Notes/Observations
- Awaiting the Fed’s policy decision with the main focus on its projection for future interest-rate increases
- Senior US and Chinese officials to meet on Thursday (Note: first one-on-one between high-level officials from both countries since Joe Biden took office on January 20th)
Asia:
- Japan Feb Trade Balance: ¥217.4B v £420.0Be; Exports Y/Y: -4.5% v -0.2%e; Imports Y/Y: 11.8% v +12.0%e
- Senior US Official speaking on China stated that it would not issue joint statement after [March 18-19th] meeting; China meeting was a ‘one-off’, not resumption of dialogue
Coronavirus:
- Total global cases 120.7M (+0.4% d/d); total deaths: 2.7M (+0.4% d/d)
- Japan govt said to consider ending the state of emergency for Tokyo on March 21st
Europe:
- ECB’s Kazimir (Estonia) stated that Euro Area yield gains were not dramatic for now; bond yields must reflect economic fundamentals
Americas:
- S&P affirmed United States sovereign rating at AA+; outlook Stable
- House approved a two-month extension of the Paycheck Protection Program
- Senate Minority leader McConnell predicted that no Republicans would vote in favor of raising taxes to pay for infrastructure plan
- Sec of State Blinken stated that China had been acting more aggressively and repressively in East Asia and South China Sea; Foreign Financial institutions that knowingly conduct significant transactions with those listed in latest US Report were subject to sanctions
- Upcoming US intel report to noted that Russia and Iran used misinformation during the 2020 presidential election
Energy:
- Weekly API Crude Oil Inventories: -1M v +12.8M prior
Speakers/Fixed income/FX/Commodities/Erratum
Equities
- Indices [Stoxx600 -0.30% at 425.52, FTSE -0.30% at 6,783.49, DAX -0.04% at 14,551.40, CAC-40 -0.05% at 6,052.18, IBEX-35 -0.54% at 8,611.00, FTSE MIB +0.08% at 24,279.50, SMI -0.33% at 10,908.90, S&P 500 Futures -0.02%]
- Market Focal Points/Key Themes: European indices open mixed with modest downward bias and stayed under pressure as the session wore on; sectors trading above the pack include industrials and financials; consumer discretionary and real estate sectors trending negative; EMA clears AstraZenca covid vaccine; reportedly Generali looking for major acquisition in Russia; focus on FOMC meeting later in the day; earnings expected in the upcoming US session include Starbucks and Lennar
Equities
- Financials: Raiffeisen [RBI.AT] +1% (earnings)
- Industrials: BMW [BMW.DE] +5% (final earnings; EV targets), Leoni [LEO.DE] +7% (earnings)
- Materials: Ferrexpo [FXPO.UK] -0.5% (earnings)
Speakers
- ECB’s Schnabel (Germany): Strong economic rebound in H2 was possible
- Denmark Central Bank updated its GDP outlook and noted that a rapid recovery was possible when virus restrictions were eased. It cut the 2021 GDP growth forecast from 2.9% to 1.4% while raising the 2022 GDP growth forecast from 3.3% to 4.5%
- Poland Central Bank’s Hardt stated that MPC should rule out Base Rate cut into negative territory as inflation could accelerate faster than predicted. Needed tools to impact the long-end of the yield curve as rising yields were more important than FX rate. QE program in its current shape had obvious limitations
- Russia govt spokesperson reiterated stance to take all necessary steps to hedge against sanctions risks. Russia did not interfere in the latest US election or any other US election
- China Foreign Ministry spokesperson: To state their position with US in upcoming talks; hoped dialogue to put relations back on track. Urged US to realize the high sensitivity of Taiwan issue
- IEA Monthly Oil Report raised its 2021 global oil demand growth from 5.4M bpd to 5.5M bpd. It cautioned that forecasts of a new oil super-cycle were exaggerated and oil price rally had more to do with the “hefty amount of spare production capacity [that] has built up as a result of OPEC+ supply curbs” rather than “a looming supply shortfall. Vaccination rollouts continued and forecasts for economic growth and oil consumption were increasing
Currencies/Fixed Income
- USD held on to recent most of its recent gains ahead of the FOMC rate decision later today as Treasury yields were close to 13-month highs. Dealers noted that the Fed might struggle to convince markets of the sustainability of its ultra-loose policy stance
- Fed was widely expected to maintain its easy-money policies when it announced its decision later on Wed (14:00 ET/1800 GMT). The focus will be on its new economic projections. Dealers noting that any sign that Fed tightening might come sooner than currently expected could weigh on emerging markets
