German economy stagnated in 4Q

Notes/Observations

- German economy stagnated in 4Q. Country likely to continue to flirt with recession in the first half of this year

 

Asia:

- China National Health Commission Coronavirus Update for Feb 13th: New deaths 121 v 254 prior; Additional cases: 5,090 v 15.2K prior

- China Hubei Coronavirus Update (Epicenter) for Feb 13th: Additional cases: 4,823 v 14,840 prior; Daily Death Toll: 116 v 242 prior (*8Note: Numbers of new coronavirus cases reported outside Hubei declined for 10th consecutive day)

- Speculation that PBOC might cut benchmark deposit rates. Article noted that China has room to use fiscal policy to step up virus control and stabilize economic growth

- Fiscal measures may include moderately increasing budget deficit ratio this year, boosting local govt bonds sales and issuing special Treasury bonds when needed

- Japan Econ Min Nishimura reiterated Q4 GDP likely to be weaker Q/Q, citing sales tax hike and typhoon; coronavirus outbreak likely to weigh on Japan's economy

- BOJ’s Maeda: Q4 GDP might have contracted 'sharply' due to overseas slowdown, sales tax hike and impact of natural disasters

- BOK Gov Lee reiterated view that had still room for rate policy but needed to be careful with rate cuts due to side effects. Coronavirus impact on manufacturers had started materializing; negative impact was 'unavoidable'; preparing financial support for companies impacted by outbreak

 

Brexit:

- UK PM Johnson said to have cancelled planned trip to Washington DC in order to drive through his domestic agenda. To likely meet with President Trump in June during a official retreat Camp David for a summit of G7 leaders.

 

Americas:

- Fed reduces size of overnight repo operations and plans smaller term operations. To lower overnight repo operations limit to $100B starting Feb 14th (from $120B)

- Fed’s Williams (moderate, voter): the US economy was very good; Saw 2020 GDP +2.25%

 

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 +0.12% at 431.60, FTSE +0.07% at 7,457.08, DAX +0.26% at 13,779.37, CAC-40 -0.15% at 6,084.01, IBEX-35 +0.32% at 9,942.00, FTSE MIB +0.03% at 24,899.02, SMI +0.29% at 11,124.50, S&P 500 Futures +0.14%]

 

Market Focal Points/Key Themes:

European Indices trade mostly higher, after slightly higher Asian Indices and higher US Index futures.
On the corporate front Renault shares rebound sharply making back earlier losses after a substantial profit miss and a 69% dividend cut; Astrazeneca also rebound from a two month low after missing on the top and bottom line, RBS declines over 5% on earnings and disappointment over the companies cost cutting guidance, while Credit Agricole declines despite a beat on both the top and bottom line.
Meanwhile EDF is a notable gainer on strong earnings and guidance, with Tarkett, and Vivendi also gaining on earnings.
In other news Fielmann falls over 7% following an analyst downgrade, with Metro and Argon gaining on upgrades.
Looking ahead notable earners include Enbridge, Newell Brands and Canopy Growth among others.

 

Equities

- Consumer discretionary: Fielmann [FIE.DE] -6.5% (analyst action)

- Utilities: Electricity of France [EDF.FR] +8% (earnings)

- Financials: Royal Bank of Scotland [RBS.UK] -6% (earnings)

- Healthcare: AstraZeneca [AZN.UK] +2% (earnings)

- Industrials: Renault [RNO.FR] +3% (earnings)

- Technology: Wirecard [WDI.DE] -1.5% (earnings)

- Energy: REC Silicon [REC.NO] +13.5% (earnings)

 

Speakers

- BOE Gov Carney: Would take a policy response if effects from coronavirus called for one. Might need to through two quarters of data due to coronvirus

- German Economic Ministry: Domestic economy was still in weak phase with increased risks from coronavirus effects

- China PBoC: saw impact on coronavirus on domestic economy seen as temporary; would not impede the opening up of the financial sector

 

Currencies/ Fixed Income

- European GDP data continued to put headwinds on the Euro currency as the pair tested its lowest level since April 2017. Continued concerns about a weakening euro zone economy after Germany Q4 GDP showed zero growth and seen as vulnerable if the coronavirus hurt global trade

- GBP/USD was slight lower in the session as markets scaled back expectations about any large-scale fiscal easing under the new Chancellor of the Exchequer (Fin Min) Sunak (On Thursday the GBP was higher back of expectations of higher fiscal spending following the abrupt resignation of Sajid Javid) in the upcoming March budget.

