NEWS / Foreign Exchange

UK Preliminary M4 Money Supply Exceeds Estimates for March

- The European indices are currently trading in negative territory in the session led lower by Societe Generale after denying rumors on Friday about a possible takeover offer from UniCredit, as well as shares of AstraZeneca, which traded lower following the announcement of a $58/share offer for Medimmune in the US, with a total value of $15.2B.

- European government bonds are currently trading higher in the session on short covering following dovish comments made by the ECB??™s Garganas in a newspaper interview. A Greek central bank spokesperson later denied that Garganas made such comments. Gilts are also trading higher today following developments elsewhere.

- In a quiet session on the data front preliminary M4 money supply for the month of March rose above estimates of 0.8% to 1.0% m/m, and above estimates of 12.5% to 12.8% y/y. M4 sterling lending declined by more than expected to ??12.7B in March form ??20.6B in February. BBA mortgage lending fell slightly to ?‚¬5.1B in March from ?‚¬5.2B in February.

- The ECB??™s Drachi said overnight that the ECB must continue to anchor inflation expectations, and must remain vigilant on inflation. Draghi said that monetary policy remains accommodative, and said that the Euro-Zone economy continues to show signs of strength.

- The ECB??™s Constancio, echoing the ECB??™s Draghi, said overnight that there is no reason to alter the ECB??™s main growth scenario. Constancio said that the ECB must remain vigilant on inflation, but noted that the ECB never precommits on rates, and is data dependent. Constancio also said that wage talks are crucial for the ECB??™s view of inflationary risks.

- Front month crude oil futures recently broke into positive territory for the first time in the session following word that EU ministers approved the implementations of further UN sanctions against Iran.