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Notes/Observations
– Eurozone January Final CPI revised 0.1% higher to set at record for Core CPI.
– The US FOMC Minutes trail on markets is relatively muted after its slightly aggressive bias, although there are no surprises of note. The US economic focus on Friday’s PCE reading.
– Geopolitical tensions between the US, Russia and China continue to monopolize macroeconomic attention eve of the anniversary of the war between Russia and Ukraine (today is Defender of the Fatherland Day). NATO Secretary General Stoltenberg has expressed concern about Russia’s nuclear plans, promising to monitor closely. It follows two days after Russia officially suspended participation in the START treaty on nuclear weapons.
– EU earnings season determines equity movements and therefore the performance of EU indices is mixed; FTSE100 lags, MIB40 Italy outperforms.
– Asia ends mixed with Nikkei225 -1.3%. The EU indices are between -0.4% and +0.7%. US futures are between +0.2% and +0.7%. Gold -0.4%, DXY 0.0%; Commodities: Brent +0.5%, WTI +0.6%, TTF -1.6%; Cryptocurrencies: BTC +0.4%, ETH +1.4%.
Asia
– The Bank of Korea (BOK) left its 7-day repo rate unchanged at 3.50% (as expected) for its first break in 11 decisions in the current tightening cycle. To judge whether the base rate needed to hike further, but saw its tightening stance as justified for a considerable time.
– BOK Gov Rhee’s press conference after the rate decision noted that the decision to keep the policy stable was not unanimous. Member Cho Yoon-Je sought a 25 basis point rate hike. The decision was based on the expectation that inflation would decline starting in March. The pause must not be interpreted as a signal indicating that the tightening cycle is over.
– Private Capital Expenditure in Australia Q4 Q/Q: 2.2% vs. 1.1%e.
Americas
– The February FOMC minutes saw all participants agree that further rate hikes are needed to meet employment and employment targets. A few members have called for a 50 basis point hike…
– Williams (voter) of the NY Fed: 2% inflation is a key target; Price stability is an absolute imperative.
Power
– Weekly API Crude Oil Inventories: +9.9 million versus +10.5 million before.
Speakers/Fixed Income/FX/Commodities/Erratum
Actions
Indices [Stoxx600 +0.13% at 462.80, FTSE -0.42% at 7,897.30, DAX +0.36% at 15,455.95, CAC-40 +0.39% at 7,327.76, IBEX-35 +0.33% at 9,203.04, FTSE MIB +0.78% at 27,313.00, SMI -0.34% at 11,262.30, S&P 500 Futures +0.44%].
Market Focal Points/Key Themes: European indices open mixed but took a positive bias during the session; top performing sectors include technology and materials; underperforming sectors include healthcare and financials; Redx to merge with Jounce; Rolls Royce CEO hints at divestments in post-earnings call; earnings expected during the upcoming US session include Moderna, Alibaba, Valeo and Accor.
Actions
– Consumer discretionary goods: Fnac Darty [FNAC.FR] +10.0% (potential stake sale), Bureau Veritas [BVI.FR] +2.0% (reports FY22- beats estimates, leads FY23), Above Steria [SOP.FR] +8.0% (report FY22), ISS [ISS.DK] +3.0% (report FY22 – FY23 guidance), Accor [AC.FR] +1.5% (report FY22 – guidance FY23), Takkt [TTK.DE] +1.0% (report Q4).
– Energy: Eni SPA [ENI.IT] -1.5% (report Q4).
– Financial: Credit Suisse [CSGN.CH] +1.5% (Apollo said it is considering Boston’s first $750 million leveraged financial bet), Axa [AXA.DE] +3.5% (FY22 reports – launches €1.1bn share buyback).
– Healthcare: EssilorLuxottica [EL.FR] -2.5% (reports FY22 – states FY22-26), genmab [GE9.DE] -3.5% (reports FY22 – announces 220,000 share buyback – post close).
– Industrialists: Rolls-Royce [RR.UK] +16.0% (report FY22), Get link [GET.FR] -4.0% (report FY22).
– Technology: Group Auto1 [AG1.DE] -1.0% (report FY22 – FY23 guidance), Fugro [FUR.NL] -5.0% (earnings; acquisition).
– Telecom: WPP [WPP.UK] +4.5% (report FY22 – guidance FY23), Bouygues [EN.FR] +2.5% (report FY22 – guidance FY23), Freenet [FNTN.DE] +2.0% (report Q4 – post closure).
speakers
– Mann of BOE the speech found that more tightening was needed and that any pivot was not forthcoming; Monetary policy had not been aggressive enough. Failure to do enough on rates now risks the worst of both worlds.
– Treasure Section Yellen commented from the G20 that the US was ready to provide an additional $10 billion in economic assistance to Ukraine in the coming weeks; The global economy was in a better position than it was seen months ago.
– NATO Secretary General Stoltenberg he said he saw signs that China was considering supplying weapons to Russia; By closely monitoring Russia on its nuclear weapons.
– Shu Jueting, spokesman for the Chinese Ministry of Commerce (MOFCOM). reiterated position and urged the United States to create good conditions for trade with China.
Currencies/Fixed Income
– The USD moved higher during the session, helped by speculation that the Fed will continue to tighten for longer to combat inflation expectations. The FOMC’s recent February minutes showed that members expected further interest rate hikes to combat stubborn inflation.
– EUR/USD fell below the 1.06 level for a 7-week low despite January EU CPI being revised slightly higher with core remaining stubborn.
– USD/JPY remains below the 135 level ahead of the parliamentary hearing of BOJ government candidate Ueda.
