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Notes/Observations

- 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.

Asia

- 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).

Europe

- 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.

Americas

- 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%.

Speakers/fixed income/FX/commodities/erratum

Equities

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.

Equities

- 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).

Speakers

- 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.

Currencies/fixed income

- 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.

Economic data

- (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.

Looking ahead

- (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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