Notes/Observations

- ECB said to see no need for drastic action to curb bond yields at this time

- Euro Zone Feb PMI Services saw upward revisions in most the final readings (Beats: Euro Zone, France; Misses: Germany, UK)

- Focus UK budget speech; expected to maintain high spending to support the economy.

Asia:

- Australia Q4 GDP Q/Q: 3.1% v 2.5%e; Y/Y: -1.1% v -1.9%e

- Australia Feb Final PMI Services: 53.4 v 54.1 prelim (confirms 6th month of expansion)

- Japan Feb Final PMI Services: 46.3 v 45.8 prelim (confirms 14th straight contraction

- China Feb Caixin PMI Services registered its 10th month of expansion (: 51.5 v 51.5e

- BOJ Board member Kataoka (Ultra-Dove) stated that was desirable to lower rates to strengthen easing; Personally believed strengthening easing with Yield Curve Control and Policy commitment. Expected CPI to stagnate for prolonged time. BOJ must examine/explain at the March review its policy strategy taking into account it is unlikely to achieve price target. BOJ must respond flexibly if bond yields continue rising, has not reached that stage yet

- China Securities Journal analysts says PBOC may cut the RRR for certain banks in March (aka targeted cut)

Europe:

- Chancellor of the Exchequer Sunak (Fin Min) said to extend furlough pay in upcoming budget speech for UK workers through Sept

- French Banking Federation (FBF) said to seek EU law to move euro clearing from London

Americas:

- Fed’s Brainard stated that the economy was still far from Fed goals and would need patience; Fed would act if inflation rose immoderately, and had the tools to do so

- Fed's Daly (non-voter, dove): recent rise in inflation expectations has been encouraging; a surge in inflation pressures remains unlikely; if policy becomes less accommodative, Fed could change maturity of bond purchases

Energy:

- Weekly API Crude Oil Inventories: +7.4M v +1.0M prior

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 +0.60% at 415.74, FTSE +1.13% at 6,688.75, DAX +0.93% at 14,170.85, CAC-40 +0.86% at 5,859.48, IBEX-35 % at #, FTSE MIB +0.98% at 23,309.50, SMI +0.26% at 10,844.94, S&P 500 Futures +0.64%]

Market Focal Points/Key Themes: European indices open higher across the board and moved further into the green as the session progressed; sectors leading to the upside include financials and industrials; sectors underperforming incle health care and real estate; Micro Focus signs commercial agreement with AWS; Stellantis issues first post-merger report; events expected in the upcoming US session include ExxonMobil investor day, Vivendi’s annual report, and Wendy’s quarterly results

Equities

- Consumer discretionary: Biffa [BIFF.UK] +6% (trading update), PageGroup [PAGE.UK] +1.5% (earnings)

- Financials: HSBC [HSBA.UK] +2% (issuance)

- Industrials: Persimmon [PSN.UK] +3% (earnings)

- Technology: Micro Focus [MCRO.UK] +15% (agreement with AWS), Dialog Semiconductor [DLG.DE] +1% (earnings), Melexis [MELF.BE] -12% (placement)

Speakers

- ECB said to see no need for drastic action to curb bond yields. Members believed economy was manageable with verbal interventions and the flexibility of the bond buying program

- ECB's Weidmann (Germany) stated that extended lockdowns in Q2 would only delay recovery. Domestic economy robust enough for longer weak phase. Reiterated stance that must return to sound fiscal policy after pandemic. German 2021 inflation slightly stronger than expected

- Russia govt spokesperson: New US and EU sanctions are unacceptable; Govt response to be reciprocal

- Some OPEC+ members said to support idea of unchanged output in Apr

Currencies/Fixed Income

- USD was on soft footing as dealers took notice that the recent rise in global bond yields are pausing for the time being. Comments from Fed’s Brainard on Tuesday that the the Fed would act if inflation rose immoderately seemed to have calmed the markets. Central banks appeared to be more concerned about the speed of the move rather than the move higher in yields.

