European stock market, economy and companies update (May 06, 2015)

***Notes/Observations***
- European Services PMI improve (Spain, Italy, France and Euro Zone all beat expectations and remain in growth territory; while Germany misses but stays in growth)
- European Bond yields saw volatility in session; initially moved higher to fresh 2015 highs for many European countries but the reversed its price action
- ECB non monetary policy meeting agenda today said to include Greek collateral haircuts (and weekly ELA discussion)
- Greece makes IMF payment of €200M (as expected)


*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
**Equities**
Indices [Stoxx +0.7%, FTSE 100 +0.3% at 6,949, DAX +0.6% at 11,401, CAC-40 +0.4% at 4,992, IBEX-35 +0.5% at 11,173, FTSE MIB +1% at 22,797, SMI -0.7% at 8,957, Athens Stock Exchange -0.8%, S&P 500 Futures +0.3% at 2,090]

- Market Focal Points/Key Themes: European equity markets open mixed following sharp losses on Tuesday, amid rise in bond yields and oil prices; Peripheral yield curves steepen amid services PMI data; Swiss SMI declines amid gains in Franc; China equities extend selloff; European markets later move off of session lows, amid paring of steeping in yield curves
BMW and Anheuser-Busch beat ests; UK supermarket Sainsbury FY profits above ests; French banks beat ests (SocGen, Credit Agricole); Vestas Wind raised outlook; ECB non-monetary policy meeting, US ADP data and Yellen comments later today; UK elections on Thursday

By Sector
- Consumer Discretionary [AB InBev ABI.BE +3% (Q1 profits above ests), Imperial Tobacco IMT.UK +2% (raised dividend); Puma PUM.DE -6% (cautious outlook)]
- Financials [Allianz ALV.DE +2% (Q1 profits above ests); SocGen GLE.FR -2.5% (lower despite better than expected Q1 profits)]
- Industrials [Kuka KU2.DE +4% (Q1 results above ests), Alstom ALO.FR +2% (FY14 Op profit +19%), BMW BMW.DE +1% (Q1 results above ests), Evonik EVK.DE +1% (raised outlook); Thales HO.FR -1% (reaffirmed outlook)]
- Healthcare [Galapagos GLPG.BE -4% (stock offering)]
- Telecom [Telenor TEL.NO +3% (Q1 results above ests)]
- Stoxx50 Sectors [Utilities +0.6%, Consumer Non-Cyclical +0.6%, Basic Materials +0.2%,Telecom +0.1%, Financials flat, Industrials flat, Energy flat; Consumer Cyclical -0.2%, Technology -0.1%]

**Speakers**
- Greece govt official: Have made the schedule payment of €200M to IMF today (as expected)
- ECB non monetary policy meeting agenda today said to include Greek collateral haircuts. Officials would discuss discounts on collateral posted by Greek banks receiving Emergency Liquidity Assistance (ELA) and also discuss whether to increase the ELA
- Poland Fin Min Szczurek hoped 2015 GDP growth could top 3.4%
- Turkey Econ Min Zeybekci: Q1 GDP growth seen at 1.5% and improving further in Q2. Believes 2015 GDP growth of 4.0% is achievable. Sees TRY currency (Lira) as undervalued between 5-8%. Says 14% food inflation due to speculators; believed central bank target of 9% was doable. Expected rating agencies to raise Turkey's sovereign rating after the June elections

**Currencies***
- European Bond yields saw volatility in session. Initially price action continued their recent trend higher in the session and this that aided the Euro currency. Euro tested above its 100-day moving avg at 1.1256 for the first time in almost a year.
- Spain, Italy bond 10-year bond yields hit fresh 2015 highs then reversed its climb. Denmark 5-year govt bond yield moved out of negative territory (1st time since January). UK 10-year govt Gilt yield briefly tested above the 2.00% level for 1st time since Dec 8th. The German 10-year bund yield approached 0.60% (over 50bps higher from record lows registered just under 2-weeks ago) but backed off to probe 0.53% just ahead of the NY morning.
- The price action in the session moved off the highest levels after reports circulated that ECB non monetary policy meeting agenda today said to include Greek collateral haircuts

**Political/In the Papers:
- (EU) ECB's Jazbec (Slovenia): ECB's policies are working and there is an inflation revival, too early to begin tapering the QE program
- (GR) IMF issues commentary on recent Greece debt reports, claims it did not push for any large scale debt relief for Greece
- OPEC delegates say the cartel will probably maintain current output at June 5th meeting, cites better than expected pricing situation recently in Brent

