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Financial Repression

“Such policies, known as financial repression, usually involve a strong connection between the government, central bank, and financial sector.”

-Carmen M. Reinhart

 

While Keynesian central planners continue to hope that they can suspend economic gravity, hope is not a risk management process. This morning’s economic data out of Europe continues to show you what Financial Repression looks like. Not good. Not going away.

 

The good news on this front is that it’s not different this time. Co-author of one of the most empirically damning books against Policies To Inflate through currency devaluation and/or sovereign debt pile-ups (This Time Is Different), Carmen Reinhart, wrote an excellent paper on March 11th that was, shockingly, not highlighted by The Ben Bernank in any of his daily Dollar Debauchery speeches last week.

 

Reinhart’s thesis, “Financial Repression Has Come Back To Stay”, is very similar to what we have called The Bernank Tax: “In the US, as in Europe, at present, this means consistent negative real interest rates (yielding less than the rate of inflation) that are equivalent to a tax on bondholders and, more generally, savers.”

 

Back to the Global Macro Grind

 

While the Fed Chairman remains laser-like focused on “laws” that are nothing more than social science stories (Okun’s Law), the rest of the world doesn’t seem so interested in his career risk management. People with real money in the game continue to search for the truth.

 

The truth is that the pace of Global Growth Slowing has picked up, sequentially, in the last month. While plenty a perma-bull was anchoring on 1 of the 2 China PMI prints released this weekend (1 beat, 1 missed – they were both probably made up), here’s the truth about PMI reports around the world in March versus February:

  1. USA 62 MAR vs 64 FEB
  2. China 53 MAR vs 51 FEB (or 48 MAR vs 50 FEB)
  3. India 54 MAR vs 56 FEB
  4. Germany 48 MAR vs 50 FEB
  5. France 47 MAR vs 50 FEB
  6. Spain 44.5 MAR vs 45 FEB

In other words, if you look at 47% of Global GDP (these 6 countries combined = approximately $29.5T in GDP), it’s slowing.

 

Now if you want to be the bull instead of being the perma Risk Manager on this top line matter, you might say ‘well hey, the UK PMI print for MAR was 52 versus 51.5 in FEB.’ And I’ll be the first to agree with you – it’s just a fact - as is Italy missing their PMI and printing a 10-year high in its unemployment rate of 9.3%.

 

Taking a step back, since Growth Slowing around this time last year didn’t wake up a lot of people until it was way too late, it’s important to reconcile why perma-bull pundits don’t get paid to see the obvious. It’s called anchoring – “a cognitive bias that describes the common human tendency to rely heavily, or “anchor”, on one piece of information when making decisions.” (Wikipedia)

 

Anchored: Washington and Old Wall Street based “economists” still think, for example, that US GDP is tracking “around 3%.” Why? Well, because the US GDP report for Q4 of 2011 was, uh, 3%!

 

You’ll find the complexion of the Q4 2011 US GDP report (C + I + G + (EX-IM)) interesting:

  1. GDP = +2.97% (up from 1.81% SAAR in Q311)
  2. Consumer Goods = +1.29% (up from +0.33% in Q311)
  3. Consumer Services = +0.19% (down from +0.9% in Q311)
  4. Fixed Investment = +0.78% (down from +1.52% in Q311)
  5. Inventories = +1.81% (up from 1.35% from Q311)
  6. Government = -0.84% (down from -0.02% in Q311)
  7. Exports = 0.37% (down from +0.64% in Q311)
  8. *Deflator = 0.84%

In other words, if the US Government uses a low enough “Deflator” (you subtract inflation from GDP to get the real (inflation adjusted) GDP number), it can pretty much tell you that US Economic Growth is whatever it wants it to be. In an election year, that’s just great.

 

But is this economy great? I think anyone who drives their own vehicle in it knows that inflation in cost of goods is running at least +300-500% higher than the GDP Deflator of 0.84% (so is the composite of US CPI and PPI).

 

Q: So, what happens to GDP when:

  1. The Nominal GDP growth rate declines sequentially like it just did (Q4 to Q1)
  2. The inflation rate rises sequentially like it just did (Q4 to Q1)

A: Real (inflation adjusted) Growth Slows.

 

Notwithstanding that Consumer Services slowing and Inventories rising in Q4 wasn’t a bad signal in and of itself in terms of Q4 “growth” mix, what you are seeing in Q1/Q2 of 2012 is the other side of Bernank’s War –it’s called Financial Repression.