- EUR/USD again held the 1.20 level on Tuesday and tested the 1.21 level during session. Euro supported by upward revisions in most the Feb Final PMI Services readings. Report that ECB saw no need for drastic action to curb bond yields and believing that the believe Euro Area economy was manageable with verbal interventions and the flexibility of the bond buying program

- GBP/USD retested the 1.40 level ahead of the UK budget speech. Sunak ahs to try to balance the need for prolonged aid to stem the damage wrought by the pandemic with calls to control the deficit.

Economic data

- (RU) Russia Feb PMI Services: 52.2 v 52.8e (2nd straight expansion); PMI Composite: 52.6 v 52.3 prior

- (UK) Feb Official Reserves Changes: 1$1.1Bv $0.0B prior

- (NO) Norway Q4 Current Account Balance (NOK): 9.3B v 14.2B prior

- (TR) Turkey Feb CPI M/M: 0.9% v 0.7%e; Y/Y: 15.6% v 15.4%e; CPI Core Index Y/Y: 16.2% v 16.0%

- (TR) Turkey Feb PPI M/M: 1.2% v 0.7%e; Y/Y: 27.1% v 26.8%e

- (ZA) South Africa Feb PMI (whole economy): 50.2 v 51.0e (5th straight expansion)

- (SE) Sweden Feb PMI Services: 62.7 v 59.6 prior (9th month of expansion); PMI Composite: 62.4 v 60.4 prior

- (CH) Swiss Feb CPI M/M: 0.2% v 0.4%e; Y/Y: -0.5% v -0.3%e; CPI Core Y/Y: -0.3% v 0.1%e

- (CH) Swiss Feb CPI EU Harmonized M/M: 0.1% v 0.0% prior; Y/Y: -0.4% v -0.6% prior

- (FR) France Jan YTD Budget Balance: -€21.9B v -€178.1B prior

- (TW) Taiwan Jan Monitoring Indicator: 37 v 34 prior

- (ES) Spain Feb Services PMI: 43.1 v 43.0e (7th straight contraction); Composite PMI: 45.1 v 45.0e

- (HK) Hong Kong Jan Retail Sales Value Y/Y: -13.6% v -11.7%e; Retail Sales Volume Y/Y: -14.5% v -12.5%e

- (NG) Nigeria Feb PMI (whole economy): 52.0 v 50.7 prior (8th month of expansion)

- (IT) Italy Feb Services PMI: 48.8 v 45.7e (7th month of contraction); Composite PMI: 51.4 v 49.2e

- (FR) France Feb Final Services PMI: 45.6 v 43.6e (confirmed 6th straight contraction); Composite PMI: # v 45.2e

- (DE) Germany Feb Final Services PMI: 45.7 v 45.9e (confirmed 5th straight contraction; Composite PMI: 51.1 v 51.3e

- (EU) Euro Zone Feb Final Services PMI: 45.7 v 44.7e (confirmed 6th straight contraction);; Composite PMI: 48.8 v 48.1e

- (IT) Italy Q4 Final GDP Q/Q: -1.9% v -2.0%e; Y/Y: -6.6% v -6.6%e

- (UK) Feb Final Services PMI: 49.5 v 49.7e (confirmed 4th straight contraction); Composite PMI: 49.6 v 49.8e

- (EU) Euro Zone Jan PPI M/M: 1.4% v 1.3%e; Y/Y: 0.0% v -0.1%e

Fixed income Issuance

- (IN) India sold total INR190B vs. INR190B indicated in 3-month, 6-month and 12-month bills

- (IT) Italy Debt Agency (Tesoro) opened book to sell new Apr 2045 green BTP bond via syndicate; guidance seen +15bps to mid-swaps

-- (DK) Denmark sold total DKK5.1B in 2022 and 2031 DGB bonds

- (SE) Sweden sold total SEK15.0B vs. SEK15.0B indicated in 3-month and 12-month bills

- (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 1.375% Aug 2030 bonds; Avg Yield: 1.45% v 0.65% prior; bid-to-cover: 2.34x v 2.96x prior

