MNI US OPEN: Post-Fed Moves Partially Fade, BoE Up Next

MNI: GERMANY MAR FACTORY ORDERS -4.7% M/M, -3.1% Y/Y; FEB +4.3%r Y/Y

Manufacturing Orders Contract in March

GERMANY MAR FACTORY ORDERS -4.7% M/M, -3.1% Y/Y; FEB +4.3%r Y/Y

• German manufacturing saw substantial declines in the March print, following the onset of the Ukraine war and associated worsening of supply chain disruptions and soaring energy prices.
• Factory orders dipped -4.7% m/m, substantially lower than -1.1% m/m forcaseted and down 3.9pp from the upwardly revised February print (upwards revisions due to late reporting).
• COmpared to March 2021, factory orders came in 3.1% lower.
• Foreign orders constiuted the key driver in the March decline, falling by 6.7% m/m, with non-eurozone orders diving 13.2% m/m.
• Capital goods orders fell 8.3% m/m, highlighting the reduced propensity to invest against the current backdrop of economic and political uncertainty.

MNI: FRANCE MAR IP -0.5% M/M, +0.1% Y/Y; FEB -1.2%r M/M

MNI: SWISS APR CPI +0.4% M/M, +2.5% Y/Y; MAR +2.4% Y/Y

MNI: UK FINAL APR SERVICES PMI 58.9 (FLASH 58.3); MAR 62.6

MNI: EUROZONE APR CONSTRUCTION PMI 50.4; MAR 52.8

FIXED INCOME: Fed done, BOE next

• Core fixed income is off of its highs this morning but remains above pre-Fed levels. TY1 futures for example were trading around 118-10 going into the decision and hit a high of 119-09+ overnight but now trade around 118-26+ at writing - not far off a 50% retracement of the move higher.
• The UST curve has bull flattened since yesterday's close (reversing some of yesterday's steepening) while Bund and gilt cash curves had caught up with these moves by steepening.
• Today the focus will be on the Bank of England. A 25bp hike is unanimously expected by analysts in the 22 previews that we read through, with markets fully pricing 25bp with around a 20% probability of a 50bp hike. The focus will be on the vote split (which could easily be a 3 way split), the forward guidance (will the time contingency of further moderate hikes be "in the coming months"?) and how far below 2% will the inflation forecasts be at market rates in 2/3 years time? There is also expected to be some further commentary on gilt sales. We wouldn't expect an announcement on the timing/pace at this meeting, but we wouldn't rule it out. For the full MNI BOE Preview click here.
• ECB's Lane is due to speak at 11:30BST / 6:30ET on the EZ economic outlook. After recent comments from other policymarkers discussing the prospects of a July hike, it will be interesting to see if he talks up the prospects today, too.
• Continued digestion of the Fed meeting alongside weekly US claims and nonfarm productivity data will be watched today, ahead of tomorrow's US employment report.
• TY1 futures are down -0-10+ today at 118-26+ with 10y UST yields up 1.7bp at 2.954% and 2y yields up 3.0bp at 2.675%.
• Bund futures are down -0.11 today at 153.07 with 10y Bund yields up 1.8bp at 0.987% and Schatz yields down -1.1bp at 0.253%.
• Gilt futures are up 0.22 today at 118.05 with 10y yields down -1.2bp at 1.953% and 2y yields down -2.6bp at 1.601%.

FOREX: Dollar Bouncing Off Post-Fed Lows

• Following the post-Fed pullback, the greenback is the strongest currency in G10 so far this morning, although the rally remains contains and yesterday's highs for the USD Index are well out of reach for now.
• Markets continue to digest Wednesday's FOMC decision, weighing the options after Powell defended the 50bps rate hike pace, but stated a 75bps move was not under consideration.
• At the other end of the table, GBP underperforms, dipping ahead of the Bank of England rate decision and on local elections day, at which the opposition Labour Party are expected to make gains in Councillor seats, but stop short of gaining a significant number of overall councils.
• Focus turns to the BoE rate decision, due at 1200BST. A 25bps hike is unanimously expected, with markets fully pricing 25bps with around a 20% probability of a 50bps hike. The focus will be on the vote split, the forward guidance and how far below 2% will the inflation forecasts be at market rates in 2/3 years time. Full MNI BOE Preview click here: https://marketnews.com/markets/central-bank-report...
• On the data front, weekly jobless claims, are the highlight, with BoC's Schembri and ECB's Holzmann also due to speak.

EQUITIES: Fading Some Post-Fed Gains

• Japanese markets were closed for holidays; elsewhere performance was mixed: China's SHANGHAI closed up 20.696 pts or +0.68% at 3067.759 and the HANG SENG ended 76.12 pts lower or -0.36% at 20793.4
• European equities are stronger, with the German Dax up 201.25 pts or +1.44% at 14172.65, FTSE 100 up 73.18 pts or +0.98% at 7566.5, CAC 40 up 95.56 pts or +1.49% at 6489.86 and Euro Stoxx 50 up 47.62 pts or +1.28% at 3773.63.
• U.S. futures are fading some post-Fed gains, with the Dow Jones mini down 153 pts or -0.45% at 33816, S&P 500 mini down 26.75 pts or -0.62% at 4268.5, NASDAQ mini down 98.75 pts or -0.73% at 13432.5.

COMMODITIES: Oil Steady Ahead Of OPEC+ Meeting

• WTI Crude up $0.16 or +0.15% at $107.73
• Natural Gas up $0.08 or +0.9% at $8.495
• Gold spot up $14.21 or +0.76% at $1894.31
• Copper up $3.3 or +0.76% at $436.75
• Silver up $0.02 or +0.09% at $22.9956
• Platinum down $8.72 or -0.88% at $986.05

What to watch (2/2)

• Against this backdrop ECB Chief Economist Lane is also due to speak on the euro area economic outlook at 11:30BST / 12:30CET at a Bruegel event. His comments will be watched closely as he is seen as one of the most influential members of the Executive Board, and if he guides towards a July hike, we are likely to see markets price in a higher probability than the round 2/3 probability priced in now.