 

My immediate-term support and resistance ranges for Gold, Oil (Brent), US Dollar Index, Japanese Yen (vs USD), and the SP500 are now $1, $121.94-124.13, $78.74-79.30, $82.44-84.03, and 1, respectively.

 

Best of luck out there this week,

KM

 

Keith R. McCullough
Chief Executive Officer

 

Financial Repression - Chart of the Day

 

Financial Repression - Virtual Portfolio


MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN

Key Takeaways

 

* Italian and Spanish sovereign swaps widened along with European Bank swaps over the week, underscoring increasing risk in the Eurozone.

 

* American Bank default swaps were a mixed batch, with 16 reference entities seeing swaps tighten and 11 seeing widening.  MS is back over 300 bps.

 

* The Euribor-OIS spread continued to move lower, falling 2 bps last week to 41bps. Over the same period, the TED spread was flat. 

 

Financial Risk Monitor Summary

 • Short-term(WoW): Negative / 2 of 12 improved / 3 out of 12 worsened / 7 of 12 unchanged

 • Intermediate-term(WoW): Positive / 4 of 12 improved / 2 out of 12 worsened / 6 of 12 unchanged

 • Long-term(WoW): Neutral / 4 of 12 improved / 4 out of 12 worsened / 4 of 12 unchanged

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - Summary2

 

1. US Financials CDS Monitor – Swaps tightened for 16 of 27 major domestic financial company reference entities last week.   

Tightened the most WoW: AXP, WFC, MTG

Widened the most WoW: ALL, TRV, BAC

Tightened the most MoM: AXP, JPM, BAC

Widened the most MoM: MBI, MMC, ACE

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - CDS  US

 

2. European Financials CDS Monitor – Bank swaps were wider in Europe last week for 35 of the 40 reference entities. The average widening was 3.4% and the median widening was 7.8%.

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - CDS  EURO

 

3. European Sovereign CDS – European Sovereign Swaps mostly tightened over last week. Portuguese sovereign swaps tightened by 9.5% (-113 bps to 1076 ) and Italian sovereign swaps widened by 6.8% (25 bps to 397).

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - Sovereign CDS 1

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - Sovereign CDS 2

 

4. High Yield (YTM) Monitor – High Yield rates rose 0.9 bps last week, ending the week at 7.14 versus 7.13 the prior week.

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - HY

 

5. Leveraged Loan Index Monitor – The Leveraged Loan Index rose 4.5 points last week, ending at 1652.

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - LLI 2

 

6. TED Spread Monitor – The TED spread remained flat over last week, ending the week at 40 bps.

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - TED spread

 

7. Journal of Commerce Commodity Price Index – The JOC index fell -0.6 points, ending the week at -9.5 versus -8.9 the prior week.

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - JOC

 

8. Euribor-OIS spread – The Euribor-OIS spread (the difference between the euro interbank lending rate and overnight indexed swaps) measures bank counterparty risk in the Eurozone. The OIS is analogous to the effective Fed Funds rate in the United States.  Banks lending at the OIS do not swap principal, so counterparty risk in the OIS is minimal.  By contrast, the Euribor rate is the rate offered for unsecured interbank lending.  Thus, the spread between the two isolates counterparty risk. The Euribor-OIS spread tightened by 2 bps to 41 bps.

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - Euribor OIS

 

9. ECB Liquidity Recourse to the Deposit Facility – The ECB Liquidity Recourse to the Deposit Facility measures banks’ overnight deposits with the ECB.  Taken in conjunction with excess reserves, the ECB deposit facility measures excess liquidity in the Euro banking system.  An increase in this metric shows that banks are borrowing from the ECB.  In other words, the deposit facility measures one element of the ECB response to the crisis.  

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - ECB

 

10. Markit MCDX Index Monitor – The Markit MCDX is a measure of municipal credit default swaps. We believe this index is a useful indicator of pressure in state and local governments. Markit publishes index values daily on six 5-year tenor baskets including 50 reference entities each. Each basket includes a diversified pool of revenue and GO bonds from a broad array of states. We track the 14-V1. Last week spreads widened, ending the week at 112 bps versus 110 bps the prior week.

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - MCDX

 

11. Baltic Dry Index – The Baltic Dry Index measures international shipping rates of dry bulk cargo, mostly commodities used for industrial production. Higher demand for such goods, as manifested in higher shipping rates, indicates economic expansion. Last week the index rose 26 points, ending the week at 934 versus 908 the prior week.

