Last checked at 
* European shares up flat
* Focus on U.S. CPI data, earnings
* Givaudan, Avanza, Hays rise after updates
April 13 - Welcome to the home for real-time coverage of
markets brought to you by Reuters reporters. You can share your
thoughts with us at markets.research@thomsonreuters.com
RETURN TO OFFICE GETS DELAYED- AGAIN! (1105 GMT)
With the euro zone facing a third wave of COVID-19
infections and more European governments signalling that they
might extend restriction measures, it comes as no surprise that
people are starting to push back their expectations for when
they will return to the office.
According to a Morgan Stanley's survey, those expectations
for the five richest European countries have now shifted from
June to July.
The one exception though is the UK, where July estimates
remained unchanged, as infection rates fell, while the
vaccination programme is progressing.
As a result of the above uncertainties, office stocks are
seen as rangebound and interest rate sensitive, the bank says.
"We have very few office stocks on an Overweight rating as a
result," they add, as working from home is "a medium-term
headwind to sentiment and rental growth in offices."
Here's a list of headlines on the state of COVID
restrictions:
Dutch face prospect of extended lockdown amidst rising
infections
Britain offers all over-50s first COVID-19 shots, beats
target
Top German health official says lockdown of two to four
weeks is needed
(Joice Alves)
*****
FED TO DISCUSS TAPERING BY SEPTEMBER? (1000 GMT)
All eyes are on the U.S. inflation data, which is expected
to signal where the Fed stands in terms of the interest rate
cycle, but most economists already have an idea about timing.
Unicredit recalls that James Bullard was the first Fed
official to link the timing of tapering to the vaccination
campaign, saying yesterday that the central bank will consider
reducing its bond purchase program when 75% of Americans are
vaccinated.
At the current seven-day average rate of vaccinations, the
date when 75% of the U.S. population will have received two
vaccine doses "is around late July," Unicredit economists say.
These numbers are consistent with the "assumption that the
Fed will start discussing tapering in August/September this
year" they add.
"With the timing of when the Fed initiates its rate hike
cycle more likely to fall into the years 2022 to 2023 in our
view," according to ING economists.
They see "housing-related inflation components adding to the
push higher in inflation towards 4% over the summer and
crucially keeping it closer to 3% for longer."
This data should make "the Fed's current forward guidance of
not raising rates before 2024 increasingly stretched," they say.
(Stefano Rebaudo)
*****
BANKS: TOP OVERWEIGHT FOR FIRST TIME SINCE MAY 2018 (0931
GMT)
With bond tantrum and inflation fears mounting to become the
biggest tail risks in BofA's latest fund manager survey, it may
be of little surprise that banks are gaining in popularity.
According to the survey, long banks is at a three year high
with the sector becoming the most overweight for the first time
in nearly three years at the expense of sectors like utilities
which tend to prosper in times of economic uncertainty.
"Allocation to banks increased 6ppt this month to a net 30%
overweight, #1 FMS sector overweight for first time since
May’18," BofA notes.
That doesn't mean however that from now on it's necessarily
going to be plain sailing for the sector, as contrarians could
look at taking some profit out of its recent gains.
"Bearish contrarians playing 'peak EPS' should sell
commodities, banks & tech," BofA says.
(Danilo Masoni)
*****
STOXX STAYS BELOW RECORD PEAK (0741 GMT)
European shares started on a cautions footing ahead of the
U.S. CPI data later on and the start tomorrow of the earning
season in the world's largest economy.
The pan-regional STOXX 600 benchmark was last 0.3% higher
but it remained below its recent record peak, while the picture
elsewhere was mixed, as most investors stayed on the sidelines.
Moves in sectors weren't particularly meaningful too with
price changes below 1% in either direction.
Givaudan stood out with a gain of more than 3%
after the Swiss fragrance and flavour maker reported strong Q1
sales and confirmed its mid-term targets.
Among top movers were Swedish financial services firm Avanza
and UK-based recruitment company Hays, up
5.6% and 3.5% respectively after solid updates.
Here's you opening snapshot:
(Danilo Masoni)
*****
CALM BEFORE THE CPI (0703 GMT)
Today's focus is squarely on U.S. March inflation data which
is expected to show a rise to 2.5%. Obviously the jump is down
to base effects, especially from last year's oil price collapse
which markets are fully aware of. The question is how bond
markets react to a figure significantly above-forecast.
Before the data, a degree of calm has settled in. The
greenback is up from three-week lows and 10-year Treasury yields
are up around two basis points, albeit almost 10 bps off recent
14-month highs. European and U.S. equity futures have eased,
while volatility gauges languish at pre-pandemic lows.
Earlier, buoyant Chinese trade data highlighted the global
recovery continues to gather steam, although gains in Chinese
shares were capped by worries of tighter policy.
There's some anxiety too what sort of results U.S. banks
will report, starting Wednesday; U.S. earnings are seen rising
25% (and 47.4% in Europe) so potential for disappointment is
high.
In corporate news, dealmaking continues apace. Asian food
delivery firm Grab is eyeing a $40 billion valuation by merging
with a U.S.-based SPAC, while Microsoft is buying artificial
intelligence firm Nuance for about $16 billion.
Several Fed speakers be on the wires again on Tuesday,
presumably helping sooth market nerves on inflation and the
prospect of tapering.
Finally, another U.S. Treasury auction -- of 30-year debt --
after a sales of 10- and three-year paper went off smoothly on
Monday, albeit with slightly higher yields.
Key developments that should provide more direction to
markets on Tuesday:
* China's exports grew at a robust pace in March in yet
another
boost to its economic recovery, while import growth surged to
the highest in four years
* Britain's economy grew by 0.4% on the month in February
* Russian foreign minister Lavrov in Teheran
* Fed speakers: Philadelphia President Patrick Harker 1600
GMT. At
Minneapolis event, speakers include San Francisco Fed President
Mary Daly, Atlanta Fed President Raphael Bostic, Bank of Kansas
City President Esther George, Cleveland Fed President Loretta
Mester and Boston Fed President Eric Rosengren 1600 GMT
* Auctions: U.S. 30-year bond; Italian medium-long bonds; UK
50-year gilts
* UK retail sales BRC/Feb GDP/trade balance/industrial
output
* German ZEW
* U.S. CPI March
(Danilo Masoni)
*****
EUROPEAN SHARES SEEN FLAT BEFORE U.S. DATA (0632 GMT)
European shares are seen opening little changed today ahead
of the release of critical U.S. CPI data for March, although
shares in Asia found support earlier by strong China trade data.
Futures on the EuroSTOXX50, FTSE and DAX indices were last
trading between a rise of 0.05% and a fall of 0.1%, while U.S.
futures eased slightly.
(Danilo Masoni)
*****
