Notes/Observations
- Major European Manufacturing PMI readings (Beats: Euro Zone, Germany, France, UK, Italy; Miss: Spain)
- Spot Silver approaching $30/oz for its highest level since Feb 2013 as retail frenzy inspired from Gamestop continues
Asia:
- China Jan Manufacturing PMI registered its 11th month of expansion (51.5e v 51.9 prior)
- China Jan Caixin PMI Manufacturing registered its 9th month of expansion but lowest since June 2020 (51.5 v 52.6e)
- Australia Jan Final PMI Manufacturing: 57.2 v 57.2 prelim (confirmed 8th month in expansion and highest since Dec 2016)
- Japan Jan Final PMI Manufacturing: 49.8 v 49.7 prelim (confirmed move back into contraction)
- China Overnight Repo Rate fell from recent 5-year highs to 2.24% following another PBoC Liquidity injection
Coronavirus:
- Total global cases 103.0M (+1.5% vs. Friday); total deaths: 2.23M (+1.8% vs. Fri)
Europe:
- ECB’s Lane (Ireland, chief economist): purchase of equities or banking-sector bonds to further loosen monetary policy are not part of the bank’s current toolbox
- Italy President Mattarella said to order Lower House speaker to continue search for new PM; asks for them to report back on Tues (Feb 2nd)
- Reports circulated that Viva party leader Renzi wanted from ECB Chief Draghi to be the next PM. Draghi had been sounded out by both President Mattarella and former PM Renzi
- Moody’s affirmed Germany sovereign rating at at AAA, outlook stable
Americas:
- President Biden expected to meet with a group of Republican Senators on Monday with talks said to be on fiscal stimulus
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 +0.98% at 399.88, FTSE +0.61% at 6,446.44, DAX +1.16% at 13,588.80, CAC-40 +0.94% at 5,449.85, IBEX-35 +0.61% at 7,806.00, FTSE MIB +0.51% at 21,681.50, SMI +0.88% at 10,684.57, S&P 500 Futures +0.87%]
- Market Focal Points/Key Themes: European indices open higher across the board and stayed firmly in the green as the session progressed; improved risk outlook after AstraZeneca announces will deliver more covid vaccine does sooner than expected; better performing sectors lead by technology and materials ; financials and real estate sectors among those biased to the downside; silver miners better performing on retail trader silver activity; reportedly Unilever evaluating potential spin-off of beauty brands; Asos confirms to buy Topshop, Topman; JD Sports acquires DTLR Villa; BP sells stake in its Oman assets; earnings expected during the upcoming US session include Electronic Arts, NXP Semi and Warner Music
Equities
- Consumer discretionary: JD Sports Fashion [JD.UK] +8% (acquisition), Asos [ASC.UK] +4% (confirms acquisitions)
- Energy: Royal Dutch Shell [RDSA.NL] -1% (expected to maintain oil and gas production largely stable until 2030)
- Financials: Swedbank [SWED.A.SE] -5% (earnings), Julius Baer [BAER.CH] -3% (earnings)
- Materials: Fresnillo [FRES.UK] +19% (silver rally)
Speakers
- Ukraine Central Bank (NBU) Jan Minutes: Vote was not unanimous to keep policy steady (8-2)
- India Fin Min Sitharaman stated that FY22 fiscal deficit target seen at 6.8%; To raise INR800B in extra borrowing to fund deficit
Currencies/Fixed Income
- USD held on to recent gains against most pairs
- EUR/USD was trading below the 1.21 level as recent ECB speak seemed to have kept a lid on any appreciation. Analysts did note that the ECB might be effectively out of tools to weaken the euro without hurting other parts of the economy. Upward revisions in Euro Area PMI Manufacturing data had little impact to muster upside momentum for the pair. Key support remains at 1.2000 with resistance at 1.2400.
- GBP/USD was higher in the session aided by perceptions that UK’s coronavirus vaccine rollout gathered pace, raising hopes for an economic recovery. Dealers did slightly push back bets on a BOE rate cut ahead of its meeting Thursday, with a 10-basis-point move now not seen until 2022
Economic data
- (RU) Russia Jan PMI Manufacturing: 50.9 v 50.4e (1st expansion in 4 months)
- (DE) Germany Dec Retail Sales Retail Sales M/M: -9.6% v -2.0%e ; Y/Y: 1.5% v 4.7%e
- (TR) Turkey Jan PMI Manufacturing: 54.4 v 50.8 prior (8th month of expansion)
- (SE) Sweden Jan PMI Manufacturing: 62.4 v 64.7 prior (8th month of expansion)
- (CH) Swiss Dec Real Retail Sales Y/Y: 4.7 v 1.8% prior
- (TH) Thailand Jan Business Sentiment Index: 44.2 v 46.8 prior
- (NL) Netherlands Jan PMI Manufacturing: 58.8 v 57.6e (6th straight expansion)
