Notes/Observations
- Major European Q4 GDP data beats expectations (France, Germany and Spain )
- European Jan inflation data continues to beat expectations
- China’s Overnight Repo Rate at highest level since March 2015 and above PBOC corridor ceiling of 3.05%; PBoC refutes speculation of rate hike
Asia:
- Japan Jan Tokyo CPI Y/Y: -0.5% v -0.9%e
- Japan Dec Jobless Rate: 2.9% v 3.0%e
- Japan Dec Preliminary Industrial Production M/M: -1.6% v -1.5%e; Y/Y: -3.2% v -3.1%e
- China PBoC injects funds via OMO for 1st time in 4 sessions; PBOC would probable provide support at an appropriate time to address any shortages before the Lunar New Year Holiday
Coronavirus:
- Total global cases 101.4M (+0.6% d/d); Total deaths: (+0.7% d/d)
Europe:
- ECB’s Kazaks (Latvia) stated that no need for a rate cut now as other instruments were better suited. reiterated stance that a rate cut was not off the table if circumstances changed
- Italy Renzi (head of Italia Viva party) said to prefer the option of forming a new political government but would not commit to supporting a fresh mandate for Conte
Americas:
- White House Press Sec Psaki stated that there was no intention to split the coronavirus relief package in order to ease its passage
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 -1.09% at 399.02, FTSE -0.94% at 6,465.06, DAX -1.06% at 13,521.05, CAC-40 -1.07% at 5,451.71, IBEX-35 -1.10% at 7,845.00, FTSE MIB -1.02% at 21,692.50, SMI -1.2% at 10,717.50, S&P 500 Futures -1.15%]
- Market Focal Points/Key Themes: European indices open broadly lower and remained in the red as the session wore on; lack of risk sentiment attributed to speculation of potential regulatory changes after retail-driven volatility; sectors among better performers are telecom and utilites; financials and materials sectors among those leading to the downside; Dr. Martens opens for trade in London; Alstom and Bombardier formally complete merger; reportedly Julus Baer looking to take over Rothchild (note, Baer reports on Monday) expectation for results of CHMP meeting later; earnings expected in the upcoming US session include Atlas Copco, Eli Lilly, Caterpillar and Honeywell
Equities
- Consumer discretionary: H&M [HMB.SE] -2% (earnings)
- Industrials: Daimler [DAI.DE] +1.5% (prelim earnings), SSAB [SSAB.A.SE[ +7% (earnings; discussions with Tata Steel), Polymetal [POLY.UK] -2% (trading update)
- Technology: SAP [SAP.DE] -1% (final earnings)
- Telecom: Nokia [NOKIA.FI] +4% (Robinhood to allow limited trades), Signify [LIGHT.NL] -2% (earnings)
Speakers
- ECB’s Makhlouf (Ireland): Optimistic about economic outlook but uncertainty remained high.. Did not see rate cut coming at this time but remained an option if needed. Reiterated Council stance of keeping close eye on Euro appreciation
- EU’s Dombrovskis (trade chief): Preparing a system for export clarity – Davos comments
- China PBoC refuted speculation that it would raise the SLF Interest Rate
Currencies/Fixed Income
- USD maintained its firm tone and being driven mainly by risk sentiment on markets. Risk aversion flows out of equities helping to keep the greenback steady. Also aiding the USD this week was the prospect that the Fed would not start debating the prospect of reducing asset purchases any time soon.
- EUR/USD was steady despite better European GDP and inflation data. Analyst remained optimistic that growth in the region would be strengthened by EU funding, loose monetary and fiscal policies and the gradual reopening of the global economy
- USD/JPY approached the 105 level as higher US yields helped to weaken the Yen.
