Group Economics
Daily Insight
Macro & Financial Markets Research Maritza Cabezas , Kim Liu
ECB purchases remain on track
+ 31 20 343 5618
5 May 2015
ECB purchases are still going strong, no signs of scarcity to be seen Weak China factory activity calls for additional easing measures to stabilise economy
ECB purchases still going on strong
China’s HSBC PMI calls for additional easing
The ECB announced that, under the Public Sector Purchase
index
Programme (PSPP), it bought a total of EUR 47.7bn of public
60
sector bonds in its second month. In total, the central bank bought an amount of EUR 60.326bn, which means that it
50
achieved its monthly target. The difference between the amount spent on PSPP bonds and the total target are purchases of ABS and Covered bonds. The average remaining
40
maturity of the public sector bonds was 8.25 years which is 30
marginally lower than in the previous month.
06
PSPP holdings are based on the ECB capital key
07
08
09
10
11
Official PMI
12
13
14
15
HSBC PMI
The data shows that the lion share of the PSPP holdings Source: Thomson Reuters Datstream
consist of German public sector bonds. Also holdings of France, Italian and Spanish debt are significant. The data confirms that PSPP purchases follow the ECB capital key.
China’s HSBC PMI drops in April China’s HSBC/Markit PMI dropped below expectations in April
Peripheral bond buys still have a longer maturity
to 48.9 from 49.2 the previous month. New orders declined at
The data also shows that peripheral bond buys have on
the strongest pace in a year, while production levels stagnated.
average a higher remaining maturity than core bond buys. The
The components suggest that weak domestic demand was the
remaining maturity of Portuguese debt is the highest of all
main driver of reduced new business, as new export work
holdings at 10.77 years. Purchases of so called core bonds of
picked up a bit in April. Meanwhile the official PMI survey
countries like Germany, Finland and most notably Holland
released on Friday was unchanged from the March reading.
have the lowest remaining maturity. This implies that core
The official number of 50.1 was the weakest reading for the
central banks skewed their purchases towards shorter
month of April since 2005. January-March data are usually
maturing bonds. This was also the case in the first month.
distorted as a result of the Chinese New Year. The official survey suggests that new orders were unchanged and
Total ECB PSPP holdings EUR bn
production increased slightly compared to the previous month. Average remaining maturity in years
25
12
20
10
15 10 5 0 FR
IT
SP
NL
BE
Amounts bought (lhs)
Source: ECB
AT
PT
Maturity (rhs)
FI
IR
This slow start going into the second quarter supports the case for a new round of stimulus measures to maintain GDP growth
8
on track. Last week, the Politburo, the Communist’s Party’s top
6
decision-making body, said that authorities will step up policy
4
adjustments and urged further tax cuts. We stick to our growth
2
forecast of 7% for 2015, which is in line with the authorities’
0 DE
Additional easing measures to stabilise economy
target announced in March.