**Looking Ahead***
All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)
- (EU) European Business Summit in Brussels on May 6-7
- (EU) Energy Security Summit in Berlin (includes Iran and Algeria Oil mins)
- (EU) ECB non-monetary policy meeting
- (PT) Bank of Portugal Releases May Economic Bulletin
- (PL) Poland Central Bank (NBP) Interest Rate Decision: expected to leave Base Rate unchanged at 1.50% prior (analyst are unanimous)
- 05:30 (DE) Germany to sell €5.0B in 0% 2017 Schatz
- 06:00 (IE) Ireland Mar Industrial Production M/M: No est v 16.2% prior; Y/Y: No est v 28.7% prior
- 06:00 (PT) Portugal Q1 Unemployment Rate: No est v 13.5% prior
- 06:00 (ZA) South Africa Q1 BER Consumer Confidence: -1e v 0 prior
- 06:00 (SE) Sweden Central Bank (Riksbank) Gov Ingves in Stockholm
- 06:00 (IS) Iceland to sell Bonds
- 06:00 (CZ) Czech Republic to sell Bonds
- 06:45 (US) Daily Libor Fixing
- 07:00 (RU) Russia to sell Bonds
- 07:00 (US) MBA Mortgage Applications w/e May 1st: No est v -2.3% prior
- 07:30 (GR) Greece Fin Min Varofakis with France Fin Min Sapin
- 08:00 (HU) Hungary Central Bank (NBH) Apr Minutes
- 08:00 (BR) Brazil Mar Industrial Production M/M: -0.7%e v -0.9% prior; Y/Y: -3.0%e v -9.1% prior
- 08:00 (DE) German Fin Min Schaeuble in Berlin
- 08:15 (RO) Romania Central Bank Gov Isarescu post rate decision press conference
-08:15 (US) Apr ADP Employment Change: +200Ke v +189K prior
- 08:30 (US) Q1 Preliminary Nonfarm Productivity: -1.9%e v -2.2% prior; Unit Labor Costs: 4.5%e v 4.1% prior
- 08:30 (US) Treasury Quarterly Refunding announcement for 3-year, 10-year and 30-year (expected amounts $24B, $24B and $16B respectively
- 09:00 (BR) Brazil Apr Services PMI: No est v 47.9 prior; Composite: No est v 47.0 prior
- 09:15 (US) Fed Chair Yellen with IMF Lagarde in Washington DC on panel
- 10:00 (CA) Canada Apr Ivey Purchasing Managers Index (Seasonally Adj): 49.2e v 47.9 prior; PMI (unadj): No est v 56.0 prior
- 10:00 (PL) Poland Central Bank Gov Belka post rate decision press conference
- 10:00 (PT) Portugal PM Coelho in Parliament
- 10:30 (US) Weekly DOE Crude Oil Inventories
- 11:00 (IT) Italy Fin Min Padoan in Rome
- 11:30 (BR) Brazil Apr Commodity Price Index M/M: No est v 7.9% prior; Y/Y: No est v 5.7% prior
- 11:30 (BR) Brazil Weekly Currency Flows
- 12:00 (EU) US NATO Ambassador Lute speaks in Brussels
- 12:00 (CA) Canada to sell 5-Year Bonds
- 13:15 (US) Fed's George (Non-voter, hawk) in Washington
- 13:30 (US) Fed's Lockhart (voter, moderate) in LA
- 17:00 (KR) South Korea Apr Foreign Reserves: No est v $362.8B prior
- 21:30 (AU) Australia Apr Employment Change: +4.0Ke v +37.7K prior; Unemployment Rate: 6.2%e v 6.1% prior
- 21:35 (JP) Japan Apr Services PMI: No est v 48.4 prior; Composite PMI: No est v 49.4 prior
- 22:05 (NZ) New Zealand to sell NZD100M in Index-Linked Bonds
- (MY) Malaysia holds special By-Election to replace Anwar Ibrahim
- (MY) Malaysia to sell 3-Year, 7-year, 10-year and 20-year Islamic Bonds


**Economic data***
- (IN) India Apr Services PMI: 52.4 v 53.0 prior; Composite PMI: 52.5 v 53.2 prior
- (IE) Ireland Apr Services PMI: 60.6 v 60.9 prior; Composite PMI: 59.7 v 59.8 prior
- (SE) Sweden Apr PMI Services: 53.9 v 57.2 prior
- (CZ) Czech Mar Retail Sales Y/Y: 8.8% v 8.0%e; Retail Sales ex Auto Y/Y: 5.9% v 6.7%e
- (HU) Hungary Mar Retail Sales Y/Y: 5.1% v 6.2%e
- (ES) Spain Apr Services PMI (beat): 60.3 v 57.4e; Composite PMI: 59.1 v 56.9 prior
- (ZA) South Africa Apr Services PMI: 51.5 v 51.6 prior
- (IT) Italy Apr Services PMI (beat): 53.1 v 52.0e; Composite PMI: 53.9 v 52.7e
- (FR) France Apr Final Services PMI (beat): 51.4 v 50.8e; Composite PMI: 50.6 v 50.4e
- (DE) Germany Apr Final Services PMI (miss): 54.0 v 54.4e; Composite PMI: 54.1 v 54.2e
- (EU) Euro Zone Apr Final Services PMI (beat): 54.1 v 53.7e; Composite PMI: 53.9 v 53.5e
- (UK) Apr Services PMI (beat): 59.5 v 58.5e; Composite PMI: 58.4 v 58.1e
- (EU) Euro Zone Mar Retail Sales M/M: -0.8% v -0.7%e; Y/Y: % v 2.4%e
- (GR) Greece Feb Unemployment Rate: 25.4% v 25.6%e (lowest since Aug 2012)
- (RO) Romania Central Bank (NBR) cuts Benchmark Interest Rate by 25bps to 1.75%, not expected

Fixed Income:
- (IN) India sold total INR140B vs. INR140B indicated in 3-month and 6-month Bills
- (EU) ECB allotted $0.0M in 8-day USD Liquidity Tender at fixed 0.63% vs. $0.0M prior
- (GR) Greece Debt Agency (PDMA) sold total €1.14B vs. €875M indicated in 26-week Bills; Avg Yield: 2.97% v 2.97% prior; Bid-to-cover: x v 1.3x prior
- (SE) Sweden sold total SEK4.0B vs. SEK4.0B in 2022 and 2025 Bonds

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