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Reports Europe

European stock market, economy and companies update (March 03, 2014)

March 3, 2014, Monday, 10:59 GMT | 05:59 EST | 16:29 IST | 18:59 SGT
Contributed by Trade The News


***Notes/Observations***
- Geo-political concerns in Ukraine Crimea region weighs on risk appetite; Note: Ukraine was still supplying Russian gas to Europe as normal
- Disappointing set of manufacturing figures from China that added to concerns about growth (China Feb Final HSBC/Markit Manufacturing PMI at 7-month low (48.5 vs. 48.5e); China Feb Manufacturing PMI at an 8-month low (50.2 vs. 50.1e); China Feb Non-Manufacturing at a 3-month high (55.0 vs. 53.4 prior
- China money-market rates fall to 9-month low on cash supply; Shanghai buck trend to close higher
- Russia Central Bank raised its key interest rate by 150 bps in a surprise intra-meeting mover to combat inflationary forces from a record low Ruble currency
- Major European PMI Manufacturing surveys come in better than expectations


*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***
***Equities**
Indices [Stoxx50 -1.9%, FTSE 100 -1.2% at 6,731, DAX -2.2% at 9,477, CAC-40 -1.8% at 4,330, IBEX-35 -1.7% at 9,947, FTSE MIB -1.6% at 20,119, SMI -1.3% at 8,363, S&P 500 Futures -0.8% at 1, 842]

- Market Focal Points: Equity markets open lower on concerns related to Russia and Ukraine, Russia's main equity index declines 10%, Companies with exposure to Russia/Ukraine underperform, Euro Zone PMI manufacturing data mostly above ests, Bank of Ireland's FY loss narrows

By Sector
- Industrials [Kuehne + Nagel KNIN.CH -3% (FY results below ests)]
- Healthcare [Stada SAZ,DE -6% (exposure to Russia), Roche ROG.CH -2% (data presentation)]
- Consumer Discretionary [Metro MEO.DE -4.5% (Russian exposure)]
- Consumer Staples [Premier Foods PFD.UK -3% (capital raise speculation)]
- Financials [Raiffeissen RBI.AT -7% (exposure to Ukraine), SocGen GLE.FR -4% (exposure to Russia); Amlin AML.UK +3% (FY profits rose y/y)]

Speakers:
- Russia Central Bank commented after its surprise rate hike that the move was due to inflationary and financial stability risks. It noted that it would meet again (as planned) on rates on March 14th
- Numerous Foreign Ministers and World Leaders provided reactions/comments on Russia's move in Crimea
- German Chancellor Merkel: Accused Putin of having breached international law with "unacceptable intervention."
- France Foreign Min Fabius: Ukraine situation not bad enough to halt warship sales to Russia; seeking to stop Russia in Ukraine with diplomacy
- EU's Barroso: EU member States working on a firm response on Ukraine and was preparing support package for the Ukraine
- China foreign ministry: China believed in non-interference in any country's internal affairs; there had been reasons for the situation in Ukraine
- IMF's Lagarde reiterated the view that the ECB needed further accommodative policies as prolonged below target inflation could derail the region's economic recovery. She noted that the AQR was ambitious but appropriate.
- Indonesia Central Bank (BI) Confident inflation would remain under control
- India Govt and RBI said to be in discussions on reducing gold import curbs
- UN Nuclear Agency (IAEA chief Amano: Much needed to be done to resolve all outstanding issues regarding Iran's nuclear program

Currencies/Fixed Income:
- Risk aversion was the theme but the USD saw little volatility thus far. The long-running political crisis in Ukraine took another turn Saturday when lawmakers in Moscow voted to allow President Putin to send troops into Ukraine region of Crimea. Also disappointing set of manufacturing figures from China that added to concerns about growth
- The GBP was firmer after numerous economic data came in better than expectations aided by its Manufacturing PMI and Mortgage approvals. The GBP/USD was above 1.6730 ahead of the NY morning.
- AUD/USD registered one-month low of 0.8890 during the Asian session following the Chinese data but off its worst levels ahead of Tuesday RBA policy meeting. The pair has had much difficulty sustaining moves above the 0.90 handle in recent months
- Safe haven flows gave a boost to Bund and Gilt futures at the European open today. Spot gold tested above $1,350/oz

