- France Dec Trade Balance wider than expected amid weak German Industrial Production and UK Halifax housing data, painting effects on consumers from rising interest rates.
- Australia's RBA hikes by 25bps as expected and lifts AUD with hawkish comments in statement.
- China gold reserves register 3rd straight monthly rise; Oil moves higher after multiple outages at refineries.
- Macro focus on Fed Powells comments at Economic Club in Washington later.
- Asia closed mixed with KOSPI outperforming at +0.6%. EU indices are mixed with Italy MIB40 +0.5%. US futures are 0.0% to +0.4%. Gold +0.4%, DXY 0.0%; Commodity: Brent +2.0%, WTI +2.2%, TTF +0.4%; Crypto: BTC +0.7%, ETH +0.7%.
- Upcoming US earnings in premarket from likes of: AGCO, GNW, HTZ, J, LEG, LIN and RCL.
- RBA raised the Cash Rate Target by 25bps to 3.35% (as expected); expected that further increases in interest rates would be needed over the months ahead.
- Japan Dec Labor Cash Earnings register its largest YoY rise since 1997 (4.8% v 2.5%e).
- UK PM Sunak said to be looking to announce a mini-reshuffle of his cabinet; Could be announced as soon as today, Feb 7th.
- Jan BRC Sales LFL Y/Y: 3.9% v 6.5% prior.
- Fed's Bostic (non-voter) stated that the January jobs data raised the possibility of a higher peak rate; Could move back to a 50bps hike if needed.
- House Speaker McCarthy (R-CA) stated that the national debt was the greatest threat to the nation's future; Defaulting on the national debt was not an option and cuts to Medicare and Social Security were off the table.
- Goldman Sachs analyst cuts probability of a US recession in the next 12 months from 35% to 25%.
Indices [Stoxx600 +0.22% at 458.16, FTSE +0.41% at 7,868.92, DAX +0.02% at 15,349.25, CAC-40 +0.42% at 7,869.67, IBEX-35 +0.30% at 9,185.27, FTSE MIB +0.42% at #, SMI +0.01% at 11,284.60, S&P 500 Futures +0.22%].
Market Focal Points/Key Themes: European indices opened mixed but then moved to trade in the green across the board; sectors among those trending higher are energy and financials; sectors trending lower include real estate and industrials; consumer discretionary sector under pressure following results from Carlsberg; oil & gas subsector supported following earnings from BP; banks subsector supported around speculation of higher rates, BNP earnings; Holcim to acquire Duro-Last; focus on upcoming remarks from Fed’s Powell at Economic Club; earnings expected during the upcoming US session include Jacobs, Linde, Qiagen and Fiserv.
- Consumer discretionary: Carrefour [CA.FR] -3.0% (analyst action - cut to underperform at Exane BNP).
- Consumer staples: Carlsberg [CARLB.DK] -2.0% (earnings).
- Energy: BP plc [BP.UK] +4% (earnings; buyback; raises dividend and targets), Siemens Energy [ENR.DE] -3.0% (reports Q1).
- Financials: Credit Suisse [CSGN.CH] -1.0% (Apollo interest in CSFB), BNP Paribas [BNP.FR] +1.5% (reports Q4 - announces €5B buyback).
- Healthcare: Ambu [AMBUB.DK] +16.5% (reports Q1 - beat estimates), Zur Rose Group [ROSE.CH] +3.5% (analyst upgrade).
- Industrials: Airbus [AIR.FR] -1.5% (analyst action - cut to sell at Berenberg), Demant [DEMANT.DK] +9.0% (reports FY22), Nel ASA [NEL.NO] +5.5% (analyst action - raised to overweight at Morgan Stanley).
- Technology: TeamViewer [TMW.DE] +13.5% (reports prelim Q4; guidance above consensus), ams Osram [AMS.CH] -12.0% (reports Q4), Nordic Semiconductor [NOD.NO] -16.5% (reports Q4 - misses estimates).
- Materials: Holcim [HOLN.CH] +1% (acquires Duro-Last for $1.29B), Sasol [SOL.ZA] -6.5% (H1 trading update).
- ECB survey on 12-month Consumers' inflationary expectations unchanged at 5.0%. Survey raised the 3-year inflation outlook from 2.9% to 3.0%.
- Thailand Central Bank said to plan to issue guidelines on sustainable ways to solve household.
- USD holding on to its post payroll job gains as recent Fed speak prompted traders to believe the Fed would need to raise interest rates to tame inflation.