2
ECB purchas ses remain on track – 1 May 2015 2
Financial markets y markets Currency
Close
Cha ange 1 day
Change 5 da ays
Change YTD
EUR/USD USD/JPY
1.1222
0.0713
3.2098
-7 7.2562
119.43
-0.1839
0.3698
-0 0.3421
AUD/USD
0.7901
0.0507
0.9842
-3 3.2333
USD/CHF
0.9337
-0.4796
-2.1176
-6 6.0569
NZD/USD
0.7625
0.1576
0.3026
-2.1809
GBP/USD
1.5341
0.0457
1.0074
-1.5403
USD/SGD
1.3248
-0.0528
-0.5480
0 0.0151
USD/CAD
1.2100
0.0744
-0.6079
4 4.1756
Bond markets
Close
Cha ange 1 day
Change 5 da ays
Change YTD
2-year Gerrman Govt Bond yield
-0.2210
0.0160
0.0430
-0 0.1230
10-year Ge erman Govt Bond yield
0.3660
0.0810
0.2010
-0 0.1750
Yield curve e Germany
0.5870
0.0650
0.1580
-0 0.0520
2-year US Treasury Bond d yield
0.5709
0.0139
0.0425
-0 0.0936
S Treasury Bon nd yield 10-year US
2.0396
0.0008
0.0819
-0 0.1316
Yield curve e US
1.4687
-0.0131
0.0394
-0 0.0380
US 2-year sw ap rate
0.8259
-0.0166
0.0494
-0 0.0684
ar sw ap rate US 10-yea
2.1296
-0.0354
0.1243
-0 0.1565
US sw ap curve c
1.3037
-0.0188
0.0749
-0 0.0881
EU 2-year sw ap rate
0.0925
-0.0005
0.0235
-0 0.0825
EU 10-year sw ap rate
0.6680
0.0002
0.1670
-0 0.1440
c EU sw ap curve
0.5755
0.0007
0.1435
-0 0.0615
-0.0050
0.0000
-0.0030
-0 0.0830
0.2782
0.0000
0.0007
0 0.0226
0.5600
-2.1500
-13 3.9500
Euribor 3 Month M ACT/360 ICE LIBOR USD 3 Month ereign S JPMorgan EMBI Plus Sove
373.4900
Equity ma arkets
Close
Chan nge 1 day % Change C 5 day ys %Change YTD% Y
Nikkei 225
19,520
-2.69
-3 3.05
11.86
g Index Hang Seng
28,133
-0.94
1 1.10
19.18
Hang Seng g China Enterpr ises Index
14,431
-1.18
-0 0.33
20.41
Australian Stock Exchang ge S&P/ASX 200 Index
5,790
-0.83
-0 0.94
7.00
ndex Singapore Straits Times In
3,487
0.01
-0 0.44
3.63
x 50 Index Euro Stoxx
3,616
-0.04
-2 2.23
14.91
S&P 500 In ndex
0.93
2,078
-1.36
-1 1.65
MSCI World d Daily Total Re eturn Gross USD D
817
-0.44
0 0.64
6.49
AEX Index
488
-0.29
-3 3.01
14.93
14.12
22 2.44
-20.42
oard Options Ex xchange Volatillity Index Chicago Bo
Commod dity markets Reuters/Je efferies CRB To otal Return Gold spot USD/Oz de Light future Generic firrst NYMEX Crud Generic firrst Brent Crude Oil future LME Coppe er 3 Months Rolling Forw ard Generic firrst Wheat future e Chicago Boarrd of Trade Source: Bloo omberg
15
Close
Chan nge 1 day % Change C 5 day ys %Change YTD% Y
228
1.16
1 1.61
1,182
-1.92
-1 1.05
-1.15 -0.28
60
1.60
3 3.08
11.73 16.27
67
1.25
2 2.79
6,335
3.09
6 6.65
0.56
467
-2.15
-6 6.18
-20.81
3
ECB purchas ses remain on track – 1 May 2015 2
Day
Da ate
Time
Country
Key Economic Indicators and Eve ents
P Period
Latest outc come
Consensus s
Monday Monday
04/05 5/2015 04/05 5/2015
03:45:00 10:00:00
CN EC
x (HSBC) PMI m anufacturing - index x PMI m anufacturing - index
Apr F Apr F
49.2 51.9
49.4 51.9
Tuesday Tuesday Tuesday
05/05 5/2015 05/05 5/2015 05/05 5/2015
14:30:00 16:00:00
US US EC
Trade balance - USD bn on-manufacturing, in ndex ISM no Europe ean Comission Eco onomic Forecasts
Mar Apr
-35.4 56.5
-40.2 56.1
Wednesday W W Wednesday W Wednesday W Wednesday W Wednesday W Wednesday W Wednesday W Wednesday
06/05 5/2015 06/05 5/2015 06/05 5/2015 06/05 5/2015 06/05 5/2015 06/05 5/2015 06/05 5/2015 06/05 5/2015
03:45:00 10:00:00 10:00:00 10:30:00 11:00:00 14:15:00 14:30:00
CN EC EC GB EC US US PL
PMI se ervices - index (HSBC) PMI se ervices - index Comp osite PMI output PMI se ervices - index Retail sales - % mom ort - thousands ADP n at. employment repo b sector - % qoq Outputt per hour nonfarm business Refere ence rate - %
Apr Apr F Apr F Apr Mar Apr 1Q P May 6
