Notes/Observations
- Cautious risk-on sentiment despite concerns over the economic impact of the coronavirus
- UK inflation accelerates in Jan aided by base-effect from cap on energy bills but remains below BOE target
Asia:
- China National Health Commission Coronavirus Update for Feb 18th: 1.7K additional cases v 1.9K prior; Additional death 136 v 98 prior
- China Hubei province coronavirus update for Feb 18th: 1.7K additional cases v 1.8K prior, Additional deaths 132 v 93 prior
- China govt policy adviser Zhang Yansheng: China may adjust 2020 GDP growth target due to coronavirus [in line with prior speculation
- Japan Jan Trade Balance: -¥1.3T v -¥1.7Te as Exports registered its 14th consecutive decline but best reading since July (-2.6% v -7.0%e)
Brexit:
- EU27 draft document on UK trade negotiation left open the possibility of an extension for the transition period beyond the end of 2020
Americas:
- US State Dept imposed restrictions and new requirements on 5 Chinese media outlets operating in the US including Xinhua and the China Daily. Designated the five Chinese state media outlets as “foreign missions,” indicating that they would be treated as arms of the Chinese government.
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 +0.64% at 433.08, FTSE +0.78% at 7,439.25, DAX +0.40% at 13,735.99, CAC-40 +0.63% at 6,094.97, IBEX-35 % at #, FTSE MIB +0.54% at 25,360.64, SMI +0.74% at 11,228.50, S&P 500 Futures +0.23%]
- Market Focal Points/Key Themes: European indices in the green following Asia indices up and slightly higher US futures. Hapag-Lloyd shares trading higher after Q4 earnings results, with average freight and transport volume increasing y/y. Puma jumps following strong Q4 earnings and guiding FY20 constant currency revenues to increase 10% y/y. Adidas rises in sympathy despite stating that business activity in China is down 85% y/y since Chinese New Year (January 25). Deutsche Telekom, Valora, Covestro, Takkt and Elringklinger also up on earnings results. Ageas drops after missing on bottom line Q4 estimates. Other decliners following earnings include Campari, Sulzer, ASRN, Fugro, Plastic Omnium, Gerresheimer, Telefonica Deutschland, Scout24 and Atos. International Consolidated Airlines up after Qatar Airways increased their equity stake in the company to 25.1% from 21.4%. Notable earners today include DISH Network, Owens Corning and Sonic Automotive.
Equities
- Consumer discretionary: Puma [PUM.DE] +9% (earnings), IAG [IAG.UK] +1.5% (Qatar Airways raises stake), Plastic Omnium [POM.FR] -3.5% (earnings)
- Materials: Covestro [1COV.DE] +3% (earnings; initial outlook)
- Industrials: Hapag-Lloyd [HLAG.DE] +5% (earnings), Gerresheimer [GXI.DE] -3.5% (earnings)
- Technology: ADVA Optical [ADV.DE] -12% (earnings)
- Telecom: Deutsche Telecom [DTE.DE] +3.5% (earnings)
Speakers
- Italy PM Conte: Belgium proposal on EU budget is not adequate (**Reminder: EU Leaders hold special summit for 2021-27 budget on Thursday, Feb 20th)
- Italy Fin Min Gualtieri: Coronavirus could cut GDP target by 0.6% (**Note: Italy govt 2020 GDP growth forecast currently stands at 0.6%)
- EU advisor De Rynck: Northern Ireland must apply EU customs code and comply with EU standards in goods
- German Association of Chambers of Trade and Industry (DIHK) saw 2020 GDP growth at 0.7% and noted that the country was far away from any upturn
- Turkey President Erdogan: Military operation in Idlib only a matter of time
- China PBoC and Finance Ministry officials would not be attending the upcoming G20 finance minister meeting in Riyadh scheduled for Feb 22-23rd citing coronavirus concerns
- China said to have made inquiry on US wheat for purchases (in-line with phase-1 trade agreement). **Reminder: On Feb 17th reports circulated that China was considering starting purchases of US farm goods by early March to show its commitment to phase one trade deal
Currencies/Fixed Income