- Italy 10-year BTP yield was lower by approx. 2bps as markets remained optimistic about the prospect of a new government being formed
Economic data
- (NL) Netherlands Dec Retail Sales Y/Y: -0.2% v +6.1% prior
- (ZA) South Africa Dec M3 Money Supply Y/Y: 9.5% v 8.2% prior; Private Sector Credit Y/Y: 3.6% v 3.5%e
- (FR) France Q4 Preliminary GDP Q/Q: -1.3% v -4.0%e; Y/Y: -5.0% v -7.6%e
- (FR) France Dec Consumer Spending M/M: 23.0% v 23.7%e; Y/Y: 3.7% v 3.4%e
- (DE) Germany Dec Import Price Index M/M: 0.6% v 0.9%e; Y/Y: -3.4% v -3.2%e
- (FI) Finland Nov Final Trade Balance: -€0.2B v -€0.2B prior
- (NO) Norway Dec Credit Indicator Growth Y/Y: 4.8% v 4.7% prior
- (TR) Turkey Dec Trade Balance: -$B v -$4.6Be
- (DK) Denmark Dec Gross Unemployment Rate: 4.4% v 4.5% prior; Unemployment Rate (seasonally adj): 3.9% v 4.0% prior
- (TH) Thailand Dec Current Account Balance: -$4.5B v -$0.6Be
- (TH) Thailand Dec Trade Balance: $2.8B v $1.9B prior; Exports Y/Y: +4.6% v -3.1% prior; Imports Y/Y: -0.1% v -3.3% prior; Overall Balance of Payments (BOP): $B v $0.4B prior
- (CN) Weekly Shanghai copper inventories (SHFE): 66.6K v 67.3K tons prior
- (FR) France Dec PPI M/M: 0.8% v 1.7% prior; Y/Y: -1.2% v -1.8% prior
- (ES) Spain Q4 Preliminary GDP Q/Q: +0.4% v -1.4%e; Y/Y: -9.1% v -10.8%e
- (ES) Spain Jan Preliminary CPI M/M: +0.1% v -1.0%e; Y/Y: +0.6% v -0.5%e
- (ES) Spain Jan Preliminary CPI EU Harmonized M/M: -0.3% v -1.4%e ; Y/Y: +0.6% v -0.6%e
- (ES) Spain Dec Adjusted Retail Sales Y/Y: -1.5% v -3.9% prior; Retail Sales Y/Y: -0.6% v -5.9% prior
- (CH) Swiss Jan KOF Leading Indicator: 96.5 v 102.0e
- (AT) Austria Q4 Preliminary GDP Q/Q: -4.3% v +12.0% prior; Y/Y: -7.8% v -4.0% prior
- (AT) Austria Dec PPI M/M: 0.4% v 0.3% prior; Y/Y: -1.0% v -1.4% prior
- (HU) Hungary Nov Average Gross Wages Y/Y: 8.6% v 7.2%e
- (RU) Russia Narrow Money Supply w/e Jan 22nd (RUB):13.64 T v 13.69T prior
- (TW) Taiwan Q4 GDP Y/Y: 4.9% v 3.6%e; Overall 2020 Annual GDP Y/Y: 3.0% v 2.6%e
- (HK) Hong Kong Q4 Advance GDP Q/Q: 0.2% v 0.8%e; Y/Y: -3.0% v -2.1%e
- (SE) Sweden Nov Non-Manual Workers Wages Y/Y: 2.0% v 1.9% prior
- (SE) Sweden Dec Household Lending Y/Y: 5.4% v 5.3% prior
- (DE) Germany Jan Unemployment Change: -41.0K v +7.5Ke; Unemployment Claims Rate: 6.0% v 6.1%e
- (DE) Germany Q4 Preliminary GDP Q/Q: 0.1% v 0.0%e; Y/Y: -3.9% v -4.0%e; GDP NSA Y/Y: -2.9% v -3.2%e
- (EU) Euro Zone Dec M3 Money Supply Y/Y: 12.3% v 11.0%e
- (ES) Spain Nov Current Account Balance: €3.3B v €1.3B prior
- (IT) Italy Dec PPI M/M: +0.5% v -0.2% prior; Y/Y: -2.3% v -2.8% prior
- (NO) Norway Central Bank (Norges) Feb Bank Daily FX Purchase (NOK): -1.7B v -1.2Be
- (NO) Norway Jan Unemployment Rate: 4.4% v 4.3%e
- (IS) Iceland Dec Final Trade Balance (ISK): -1.3B v +1.0B prelim
- (CZ) Czech Dec M2 Money Supply Y/Y: 10.5% v 10.7% prior
- (PL) Poland 2020 Annual GDP Y/Y: -2.8% v -2.7%e
- (TR) Turkey Dec Foreign Tourist Arrivals Y/Y: -67.4% v -61.9% prior
- (IT) Italy Dec Hourly Wages M/M: 0.0% v 0.1% prior; Y/Y: 0.6% v 0.5% prior
- (GR) Greece Nov Retail Sales Value Y/Y: -6.9% v +4.6% prior; Retail Sales Volume Y/Y: -7.9% v +4.7% prior
- (BE) Belgium Q4 Preliminary GDP Q/Q: 0.2% v 11.6% prior; Y/Y: -4.8% v -4.3% prior
Fixed income Issuance
- (IN) India sold total INR211.5B vs. INR210B indicated in 2023, 2033, 2035 and 2050 bonds
- (ZA) South Africa sold total ZAR2.0B vs. ZAR2.0B indicated in I/L 2025, 2038 and 2046 Bonds
Looking Ahead
- (EU) Daily ECB Liquidity Stats
- 05:30 (IN) India Dec Fiscal Deficit (INR):
