reports
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: The dollar should be stronger
The divergence of FX markets from rates and equities generally doesn't last long, and we expect a delayed USD strengthening after yesterday's upside surprise in 1Q US PCE data. We cannot rule out a consensus 0.3% MoM March core PCE print today, but 0.4% now looks much likelier. In Japan, FX intervention risk is even higher after a dovish hold by the BoJ
- Benjamin Schroeder
- Michiel Tukker
- Padhraic Garvey
- CFA
Rates Spark: Bonds braced for another inflation pop
A higher-than-expected US inflation print yesterday is likely to be followed by another one today. The FOMC meets next week, and had they not been intimating a cut, a hike could have been a discussion point. No change expected though. Markets remain convinced about a June ECB cut, but are now having slightly less conviction about a total of three cuts for 2024
- Marc Hesselink
- CFA
- Thymen Rundberg
Melexis/Slower growth period/HOLD
Melexis reported a comforting 1Q24 update pointing towards an end of destocking. The company is performing relatively well taking into account the weakness in automotive production. This is supported by R&D driving good levels of design wins. We leave our estimates largely unchanged but we still expect below average growth for 2024-25F on the back of limited car production growth and above-average price pressure. We reiterate our HOLD rating and maintain our DCF-based target of €85.
- Stijn Demeester
AMG/1Q24 preview and model update/BUY
We update our model ahead of AMG's 1Q24 results. While current lacklustre market conditions provide limited room for positive earnings surprises in the short term, we continue to see attractive mid-term earnings growth potential on the back of capacity expansions in Lithium Brazil and Germany. We reiterate our BUY on a lowered target price of €30 per share.
- Min Joo Kang
- Nicky Mapa
- Rob Carnell
- James Knightley
US GDP growth slows markedly, and inflation remains the focus
US GDP growth slowed to 1.6% annualised in the first quarter of this year, less than half the 3.4% rate recorded in 4Q23, but core inflation was stronger, picking up from a 2% annualised rate to 3.7%. This implies upside risks to tomorrow's key monthly core PCE deflator and makes a near-term rate cut even less likely
- Coco Zhang
- James Knightley
Decarbonisation and climate resiliency step into the spotlight for the...
Reducing emissions from buildings is now a crucial step in reaching net zero in the US. Efficiency standards, government policy and sustainable finance opportunities will encourage decarbonisation, while climate risks will need property owners' attention. Still, complexity can arise when sustainability meets economic and policy uncertainty
- Chris Turner
Japanese FX intervention: Primed and Ready
With USD/JPY trading above 155, markets are now on high alert for BoJ FX intervention. Having secured a joint press release with US and Korean authorities last week to acknowledge serious concern over yen weakness, Tokyo will now feel it has Washington's blessing to enter FX markets. We look at when and how Japanese authorities could intervene.
- Marine Leleux
- Maureen Schuller
- Suvi Platerink Kosonen
Bank Brunch/BNP Paribas, Barclays and Deutsche Bank earnings, LF Hypot...
BNP Paribas: unimpressive earnings, a dive in leverage ratio likely to lead to new AT1 issuance. The MDA headroom of Barclays tightens a tad more. Deutsche Bank reported higher earnings and a drop in capital. LF Hypotek brings a 6yr covered bond to the market. Banca Popolare di Sondrio upped to investment grade at Fitch
- Marine Leleux
- Maureen Schuller
- Suvi Platerink Kosonen
Bank Brunch/BNP Paribas, Barclays and Deutsche Bank earnings, LF Hypot...
BNP Paribas: unimpressive earnings, a dive in leverage ratio likely to lead to new AT1 issuance. The MDA headroom of Barclays tightens a tad more. Deutsche Bank reported higher earnings and a drop in capital. LF Hypotek brings a 6yr covered bond to the market. Banca Popolare di Sondrio upped to investment grade at Fitch
- Roelof-Jan van den Akker
Technical Analysis/Bund future
No signs of a bottom in the weekly chart with a lower high and low last week. Prices closed 146bp lower at 131.04 in combination with a new low within this year's corrective phase at 130.83. Nevertheless, we are still not bearish here and recommend our view to Buy on weakness in expecting the development of a higher bottom. The downside potential is limited from here with solid support coming in between the horizontal line around 130.70 and the former upper end of the falling trend channel aroun...
- Jan Frederik Slijkerman
- Jeroen van den Broek
- Jesse Norcross
- Nadège Tillier
- Timothy Rahill
- ING Helpdesk
Benelux Morning Notes
Azelis: Strong margin performance in weak trading results in 3% EBITA beat. BE Semiconductor Industries: 1Q24 results; prolonged downcycle. Coca-Cola Europacific Partners plc: Messy but good. DWS: Record breaking. Flow Traders: Crypto Kings. Fugro: Here we go again. Kinepolis: Weak start to the year, but a bit better than feared. UCB: Changes in the group executive committee. Unilever: Heading in the right direction. Vonovia: Disposal of 4,500 apartments for €700m. Wolters Kl...
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: When the second decimal place counts
There will be quite a lot of attention on today's first quarter US core GDP price deflator and what it means for tomorrow's release of the March core PCE figure. Analysts will be looking at the second decimal point on today's release to infer whether tomorrow's number is on consensus at 0.3%, 0.4% or 0.2% MoM. The outcome will have implications for the dollar
- Carsten Brzeski
- Stijn Demeester
- Min Joo Kang
- Nicky Mapa
- Rob Carnell
- Benjamin Schroeder
- Michiel Tukker
- Padhraic Garvey
- CFA
Rates Spark: Upbeat sentiment helps yields higher
Positive risk sentiment is helping yields up and was reflected in solid demand for Greece's 30y bond sale. Euro rates will now focus on this week's US PCE reading as the impact is likely to spill over into the market pricing for 2024 European Central Bank cuts
- Roelof-Jan van den Akker
Technical Analysis/Corn
The weekly chart was bearish after prices broke below the upward sloping trend line around US$634.50/bu a year ago. This resulted in a Sell signal with a target of around US$360.00/bu. The close below the next solid horizontal support around US$501.00/bu August last year, confirmed the bearish view. Prices reached a low at US$394.50/bu in March, but not the target around US$360.00/bu.
- Benjamin Schroeder
- Padhraic Garvey
- CFA
Money Markets Update/Disentangling from the Fed
Euro key points: Surveys suggest markets see new structural operations already in 2025. Risk-off ended Schatz ASW tightening, Euribor/OIS widening looks more technical. ECB discount is resilient to the Fed, risks still suggest paying Dec 2024 implied rate.
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