- (DK) Denmark sold total DKK2.74B in 2025 and 2029 DGB bonds
Economic Data
- (FI) Finland Jan CPI M/M: -0.3% v +0.1% prior; Y/Y: 1.0% v 0.9% prior
- (ZA) South Africa Jan CPI M/M: 0.3% v 0.4%e; Y/Y: 4.5% v 4.6%e
- (ZA) South Africa Jan CPI Core M/M: 0.1% v 0.2%e; Y/Y: 3.7% v 3.8%e
- (SE) Sweden Jan CPI M/M: -1.4% v -1.1%e; Y/Y: 1.3% v 1.7%e; CPI Level: 332.82 v 334.03e
- (SE) Sweden Jan CPIF M/M: -1.5% v -1.2%e; Y/Y: 1.2% v 1.6%e
- (SE) Sweden Jan CPIF (ex-energy) M/M: -1.4% v -1.2%e; Y/Y: 1.6% v 1.9%e
- 04:00 (EU) Euro Zone Dec Current Account Balance: €32.6B v €32.4B prior
- (PL) Poland Dec Employment M/M: 0.7% v 1.3%e; Y/Y: 1.1% v 2.2%e
- (PL) Poland Jan Average Gross Wages M/M: -5.7% v -5.8%e; Y/Y: 7.1% v 7.0%e
- (UK) Jan CPI M/M: -0.3% v -0.4%e; Y/Y: 1.8% v 1.6%e (highest annual pace since July); CPI Core Y/Y: 1.6% v 1.5%e; CPIH Y/Y: 1.8% v 1.7%e
- (UK) Jan RPI M/M: -0.4% v -0.6%e; Y/Y: 2.7% v 2.6%e; RPI-X (ex-mortgage Interest Payments Y/Y: 2.8% v 2.6%e; Retail Price Index: 290.6 v 290.2e
- (UK) Jan PPI Input M/M: +0.9% v -0.4%e; Y/Y: +2.1% v -0.1%e
- (UK) Jan PPI Output M/M: 0.3% v 0.1%e; Y/Y: 1.1% v 1.0%e
- (UK) Jan PPI Output Core M/M: 0.1% v 0.1%e; Y/Y: 0.7% v 0.8%e
- (UK) Dec House Price Index Y/Y: 2.2% v 2.5%e
- (IT) Italy Dec Current Account Balance: €4.8B v €4.7B prior
- (GR) Greece Dec Current Account: -€0.5B v -€1.7B prior
- (EU) Euro Zone Dec Construction Output M/M: -3.1% v +0.7% prior; Y/Y: -3.7% v +1.4% prior
Fixed Income Issuance
- (DK) Denmark sold total DKK2.74B in 2025 and 2029 DGB bonds
Looking Ahead
- (IT) Israel Feb 12-month CPI Forecast: No est v 1.0% prior
- 05:30 (DE) Germany to sell €1.5B in 1.25% Aug 2048 Buxel
- 05:30 (PL) Portugal Debt Agency (IGCP) to sell 3-month and 12-month Bills
- 06:00 (PT) Portugal PPI M/M: No est v -0.6% prior; Y/Y: No est v -1.6% prior
- 06:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to cut One-Week Repo Rate by 50bps to 10.75%
- 07:00 (US) MBA Mortgage Applications w/e Feb 14th: No est v 1.1% prior
- 07:00 (UK) Weekly PM question time in House of Commons
- 07:00 (RU) Russia to sell OFZ bonds
- 07:45 (US) Goldman Economist Chain Store Sales
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:10 (US) Fed’s Bostic (dove, non-voter)
- 08:30 (US) Jan PPI Final Demand M/M: 0.1%e v 0.1% prior; Y/Y: 1.6%e v 1.3% prior
- 08:30 (US) Jan PPI Ex Food and Energy M/M: 0.2%e v 0.1% prior; Y/Y: 1.3%e v 1.1% prior
- 08:30 (US) Jan PPI Ex Food, Energy, Trade M/M: 0.1%e v 0.1% prior; Y/Y: No est v 1.5% prior
- 08:30 (US) Jan Housing Starts: 1.428Me v 1.608M prior; Building Permits: 1.450Me v 1.420M prior (revised from 1.416M)
- 08:30 (CA) Canada Jan CPI M/M: 0.2%e v 0.0% prior; Y/Y: 2.3%e v 2.2% prior; Consumer Price Index: 136.8e v 136.4 prior; CPI Core- Median Y/Y: 2.2%e v 2.2% prior; CPI Core- Common Y/Y: 2.0%e v 2.0% prior; CPI Core- Trim Y/Y: 2.2%e v 2.1% prior
- 08:30 (US) Fed’s Mester (hawk, voter) at forum
- 08:55 (US) Weekly Redbook LFL Sales data
- 09:00 (BE) Belgium Feb Consumer Confidence Index: No est v -6 prior
- 14:00 (US) FOMC Jan Minutes
- 16:00 (KR) South Korea Jan PPI Y/Y: No est v 0.7% prior
- 16:30 (US) Weekly API Oil Inventories
- 11:45 (US) Fed’s Kashkari (dove, voter)
- 13:30 (US) Fed’s Kaplan (dove, voter)
- 14:00 (US) FOMC Jan Minutes
- 14:00 (US) FOMC Jan Minutes 16:30 (US) Weekly API Crude Oil Inventories
- 16:30 (US) Fed’s Barkin (hawk, non-voter) on monetary policy framework
- 16:45 (NZ) New Zealand Q4 PPI Input Q/Q: No est v 0.9% prior; PPI Output Q/Q: No est v 1.0% prior
- 19:30 (AU) Australia Jan Employment Change: +10.0Ke v +28.9K prior; Unemployment Rate: 5.2%e v 5.1% prior; Full Time Employment Change: No est v -0.3K prior; Part Time Employment: No est v +29.2K prior; Participation Rate: 66.0%e v 66.0% prior
- 20:05 (NZ) New Zealand to sell NZD200M in 2.75% 2037 Bonds
- 22:00 (KR) South Korea Q4 Short-Term External Debt: No est v $133.B prior (revised from $133.8B) – 22:35 (JP) Japan to sell 20-Year JGB Bonds