52.3 53.7 53.5 58.9 -0.2 7 188.7 -2.2 1.5
53.7 53.5 58.7 -0.3 199.3 -1.8 1.5
Thursday T T Thursday T Thursday T Thursday T Thursday T Thursday T Thursday
07/05 5/2015 07/05 5/2015 07/05 5/2015 07/05 5/2015 07/05 5/2015 07/05 5/2015 07/05 5/2015
08:00:00 09:00:00 09:30:00 10:00:00 13:00:00 14:30:00 21:00:00
DE CH NL NO CZ US US
Manufa acturing orders - % mom Foreign currency reserves s - CHF bn CPI - % yoy Policy rate - % Repo rate r -% Initial jobless claims - thousands Fed Re eserve consumer crredit - USD bn
Mar Apr Apr May 7 May 7 May 2 Mar
-0.9 522.40 0 0.4 1.25 0.1 262 15.5
1.3 526.33
Friday Friday Friday Friday Friday Friday Friday
08/05 5/2015 08/05 5/2015 08/05 5/2015 08/05 5/2015 08/05 5/2015 08/05 5/2015 08/05 5/2015
08:00:00 10:30:00 14:30:00 14:30:00 14:30:00
DE GB US US US CN CN
Industrial production - % mom m Trade balance - GDP mln ge in employment prrivate employment - thousands Chang Chang ge in employment to otal - thousands Unem ployment - % Exports Importts
Mar Mar Apr Apr Apr Apr Apr
0.2 -2859 9 129 126 5.5 -15.0 -12.7
0.3 -2300 223 225.5 5.4 2.9 -9.8
ABN AMRO
-0.5
1.5 2.0 0.4
1.13 0.1
0.1
15.7 0.5 223 225 5.4
So ource: Bloomberg, Reuters, ABN AMR RO Group Econom mics (we provide ow wn forecasts only fo or selected k ey varriables and events))
nd out more abo out Group Eco onomics at: http ps://insights.a abnamro.nl/en n/ Fin This document has been prepared by ABN AMRO O. It is solely intended to provide financial annd general information on economics. The infformation in this docum ment is strictly proprieta ary and is being supplie ed to s for your informattion. It may not (in who ole or in part) be reprod duced, distributed or paassed to a third party or o used for any other purposes than stated abbove. This document is s informative in nature and you solely does s not constitute an offerr of securities to the pu ublic, nor a solicitation to make such an offer. r. No re eliance may be placed d for any purposes wha atsoever on the informa ation, opinions, forecassts and assumptions co ontained in the docume ent or on its completenness, accuracy or fairness. No representation n or warra anty, express or implie ed, is given by or on be ehalf of ABN AMRO, orr any of its directors, offficers, agents, affiliate es, group companies, or o employees as to the accuracy or completeness of the information n conta ained in this documentt and no liability is acce epted for any loss, aris sing, directly or indirecttly, from any use of suc ch information. The views and opinions expreessed herein may be subject s to change at an ny given n time and ABN AMRO O is under no obligation n to update the informa ation contained in this ddocument after the datte thereof. Before investing in any pro oduct of ABN AMRO Ba ank N.V., you should obtain o information on va various financial and oth her risks and any poss sible restrictions that yoou and your investmen nts activities may encou unter unde er applicable laws and regulations. If, after reading this document, you y consider investing in a product, you are advised a to discuss such an investment with yyour relationship manager or personal adviso or and chec ck whether the relevantt product –considering the risks involved- is appropriate a within yourr investment activities. The value of your inve estments may fluctuatee. Past performance is no guarantee for future e returrns. ABN AMRO reservves the right to make amendments a to this ma aterial. © Co opyright 2015 ABN AM MRO Bank N.V. and affi filiated companies ("AB BN AMRO").