 

Economic Data

- (FI) Finland Dec GDP Indicator : 0.5% v 1.6% prior

- (IN) India Jan Wholesale Prices (WPI) Y/Y: 3.1% v 3.0%e

- (DE) Germany Q4 Preliminary GDP Q/Q: 0.0% v 0.1%e; Y/Y: 0.4% v 0.3%e; GDP NSA (unadj) Y/Y: 0.3% v 0.2%e

- (DE) Germany Jan Wholesale Prices M/M: 0.3% v 0.0% prior; Y/Y: +1.0% v -1.3% prior

- (RO) Romania Q4 Advance GDP (1st of 3 readings) Q/Q: 1.5% v 0.5%e; Y/Y: 4.3% v 3.2%e

- (DK) Denmark Q4 GDP Indicator Q/AQ: 0.3% v 0.3% prior

- (TR) Turkey Dec Current Account Balance: -$2.8B v -$3.0Be

- (CH) Swiss Jan Producer & Import Prices M/M: 0.0% v 0.1% prior; Y/Y: -1.0% v -1.7% prior

- (CN) Weekly Shanghai copper inventories (SHFE): 262.7K v 206.3K tons prior

- (ES) Spain Jan Final CPI M/M: -1.0% v -1.0%e; Y/Y: 1.1% v 1.1%e

- (ES) Spain Jan Final CPI EU Harmonized M/M: -1.4% v -1.4%e; Y/Y: %1.1 v 1.1%e

- (ES) Spain Jan CPI Core M/M: -1.5% v 0.0% prior; Y/Y: 1.0% v 1.0% prior

- (CZ) Czech Q4 Advance GDP (1st of 3 readings) Q/Q: 0.2% v 0.3%; Y/Y: 1.7% v 2.0%e

- (CZ) Czech Jan CPI M/M: 1.5% v 1.0%e; Y/Y: 3.6% v 3.2%e (fastest annual pace since March 2012)

- (HU) Hungary Q4 Preliminary GDP Q/Q: 1.0% v 0.5%e; Y/Y: 4.5% v 4.3%e

- (RU) Russia Narrow Money Supply w/e Feb 7tht (RUB): 10.72T v 10.61T prior

- (CN) China Q4 Preliminary Current Account: $40.1B v $49.2B prior

- (IT) Italy Dec Total Trade Balance: €5.0B v €4.9B prior; Trade Balance EU: -€0.8B v €0.7B prior

- (PL) Poland Q4 Preliminary GDP Q/Q: +0.2% v -0.1%e; Y/Y: 3.1% v 3.0%e

- (PL) Poland Jan CPI M/M: 0.9% v 0.6%e; Y/Y: 4.4% v 4.2%e

- (PT) Portugal Q4 Preliminary GDP Q/Q: 0.6% v 0.4%e; Y/Y: 2.2% v 1.9% prior

- (IT) Italy Dec General Government Debt: €2.409T v €2.446T prior

- (EU) Euro Zone Q4 Preliminary GDP (2nd reading) Q/Q: 0.1% v 0.1%e; Y/Y: 0.9% v 1.0%e

- (EU) Euro Zone Q4 Preliminary Employment Q/Q: 0.3% v 0.1% prior; Y/Y: 1.0% v 0.9% prior

- (EU) Euro Zone Dec Trade Balance (Seasonally Adj): €22.2B v €19.3Be; Trade Balance NSA (unadj): €23.1B v €20.7B prior

- (GR) Greece Jan CPI Y/Y: 0.9% v 0.8% prior; CPI EU Harmonized Y/Y: 1.1% v 1.1% prior