Looking Ahead

- (UK) Chancellor of the Exchequer Sunak (Fin Min) Budget speech

- 05:10 (EU) Daily ECB Liquidity Stats

- 05:30 (DE) Germany to sell €3.0B in new 0% 2036 Bunds

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills

- 05:30 (GR) Greece Debt Agency (PDMA) to sell 13-week Bills )

- 06:00 (IE) Ireland Feb Unemployment Rate: No est v 5.8% prior

- 06:00 (CZ) Czech Republic to sell combined CZK14B in 2027, 2031 and 2036 bonds

- 06:00 (RU) Russia OFZ Bond auction (if any)

- 06:45 (US) Daily Libor Fixing

- 07:00 (US) MBA Mortgage Applications w/e Feb 26th: No est v -11.4% prior

- 07:00 (BR) Brazil Q4 GDP Q/Q: 2.8%e v 7.7% prior; Y/Y: -1.6%e v -3.9% prior; GDP 4 Quarters Accumulated: -4.2%e v -3.4% prior

- 07:00 (MX) Mexico Feb Vehicle Domestic Sales: No est v 81.2K prior

- 07:00 (UK) Weekly PM Question time in House

- 08:00 (BR) Brazil Feb PMI Services: No est v 47.0 prior; PMI Composite: No est v 48.9 prior

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

- 08:15 (US) Feb ADP Employment Change: +200Ke v +174K prior

- 08:30 (CA) Canada Jan Building Permits M/M: +2.5%e v -4.1% prior

- (PL) Poland Central Bank (NBP) Interest Rate Decision: Expected to leave Base Rate unchanged at 0.10%

- 09:45 (US) Feb Final Markit Services PMI: 58.9e v 58.9 prelim; Composite PMI: No est v 58.8 prelim

- 09:45 (UK) BOE to buy £1.48B in APF Gilt purchase operation (7-20 years)

- 10:00 (US) Feb ISM Services Index: 58.7e v 58.7 prior

- 10:00 (US) Fed’s Harker on equitable workforce discovery

- 10:00 (PL) Poland Central Bank Gov Glapinski post rate decision press conference

- 10:30 (US) Weekly DOE Oil Inventories

- 11:00 (UK) BOE's Tenreyro on negative rate policies

- 13:00 (MX) Mexico Central Bank (Banxico) Quarterly Inflation Report

- 13:00 (US) Fed’s Evans on economic outlook

- 14:00 (US) Federal Reserve Beige Book

- 15:15 (NZ) RBNZ Gov Orr at Waikato University

- 16:00 (NZ) New Zealand Government 7-Month Financial Statements

- 16:00 (KR) South Korea Feb Foreign Reserves: No est v $442.7B prior

- 18:00 (KR) South Korea Q4 Final GDP Q/Q: 1.1%e v 1.1% prelim; Y/Y: -1.4%e v -1.4% prelim

- 18:00 (KR) South Korea CPI M/M: 0.4%e v 0.8% prior; Y/Y: 0.9%e v 0.6% prior; CPI Core Y/Y: 0.7%e v 0.9% prior

- 18:30 (AU) Australia to sell combined A$2.0B in 3-month and 6-month Bills

- 18:50 (JP) Japan Jan Loans & Discounts Corp Y/Y: No est v 7.1% prior

- 19:30 (AU) Australia Jan Trade Balance: A$6.9Be v A$6.8B prior; Exports M/M: 4%e v 3% prior; Imports M/M: -4%e v -2% prior

- 19:30 (AU) Australia Jan Final Retail Sales M/M: 0.6%e v 0.6% prelim

- 20:30 (KR) Bank of Korea (BOK) to sell KRW2.4 T in 2-year Bonds

- 21:00 (SL) Sri Lanka Central Bank (CBSL) Interest Rate Decision: Expected to leave Standing Lending Rate unchanged at 5.50%; Standing Deposit Rate at 4.50%

- 22:30 (TH) Thailand Feb Consumer Confidence: No est v 47.8 prior; Economic Confidence: No est v 41.6 prior

- 22:35 (JP) Japan to sell 30-Year JGB Bonds

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