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - Baltic Dry

 

12. 2-10 Spread – We track the 2-10 spread as an indicator of bank margin pressure. Last week the 2-10 spread widened by 1 bp to 189 bps.

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - 2 10

 

13. XLF Macro Quantitative Setup – Our Macro team’s quantitative setup in the XLF shows 1.4% upside to TRADE resistance and 1.3% downside to TRADE support.

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - XLF2

 

Margin Debt - February: +0.85 standard deviations 

We publish NYSE Margin Debt every month when it’s released. NYSE Margin debt hit its post-2007 peak in April of 2011 at $320.7 billion. The chart below shows the S&P 500 overlaid against NYSE margin debt going back to 1997. In this chart both the S&P 500 and margin debt have been inflation adjusted (back to 1990 dollar levels), and we’re showing margin debt levels in standard deviations relative to the mean covering the period 1. While this may sound complicated, the message is really quite simple. First, when margin debt gets to 1.5 standard deviations or greater, as it did last April, it has historically been a signal of extreme risk in the equity market - the last two times it did this the equity market lost half its value in the ensuing period. We flagged this for the first time back in May 2011. The second point is that margin debt trends tend to exhibit high degrees of autocorrelation. In other words, the last few months’ change in margin debt is the best predictor of the change we’ll see in the next few months. We would need to see it approach -0.5 to -1.0 standard deviations before the trend runs its course. There’s plenty of room for short/intermediate term reversals within this broader secular move. Overall, however, this setup represents a long-term headwind for the market. One limitation of this series is that it is reported on a lag.  The chart shows data through February.

 

MONDAY MORNING RISK MONITOR: ITALIAN AND SPANISH SWAPS WIDEN - EUROPE IS BECOMING RELEVANT AGAIN - Margin Debt

 

Joshua Steiner, CFA

 

Allison Kaptur

 

Robert Belsky

 

Having trouble viewing the charts in this email?  Please click the link below to view in your browser.    


Q1 2012 HOTEL TRANSACTIONS

2012 off to a slow start 

 

 

M&A and Other Trends for Q1 2012

  • Q1 2012 US hotel transaction volume was roughly unchanged quarter-over-quarter at ~$1 billion, down significantly from Q1 2011's ~$5 billion.  This has been a much weaker start than expected. 
    • The number of US hotel transactions in Q1 2012 was similar to Q4 2011
    • US average price per key in the Upper Upscale segment rose 14% QoQ
    • The European market was also unusually quiet this quarter
  • Apart from some scheduled sales from Accor, the majority of the transactions involved REITs/JVs 
  • According to Fitch, February hotel delinquency rate dropped to 10.75% from 12.21% in January 2012.  
    • The decline was largely attributed to the two loans of the Innkeepers portfolio being converted to current. Hotel delinquency rates have steadily declined from 14% in Q3 2011.

Q1 2012 HOTEL TRANSACTIONS - UUP2

 

Q1 2012 HOTEL TRANSACTIONS - LUXURY2

 

Q1 2012 HOTEL TRANSACTIONS - hotel2


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PFCB: TRADE UPDATE

Lately we have been seeing some good opportunities on the short side but PFCB remains one of our favorite longs.  Keith bought PFCB today in the Hedgeye Virtual Portfolio.

 

P.F. Chang’s is a turnaround story that is, we believe, slowly turning the tide of bearishness that has weighed down the stock during the last few years.  We are confident that the company – for the first time in a while – has a credible plan to turn the Bistro around.  The stock languishes near the bottom of our sentiment scorecard so there are still plenty of analysts and investors to be converted.

 

In terms of catalysts, April 2nd is an important day for the Bistro as the Triple Dragon initiative is launched.  The initiative blends “a number of the key initiatives including our new lunch menu, some of the best items from our innovation Bistro menu; new music and a new look for our service teams.  All of these are designed to elevate our guest experience and energize our employee team”. 

 

As the chart below shows, the stock is nearing the trade-line support line at $39.35.

 

PFCB: TRADE UPDATE - pfcb levels

 

Howard Penney

Managing Director

 

Rory Green

Analyst


THE WEEK AHEAD

The Economic Data calendar for the week of the 2nd of April through the 6th is full of critical releases and events. Attached below is a snapshot of some (though far from all) of the headline numbers that we will be focused on.

