Notes/Observations
- Inflation readings continue to beat expectations (Sweden the latest)
- Indonesia resumed its easing to aid its growth front amid the pandemic
Asia
- Australia Jan Employment Change: +29.1K v +30.0Ke; Unemployment Rate: 6.4% v 6.5%e
- BOJ Gov Kuroda discussed recent global economic events and its upcoming March policy review with PM Suga
- China PBoC conducts CNY200B in 1-year Medium Term Lending Facility (MLF)with rate unchanged at 2.95%
Coronavirus
- New England Med Journal of Medicine Letters on Pfizer , new data shows 1 shot is 93% effective after 2 weeks and almost as good as 2 shots. Urged a change in policy to single dosing; on Moderna, their vaccine was good against all variants except possibly the South African one
Europe
- BOE’s Ramsden stated that the current policy stance remained appropriate given the current degree of uncertainty. Work on negative rates was contingency planning and did not rule out using negative rates
- Italy PM Draghi govt won vote of confidence in Italian Senate by an overwhelming margin (Note: another one in lower Chamber of Deputies on Thursday)
Americas
- FOMC Jan Minutes noted that longer-term treasury yields rose notably over the period. Pace of recovery and employment had moderated in recent months. Noted economic conditions were ‘currently far from’ longer-run goals; needed to remain accommodative until achieved. Likely to take time before ‘substantial progress’; it’s important to communicate ahead of a purchases shift
Energy
- Weekly API Crude Oil Inventories: -5.8M v -3.5M prior
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
- Indices [Stoxx600 +0.01% at 416.16, FTSE -0.17% at 6,700.15, DAX -0.14% at 6,701.48, CAC-40 -0.07% at 5,761.58, IBEX-35 -0.02% at 8,121.00, FTSE MIB -0.12% at 23,150.50, SMI +0.21% at 10,832.23, S&P 500 Futures -0.24%]
- Market Focal Points/Key Themes: European indices open mixed and failed to gain direction as the session progressed; better performing sectors include materials and technology; telecom and health care sectors among underperformers; ThyssenKrupp terminates Liberty Streel deal; reportedly HeidelbergCement looking to sell Spanish unit; earnings expected in the upcoming US session include Targa Resources, Hormel Foods, Reliance Steel and Dana
Equities
- Consumer discretionary: Nestle [NESN.CH] -1% (earnings)
- Financials: Barclays [BARC.UK] -3% (earnings; buyback), Credit Suisse [CSGN.CH] -1% (earnings)
- Healthcare: Smith & Nephew [SN.UK] -5% (earnings)
- Industrials: Daimler [DAI.DE] +2% (final earnings; initial outlook), Thyssenkrupp [TKA.DE] +1% (ends talks with Liberty Steel), Airbus [AIR.FR] -4% (earnings)
- Telecom: Orange [ORA.FR] -5% (earnings), Bouygues [EN.FR] -1% (earnings)
Speakers
- Norway Central Bank (Norges) Household Expectation Survey cut the12-month inflation outlook from 1.9% to 1.8% while raising the 2-3-year inflation outlook from 3.4% to 3.8%
- Poland Central Bank member Zyzynski stated that interest rates should remain stable in coming quarters; no need to be concern over Polish inflation. Saw preferred EUR/PLN currency level between 4.0-5.0% range
- Poland Central Bank’s Kropiwnicki (hawk) stated that a possible rate hike could be considered in the H2 if concerns about rising inflationary pressures materialized. Believed that further cut in Base rate did not seem advisable at this time
- Indonesia Central Bank (BI) Policy Statement noted that decision to cut rates consistent with low inflation, external stability and efforts to support economy.
