MNI EUROPEAN OPEN: CPI To Add to BoE Puzzle

EXECUTIVE SUMMARY

• BIDEN, TOP DEMOCRATS CALL ON GOP TO PRESENT ‘CLEAN’ DEBT LIMIT BILL; HOLD SEPARATE BUDGET NEGOTIATIONS (THE HILL)
• US REGIONAL BANKS’ DEPOSIT GROWTH SEEN DROPPING TO JUST $73 BILLION (BBG)
• ECB’S LANE: SET FOR MAY HIKE, SIZE DATA DEPENDENT (MNI)
• YELLEN TO LAY OUT U.S. ECONOMIC PRIORITIES ON CHINA IN THURSDAY SPEECH (RTRS)
• CHINA WANTS WEAKER US DOLLAR AS RESERVE CURRENCY, SAYS BIDEN ECONOMIST NOMINEE (RTRS)
• UKRAINE AGREES WITH POLAND ON GRAIN TRANSIT, BUT BLACK SEA DEAL IN DOUBT (RTRS)
• $1 BILLION SALE MARKS FIRST MAJOR BANK’S AT1 BOND OFFER SINCE CREDIT SUISSE WIPEOUT (BBG)
• RECORD EU GAS STORAGE RAISES HOPES OF CUTTING RUSSIAN DEPENDENCE (FT)
• IRAQ TO RESTART OIL FLOWS FROM KURDISTAN THIS WEEK, PM SAYS (BBG)

Fig. 1: BoE May '23 & Dec '23 OIS

Source: MNI - Market News/Bloomberg

UK

POLITICS: Rishi Sunak will launch a charm offensive with business leaders next week, in an attempt to galvanise his growth agenda and counter Labour’s growing success in wooing corporate Britain. (FT)

EUROPE

ECB: Another European Central Bank interest rate hike in May looks likely, but, until all the relevant data is seen the scale of rise remains an ongoing debate, ECB chief economist Philip Lane said Tuesday. (MNI)

U.S.

FED: The hunt for a new president of the Federal Reserve Bank of Kansas City has turned into a marathon that’s days from becoming the longest search this century. (BBG)

FED: A so-called "wholesale" central bank digital currency could hold promise for the future settlement of certain financial market transactions and processing international payments, Federal Reserve Governor Michelle Bowman said on Tuesday. (RTRS)

FED: The boards of directors of six Federal Reserve banks voted in February for a pause in hikes in the discount rate charged to banks for emergency loans, according to the latest discount rate meeting minutes published Tuesday, but the directors of all 12 banks voted for an increase in March. (MNI)

ECONOMY: Bank of America’s customers are spending freely on dining, entertainment and other experiences, which in turn supports U.S. employment, CEO Brian Moynihan told CNBC’s Becky Quick. (CNBC)

ECONOMY: Walt Disney Co. plans to cut thousands of jobs next week, including about 15% of the staff in its entertainment division, people familiar with the matter said. (BBG)

FISCAL: President Biden and top congressional Democrats are calling on Republicans to present a “clean” debt limit bill and hold separate negotiations on a budget, as the GOP rolls out its opening pitch in the high-stakes battle to increase the borrowing limit. (The Hill)

POLITICS: The indictment of former President Donald Trump on felony charges in New York looks to be having little effect on Americans’ support for his candidacy, but a majority of Americans say bringing charges against the ex-president was “a good thing” for the rule of law in the country. The CNBC All-America Economic Survey found that 58% of participants said Trump’s indictment would have no effect on how they vote, with men ages 18 to 49 years, non-conservative Republicans and those earning less than $30,000 among those least likely to be influenced by the development. (CNBC)

BANKS: Local U.S. banks are pressing ahead with regular lending including for commercial real estate projects, an Independent Community Bankers of America executive told MNI, even after the failure of Silicon Valley Bank raised concerns about a credit squeeze. (MNI)

BANKS: US regional banks reporting first-quarter earnings over the coming weeks will barely grow their customer deposits amid turmoil that engulfed the sector, according to data compiled by Bloomberg. (BBG)

BANKS: Western Alliance Bancorp on Tuesday posted stronger-than-expected earnings and said its deposits had stabilized after the March banking crisis, news that boosted its shares and other U.S. regional banks in after-hours trading. (RTRS)

BANKS: Shares of Metropolitan Bank surged in aftermarket trading after the lender reported a higher profit and revenue. (WSJ)

EQUITIES: Netflix Inc. will begin cracking down this quarter on US viewers who share someone else’s account, predicting plans to charge such customers will boost growth in the second half of the year. The company, which reported a lower-than-expected subscriber gain for the first quarter, has been testing ways to reduce account sharing in Latin America, and rolled out a plan to charge such users in four additional territories in the first quarter. (BBG)

EQUITIES: Boeing Co. is moving ahead with plans to hike output of its cash-cow 737 jetliner while dealing with the ripple effects from a new production flaw uncovered by one of its largest suppliers. (BBG)