 

THE WEEK AHEAD - 1

THE WEEK AHEAD - 2


Weekly European Monitor: Chatter

No Current Positions in Europe

 

Asset Class Performance:

  • Equities:  The EuroStoxx50 closed down -1.9% week-over-week vs -3.2% last week. Bottom performers: Russia (MICEX) -4.6%; Finland -3.5%; Italy -3.5%; Sweden -3.5%; France -3.3%. Top performers:  Greece 1.0%; Portugal 70bps; Slovakia 10bps.  
  • FX:  The EUR/USD is up +0.52% week-over-week.  W/W Divergences: SEK/EUR +1.26%, NOK/EUR +0.59%, GBP/EUR +0.29%, CHF/EUR +0.09%; RUB/EUR -0.77%, CZK/EUR -0.75%, ISK/EUR -0.74%.
  • Fixed Income:  Greek 10YR yields gained +100 bps to 21.04% week-over-week after a rise of +192bps last week.  10YR Portuguese yields dropped the most, -126bps to 11.40%, while most other countries we track were broadly flat.

Weekly European Monitor: Chatter - 11. yields

 

 

Call Outs:


Germany - Chancellor Merkel’s party won a regional ballot in the western state of Saarland, the first electoral test of her crisis-fighting policy since she persuaded European leaders into a pact to limit budget deficits. [Federal elections due in 2013].

 

Greece - In comments to privately-owned television station Antenna, Greek Government spokesman Pantelis Kapsis confirmed three possible dates on which the country is widely expected to hold national elections: April 29, May 6, or May 13 ("It will be one of these three Sundays," he said).

 

Ireland - The Government said a referendum on the EU’s new fiscal treaty will be held on May 31. Formally starting a campaign to persuade voters to back the compact or risk exclusion from access to future bailout funds.

 

UK - The economy shrinks more than previously estimated (Q4 GDP Q/Q -0.3% vs -0.2 estimate).

 

UK - Is in talks to sell as much as a third of its RBS stake to Abu Dhabi.

 


In Review:


Book ends. The week started with increased fears that Spain is the next domino to fall after Italy’s PM Mario Monti responded in a Q&A session at a conference that “it doesn’t take much to recreate risks of contagion.” While he praised Spain’s efforts to loosen work regulations, he advised Spain to focus on cutting the national budget, saying it “hasn’t paid enough attention to its public accounts.” Meanwhile, the market waited around for today’s decision (and seemingly liked it as European equities shot up 1%), on the structure of a combined ESM and EFSF bailout facilities and Spanish PM Rajoy’s 2012 Budget announcement.

 

The unnerving part remains days like today when equities (and EUR/USD) are rising despite underlying imbalances that are far from corrected, understood, or revealing an improving trend. After all, there is to be no increase in the combined size of the bailout fund, ESM (€500B) + EFSF (€240B existing) + €50-60B of addition loans, and it’s laughable to think that Spain will reach its deficit target of 5.3% of GDP this year versus 8.5%, along with the issue of Portugal requiring (another) bailout. Are we really out of the clear on the sovereign and banking sides because of two rounds of LTRO?

 

In between the events we continue to just hear a lot of “chatter” (including Monti back pedaling his statement on Spain this week) from leading Eurocrats and commentators that demonstrated: 1. How little Eurocrats understand about the severity of the region’s sovereign imbalances, 2.) the extent to which Eurocrats are saving face for their own job security, 3.) how uncertain Eurocrats are on future policy measures to shore up fiscal risks, reset expectations, sustain a union, and 4.) a combination of all of the above.

 

Here are some notable comments this week:

  • Draghi sees signs of stabilization in economic activity and bank lending
  • Draghi says Ireland and Portugal programs are on track, Spain showing progress “to some extent”
  • Merkel says that it would be a huge political mistake if Greece was allowed to leave the Euro
  • IMF sees improvements in global outlook but severe downside risks remain (Deputy MD Shinoha)
  • Mario Monti says Eurozone crisis is almost over, Italy has helped stop crisis from getting worse
    • Risk of a Spanish debt restructuring is higher now than it's been since the beginning of the crisis, said Citigroup Inc. chief economist William Buiter

What comes out in the wash is an unwillingness to turn the dial on years of fiscal excess. This “New Reality”, or “New Normal”, as PIMCO’s Gross has called it, is not fun, sexy, or easy. It means real pain for real people (see strikes and riots on the streets in Spain this week), and there’s no alternative?  Spending your way out of a crisis doesn’t work. After all, it was this spending over the last decade that got these nations into the fiscal gutter. Sky-high unemployment rates across the PIIGS nations won’t recede over night. Countries like Portugal and Greece, for example, must figure out ways to increase competitiveness and grow their economies. As an example, over the last 10 years, Portugal’s GDP has averaged an annual -0.5%!  What’s clear is that if the Eurozone project is going to work in the long run, we’re likely to see it at the hand of subsidization of the weak countries by the strong, and an acceptance of The New Normal standard of living and consuming (or at least uneven wealth across countries). However, a persistent headwind for Eurocrats will be managing this union around the underlying challenges of one common currency and one monetary policy, which we think is inherently flawed. 