Political/In the Papers:
Ukraine Summary:
- On Friday US President Obama stated that there would be costs if there was a military intervention in Ukraine
- On Friday Crimea Governor (pro-Russia): asked Putin for help to maintain peace in the region;
- On Sat March 1st, Russia's parliament voted unanimously to authorize a request from President Vladimir Putin to deploy troops in Ukraine until situation is normalized
- In a phone call on Sat, March 1st President Putin told US President Obama that Russia reserves the right to protect its interests in Crimea and Eastern Ukraine to prevent the spread of violence.
-Ukraine: puts army on alert & called up military reserves; asked EU, US and NATO to study ways to protect it
- US State Sec Kerry: Calls Russia's moves an incredible act of aggression; calls on Russia to diffuse the situation or West is ready to go to the hilt to isolate Russia;

Other news:
- Moodys raised sovereign outlook on Germany, Austria and Luxembourg to stable from negative; ratings all affirmed at Aaa

**Looking Ahead***
All times listed for economic events are denominated in Eastern Standard Time (Add 5 hours for GMT equivalent)
- (CH) Swiss Parliament Spring Session Bern
- (CZ) Czech Feb Budget Balance (CZK): No est v 45.0B prior
- (RO) Romania Feb International Reserves: No est v $36.0B prior
- (RU) Russia Feb Reserve Fund: No est v $87.1B prior; Wellbeing Fund: No est v $87.4B prior
- (ZA) South Africa Feb Naamsa Vehicle Sales Y/Y: No est v -6.8% prior
- (IT) Italy Feb Budget Balance: No est v €0.8B prior
- 06:00 (PT) Portugal Jan Industrial Production M/M: No est v 1.1% prior; Y/Y: No est v 7.2% prior
- 06:00 (PT) Portugal Jan Retail Sales M/M: No est v -5.8% prior; Y/Y: No est v -0.8% prior
- 06:00 (NL) Netherlands Debt Agency (DSTA) to sell Up to €4.0B in 3-month and 6-month Bills
- 06:00 (TR) Turkey to sell 2018 and 2019 Bonds
- 06:45 (US) Daily Libor Fixing
- 08:30 (US) Jan Personal Income: 0.2%e v 0.0% prior; Personal Spending: 0.1%e v 0.4% prior
- 08:30 (US) Jan PCE Deflator M/M: 0.1%e v 0.2% prior; Y/Y: 1.1%e v 1.1% prior
- 08:30 (US) Jan PCE Core M/M: 0.1%e v 0.1% prior; Y/Y: 1.1%e v 1.2% prior
- 08:30 (CA) Canada Jan Industrial Product Price M/M: No est v 0.7% prior; Raw Materials Price Index M/M: No est v 1.9% -prior
- 08:30 (SG) Singapore Feb Purchasing Managers Index: 50.3e v 50.5 prior; Electronics Sector Index: 51.6e v 52.0 prior
- 08:50 (FR) France Debt Agency (AFT) to sell combined €7.5B total in 3-month, 6-month and 12-month Bills
- 08:58 (US) Feb Final Markit US PMI Manufacturing: No est v 56.7 prelim
- 09:00 (EU) ECB chief Draghi testifies in Brussels
- 09:30 (EU) ECB calls for bids in 7-Day Main Refinancing Tender at fixed 0.25%
- 09:30 (EU) ECB announces prior settlements in SMP program to offset bond purchases
- 10:00 (US) Feb ISM Manufacturing: 52.2e v 51.3 prior; Prices Paid: 56.5e v 60.5 prior
- 10:00 (US) Jan Construction Spending M/M: -0.4%e v +0.1% prior
- 10:00 (MX) Mexico Jan Total Remittances: No est v $1.8B prior
- 11:00 (IS) Iceland Q4 Current Account Balance (ISK): No est v 54B prior
- 11:00 (US) Fed to purchase bonds
- 11:30 (US) Treasury to sell combined $50B in 3-Month and 6-Month Bills
- 12:00 (IT) Italy Feb New Car Registrations Y/Y: No est v 3.2% prior
- 13:00 (MX) Mexico Feb IMEF Manufacturing Index (Seasonally Adj): No est v 49.7 prior; Non-Manufacturing Index (Seasonally Adj): No est v 53.5 prior
- 13:00 (MX) Mexico Feb IMEF Manufacturing Index (Unadj): No est v 49.2 prior; Non-Manufacturing Index (Unadj): No est v 52.0 prior
- 15:00 - (US) Feb Domestic Vehicle Sales: 11.90Me v 11.94M prior; Total Vehicle Sales: 15.35Me v 15.16M prior
- 18:50 (JP) Japan Feb Monetary Base: No est v ¥200.9T prior
- 22:30 (AU) Australia Central Bank (RBA) Interest Rate Decision: Expected to leave Cash Rate Target unchanged at 2.50%