OTHER

GLOBAL TRADE: European Union negotiators agreed on a final version of a €43 billion ($47.2 billion) plan to make Europe a key player in a global race to ramp up the production of semiconductors. (BBG)

GLOBAL TRADE: Poland agreed on Tuesday to lift a ban on the transit of Ukrainian grain and food products, but Ukraine said a wartime deal allowing it to safely ship grain from Black Sea ports was still under threat. (RTRS)

GLOBAL TRADE: Hungary’s government banned imports of Ukrainian grains and selected agricultural products until July 1, according to a decree in the official gazette, while allowing cargo to pass through the country. (BBG)

GLOBAL TRADE: Samsung Electronics submitted Statement of Intent to US Commerce Department to apply for subsidy in accordance with the US Chips Act, DongA Ilbo newspaper reports, without citing anyone. (BBG)

U.S./CHINA: U.S. Treasury Secretary Janet Yellen on Thursday will lay out the Biden administration's principal objectives for the U.S.-China economic relationship in a speech in Washington, the Treasury said on Tuesday as tensions between the world's two largest economies has thwarted high-level meetings. (RTRS)

U.S./CHINA: Raimondo said that the Biden administration is working as quickly as possible on rules for screening and preventing US investors from putting money into sensitive sectors in China such artificial intelligence and quantum computing. (BBG)

U.S./CHINA: White House economist Jared Bernstein on Tuesday said there was "some evidence" that China wants to see the dollar weaken as the international reserve currency, and urged Congress to raise the U.S. debt ceiling to protect the value of the dollar. (RTRS)

U.S./CHINA: A chip industry conference that kicked off here Tuesday has lined up major U.S. companies as participants despite Washington's widening restrictions on sales of cutting-edge semiconductor technology to China. (Nikkei)

U.S./CHINA: The Chinese military could soon deploy a high-altitude spy drone that travels at least three times the speed of sound, according to a leaked U.S. military assessment, a development that would dramatically strengthen China's ability to conduct surveillance operations. (Washington Post)

U.S./CHINA/TAIWAN: The top US military commander in the Indo-Pacific has pushed back against colleagues that are “guessing” the date of a potential Chinese invasion of Taiwan. (FT)

AUSTRALIA: Australia’s chances of sliding into a recession have declined, according to a Bloomberg survey, as the Reserve Bank’s decision to pause an 11-month tightening cycle helps improve the economic outlook. (BBG)

NEW ZEALAND: Economists raised their inflation outlook for New Zealand and see a higher chance of the country heading into recession, according to the latest Bloomberg survey. (BBG)

NORTH KOREA: During the summit, Yoon said he will seek "tangible outcomes" on the allies' efforts to improve responses to evolving threats from North Korea, which has ramped up military tests, and launched its first solid-fuel intercontinental ballistic missile last week. Seoul, for its part, will step up its surveillance, reconnaissance and intelligence analysis capability and develop "ultra-high-performance, high-power weapons" to fend off the North's threats, Yoon said. (RTRS)

NORTH KOREA: North Korean leader Kim Jong Un has ordered officials to launch the first spy satellite as planned, saying that boosting reconnaissance capabilities is a priority to counter "threats" from the United States and South Korea, state media reported on Wednesday. (RTRS)

BOC: Bank of Canada Governor Tiff Macklem said that Tuesday's inflation report shows price gains are fading quickly and more moderation is likely, while reiterating he's prepared to raise interest rates again. (MNI)

CANADA: Canada’s largest federal public-service union said Tuesday that some 155,000 workers will go on strike after talks with the federal government failed to produce an agreement before its deadline. (AP)

TURKEY: Turkish President Recep Tayyip Erdogan signals that low interest rate policy will continue after elections in a televised interview on Tuesday. (BBG)

MEXICO: Mexican President Andres Manuel Lopez Obrador ratcheted up the political infighting with the US by saying Tuesday his country has been a target of espionage by the Pentagon. (BBG)

MEXICO: Mexico’s supreme court struck down on Tuesday part of a law pushed by President Andrés Manuel López Obrador that aimed to put day-to-day public security forces under military control. (FT)

BRAZIL: President Luiz Inacio Lula da Silva sent congress a proposal to shore up Brazil’s public finances after ordering a change that added uncertainty over the government’s ability to boost its revenues — a key element for the plan’s success. The finance ministry released a draft of the bill on Tuesday and Lula personally delivered the proposal to lower house Speaker Arthur Lira during an afternoon meeting. It will set the stage for the first major test of his government’s strength in congress. (BBG)

BRAZIL: Brazil's Finance Minister Fernando Haddad said on Tuesday there is plenty of room to cut interest rates after the government formally sent to Congress a proposed fiscal framework to control the trajectory of the public debt. Speaking to journalists, Haddad said exceptions to the new fiscal rules are already in the constitution and were only reproduced in the government's bill. (RTRS)

RUSSIA: South Korea might extend its support for Ukraine beyond humanitarian and economic aid if it comes under a large-scale civilian attack, President Yoon Suk Yeol said, signalling a shift in his stance against arming Ukraine for the first time. (RTRS)