 

From the “Data Dump” below we want to point out that March fundamentals continue to be challenged. The five Eurozone confidence surveys all ticked down month-over-month, following on weak March Services and Manufacturing PMI numbers for the Eurozone, an unemployment rate of 10.7%, and CPI holding steady above the 2% target.

 

 

CDS Risk Monitor:

 

CDS fell -143bps to 1,074bps in Portugal on a w/w basis after a -94bps move last week, to lead decliners. Ireland fell -47bps to 570bps.  Like sovereign yields, we did not see large moves on a week-over-week basis for the countries we track.  Italy led gainers at +13bps to 397bps. 

 

Weekly European Monitor: Chatter - 11. cds   a

 

Weekly European Monitor: Chatter - 11. cds   b

 


Data Dump:


Eurozone Business Climate -0.30 MAR (exp. -0.16) vs -0.16 FEB

Eurozone Consumer Confidence -19.1 MAR (exp. -19.0) vs -19 FEB

Eurozone Economic Confidence 94.4 MAR (exp. 94.5) vs 94.5 FEB

Eurozone Industrial Confidence -7.2 MAR (exp. -5.8) vs -5.7 FEB

Eurozone Services Confidence -0.3 MAR (exp. -0.8) vs -0.9 FEB

Eurozone M3 2.8% FEB Y/Y (exp. 2.4%) vs 2.5% JAN   [3M AVG = 2.3% FEB Y/Y vs 2.0% JAN]

Eurozone CPI Estimate 2.6% MAR Y/Y (exp. 2.5%) vs 2.7% FEB

 

Germany GfK Consumer Confidence 5.9 APR (exp. 6) vs 6 MAR

Germany IFO Business Climate 109.8 MAR (exp. 109.6) vs 109.7

Germany IFO Current Assessment 117.4 MAR (exp. 117) vs 117.4 FEB

Germany IFO Expectations 102.7 MAR (exp. 102.6) vs 102.4 FEB

Germany Import Price Index 1% FEB M/M (exp. 0.9%) vs 1.3% JAN   

Germany CPI 2.3% MAR Prelim Y/Y (exp. 2.3%) vs 2.5% FEB   

Germany Unemployment Rate 6.7% MAR (20yr low) (exp. 6.8%) vs 6.8% FEB

Germany Unemployment Chg -18K MAR (to 2.84 million) vs -3K FEB

Germany Retail Sales 1.7% FEB Y/Y (exp. 0.1%) vs 1.7% JAN   [-1.1% FEB M/M (exp 1.1%) vs -1.2%]

 

France Consumer Confidence Indicator 87 MAR (exp. 82) vs 82 FEB

France Q4 GDP Final 0.2% Q/Q = UNCH vs prev. est   [1.3% Y/Y = down 10bps vs prev. est.]

France Producer Prices 4.3% FEB Y/Y (exp. 4%) vs 4.3% JAN  

 

Italy Consumer Confidence 96.8 MAR (exp. 93.5) vs 94.4 FEB

Italy PPI 3.2% FEB Y/Y (exp. 3.3%) vs 3.5% JAN   [0.4% FEB M/M vs 0.8%]

Italy CPI 3.8% MAR Prelim Y/Y (exp. 3.3%) vs 3.4% FEB

Italy Hourly Wages 1.4% FEB Y/Y vs 1.4% JAN

 

UK Q4 GDP Final -0.3% Q/Q = down -10bps vs prev. est.  

