March 22 – A look at the day ahead from Danilo Masoni.
A sense of caution is sweeping across markets this morning after Erdogan shocked markets on Saturday by sacking Turkey’s respected central bank chief days after a rate hike.
A collapsing Turkish lira was set for its worst day against the U.S. dollar since 2018, prompting investors seeking refuge in the safety of bond markets, easing the recent surge in global bond yields.
The fallout however remained relatively limited. So while 10-year Treasury yields slid below 1.7% after seven straight weekly gains and the Yen rose on its safe-haven status, U.S. stocks were unscathed with Nasdaq seen rising 0.5%.
Investors were also eyeing delays to European efforts to reopen its economies amid slow progress in vaccine roll-outs. Morgan Stanley has warned the region faces “another lost summer” leading to a second major hit it southern countries.
European shares were targeting two-week lows with DAX futures heading south amid reports Merkel is set to extend a national lockdown into April, as COVID-19 cases grow. Eyes will also be on bank stocks with big exposure to Turkey. Shares in BBVA, ING and UniCredit were seen falling 3-4% at the open.
In corporate news, Kingfisher stood out after the UK home improvement retailer reported a 44% jump in FY profit, driven by the popularity of DIY projects during the pandemic.
Key developments that should provide more direction to markets on Monday:
* Deliveroo’s upcoming IPO will value the company at up to 8.8 billion pounds
* Confidence in the safety of AstraZeneca’s vaccine has taken a big hit in Spain, Germany, France and Italy, a poll showed
* BioNTech says optimistic virus will be under control in most European countries by the end of the summer
* China kept its benchmark lending rate for corporate and household loans unchanged for an 11th straight month
* BoJ Governor said the central bank would not stop buying exchange-traded funds or sell them
* ECB chief economist Philip Lane speaks 1000 GMT
* Fed speakers: Richmond Fed President Thomas Barkin 1430 GMT, San Francisco Fed President Mary Daly 1700 GMT
* Swiss National Bank:2020annualreport
* Ghana central bank meets
* U.S.6-mth, 3-mth bill auctions
* U.S. existing home sales
* U.S.corporate news: Guess
* European corporate news: Kingfisher
Reporting by Danilo Masoni