Futures Slide As "Punched In The Face" Market Eyes Surging Yields Ahead Of ECB, PPI

Futures are weaker signaling further losses on Wall Street as stubborn inflation forces investors to reduce their expectations for Federal Reserve interest-rate cuts; tech stocks are underperforming following the significant surge in Treasuries yields which has continued today. As of 8:00am ET, S&P futures are down 0.5% and back to yesterday's post-CPI session lows while Nasdaq futures are down 0.4%. Pre-mkt, Mag7 names are mixed, and small-caps set to underperform as yields move higher. Europe’s Stoxx 600 index also retreated, with most sectors in the red, as did Asian stocks. Treasury yields ticked higher again after the previous day’s surge, with the rate on the 10-year at 4.57%. Bonds in Europe dropped as traders trimmed their wagers on easing, with attention focused on the ECB’s policy announcement later; the USD is flat following its 1% surge yesterday, the strongest move since Mar 2023. Commodities are flattish with outperformance in base metals and crude.  Today’s macro focus is on PPI and the ECB.

A sharp reset to rate-cut expectations sparked tumult in markets this week. When the year started, investors were looking forward to six Fed rate reductions totaling 1.5% percentage points over 2024. Now, they are pricing just two, with the first pushed out to beyond the summer. 10Y Treasury yields surged the most since August 2022 in the wake of yesterday’s inflation reading.

"If memory serves, this is the seventh time during this cycle that the market got the pivot wrong,” said Win Thin, managing director and global head of markets strategy at Brown Brothers Harriman & Co. “The market will try again despite being punched in the face repeatedly. Eighth time’s the charm?”

As noted in our preview earlier, the ECB is forecast to keep borrowing costs on hold at a record high for a fifth meeting Thursday, but is widely predicted to signal that easing will start in June, as inflation moves closer to its 2% target. Beyond that, the outlook for price pressures and the economy remains uncertain.

“June is really the moment for the ECB to start the cutting cycle,” Evelyn Herrmann, economist for Bank of America Securities Europe, said on Bloomberg Television. “They probably have a rather shallow cutting cycle in mind.” The ECB is dealing with different factors to the Fed, with more pronounced disinflation and economic weakness in the region, she said.

Traders now anticipate just under three quarter-point cuts from the ECB this year, compared to earlier this week when there was a 50% chance of a fourth reduction. While a first move in June is still the base case, it’s no longer fully priced. It’s a similar story in the UK, where money markets now price fewer than two quarter-point cuts by the Bank of England in 2024 for the first time since October. Policymaker Megan Greene said UK rate cuts should still be a way off, according to an article in the Financial Times on Thursday.

There’s more US data for traders to pore over today as they contemplate the Fed’s next move, with initial jobless claims figures and an update on producer-price inflation due.

European stocks edge lower as losses in telecommunication and travel shares outweigh gains in energy and utilities.

Earlier int he session, Asian equities also dropped, as disappointing Chinese consumer prices added to concerns about persistent deflationary pressure, while higher-than-expected US inflation suggests the Federal Reserve may keep interest rates higher for longer. The MSCI Asia Pacific Index fell as much as 0.8%, dropping for a second day, with markets including Hong Kong, Taiwan and Australia in the red.

• Hang Seng and Shanghai Comp. were mixed with underperformance in Hong Kong amid notable weakness in developers and tech stocks, while the mainland bucked the trend as softer-than-expected Chinese CPI and persistent producer price deflation kept the door open for future support measures.
• Nikkei 225 declined at the open but retained the 39,000 level with downside cushioned by currency weakness.
• ASX 200 was led lower by underperformance in the rate-sensitive real estate and tech sectors amid higher yields.

In FX, the Bloomberg dollar index edged higher, adding to Wednesday’s advance to the highest this year. The yen steadied after weakening to levels not seen since 1990 against the greenback in the prior session. The depreciation has sparked fresh speculation Japanese authorities might step into the market to support the currency. The USD/JPY is little changed around 153 with traders on intervention watch after more warnings from Japanese government officials. The Norwegian krone is the best performer among the G-10 currencies, rising 0.4% versus the greenback.