UK Total Business Investment 1.6% in Q4 Y/Y vs 6.6% in Q3

UK Nationwide House Prices -1.0% MAR M/M (exp. 0.2%) vs 0.4% FEB   [-0.9% MAR Y/Y (inline) vs 0.9% FEB]

UK M4 Money Supply -3.4% FEB Y/Y vs -1.8% JAN

UK Mortgage Approvals 49K FEB (exp. 57.2K) vs 57.9K

 

Spain Housing Permits -25% JAN Y/Y vs -27.9% DEC

Spain Mortgages on Houses -41.3% JAN Y/Y vs -37.2% DEC

Spain CPI 1.8% MAR Prelim. Y/Y (inline) vs 1.9% FEB

Spain Retail Sales -3.4% FEB Y/Y vs -4.6% JAN

 

Switzerland UBS Consumption Indicator 0.87 FEB vs 0.93 JAN

Switzerland KOF Swiss Leading Indicator 0.08 MAR vs -0.11 FEB

 

Sweden Retail Sales 3.4% FEB Y/Y (exp. 1.6%) vs 1.6% JAN

Sweden Household Lending 5% FEB Y/Y (exp. 5%) vs 5.1% JAN

Sweden PPI 0.5% FEB Y/Y (exp. 0.3%) vs 0.1% JAN

Sweden Consumer Confidence 0 MAR (exp. -2.1) vs -3.2 FEB

Sweden Manufacturing Confidence 1 MAR (exp. -11%) vs -13 FEB

Sweden Economic Tendency Survey 101.8 MAR (exp. 94) vs 93.4 FEB

 

Ireland Property Prices M/M -2.2% FEB vs -1.9% JAN   [-17.8% FEB Y/Y vs -17.4% JAN]

Norway Unemployment Rate 2.6% MAR vs 2.7% FEB

Finland Business Confidence -4 MAR (exp. -2) vs -2 FEB

Finland Consumer Confidence 8 MAR (exp. 10) vs 8.3 FEB

Belgium CPI 3.37% MAR Y/Y vs 3.66% FEB

 

Portugal Consumer Confidence -54.5 MAR vs -55.8 FEB

Portugal Economic Climate Indicator -4.8 MAR vs -4.9 FEB

Portugal Industrial Production -6,8% FEB Y/Y vs -5.4% JAN

Portugal Retail Sales -8.9% FEB Y/Y vs -7.8% JAN

 

Hungary Unemployment Rate 11.6% FEB vs 11.1% JAN

Slovakia Consumer Confidence -32.3 MAR vs -32.5 FEB

Slovakia Industrial Confidence 3 MAR vs -1.3 FEB

Lithuania Consumer Confidence -21 MAR vs -23 FEB

 


Interest Rate Decisions:


(3/27) Turkey Benchmark Repo Rate UNCH at 5.75%

(3/27) Hungary Base Rate UNCH at 7.00%

(3/29) Romania Interest Rate CUT 25bps to 5.25%

(3/29) Czech Repo Rate UNCH at 0.75%

 

 

The European Week Ahead:


Friday/Saturday: Eurozone Financial Ministers and Central Bankers will meet in Copenhagen to discuss strengthening the region's firewall

 

Sunday: Mar. UK Lloyds Business Barometer, Hometrack Housing Survey

 

Monday: Mar. Eurozone, Germany, and France PMI Manufacturing - Final; Feb. Eurozone Unemployment Rate; Mar. UK, Italy, and Greece PMI Manufacturing; 4Q UK BoE Housing Equity Withdrawal; 4Q Italy Unemployment Rate, Budget Balance; Feb. Italy Unemployment Rate - Preliminary       

       

Tuesday: Feb. Eurozone PPI; Mar. UK PMI Construction, BRC Shop Price Index; Mar. Spain Unemployment MoM

 

Wednesday: ECB Policy Meeting/Announces Interest Rates; Mar. Eurozone PMI Composite and Services - Final; Feb. Eurozone Retail Sales; Mar. Germany and France PMI Services - Final; Feb. Germany Factory Orders; Mar. UK, Italy, and Spain PMI Services; Mar. UK Official Reserves; 4Q Italy Deficit to GDP

 

Thursday: Feb. Germany Industrial Production; BoE Announces Rates; Apr. UK BoE Asset Purchase Target; Mar. UK NIESR GDP Estimate; Feb. UK Industrial and Manufacturing Production

 

Friday: Feb. France Central Government Balance, Trade Balance

 

 

Extended Calendar Call-Outs:


22 April:  French Elections (Round 1) begins, to conclude in May.

 

29 April, 6 or, 13 May:  Potential Greek Presidential Elections.

 

30 June:  Deadline for EU Banks to meet €106 billion capital target/the 9% Tier 1 capital ratio.

 

1 July:  ESM to come into force.

 

 

Matthew Hedrick

Senior Analyst


Early Look

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