- EUR/USD hovering above the 1.07 level while GBP/USD steadied around the 1.2000.
- USD/JPY moved off the session highs of 132.70 with focus on the upcoming nomination process for the BOJ Gov position.
- AUD/USD was higher after the RBA delivered the expected 25bps rate hike but its forward guidance was deemed to have a hawkish tilt with more rate hikes expected in coming meetings. Dealers noted that the RBA was undermining any thoughts of potential easing later this year or early next year.
- (ZA) South Africa Jan Gross Reserves: $61.9B v $60.6B prior; Net Reserves: $54.8B v $54.4Be.
- (CH) Swiss Jan Unemployment Rate: 2.2% v 2.2%e; Unemployment Rate (adj): 1.9% v 1.9%e.
- (DE) Germany Dec Industrial Production M/M: -3.1% v -0.8%e; Y/Y: -3.9% v -1.6%e.
- (UK) Jan Halifax House Price Index M/M: 0.0% v -1.5% prior; Y/Y: 1.9% v 2.0% prior.
- (FI) Finland Dec Preliminary Trade Balance: -€0.7B v +€0.3B prior.
- (SE) Sweden Jan Budget Balance (SEK): 45.7B v -78.5B prior.
- (NO) Norway Dec Industrial Production M/M: -0.1% v -0.5% prior; Y/Y: 0.0% v 4.5% prior.
- (NO) Norway Dec Manufacturing Production M/M: -0.6% v -0.7% prior; Y/Y: 0.4% v 0.2% prior.
- (HU) Hungary Dec Industrial Production M/M: +3.8% v -0.7% prior; Y/Y: +5.7% v -0.5%e.
- (FR) France Dec Trade Balance: -€14.9B v -€12.0Be; Current Account: -€8.5B v -€6.8B prior.
- (FR) France Dec YTD Budget Balance: -€151.5B v -€159.3B prior.
- (ES) Spain Dec Industrial Production M/M: 0.8% v 0.2%e; Y/Y: +0.6% v -0.6%e; Industrial Output (unadj) Y/Y: -3.4% v -1.5% prior.
- (CH) Swiss Jan Foreign Currency Reserves (CHF): 784.4B v 783.8B prior.
- (AT) Austria Jan Wholesale Price Index M/M: +1.5% v -2.3% prior; Y/Y: 13.2% v 14.4% prior.
- (CZ) Czech Dec Retail Sales (ex-auto) Y/Y: -7.3% v -5.4%e.
- (TW) Taiwan Jan Trade Balance: $2.9B v $3.9Be; Exports Y/Y: -21.2% v -20.3%e; Imports Y/Y: -16.6% v -18.2%e.
- (CN) China Jan Foreign Reserves: $3.184B v $3.155Te; gold portion rise for the 3rd straight month.
- (CZ) Czech Jan International Reserves: $140.0B v $140.0B prior.
- (SG) Singapore Jan Foreign Reserves: $291.7B v $289.5B prior.
- (IS) Iceland Jan Preliminary Trade Balance (ISK): -15.0B v -12.2B prior.
Fixed income issuance
- (ID) Indonesia sold total IDR14.0T vs. IDR14.0T target in Islamic bills and bonds (sukuk).
- (FR) France Debt Agency (AFT) opened its book to sell EUR-denominated 2054 bond via syndicate; guidance seen +11bps to 2053 OAT.
- (PL) Poland opened its book to sell EUR-denominate 10-year and 20-year bonds via syndicate.
- (DE) Germany State owned KfW bank opened its book to sell EUR-denominated 10-year green bond; guidance seen -14bps to mid-swaps.
- (NL) Netherlands Debt Agency (DSTA) opened its book to sell €4.0-6.0B in new July 2033 DSL Bonds via DDA (similar to syndicate); guidance seen +32-35bps to Feb 2033 bond.
- (ZA) South Africa sold total ZAR3.9B vs. ZAR3.9B indicated in 2030, 2032 and 2035 bonds.
- (ES) Spain Debt Agency (Tesoro) sold total €5.06B vs. €4.5-5.5B indicated range in 6-month and 12-month bills.
- (UK) DMO sold £3.5B in 4.125% Jan 2027 Gilts; Avg Yield: % v 3.665% prior; bid-to-cover: 2.36x v 2.18x prior; Tail: 0.7bps v 0.6bps prior.
- (AT) Austria Debt Agency (AFFA) sold total €1.725B vs. €1.725B indicated in 2033 and 2040 RAGB bonds.