In rates, treasury yields ticked higher again after the previous day’s surge, with the rate on the 10-year at 4.57%. Bonds in Europe dropped as traders trimmed their wagers on easing, with attention focused on the ECB’s policy announcement later. At front end, 2-year yields are ~1bp lower on the day after rising 23bp Wednesday. Treasury 10-year yields are higher at 4.56% after eking out a new YTD high at 4.568%; 2s10s, 5s30s spreads are ~1.5bp steeper on the day. Swaps market prices in around 40bp of Fed rate cuts for the year and 11bp of easing for the July policy meeting, or 44% odds of a 25bp move. US session includes weekly jobless claims and PPI data along with 30-year bond reopening. Coupon auction cycle concludes with $22b 30-year bond reopening; Wednesday’s 10-year was poorly received, with 3.1bp tail. WI 30-year yield at ~4.640% is ~30bp cheaper than last month’s, which stopped through by around 2.1bp.

European government bonds fall as traders pare bets on how fast and far the European Central Bank and Bank of England will cut interest rates this year. At one stage, money markets were pricing in less than 75bps of easing by the ECB in 2024 and less than 50bps from the BOE. Gilts are leading the drop, with UK 10-year yields rising 6bps to 4.20%. German 10-year yields rise 2bps ahead of the ECB policy decision later on Thursday.

In commodities, oil held the first gain in three sessions as traders watched for a potential attack on Israel by Iran or its proxies, which could spark a significant escalation of hostilities in the Middle East. WTI traded near $86.40. Spot gold is little changed.

Bitcoin holds incrementally above USD 70k, whilst Ethereum (+2.2%) firmly sits above USD 3.5k.

Looking at today's calendar, the US economic data slate includes March PPI and initial jobless claims (8:30am). Fed speakers scheduled for the session include Williams (8:45am), Barkin (10am), Collins (12pm) and Bostic (1:30pm)

Market Snapshot

S&P 500 futures little changed at 5,204.50
Gold spot down 0.1% to $2,332.69
US Dollar Index little changed at 105.15

Top overnight news

• China’s CPI cools by more than anticipated in Mar (coming in at +0.1% vs. +0.7% in Feb and vs. the Street +0.4%) while PPI deflation dipped to -2.8% (inline w/the Street and 10bp worse than -2.7% in Feb). BBG  
• China ramped up yuan support with a record fixing relative to estimates, as dollar strength kept the currency close to a policy no-go area. After four months of relative stability, danger signals are appearing that may add to downward pressure — including stalling inflation. BBG
• Temasek plans to invest as much as $18 billion across Europe over the next five years as it eyes rich family businesses. BBG
• Huawei Technologies is building a massive semiconductor equipment research and development center in Shanghai as the Chinese tech titan continues to beef up its chip supply chain to counter a U.S. crackdown. Nikkei
• Ukraine said a Russian missile barrage destroyed the Kyiv region’s largest power plant. The attack set Trypilska, owned by state-run electricity and heat producer Centrenergo, ablaze, a person familiar said. BBG
• Fed cuts are now a matter of “if”, not just “when”, following several months of hot economic data according to Nick Timiraos (the risk is that inflation becomes “stuck” around 3%). WSJ
• The DOJ opened an extended antitrust probe into Nippon Steel’s bid for US Steel, people familiar said. The investigation is focusing on the Japanese firm’s ownership of a steel mill in Alabama, a JV with ArcelorMittal. BBG
• A new rise in US inflation is undermining Joe Biden’s re-election message, threatening the president’s effort to defend his economic record in a crucial phase of the campaign against Donald Trump. FT
• Amazon must pay $525 million to software firm Kove for infringing three patents covering distributed cloud storage technology. BBG
• Manhattan apartment rents unexpectedly declined in March after months of increases, though it’s unlikely to be a sign of a softening market. New leases were signed at a median of $4,100, down 1.8% from a year earlier, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the first time in four months that rents fell on an annual basis and an unusual twist at the tail end of winter, when prices tend to begin climbing toward their traditional summertime peaks. BBG

A more detailed look at global markets courtesy of Newsquawk

Asia Pacific stocks were subdued after hotter-than-expected US CPI data and a further unwinding of Fed rate cut bets reverberated across global markets, although stocks are off their worst levels and participants also digested the latest Chinese inflation figures.  ASX 200 was led lower by underperformance in the rate-sensitive real estate and tech sectors amid higher yields. Nikkei 225 declined at the open but retained the 39,000 level with downside cushioned by currency weakness. Hang Seng and Shanghai Comp. were mixed with underperformance in Hong Kong amid notable weakness in developers and tech stocks, while the mainland bucked the trend as softer-than-expected Chinese CPI and persistent producer price deflation kept the door open for future support measures.