- Indonesia Central Bank (BI) Gov Warjiyo pre-rate decision press conference noted that the stimulus and vaccine programs were supporting recovery. Q4 GDP was below expectations but economy continued to recover. Looking to focus on increasing loans and state spending for growth. Reiterated stance that recent IDR currency (Rupiah) appreciation was in line with fundamentals. Rupiah remained undervalued and has room to strengthen
- Taiwan Econ Min Wang Mei-hua stated that it had not received letter from White House on helping with a chip shortage but stressed companies in Taiwan were working ‘hard’ to produce auto chips
Currencies/Fixed Income
- USD maintained its most of its recent gains aided by the recent rise in Treasury yields
- EUR/USD holding above the key 1.20 psychological support level. Focus turns to Friday’s release of Feb PMI data for the major countries. Dealers noted that the Euro Zone was showing surprising resiliency to pandemic restrictions
- Focus on Turkey Rate decision as the CBRT trys to balance high inflation and providing support during coronavirus
Economic data
- (NL) Netherlands Jan Unemployment Rate: 3.6 v 3.9% prior
- (CH) Swiss Jan Trade Balance (CHF): 5.1B v 2.9B prior; Real Exports M/M: +5.7% v -5.9% prior; Real Imports M/M: +1.4% v -6.4% prior; Watch Exports Y/Y: -11.0% v -2.4% prior
- (DK) Denmark Feb Consumer Confidence Indicator: -5.2 v -4.1 prior
- (ID) Indonesia Central Bank (BI) cut the 7-Day Reverse Repo by 25bps to 3.50% (as expected)
- (HK) Hong Kong Jan Unemployment Rate: 7.0% v 6.9%e (highest since 2004)
- (SE) Sweden Jan CPI M/M: -0.4% v -0.4%e; Y/Y: 1.6% v 1.5%e; CPI Level: 338.09 v 338.19e
- (SE) Sweden Jan CPIF M/M: -0.3% v -0.4%e; Y/Y: 1.7% v 1.6%e
- (SE) Sweden Jan CPIF (ex-energy) M/M: -0.7% v -0.9%e; Y/Y: 1.8% v 1.7%e
- (PL) Poland Jan Sold Industrial Output M/M: -5.1% v -5.5%e; Y/Y: 0.9% v 1.0%e
- (PL) Poland Jan PPI M/M: 0.7% v 0.5%e; Y/Y: 0.7% v 0.5%e
- (BE) Belgium Feb Consumer Confidence Index: -9 v -10 prior
Fixed income Issuance
- (ES) Spain Debt Agency (Tesoro) sold total €5.12B vs. €4.5-5.5B indicated range in 2024, 2027, 2031 and 2040 bonds
- Sold €2.04B in 0.0% May 2024 SPGB bonds; Avg yield: -0.410% v -0.458% prior; Bid-to-cover: 2.56x v 2.09x prior (Feb 4th 2021)
- Sold €1.11B in 0.8% July 2027 SPGB bonds; Avg yield: -0.121% v -0.254% prior; Bid-to-cover: 2.29x v 1.91x prior (Jan 21st 2021)
- Sold €1.5B in 0.10% Apr 2031 SPGB bonds; Avg Yield: 0.271% v 0.162% prior; bid-to-cover: 2.12x v 1.65x prior (Feb 4th 2021)
- Sold €466M in 4.9% Oct 2040 SPGB bonds; Avg Yield: 0.752% v 1.497% prior, bid-to-cover: 3.75x v 1.80x prior (Mar 31st 2019)
- (FR) France Debt Agency (AFT) sold total €10.04B vs €9.5-10.5B indicated range in 2024, 2026 and 2029 Bonds
- Sold €4.34B in 0.00% Feb 2024 Oat; Avg Yield: -0.60% v -0.66% prior; Bid-to-cover: 2.33x v 2.35x prior (Jan 21st 2021)
- Sold €2.658B in 0.00% Feb 2026 Oat; Avg Yield: -0.50% v -0.60% prior; Bid-to-cover: 2.60x v 2.10x prior (Jan 21st 2021)
- Sold €3.04B in 0.50% May 2029 Oat; Avg Yield: -0.25% v -0.50% prior; Bid-to-cover: 1.87x v 1.82x prior
- (IE) Ireland Debt Agency (NTMA) sold €750M vs. €750M indicated in 6-month bills; Avg Yield: -0.575% v -0.595% prior; Bid-to-cover: 1.90x v 2.40x prior
