€€€ Euro, Top Currencies Focus on Spanish Bond Sale and Earnings Docket €€€

Talking Points

• All Eyes on Spanish Bond Auctions Amid Returning Eurozone Debt Fears
• Traders Most Concerned with Guidance as Q1 Reporting Season Continues
• Last Batch of US Data This Weeks Aims to Produce Risk-Supportive Cues

Eurozone debt crisis worries take center stage in European hours as traders look for the outcomes of a pair Spanish bond auctions for direction. Madrid is due to sell 2014 and 2022 debt. Previous auctions of equivalent maturities drew average yields of 2.069 and 5.403 percent for 2-year and 10-year notes respectively. Readings north of these outcomes threaten to project returning funding stress in the currency bloc and stand to weigh on the Euro and broad-based risk appetite.

The spread between yields on Spanish and benchmark German 10-year bonds now stands at 410.2 basis points, which is 67.6bps or 2 standard deviations above its three-month average. France is also on the issuance calendar, with Paris selling up to 3bn in 2018 inflation-linked bonds as well as a tranche of 2014, 2015 and 2017 paper.

Later in the session, another helping of corporate earnings reports enters the spotlight, with names including Bank of America, Verizon and Microsoft on tap. Traders appear primarily concerned with guidance from major cycle-sensitive companies as the primary question defining the macro environment remains the degree to which a pickup in the US can offset a slowdown in China and recession in the Eurozone this year.

On the US economic data front, expectations call for a minor pullback in the Philadelphia Fed business confidence gauge in April while Existing Home Sales rise the most in five months while the composite Leading Indicators metric gains 0.2 percent to reach the highest level since June 2008. Weekly jobless claims numbers are expected to yield mixed results, with initial applications for benefits down while continuing ones advance.

The US Dollar (ticker: USDollar) continues to show a formidable inverse correlation with the S&P 500, hinting a pick-up in risk appetite that sends share prices higher – whether courtesy of earnings outcomes or the economic data set – is likely to weigh on the benchmark currency. Needless to say, the inverse scenario stands to produce the opposite effect.

Asia Session: What Happened

GMT	CCY	EVENT	ACT	EXP	PREV
22:00	NZD	ANZ NZ Job Ads (MoM) (MAR)	-1.0%	-	4.6% (R-)
22:45	NZD	Consumer Prices Index (QoQ) (1Q)	0.5%	0.5%	-0.3%
22:45	NZD	Consumer Prices Index (YoY) (1Q)	1.6%	1.6%	1.8%
23:50	JPY	Merchandise Trade Balance Total (¥) (MAR)	-82.6B	-223.2B	29.4B
23:50	JPY	Adj. Merchandise Trade Balance (¥) (MAR)	-223.2B	-446.3B	-321.4B (R-)
23:50	JPY	Merchandise Trade Exports (YoY) (MAR)	5.9	0.2	-2.7
23:50	JPY	Merchandise Trade Imports (YoY) (MAR)	10.5	7.0	9.2
1:30	AUD	NAB Business Confidence (1Q)	-1	-	1
1:30	AUD	RBA FX Transaction (A$) (MAR)	944M	-	372M

Euro Session: What to Expect

GMT	CCY	EVENT	EXP	PREV	IMPACT
8:00	EUR	Italian Industrial Orders sa (MoM) (FEB)	-1.1%	-7.4%	Low
8:00	EUR	Italian Industrial Orders nsa (YoY) (FEB)	-6.2%	-5.6%	Low
8:00	EUR	Italian Industrial Sales sa (MoM) (FEB)	-	-4.9%	Low
8:00	EUR	Italian Industrial Sales nsa (YoY) (FEB)	-	-4.4%	Low
8:30	EUR	Spain to Sell 3.3% 2014 Bonds	-	-	High
8:30	EUR	Spain to Sell 5.85% 2022 Bonds	-	-	High
9:00	EUR	France to Sell €3bn I/L 2018 Bonds	-	-	Medium
9:00	EUR	France to Sell 2014-2017 bonds	-	-	Medium

 Critical Levels

CCY	SUPPORT	RESISTANCE
EURUSD	1.3074	1.3157
GBPUSD	1.5931	1.6135