***Economic Data***
- (RU) Russia Feb Manufacturing PMI: 48.5 v 48.0 prior; 4th straight contraction
- (IN) India Feb HSBC/Markit Manufacturing PMI: 52.5 v 51.4 prior; 4th month of expansion
- (JP) Japan Feb Vehicle Sales Y/Y: 15.0% v 27.5% prior; 6th consecutive rise
- (AU) Australia Feb Commodity Index Y/Y: -12.1% v -9.9% prior; Commodity Index AUD: 90.8 v 91.5 prior
- (IE) Ireland Feb Investec Manufacturing PMI: 52.9 v 52.8 prior; 9th consecutive expansion
- (SE) Sweden Feb PMI Manufacturing: 54.6 v 55.0e; 6th straight month of expansion
- (NO) Norway Feb Manufacturing PMI: 51.0 v 52.5e
- (NL) Netherlands Feb Manufacturing PMI: 55.2 v 54.8 prior; 8th month in expansion but slowest pace in 4 months
- (PL) Poland Feb Manufacturing PMI: 55.9 v 55.4 prior; 9th straight month of expansion
- (HU) Hungary Feb Manufacturing PMI: 54.3 v 57.9 prior; 6th straight month of expansion
- (TR) Turkey Feb Manufacturing PMI: 53.4 v 52.7 prior; 7th straight month in expansion territory
- (TR) Turkey Feb CPI M/M: 0.4% v 0.4%e; Y/Y: 7.9% v 7.8%e; CPI Core Index Y/Y: 8.4% v 7.8%e
- (TR) Turkey Feb PPI M/M: 1.4% v 3.3% prior; Y/Y; 12.4% v 10.7% prior
- (FI) Finland Q4 GDP Q/Q: -0.3% v -0.7%e; Y/Y: -0.6% v -0.9%e
- (EU) ECB €776M borrowed in overnight loan facility vs. €165M prior; €29.4B parked in deposit facility vs. €28.9B prior - Daily Eurosystem Liquidity Conditions
- (ES) Spain Feb. Manufacturing PMI: 52.5 v 52.0e; 3rd straight month of expansion and highest reading since Apr 2010)
- (CH) SNB Sight Deposits w/e Feb 28th (CHF): 314.9B v 316.6B prior
- (CZ) Czech Republic Manufacturing PMI: 56.5 v 55.9 prior ; 10th straight month of expansion and at a 34 month high
- (SE) Sweden Q4 Current Account Balance (SEK): 49.2B v 56.6B prior
- (CH) Swiss Feb PMI Manufacturing: 57.6 v 55.4e
- (HK) Hong Kong Jan Retail Sales Value Y/Y: 14.5% v 7.8%e; Retail Sales Volume Y/Y: 16.8% v 7.5%e
- (IT) Italy Feb PMI Manufacturing: 52.3 v 52.9e; 8th straight month of growth
- (FR) France Feb Final PMI Manufacturing: 49.7 v 48.5e; data at a 5-month high but confirms 24th straight contraction
- (DE) Germany Feb Final PMI Manufacturing: 54.8 v 54.7e; confirms 8th straight month of growth
- (EU) Euro Zone Feb Final PMI Manufacturing: 53.2 v 53.0e; confirms 8th straight month of growth
- (IT) Italy 2013 Annual GDP -1.9% v -1.9%e; Deficit to GDP Ratio: 3.0% v 3.0%e
- (ZA) South Africa Feb Kagiso Manufacturing PMI: 51.7 v 50.1e; 1st growth in three months
- (NO) Norway Jan Credit Indicator Growth Y/Y: 5.7% v 5.9%e
- (UK) Feb PMI Manufacturing: 56.9 v 56.8e
- (UK) Jan Net Consumer Credit: £0.7B v £0.7Be; Net Lending Securities on Dwellings: £1.4B v £1.8Be
- (UK) Jan Mortgage Approvals: 76.9K v 74.5Ke; (highest since Nov 2007)
- (UK) Jan M4 Money Supply M/M: 0.3% v 1.4%e; Y/Y: -0.3% v +0.7%e; M4 Ex IOFCs 3M Annualized: 1.6% v 4.1%e
- (DK) Denmark Feb PMI Survey: 56.0 v 56.5 prior; 10th straight month of expansion

Fixed Income:
- None seen

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