Top Asian News

• China MOFCOM official said China lodged solemn representations with the EU on issues such as the investigation of foreign subsidies to China and believes the probes launched by the EU so far are all aimed at Chinese new energy-related enterprises, which will seriously damage the confidence of Chinese enterprises in carrying out investment and trade cooperation.
• Japanese Finance Minister Suzuki reiterated it is important for currencies to move in a stable manner reflecting fundamentals and excessive FX moves undesirable, while he won't rule out any steps to respond to excessive FX moves and is looking at the background of yen weakening to 152 and 153 against the dollar and not necessarily the levels themselves. Suzuki said 'no comment' on the FX level and government response but stated that FX levels are basically determined by markets and that a weak yen has merits and demerits.
• Japan's top currency diplomat Kanda said recent yen moves are rapid and won't rule out any steps to respond to disorderly FX moves, while he said they are prepared to take necessary actions whenever possible but wouldn't comment on whether overnight forex moves are excessive.
• Japan Chief Cabinet Secretary Hayashi said won't comment on forex levels and currency intervention, but added it is important for currencies to move in a stable manner reflecting fundamentals and that excessive FX volatility is undesirable. Hayashi also stated that he is closely watching FX moves with a high sense of urgency and won't rule out any steps to respond to excessive FX moves.
• South Korea's PM and senior officials in the Presidential Office offered to resign, while President Yoon said he humbly accepts the parliament election result and will renew the administration, according to Yonhap. It was separately reported that the leader of South Korea's ruling party leader resigned following the parliamentary election defeat, according to AFP News Agency.
• Fast Retailing (9983 JT) Q2 (JPY) Operating Income 110.4bln (exp. 118.1bln), Net 88bln (exp. 79bln). FY Guidance: Net 320bln (prev. guided 310bln), Dividend 350/shr (prev. guided 330/shr).
• REUTERS POLL: Chinese 2024 GDP growth seen at 4.6% (prev. 4.6% in Jan poll), 2025 growth seen at 4.4%; Q1 GDP at 4.6%, Q2 5.0% Y/Y, 2024 CPI seen at 0.7% (prev. 1.0% in Jan poll), 2025 CPI at 1.6%. PBoC seen cutting banks' RRR by 25bps in Q3 2024.
• Morgan Stanley upgrades China's 2024 real GGDP target to 4.8% from 4.2%
• China's Foreign Ministry decided to take countermeasures again two US enterprises over arms sales to Taiwan, according to Reuters; Measures taken on general atomic aeronautical systems and General Dynamics land systems (GD), effective April 11th

European bourses, Stoxx600 (U/C), initially traded with little direction, though have succumbed to marginal selling pressure, in tandem with similar price action seen in the US. European sectors are mixed. Energy and Basic Resources take the top spots, lifted by broader strength in underlying commodity prices. Travel & Leisure is found at the foot of the pile. US Equity Futures (ES U/C, NQ U/C, RTY -0.2%) are entirely in the red, with slight underperformance in the economy-linked RTY, post-CPI and ahead of PPI.

Top European News

• BoE's Greene wrote in the FT that markets must stop comparing the UK and the US, as well as noted that inflation persistence is a greater threat for the former than the latter and that rate cuts are a way off. Greene noted that markets now expect the BoE will cut rates earlier and by more than the Fed this year and that UK services inflation remains much higher than in the US, while she added that higher inflation expectations have translated to higher pay growth, by metrics now between 6%-7% in the UK.

FX

• DXY is a touch lower but holding above the 105.00 mark post-CPI print; a dovish ECB today could open up a test of 106 for the index.
• EUR is flat vs. the USD after a tumultuous session yesterday which sent the pair to a low of 1.0728. Price action for the pair will likely be more swayed by the EUR side of the equation due to the ECB. A dovish release could see a test of 1.07 to the downside with the YTD trough at 1.0694.
• GBP is benefitting in today's trade alongside other risk-sensitive currencies but well beneath yesterday's 1.27+ peak.
• JPY is flat vs. the USD but that will be of little consolation to officials in Tokyo after the pair ripped through 152 yesterday, topping out at 153.28. Jawboning overnight has proved futile and as such, intervention speculation is rife.
• Antipodeans are both firmer vs. the USD after a bruising session yesterday. AUD/USD still has some way to go before paring yesterday's heavy losses with interim resistance coming via the 50 and 200DMAs.
• PBoC set USD/CNY mid-point at 7.0968 vs exp. 7.2622 (prev. 7.0959).

