Market Update - 19 April 2013

• Last night was generally a “risk off: mode with EUR down, Gold up, equities soft to flat & core yields in at the margin but the truth is everything was contained in recent ranges. Eurostoxx unch, S&P -0.67, German 10yr -0.5pt, US 10yr -1pt. Soft US earnings by tech companies.

• USDMYR opened at 3.0400 and we expect it be fairly quiet today ahead of the weekend. Expected range for today 3.0200-3.0500.

• Yesterday the data kicked off with UK Retail Sales at 6:30pm. A disappointing headline number was overlooked by markets as snow/weather affected. Core spending on food is strong & the overall trend is still aiming higher.

• The Spanish Bond auction was also held at 6:30pm followed by the French at 6:50pm. Yields across everything lower than previous & demand was up so there’s plenty of confidence in the ECB backstop down the road. Bunds didn’t seem to trade off these results at all.

• Italy failed to elect a president in the 1^st round of parliamentary voting. While the German lower House formally passed the Cypriot Bailout measures. 487 Yes, 102 No & 13 Abstained.

• The US tried to auction off a record $18bln of 5yr TIPS paper but found a 5yr low in demand with BTC of just 2.2x. Maybe not a surprise to all given even the Fed are publicly talking about deflation (Bullard yesterday). Inflation linked securities look like underperforming traditional securities for the first time since 2008.
• US Claims data was right on survey. The slightly soft Philly Fed & Leading Indicators saw equities sell off but they were already falling into the release.