- 06:00 (PT) Portugal Jan Preliminary CPI M/M: No est v -0.1% prior; Y/Y: No est v -0.2% prior
- 06:00(PT) Portugal Jan Preliminary CPI EU Harmonized M/M: No est v -0.3% prior; Y/Y: No est v -0.1% prior
- 06:00 (PT) Portugal Dec Retail Sales M/M: No est v -3.2% prior; Y/Y: No est v -5.1% prior
- 06:00 (PT) Portugal Dec Industrial Production M/M: No est v -5.0% prior; Y/Y: No est v -3.6% prior
- 06:00 (UK) DMO to sell £4.5B in 1-month, 3-month and 6-month bills (£0.5B, £1.0B and £3.0B respectively)
- 06:30 (IN) India Weekly Forex Reserve w/e Jan 22nd: No est v $584.2B prior
- 06:45 (US) Daily Libor Fixing
- 07:00 (ZA) South Africa Dec Trade Balance (ZAR): 30.0Be v 36.7B prior
- 07:00 (ZA) South Africa Dec Monthly Budget Balance (ZAR): +3.7Be v -21.4B prior
- 07:00 (MX) Mexico Q4 Preliminary GDP Q/Q: 3.0%e v 12.1% prior; Y/Y: -5.2%e v -8.6% prior
- 07:00 (CL) Chile Dec Retail Sales Y/Y: 17.5%e v 25.0% prior; Commercial Activity Y/Y: No est v 15.2% prior
- 07:00 (CL) Chile Dec Manufacturing Production Y/Y: -1.5%e v -1.7% prior; Industrial Production Y/Y: No est v -0.7% prior; Total Copper Production: No est v 493.5K prior
- 07:00 (CL) Chile Dec Unemployment Rate: 10.6%e v 10.8% prior
- 07:00 (BR) Brazil Dec PPI Manufacturing M/M: No est v 1.6% prior; Y/Y: No est v 18.5% prior
- 07:00 (IN) India Dec Eight Infrastructure (key) Industries: No est v -2.6% prior
- 07:00 (IN) India 2020 GDP Annual Estimate Y/Y: No est v 6.1% prior
- 07:00 (IN) India announces upcoming bill issuance (held on Wed
- 07:30 (BR) Brazil Dec Nominal Budget Balance (BRL): -78.1Be v -20.1B prior; Primary Budget Balance: -64.2Be v -18.1B prior; Net Debt to GDP Ratio: 62.7%e v 61.4% prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:00 (ES) Spain Debt Agency (Tesoro) announces upcoming upcoming bond issuance
- 08:30 (US) Dec Personal Income: +0.1%e v -1.1% prior; Personal Spending: -0.4%e v -0.4% prior; Real Personal Spending (PCE): -0.6%e v -0.4% prior
- 08:30 (US) Dec PCE Deflator M/M: 0.3%e v 0.0% prior; Y/Y: 1.2%e v 1.1% prior
- 08:30 (US) Dec PCE Core Deflator M/M: 0.1%e v 0.0% prior; Y/Y: 1.3%e v 1.4% prior
- 08:30 (US) Q4 Employment Cost Index: 0.5%e v 0.5% prior
- 08:30 (CA) Canada Nov GDP M/M: 0.4%e v 0.4% prior; Y/Y: -3.1%e v -3.5% prior
- 08:30 (CA) Canada Dec Industrial Product Price M/M: +1.4%e v -0.6% prior; Raw Materials Price Index M/M: 2.5%e v 0.6% prior
- 09:45 (US) Jan Chicago Purchaser Managers Index (PMI): 58.5e v 59.5 prior (58.7 revised)
- 10:00 (US) Dec Pending Home Sales M/M: -0.5%e v -2.6% prior; Y/Y: 20.3%e v 16.0% prior
- 10:00 (US) Jan Final University of Michigan Confidence: 79.2e v 79.2 prelim
- 10:00 (MX) Mexico Dec Net Outstanding Loans (MXN): No est v 4.668T prior
- 10:00 (CO) Colombia Dec National Unemployment Rate: No est v 13.3% prior; Urban Unemployment Rate: 15.0%e v 15.4% prior
- 11:00 (US) Tsy Sec Yellen to meet President Biden and VP Harris to deliver a briefing on the economy
- 11:00 (EU) Potential sovereign ratings after European close
- 13:00 (CO) Colombia Central Bank Interest Rate Decision: Expected to leave Overnight Lending Rate unchanged at 1.75%
- 13:00 (US) Weekly Baker Hughes Rig Count
- 13:00 (US) Fed’s Kaplan at Energy Forum
- 14:00 (AR) Argentina Nov Wages M/M: No est v 4.1% prior
- (MX) Mexico Dec YTD Budget Balance (MXN): No est v -399.3B prior
Sat
- 20:00 (CN) China Jan Manufacturing PMI: 51.5e v 51.9 prior; Non-manufacturing PMI: 55.0e v 55.7 prior; Composite PMI: No est v 55.1 prior