RUSSIA: The U.S. Justice Department announced new charges on Tuesday against four Americans in Florida and three Russians for allegedly working on behalf of Moscow "to conduct a multi-year foreign malign influence campaign in the United States." (RTRS)

RUSSIA: The UK government's cyber defence agency warned on Wednesday of an emerging threat to Western critical national infrastructure posed by hackers sympathetic to Russia and its war on Ukraine. (RTRS)

RUSSIA: Inflationary pressures in Russia's economy will likely increase over the coming months, analysts from the country's central bank said on Tuesday. They added the central bank faces a dilemma over whether to react pre-emptively to rising prices or wait for "clear evidence" of higher inflation. (RTRS)

PERU: Peru’s former President Alejandro Toledo’s request to delay his extradition from the US to his home country to face corruption charges was again rejected by an federal appeals court in California. (BBG)

BONDS: Sumitomo Mitsui Financial Group Inc. sold yen Additional Tier 1 bonds, becoming the first major global bank to issue such debt since the collapse of Credit Suisse Group AG last month. (BBG)

METALS: Brazilian mining giant Vale SA said output of iron ore rose in the first quarter from the previous three months due to a stronger performance at the company's giant S11D mine and amid better weather conditions in the state of Minas Gerais. (Dow Jones)

METALS: Recent rise of iron ore prices is due to expectations and other reasons, National Development and Reform Commission spokeswoman Meng Wei says in a regular briefing on Wednesday. (BBG)

ENERGY: The EU is storing record levels of natural gas after a milder-than-anticipated winter, bolstering hopes that the bloc can wean itself off imports from Russia. The bloc’s storage totalled 55.7 per cent of capacity at the start of the month according to the industry body Gas Infrastructure Europe — the highest level for early April since at least 2011. (FT)

OIL: Oil exports from Iraq’s Kurdistan region will resume this week as only technicalities remain to implement the agreement between Baghdad and Erbil, Iraqi Prime Minister Mohammed Shia Al-Sudani told Rudaw in an interview. (BBG)

OIL: The American Petroleum Institute reports US commercial inventories of crude oil fell by 2.7M barrels last week, a source citing the data says, while gasoline supplies fell by 1M barrels. The mostly- bullish results were released ahead of official EIA inventory data due tomorrow. Average forecasts in a WSJ survey indicate the EIA report will show crude stockpiles fell by just 500,000 barrels from the previous week and that gasoline decreased by 1.2M barrels. In late trading, (Dow Jones)

CHINA

ECONOMY: China’s GDP will grow between 5.5-8.0% in 2023 should Q1 trends continue, according to the 21st Century Business Herald. Local analysts said the economy shows strength, but the rebound is uneven. (MNI)

FISCAL: China’s fiscal revenue will grow faster in Q2 as the economic rebound gathers momentum, according to Xue Qian, deputy director at the National Treasury Payment Center. (MNI)

FISCAL: Beijing’s local government will continue energy vehicle subsidies to boost consumption this year, according to Yicai. (MNI)

POLICY: China is studying and drafting policies to expand consumption, National Development and Reform Commission spokeswoman Meng Wei says in a regular briefing on Wednesday. (BBG)

INFLATION: Hog prices in China are expected to rebound to reasonable range with gradual recovery of consumption, National Development and Reform Commission spokeswoman Meng Wei says at a briefing. (BBG)

PROPERTY: China’s real estate industry expanded in the first quarter for the first time since 2021, boosting the economy’s recovery. (BBG)

CHINA MARKETS

PBOC NET INJECTS CNY25 BILLION VIA OMOS WEDNESDAY

UP TODAY (TIMES GMT/LOCAL)

Date	GMT/Local	Impact	Flag	Country	Event
19/04/2023	0600/0700	***		UK	Consumer inflation report
19/04/2023	0600/0700	***		UK	Producer Prices
19/04/2023	0800/1000	**		EU	EZ Current Account
19/04/2023	0830/0930	*		UK	ONS House Price Index
19/04/2023	0900/1100	***		EU	HICP (f)
19/04/2023	0900/1100	**		EU	Construction Production
19/04/2023	0900/1000	**		UK	Gilt Outright Auction Result
19/04/2023	1035/1235			EU	ECB Lane Speech at Enterprise Ireland Summit
19/04/2023	1100/0700	**		US	MBA Weekly Applications Index
19/04/2023	1215/0815	**		CA	CMHC Housing Starts
19/04/2023	1230/0830	*		CA	Industrial Product and Raw Material Price Index
19/04/2023	1430/1030	**		US	DOE Weekly Crude Oil Stocks
19/04/2023	1500/1700			EU	ECB Schnabel Lecture at Leibniz-Zentrum ZEW
19/04/2023	1700/1300	**		US	US Treasury Auction Result for 20 Year Bond
19/04/2023	1800/1400			US	Fed Beige Book
19/04/2023	2130/2230			UK	BOE Mann Panellist at Brandeis International Business School
19/04/2023	2300/1900			US	New York Fed's John Williams