Economic data
– (NO) Norway Jan Unemployment rate trend: 3.4% versus 3.4% previously.
– (NO) Norway January Credit Ratio Growth Y/Y: 5.3% versus 5.5% previously.
– (HU) Hungary Dec Average gross wages Y/Y: 18.1% v 17.0%e.
– (ES) Spain, December, total mortgage loans y/y: -9.8% versus +11.9% previously; Mortgage approvals y/y: -8.8% against +9.3% before.
– (AT) Austria January Final CPI M/M: 0.9% vs. 0.8% prelim; Y/Y: 11.2% versus 11.1% prelim.
– (TW) Taiwan Jan Industrial Production Y/Y: -20.5%v -11.3%e.
– (HK) Hong Kong Gen CPI Composite Y/Y: 2.4% vs. 2.1%e.
– (PL) Poland Jan Unemployment rate: 5.5% against 5.5%e; Q4 Unemployment Rate: 2.9% vs. 3.0% e.
– (ZA) M/M PPI Southern Africa: -0.6%v -0.4%e; Y/Y: 12.7% versus 12.8%e.
– (EU) Eurozone Final January CPI Y/Y: 8.6% vs. 8.5% in advance; Core CPI Y/Y: 5.3% versus 5.2% up (Core at the highest level).
– (CY) Cyprus Jan CPI M/M harmonized: -1.4% versus -0.8% previously; Y/Y: 6.8% versus 7.6% previously.
Fixed income issue
– (SELF) Sweden sold a total of SEK500M versus SEK500M shown in to sell 2026 and 2039 I/L Bonds.
– (IT) Italian debt agency (Treasury) sold €2.0bn against €2.0bn indicated in semi-annual bonds; Average return: % vs. previous 2.822%; Bid-to-cover: xv 1.50x before.
– (IT) Italian debt agency (Treasury) sold 3.0 billion euros against 3.0 billion euros indicated in 12-month bonds; Average Return: % versus previous 3.179%; Bid-to-cover: xv 1.38x previous.
Looking forward
– (RO) Romania Gen M3 Money supply Y/Y: no estimate compared to the previous 6.9%.
– 05:25 (EU) Daily ECB liquidity statistics.
– 05:30 (PL) Poland will sell bonds 2025, 2027 and 2033 (5 tranches).
– 05:30 (HU) Hungary Debt Agency (AKK) to sell bonds (3 tranches).
– 05:45 (UK) Cunliffe of the BOE.
– 06:00 (TR) Central Bank of Turkey (CBRT) interest rate decision: One week repo rate cut 100 basis points to 8.00%.
– 0600 (UK) February CBI Retail Sales Reported: -10e vs -23 previously; Sales reported on total distribution: no previous estimate v -22.
– 06:00 (CZ) Czech Republic to sell Bills.
– 06:00 (RO) Romania to sell combined bonds of RON 1.0 billion in 2026 and 2032.
– 06:45 (US) Daily Libor fixing.
– 07:00 (CA) Canada Feb CFIB Business Barometer: No est v 51.4 prior.
– 08:00 (RU) Russia Gold and Forex Reserve w/e Feb 17: No estimate compared to $589.0 billion before.
– 08:00 (UK) Daily Baltic Dry Bulk Index.
– 08:30 (US) Q4 Preliminary Annualized Q/Q GDP: 2.9% ev +2.9%; Personal consumption: 1.9% iv 2.1% upfront.
– 08:30 (US) Q4 Preliminary GDP Price Index: 3.5% ev +3.5%; Core PCE Q/Q: 3.9% with 3.9% progress.
– 08:30 (US) Initial jobless claims: 200Ke vs. 194K prior; Continuous complaints: 1.70 million against 1.696 million previously.
– 08:30 (USA) Jan Chicago Fed National Activity Index: -0.25ev -0.49 before.
– 09:00 (BR) Brazil Jan Tax Collections (BRL): 250.4Be versus 210.2B previously.
– 10:00 (MX) Central Bank of Mexico (Banxico) February Minutes.
– 10:30 (US) EIA weekly natural gas inventories.
– 10:50 (US) Fed’s Bostic on the Fed’s role in the banking system.
– 11:00 (USA) February Kansas City Fed Manufacturing Activity Index: -2e versus -1 previously.
– 11:00 (US) Weekly DOE oil inventories.
– 11:30 (USA) The Treasury sells 4- and 8-week bonds.
– 12:00 (CA) Canada to sell 10-year bonds.
– 13:00 (US) Treasuries to sell 7-year bonds.
– 14:00 (AR) Argentina December Economic Activity Index (Monthly GDP) M/M: no estimate vs -0.7% previously; Y/Y: 0.9% iv 2.6% previous.
– (AR) February consumer confidence in Argentina: 40.1ev 38.5 before.
– 2:00 pm (USA) Fed’s Daly.
– 6.30pm (JP) Japan January Domestic CPI Y/Y: 4.3% ev 4.0% previous; CPI Ex-Fresh Food (Core) Y/Y: 4.3% iv 4.0% previous; CPI Ex-Fresh Food/Energy (Core-Core) Y/Y: 3.3% iv 3.0% previous.
– 19:01 (UK) February GfK Consumer Confidence: -43e versus -45 before.
– 22:30 (JP) Japan to sell 3-month bonds.
– 23:00 (MY) Malaysia January CPI y/y: 3.7% ev 3.8% previous.
– 23:30 (TW)) Taiwan to sell NT$25 billion in 20-year bonds; Average return: % v 1.880% before, bid-to-cover: xv 1.22x before (September 27, 2022).
– (JP) Ueda of the BOJ in Parliament.