- (CY) Cyprus Q4 Preliminary GDP Q/Q: 0.8% v 0.5% prior; Y/Y: 3.2%v 3.5% prior

 

Fixed Income Issuance

- (ZA) South Africa sold total ZAR1.04B vs. ZAR1.04B indicated in 2025, 2038 and 2050 I/L bonds

 

Looking Ahead

- 05:30 (BE) Belgium Debt Agency (BDA) to sell €0.5B in 2057 and 2066 OLO bonds

- 06:00 (BR) Brazil Feb FGV Inflation IGP-10 M/M: 0.0%e v 1.1% prior

- 06:00 (PT) Portugal Q4 Labour Costs Y/Y: No est v 5.0% prior

- 06:00 (IE) Ireland Dec Trade Balance: No est v €5.5B prior

- 06:30 (TR) Turkey Central Bank TCMB Survey of Expectations: 12-month Survey: No est v 9.5% prior

- 06:00 (UK) DMO to sell £3.0B in 1-month, 3-month and 6-month bills (£0.5B, £1.0B and £1.5B respectively)

- 06:30 (IN) India Weekly Forex Reserve w/e Feb 7th: No est v $471.3B prior

- 07:00 (IL) Israel Jan CPI M/M: -0.3%e v 0.0% prior; Y/Y: 0.45e v 0.6% prior

- 07:00 (IS) Iceland Jan Unemployment Rate: No est v 4.3% prior

- 07:00 (BR) Brazil Dec Economic Activity Index (Monthly GDP)M/M: -0.2%e v +0.2% prior; Y/Y: 1.4%e v 1.1% prior

- 08:00 (RO) Romania Central Bank (NBR) Feb Minutes

- 08:00 (UK) Daily Baltic Dry Bulk Index

- 08:00 (IN) India announces upcoming bill issuance (held on Wed)

- 08:00 (ES) Spain Debt Agency (Tesoro) announcement on upcoming issuance

- 08:30 (US) Jan Retail Sales Advance M/M: 0.3%e v 0.3% prior; Retail Sales (ex-auto) M/M: 0.3%e v 0.7% prior; Retail Sales (ex-auto/gas): 0.3%e v 0.5% prior; Retail Sales (control group): 0.3%e v 0.5% prior

- 08:30 (US) Jan Import Price Index M/M: -0.2%e v +0.3 % prior; Y/Y: 0.2%e v 0.5% prior; Import Price Index (ex-petroleum) M/M: -0.1%e v +0.2rior

- 08:30 (US) Jan Export Price Index M/M: -0.1%e v -0.2% prior; Y/Y: -0.2%e v -0.7% prior

- 09:00 (CA) Canada Jan Existing Home Sales M/M: -0.1%e v -0.9% prior

- 09:15 (US) Jan Industrial Production M/M: -0.2%e v -0.3% prior; Capacity Utilization: 76.8%e v 77.0% prior; Manufacturing Production: -0.1%e v +0.2% prior

- 10:00 (US) Feb Preliminary University of Michigan Confidence: 99.4e v 99.8 prior

- 10:00 (US) Dec Business Inventories: +0.1%e V -0.2% prior

- 11:00 (CO) Colombia Q4 GDP Q/Q: 0.7%e v 0.6% prior; Y/Y: 3.3%e v 3.3% prior; Overall 2020 GDP Y/Y: No est v 2.7% prior

- 11:00 (EU) Potential sovereign ratings after European close (Moody’s on Ireland, Lithunaia; S&P on Hungary, Sweden; Fitch on Hungary; DBRS on Belgium)

- 11:45 (US) Fed’s Mester on payments

- (UR) Ukraine Q4 Preliminary GDP Q/Q: No est v 0.6% prior; Y/Y: No est v 4.1% prior

- 13:00 (US) Weekly Baker Hughes Rig Count

- 14:00 (CO) Colombia Dec Economic Activity Index (Monthly GDP) Y/Y: 3.3%e v 2.9% prior