- EUR/USD climbed back above the 1.19 level in quiet trading. Euro on the defensive after the ECB committed to increase the pace of bond buying to keep a lid on rising yields
- Dealers noted that BOE was unlikely to follow the ECB lead and readjust policy to quell rising borrowing costs at Thursday’s policy decision. GBP/USD hovering around the 1.39 level by mid-session
Economic data
- (EU) EU27 Feb New Car Registrations: -19.3% v -24.0% prior
- (ES) Spain Q4 Labour Costs Y/Y: -0.1% v -1.1% prior
- (AT) Austria Feb CPI M/M: +0.5% v -0.8% prior; Y/Y: 1.2% v 0.8% prior
- (ES) Spain Jan Trade Balance: -€1.8B v -€1.1B prior
- (PL) Poland Feb Employment M/M: 0.3% v 0.1%e; Y/Y: -1.7% v -1.9%e
- (PL) Poland Feb Average Gross Wages M/M: 0.6% v 1.1%e; Y/Y: 4.5% v 4.9%e
- (PL) Poland Mar Consumer Confidence: -23.0 v -25.5e
Fixed income Issuance
- (IN) India sold total INR190B vs. INR190B indicated in 3-month, 6-month and 12-month bills
- (LX) Luxembourg opened its to sell EUR-denominated 10-year notes; guidance seen -6bps to mid-swaps
- (GR) Greece Debt Agency (PDMA) opened book to sell EUR-denominated 30-year bond via syndicate; guidance seen +160bps to mid-swaps
- (DK) Denmark sold total DKK3.88B in 2022 and 2031 DGB bonds
Looking Ahead
- 06:00 (EU) Euro Zone Feb Final CPI Y/Y: 0.9%e v 0.9% advance; CPI Core Y/Y: 1.1%e v 1.1% advance; CPI M/M: 0.2%e v 0.2% advance
- 06:00 (EU) Euro Zone Jan Construction Output M/M: No est v -3.7% prior; Y/Y: No est v -2.3% prior
- 06:00 (GR) Greece Dec Unemployment Rate: No est v 16.2% prior
- 06:00 (CY) Cyprus Feb CPI Harmonized M/M: No est v -0.8% prior; Y/Y: No est v -0.8% prior
- 06:00 (EU) Daily Euribor Fixing
- 06:00 (EU) ECB, BOE and SNB hold weekly 7-day and 3-month USD Liquidity Tender
- 06:00 (SE) Sweden to sell combined SEK17.5B in 6-month and 9-month Bills
- 06:00 (UK) DMO to sell £2.5B in 0.625% July 2035 Gilts
- 06:10 (EU) Daily ECB Liquidity Stats
- 06:30 (DE) Germany to sell €1.5B in 0% Aug 2050 Bunds
- 06:30 (PT) Portugal Debt Agency (IGCP) to sell €1.25-1.5B in sell 6-month and 12-month Bills
- 06:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills
- 07:00 (US) MBA Mortgage Applications w/e Mar 12th: No est v -1.3% prior
- 07:00 (PT) Portugal Feb PPI M/M: No est v 2.2% prior; Y/Y: No est v -3.0% prior
- 07:00 (PT) Portugal Jan Current Account Balance: No est v -€0.5B prior
- 07:00 (ZA) South Africa Jan Retail Sales M/M: +0.1%e v -0.8% prior; Y/Y: -2.4%e v -1.3% prior
- 07:00 (CZ) Czech to sell to sell 2024, 2030 and 2040 bonds
- 07:00 (RU) Russia OFZ Bond auction
- 07:45 (US) Daily Libor Fixing
- 08:00 (UK) Weekly PM Question time in House
- 08:30 (US) Feb Housing Starts: 1.562Me v 1.580M prior; Building Permits: 1.750Me v 1.886M prior (revised from 1.881M)
- 08:30 (CA) Canada Feb CPI M/M: 0.7%e v 0.6% prior; Y/Y: 1.3%e v 1.0% prior; Consumer Price Index: 139.2e v 138.2 prior
- 08:30 (CA) Canada Feb Teranet House Price Index M/M: No est v 0.3% prior; Y/Y: No est v 9.6% prior; HP Index: No est v 250.5 prior
- 09:00 (UK) Daily Baltic Dry Bulk Index
- 10:00 (NL) ECB’s Elderson (Netherlands)
- 10:30 (US) Weekly DOE Oil Inventories
- 10:45 (UK) BOE to buy £1.48B in APF Gilt purchase operation (7-20 years)
- 11:00 (MX) Mexico Weekly International Reserve data
- 12:00 (RU) Russia Feb PPI M/M: 1.5%e v 3.5% prior; Y/Y: 8.9%e v 6.7% prior
- 14:00 (US) FOMC Interest Rate Decision: Expected to leave Interest Rates unchanged between 0.00-0.255 range ; Expected to leave Interest Rate on Excess Reserves (IOER) unchanged at 0.10%
- 14:30 (US) Fed Chair Powell holds post rate decision press conference
- 17:00 (BR) Brazil Central Bank (BCB) Interest Rate Decision: Expected to raise Selic Target Rate by 50bps to 2.50%
- 17:45 (NZ) New Zealand Q4 GDP Q/Q: 0.2%e v 14.0% prior; Y/Y: 0.5%e v 0.4% prior
- 20:05 (AU) RBA’s Kent
- 20:30 (AU) Australia Feb Employment Change: +30.0Ke v +29.1K prior; Unemployment Rate: 6.3%e v 6.4% prior; Full Time Employment Change: No est v +59.0K prior; Part Time Employment Change: No est v -29.8K prior; Participation Rate: 66.1%e v 66.1% prior
- 21:00 (CM) China Feb Swift Global Payments (CNY): No est v 2.4% prior
- 23:00 (KR) South Korea Jan M2 Money Supply M/M: No est v 0.4% prior; “L” Money Supply M/M: No est v -0.1% prior
- 23:30 (JP) Japan to sell 3-Month Bills
- (NL) Netherlands holds elections