Looking Ahead
- (IT) Italian government confidence vote in Lower House
- 05:10 (EU) Daily ECB Liquidity Stats
- 05:30 (HU) Hungary Debt Agency (AKK) to sell bonds
- 05:50 (HU) Hungary Central Bank One-Week Deposit Rate tender
- 05:50 (FR) France Debt Agency (AFT) to sell €1.25-1.75B in I/L 2026, 2036 and 2047 Bonds (Oatei)
- 06:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to leave One-Week Repo Rate unchanged at 17.00%
- 06:00 (IE) Ireland Jan CPI M/M: No est v 0.3% prior; Y/Y: No est v -1.0% prior
- 06:00 (IE) Ireland Jan CPI EU Harmonized M/M: No est v 0.2% prior; Y/Y: No est v -1.0% prior
- 06:00 (PT) Portugal Jan PPI M/M: No est v 0.1% prior; Y/Y: No est v -4.0% prior
- 06:00 (BR) Brazil Feb IGP-M Inflation (2nd Preview): 1.9%e v 2.4% prior
- 06:00 (UK) BOE Saunders
- 06:45 (US) Daily Libor Fixing
- 07:30 (EU) ECB Jan Minutes
- 08:00 (RU) Russia Gold and Forex Reserve w/e Feb 12th: No est v $586.1B prior
- 08:00 (UK) Daily Baltic Dry Bulk Index
- 08:00 (US) Fed’s Brainard
- 08:30 (US) Feb Philadelphia Fed Business Outlook: 20.0e v 26.5 prior
- 08:30 (US) Initial Jobless Claims: 770Ke v 793K prior; Continuing Claims: 4.410Me v 4.545M prior
- 08:30 (US) Jan Housing Starts: 1.660Me v 1.669M prior; Building Permits: 1.680Me v 1.704M prior (revised from 1.709M)
- 08:30 (US) Jan Import Price Index M/M: 1.0%e v 0.9% prior; Y/Y: +0.4%e v -0.3% prior; Import Price Index (ex-petroleum) M/M: 0.4%e v 0.4% prior
- 08:30 (US) Jan Export Price Index M/M: 0.8%e v 1.1% prior; Y/Y: No est v 0.2% prior
- 08:30 (CA) Canada Jan Teranet HPI M/M: No est v 0.6% prior; Y/Y: No est v 9.4% prior; House Price Index: No est v 249.83 prior
- 10:00 (EU) Euro Zone Feb Advance Consumer Confidence: -15.0e v -15.5 prior
- 10:00 (US) Fed’s Bostic
- 10:30 (US) Weekly EIA Natural Gas Inventories
- 11:00 (US) Weekly DOE Oil Inventories
- 11:00 (RU) Russia Jan Unemployment Rate: 6.0%e v 5.9% prior
- 11:00 (RU) Russia Dec Real Wages Y/Y: -0.6%e v +0.2% prior
- 11:00 (RU) Russia Jan Real Retail Sales Y/Y: -3.0%e v -3.6% prior
- 11:15 (DE) ECB’s Schnable (Germany)
- 12:00 (NO) Norway Central Bank (Norges) Gov Olsen annual address
- 13:00 (US) Treasury to sell 30-Year TIPS
- (PE) Peru Q4 GDP Y/Y: No est v -9.4% prior
- 16:00 (KR) South Korea Jan PPI Y/Y: No est v 0.1% prior
- 16:45 (NZ) New Zealand Q4 PPI Input Q/Q: No est v 0.6% prior; PPI Output Q/Q: No est v -0.3% prior
- 17:00 (AU) Australia Feb Preliminary PMI Manufacturing: No est v 57.2 prior; PMI Services: No est v 55.6 prior; PMI Composite: No est v 55.9 prior
- 18:30 (JP) Japan Jan National CPI Y/Y: -0.7%e v -1.2% prior; CPI ex-fresh food (core) Y/Y: -0.6%e v -1.0% prior; CPI ex-fresh food/energy (core-core) Y/Y: 0.0%e v -0.4% prior
- 19:01 (UK) Feb GfK Consumer Confidence: -27e v -28 prior
- 19:30 (JP) Japan Feb Preliminary PMI Manufacturing: No est v 49.8 prior
- PMI Services: No est v 46.1 prior; PMI Composite: No est v 47.1 prior
- 19:30 (AU) Australia Jan Preliminary Retail Sales M/M: +2.0%e v -4.1% prior
- 22:00 (KR) South Korea Q4 Short-Term External Debt: No est v $144.1B prior
- 22:00 (ID) Indonesia Q4 Current Account Balance: $1.3Be v $1.0B prior
- 22:30 (HK) Hong Kong to sell HKD1.2B in 2-year Notes
- 22:30 (JP) Japan to sell 3-Month Bills