Fixed Income

• USTs are contained following Wednesday's significant US CPI-induced sell-off. Today's 108-05 base is half a tick below Wednesday's trough, support limited below and attention still firmly on yields as a return to near 5.0% re-enters the conversation.
• Bunds are under pressure as markets begin to pare ECB rate expectations in the wake of the hot US CPI. Bunds down to 131.41 and the 10yr yield to 2.47% bringing 2.50% into view. The ECB at 13:15 BST / 08:15 ET will dictate price action for today.
• Gilts are pressured and underperforming as the benchmark catches up to the poor US 10yr and FOMC Minutes. Additional weakness may have also been sparked by hawkish commentary from BoE's Greene, who said rate cuts should "still be a way off".
• Italy sells EUR 8.25bln vs exp. EUR 7.0-8.25bln 2.95% 2027, 3.50% 2031 & 4.15% 2039 BTPs.
• Japan sells JPY 815bln 20yr JGBs; b/c 3.05x (prev. 3.01), average yield 1.630% (prev. 1.559%).

Commodities

• Crude holds near recent highs though price action has been contained throughout the European morning; Brent June trades within a 90.35-90.80/bbl parameter. Ahead, the OPEC MOMR will be released today (timing TBC), but this is unlikely to move crude markets.
• Precious metals are mixed following yesterday's slump triggered by the hot US CPI data; XAU sits at the bottom of a USD 2,330.65-2,346.95/oz range.
• Base metals are mixed with the breadth of the market narrow. The sub-forecast Chinese inflation figures overnight did little to affect base western metal prices.

Geopolitics: Middle East

• US Secretary of State Blinken made it clear in a call with Israeli Defence Minister Gallant that the US will stand with Israel against any threats by Iran and its proxies, while they discussed efforts to release all hostages through an immediate ceasefire agreement in Gaza and Blinken reiterated that incidents such as the targeting World Central Kitchen workers must not be repeated.
• US senior general is to visit Israel to coordinate on Iran attack threat with CENTCOM commander Gen. Kurilla expected to meet senior Israeli Defence Force officials and Defense Minister Gallant, according to Axios. Israeli officials said they are preparing for a possible, unprecedented direct attack against Israel from Iranian soil using ballistic missiles, drones and cruise missiles against Israeli targets, while Israel would retaliate with its own direct attack against Iran in such a scenario.
• Saudi Arabia, Qatar, UAE and Iraq's Foreign Ministers spoke by phone last night with the Iranian Foreign Minister to discuss regional tensions, according to Axios's Ravid. The officials contacted the Iranian Foreign Minister after conversations with US President Biden's senior Middle East adviser McGurk who asked them to convey a message to Iran that Iran must refrain from escalation with Israel which could also thwart efforts to reach a ceasefire in Gaza.
• "Israeli Finance Minister: Rafah and Deir al-Balah and Nuseirat must be entered starting today", according to Al Arabiya; "The army is preparing to deepen operations in Rafah".

Geopolitics: Other

• Explosions were heard in Ukraine's Kharkiv with the city being attacked by Russian missiles.
• US bipartisan bill reportedly seeks USD 2.5bln for Philippines defence in the face of Chinese pressure.
• North Korean leader Kim said now is the time to be prepared for war more than ever before, according to KCNA.