- (PL) Poland Jan PMI Manufacturing: 51.9 v 51.3e (6th straight expansion)
- (HU) Hungary Jan PMI Manufacturing: 54.9 v 51.2e (4th straight expansion)
- (HU) Hungary Nov Final Trade Balance: €0.8B v €0.8B prior
- (ES) Spain Jan Manufacturing PMI: 49.3 v 50.9e (moves back into contraction)
- (CH) Swiss Jan PMI Manufacturing: 59.4 v 56.8e (6th straight expansion)
- (CZ) Czech Jan PMI Manufacturing: 57.0 v 55.8e (5th straight expansion)
- (SE) Sweden Q4 GDP Indicator Q/Q: 0.5% v 1.0%e; Y/Y: -2.6% v -2.1%e
- (IT) Italy Jan Manufacturing PMI: 55.1 v 52.4e (7th month of expansion)
- (FR) France Jan Final Manufacturing PMI: 51.6 v 51.5e (confirmed 2nd month of expansion)
- (DE) Germany Jan Final Manufacturing PMI: 57.1 v 57.0e (confirmed 7th month of expansion)
- (EU) Euro Zone Jan Final Manufacturing PMI: 54.8 v 54.7e (confirmeds 7th month of expansion)
- (GR) Greece Jan PMI Manufacturing: 50.0 v 46.9 prior (1st expansion in 4 months)
- (NO) Norway Jan PMI Manufacturing: 51.8 v 52.0 prior (5th straight expansion)
- (ZA) South Africa Jan Manufacturing PMI: 50.9 v 50.0e (9th month of expansion)
- (IT) Italy Dec Preliminary Unemployment Rate: 9.0% v 9.0%e
- (CH) Swiss weekly Total Sight Deposits (CHF): 704.6B v 704.4B prior; Domestic Sight Deposits: 637.4B v 636.3B prior
- (UK) Jan Final Manufacturing PMI: 54.1 v 52.9e (confirmed 8th straight expansion)
- (UK) Dec Net Consumer Credit: -£1.0B v -£1.1Be; Net Lending: £5.6B v £5.6Be
- (UK) Dec Mortgage Approvals: 103.4K v 100.0Ke
- (UK) Dec M4 Money Supply M4 M/M: 0.7% v 0.8% prior; Y/Y: 13.4% v 12.9% prior; M4 Ex IOFCs 3M Annualized: 13.7% v 13.3% prior
- (EU) Euro Zone Dec Unemployment Rate: 8.3% v 8.3%e
- (BE) Belgium Dec Unemployment Rate: 5.8% v 6.1% prior
- (DK) Denmark Jan PMI Survey: 42.1 v 41.9 prior (3rd straight contraction)
Fixed income Issuance
- (EU) EFSF opened its book to sell €2.0B in 0% Oct 2027 bonds via syndicate; guidance seen 11bps to mid-swaps
- (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 3-month Bills; Avg Yield: 0.13% v 0.12% prior; Bid-to-cover: 2.00x v 1.96x prior
Looking Ahead
- (EU) Daily ECB Liquidity Stats
- (ZA) South Africa Jan Naamsa Vehicle Sales Y/Y: No est v -10.1% prior
- (RO) Romania Jan International Reserves: No est v $42.5B prior
- 05:30 (DE) Germany to sell total €6.0B in 3-month and 9-month Bubills
- 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €1.0-3.0B in 3-month and 6-month bills
- 06:00 (IL) Israel to sell combined ILS in bonds
- 06:25 (BR) Brazil Central Bank Weekly Economists Survey
- 06:30 (CL) Chile Dec Economic Activity Index (Monthly GDP) M/M: No est v 1.1% prior; Y/Y: -2.3%e v +0.3% prior; Economic Activity (ex-mining) Y/Y: No est v 0.4% prior
- 06:45 (US) Daily Libor Fixing
- 08:00 (BR) Brazil Jan PMI Manufacturing: No est v 61.5 prior
- 08:00 (CZ) Czech Jan Budget Balance (CZK): No est v -367.4B prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:00 (ES) Spain Debt Agency (Tesoro) announces upcoming bond size for issuance
- 08:00 (IN) India announces upcoming bond issuance
- 08:30 (CA) Canada Dec MLI Leading Indicator M/M: No est v 1.4% prior
- 08:50 (FR) France Debt Agency (AFT) to sell €4,4-5.6B in 3-month, 6-month and 12-month bills
- 09:30 (CA) Canada Jan Manufacturing PMI: No est v 57.9 prior
- 09:45 (US) Jan Final Markit Manufacturing PMI: 59.1e v 59.1 prelim
- 09:45 (EU) ECB weekly QE bond buying update
- 10:00 (US) Jan ISM Manufacturing: 60.0e v 60.5 prior; Prices Paid: 75.5e v 77.6 prior
- 10:00 (US) Dec Construction Spending M/M: 0.8%e v 0.9% prior
- 10:00 (CO) Colombia Jan PMI Manufacturing: No est v 51.8 prior
- 11:00 (RU) Russia 2020 Annual GDP Y/Y: No est v 1.3% prior
- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills
- (IT) Italy Jan Budget Balance: No est v -€3.4B prior
- 13:00 (BR) Brazil Jan Trade Balance: -$2.1Be v $0.0B prior; Total Exports: $14.3Be v $18.4B prior; Total Imports: $16.7Be v $18.4B prior
- 17:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 111.2 prior
- 18:00 (KR) South Korea Jan CPI M/M: 0.3%e v 0.2% prior; Y/Y: 0.5%e v 0.5% prior; CPI Core Y/Y: No est v 0.9% prior
- 18:50 (JP) Japan End-Jan Monetary Base: No est v ¥617.6T prior
- 22:30 (AU) RBA Interest Rate Decision: Expected to leave Cash Rate Target unchanged at 0.10% and maintain 3-year Yield Target at 0.10%
- 22:30 (HK) Hong Kong to sell 3-month and 6-month bills
- 22:35 (JP) Japan to sell 10-Year JGB Bonds