- (IL) Israel Jan Foreign Currency Balance: No est v $194.1B prior.
- (UR) Ukraine Jan Official Reserve Assets: No est v $28.5B prior.
- (IT) Bank of Italy Report on Balance-Sheet Aggregates.
- (MX) Mexico Banamex Survey of Economists.
- 05:15 (UK) BOE's Pill (chief economist).
- 05:15 (CH) Switzerland to sell 6-month Bills.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.
- 05:30 (DE) Germany to sell combined €700M in 2026 and 2046 inflation-linked bonds (Bundei).
- 05:30 (BE) Belgium Debt Agency (BDA) to sell combined €2.2B in 3-month and 12-month Bills.
- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).
- 06:00 (IE) Ireland Dec Industrial Production M/M: No est v 6.4% prior; Y/Y: No est v 35.3% prior.
- 06:00 (BR) Brazil Jan FGV Inflation IGP-DI M/M: 0.3%e v 0.3% prior; Y/Y: 3.3%e v 5.0% prior.
- 06:00 (BR) Brazil Central Bank (BCB) Feb Minutes.
- 06:30 (CL) Chile Jan Trade Balance: $2.6Be v $1.9B prior; Exports: No est v $8.9B prior; Imports: No est v $7.0B prior; Copper Exports: No est v $4.3B prior.
- 06:30 (CL) Chile Jan International Reserves: $39.1Be v $39.2B prior.
- 06:30 (EU) ESM to sell €1.1B in 3-month Bills.
- 07:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).
- 07:00 (MX) Mexico Nov Gross Fixed Investment: 5.4%e v 6.2% prior.
- 07:00 (MX) Mexico Jan Vehicle Production: No est v 239.5K prior; Vehicle Exports: No est v 243.4K prior.
- 07:00 (CL) Chile Dec Nominal Wage Y/Y: No est v 10.7% prior.
- 08:00 (PL) Poland Jan Official Reserves: No est v $166.7B prior.
- 08:00 (RU) Russia Jan Official Reserves: No est v $582.0B prior.
- 08:00 (BR) Brazil Jan Vehicle Production: No est v 191.5K prior; Vehicle Sales: No est v 216.9K prior; Vehicle Exports: No est v 31.2K prior.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Dec Trade Balance: -$68.5Be v -$61.5B prior.
- 08:30 (CA) Canada Dec Int’l Merchandise Trade (CAD): -0.5Be v -0.1B prior.
- 08:55 (US) Weekly Redbook LFL Sales data.
- 09:00 (UK) BOE Resuls of FX Turnover Survey.
- 09:30 (TR) Turkey Jan Cash Budget Balance (TRY): No est v -108.3B prior.
- 10:00 (UK) BOE's Cunliffe.
- 12:00 (DE) ECB's Schnabel (Germany).
- 12:30 (US) Fed Chair Powell.
- 12:30 (CA) BOC Gov Macklem.
- 13:00 (US) Treasury to sell 3-Year Notes.
- 14:00 (US) Fed’s Barr on Financial Inclusion.
- 15:00 (US) Dec Consumer Credit: $25.0Be v $27.9B prior.
- 16:30 (US) Weekly API Oil Inventories.
- 18:00 (KR) South Korea Dec Current Account (BOP): No est v -$0.6B prior; Balance of Goods (BOP): No est v -$1.57B prior.
- 18:50 (JP) Japan Dec BOP Current Account: ¥112.0Be v ¥1.8T prior; Adj Current Account: ¥1.236Te v ¥1.9T prior; Trade Balance (BOP): -¥1.115Te v -¥1.5T prior.
- 18:50 (JP) Japan Jan Bank Lending Y/Y: No est v 2.7% prior; Bank Lending (ex-trusts) Y/Y: No est v 3.0% prior.
- 19:00 (AU) Australia to sell A$1.0B in 3% 2033 Bonds.
- 20:00 (PH) Philippines Dec Unemployment Rate: No est v 4.2% prior.
- 20:10 (JP) BOJ Outright Bond Purchase Operation for 1~3 Years, 3~5 Years, 5~10 Years and 10~25Years maturities.
- 20:30 (KR) Bank of Korea (BOK) to sell KRW1.0T in 1-Year Bonds.
- 21:00 (US) State of the Union address.
- 23:30 (IN) India Central Bank (RBI) Interest Rate Decision: Expected to raise Repurchase Rate by 25bps to 6.50%.
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