US Event Calendar

• 08:30: April Initial Jobless Claims, est. 215,000, prior 221,000
• 08:30: March Continuing Claims, est. 1.8m, prior 1.79m
• 08:30: March PPI Final Demand MoM, est. 0.3%, prior 0.6%
• 08:30: March PPI Final Demand YoY, est. 2.2%, prior 1.6%
• 08:30: March PPI Ex Food and Energy MoM, est. 0.2%, prior 0.3%
• 08:30: March PPI Ex Food and Energy YoY, est. 2.3%, prior 2.0%

Central Bank Speakers

• 08:45: Fed’s Williams Gives Keynote Remarks
• 10:00: Fed’s Barkin Takes Audience Questions
• 12:00: Fed’s Collins Speaks at Economic Club of New York
• 13:30: Fed’s Bostic Participates in Moderated Conversation

DB's Henry Allen concludes the overnight wrap

Markets saw an aggressive selloff yesterday, as another upside surprise in US inflation meant bonds and equities both slumped. That included the biggest daily rise in the 10yr Treasury yield (+18.2bps) since September 2022, while futures priced out a full 25bp rate cut from the Fed by year-end. The main takeaway from the report was a +0.4% monthly print for core CPI in March, contrary to expectations for a slowdown to +0.3%. But the bigger picture is that this is now the third consecutive month that core CPI has been at +0.4%. So it’s getting increasingly difficult to dismiss this as just a temporary bump, and the major concern is that inflation is ending up sticky above the Fed’s target. Indeed, there are increasing echoes of late 2021, when it became apparent that the initial spike in inflation was proving persistent, which in turn laid the groundwork for much more hawkish policy from the Fed. That’s been clear today as well, with investors pushing out the likely timing of rate cuts until later in the year, and pricing in a more hawkish policy stance ahead.

In terms of the details of the report, headline CPI came in at a monthly +0.4% (vs. +0.3% expected), pushing up the year-on-year rate to a 6-month high of +3.5%. Similarly for core CPI, the monthly print was at +0.4% (vs. +0.3% expected), with the year-on-year unchanged at +3.8%. While core goods prices were down (-0.15%), core services (+0.52%) saw fresh persistence. And even though some outliers contributed to this – notably a +2.6% monthly rise in motor vehicle insurance – the Cleveland Fed’s trimmed mean measure (which excludes the biggest outliers) still came in at a strong +0.3%. Keep an eye out for today’s PPI print as well, which will give further details on inputs for March core PCE inflation, as the PCE numbers are what the Fed officially target. But as far as the CPI signal is concerned, the components that feed into core PCE have shown no improvement since the start of the year. Indeed, the trend over recent months has become increasingly concerning, with 3-month core CPI now running at an annualised rate of +4.5%.

This upside inflation surprise has led to a big reassessment about the chance of rate cuts this year, with investors questioning if the Fed can still cut if inflation remains this persistent. In response, yesterday saw futures slash the odds of a rate cut by the June meeting from 60% to just 21%, and July cut pricing falling to around 50%, having been almost fully priced the day before. That pattern was clear over a longer time horizon as well, with a full 25bp cut priced out by the December meeting (down from 66bps to just 41bps). In a report (link here) at the end of last week, our US economists noted that if firmer inflation data prevent the Fed from cutting rates in June or July, the FOMC may then find it difficult to ease rates meaningfully this year, not least as base effects will begin to push up the year-over-year inflation rate in the second half of the year.

We did hear from a couple of Fed officials after the CPI print, who both expressed a degree of concern. Chicago Fed president Goolsbee (non-voter) said that “these first three months of this year, they’re definitely worse” and that “we’re getting to the point where there’s going to be more trade-offs than there were last year”. Meanwhile, Richmond Fed president Barkin (voter) noted that “we’re making a lot of progress but we need to be humble about how easy it is to get there”.

Given all these developments, US Treasuries saw a massive selloff, with the 10yr yield (+18.2bps) moving up to 4.54%. That takes it up to its highest level since mid-November, and is now some way above the 3.88% level it began this year. Yields spiked by c. 15bps following the CPI print and continued to drift slightly higher, with a weak 10yr auction also weighing on Treasuries. This saw bonds issued 3.1bps above the pre-sale yield at 4.56% with the highest primary dealer takedown since November 2022. Meanwhile at the front end, the 2 yr yield (+23.0bps) saw its biggest rise in over a year, moving up to 4.97%, so very close to the 5% mark again. At the same time, there was a sharp rise in real yields, and the 10yr real yield (+14.5bps) was up to 2.14%. Amid the rates repricing, the broad dollar index (+1.05%) posted its strongest day since the regional banking stress last March, and rose to its highest level in almost five months.

