a good buy opportunity in an otherwise rather directionless market.

Real money and Middle Eastern names have apparently been buying the GBP/AUD cross off the dip this morning

AUD’s at 1.0294, GBP/AUD at 1.5437 and EUR/AUD at 1.2765

US DATA: American Bankers Association Thursday says consumer
delinquencies fell in all 11 loan categories it tracks. The composite
ratio, which tracks delinquencies in eight closed-end installment loan
categories, fell 10 basis points to 2.49% of all accounts in the fourth
quarter, the lowest it has been since 2008. Bank card delinquencies fell
8 bps to 3.17%. Home equity loan delinquencies “appear to be the most
stubborn,” ABA says, falling just 4 bps to 4.08% of all accounts in Q4.

Down at 1.3135 from the 1.3155 which greeted me first thing.

So what we got; much talk of 1.3100 barrier option interest, defensive buy orders parked just infront of said level.

On topside, overnight Sean mentioned sell orders clustered up at 1.3165/80.

Could the 1.3100-13180 parameters hold price action this morning? Barring a big surprise, I think they could. 

Personally I’m sitting here waiting for the Easter Bunny to arrive.

Compared to +0.8%, +2.5% respectively in February.

Does anyone care?

I’ve always found the Dutch to be thoroughly likeable folk, but I’ve got to admit I don’t think the financial markets give a monkeys what their cost of living is doing.  Harsh, but true……

Firmer than Reuter’s median forecasts +0.4%, -1.1% respectively.

EUR/CHF remains at 1.2035.

From 227.23 bln in February (revised from previous 224.9 bln)

EUR/CHF comatose at 1.2035.  Infact everything’s comatose in the forex markets so far this morning.

Up at 07:15 GMT we have Swiss March CPI expected +0.4% m/m, -1.1% y/y

Hard to disagree with that

UK rate decision today.  No change widely expected. Rate steady at 0.5%, QE steady at £325 bln

EUR/USD: 1.3100, 1.3150, 1.3200

USD/JPY:  81.70, 82.00, 82.30, 82.70, 83.00

GBP/USD:  1.5850, 1.5900, 1.6015

EUR/GBP:  0.8300

USD/CHF:  0.9225, 0.9300

AUD/USD: 1.0250, 1.0225

AUD/JPY:  85.00

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Financial bookies see FTSE up as much as +0.3%, DAX up as much as +0.2% and CAC 40 up as much as +0.6%.

Right, no more polls then

‘Australia and New Zealand will consider adopting a single currency under proposals jointly floated by the countries’ productivity bodies’

TOKYO (MNI) – The opposition-controlled upper house of parliament
has rejected the nomination of private-sector economist Ryutaro Kono to
the Bank of Japan board, a parliamentary official said on Thursday.

BOJ policymaker appointments need the approval of both houses of
the Diet.

Kono’s rejection means two posts on the BOJ’s nine-member policy
board remain vacant for now.

In March 2008, political wrangling between the government and the
opposition camp in parliament forced the BOJ’s new leadership to start
without a permanent governor. There were also two vacancies on the board
at the time.

Last month the government nominated Kono, chief economist at BNP
Paribas in Tokyo, as a candidate to succeed BOJ board member Seiji
Nakamura, a former shipping firm executive whose five-year term ended
on Wednesday.

The government hasn’t nominated a candidate for filling the post
left open by Hidetoshi Kamezaki, who came from a trading firm and also
left the BOJ board at the end of his five-year term on Wednesday.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4833 **

[TOPICS: M$J$$$,M$A$$$,MMJBJ$,MGJ$$$]