The US rates repricing transmitted globally, and investors moved to push back the probability of rate cuts from other central banks. In particular, the likelihood of an ECB cut by June fell back to 82%, down from 91% the previous day. Likewise at the Bank of England, it fell from 74% to 56%, for the Bank of Canada it fell from 78% to 53%, and for the Reserve Bank of Australia it went from 25% to 21%. So it’s clear that investors think that central banks elsewhere are likely to be more cautious as well, and sovereign bond yields saw a noticeable increase more broadly, albeit more muted than the US. For instance in Europe, yields on 10yr bunds (+6.4bps), OATs (+6.4bps), BTPs (+5.4bps) and gilts (+11.7bps) all moved higher. And overnight, the Bank of England’s Greene said in an FT article that UK rate cuts “should still be a way off”.

With inflation not going away, US equities slumped and the S&P 500 fell -0.95%. That also means the index is negative on a 4-week basis again, which just shows how the incredibly fast rally from November to March has stalled. The equity losses were broad, with the equal weighted version of the S&P 500 (-1.64%) seeing its worst day in nearly two months, and there was a particularly noticeable divergence between small-caps and mega-caps. For instance, the small-cap Russell 2000 (-2.52%) saw a very sharp move lower, whereas the Magnificent 7 only fell -0.19%. Meanwhile in Europe, there was a stronger performance that saw the STOXX 600 up +0.15%, but that was still beneath its intraday high, when it had been up +0.75%.

Looking forward, central banks will be in the spotlight again today, as the ECB are making their latest policy decision. It’s widely expected they’ll leave interest rates unchanged. But investors will be focused on the prospect of a cut at the subsequent meeting in June, which has been strongly hinted at by ECB commentary and which market pricing still considers likely, even with the US inflation report yesterday. In their preview (link here), our European economists think the ECB needs more data over the next couple of months to underpin its confidence in price stability, but see a June cut as the clear working assumption, barring a significant shock. In a separate report last week, they argued that while there are limits to how much ECB policy can diverge from the Fed over time, there is nothing to stop the ECB from cutting first or setting its own pace of cuts early on in the easing cycle.

Ahead of the ECB, the Bank of Canada announced their own policy decision yesterday, where they left their policy rate on hold at 5%. That was in line with expectations, and Governor Macklem said afterwards that “The further decline we’ve seen in core inflation is very recent. We need to be assured this is not just a temporary dip.” Yields on 10yr Canadian government debt were up +14.0bps on the day, although the bulk of that increase followed the reaction to the US CPI report, in line with the global move higher in yields.

In other central bank news, yesterday brought the minutes of the March FOMC meeting. These were largely overshadowed by the CPI report but included discussions on the future slowing of QT, saying that “The vast majority of participants […] judged it would be prudent to begin slowing the pace of runoff fairly soon”. It also said that “participants generally favored reducing the monthly pace of runoff by roughly half from the recent overall pace”, and FOMC members favoured reducing the monthly cap on the Treasury runoff, while seeing little need to adjust the (currently non-binding) cap on the runoff of MBS.

Whilst CPI was the main focus in markets yesterday, the other important news was that Brent crude oil prices rose back above $90/bbl yesterday (+1.19% to $90.48/bbl). That followed a Bloomberg report saying that the US believes missile or drone strikes on Israel by Iran or its proxies were imminent, which added to fears about a potential escalation in the Middle East.

Overnight, the bond selloff has continued after the US CPI, with a sharp rise in the 10yr yield in Japan (+8.4bps), Australia (+13.5bps) and New Zealand (+13.0bps). However, we also got the news that Chinese CPI fell to +0.1% in March on a year-on-year basis, beneath the +0.4% reading expected, and down from +0.7% in February. For equities in Asia, the tone has been more mixed, with losses for the Nikkei (-0.41%) and the Hang Seng (-0.76%), alongside gains for the Shanghai Comp (+0.37%), the CSI 300 (+0.03%) and the KOSPI (+0.08%). Looking forward, US equity futures are currently flat, with those on the S&P 500 currently down just -0.01%.

To the day ahead now, and the main highlight will be the ECB’s policy decision, along with President Lagarde’s subsequent press conference. Other central bank speakers include the Fed’s Williams, Barkin, Collins and Bostic, along with the BoE’s Greene. In terms of data, US releases include the PPI reading for March and the weekly initial jobless claims, and elsewhere we’ll get Italy’s industrial production for February.