TradeTheNews.com Staff
TradeTheNews.com
Notes/Observations
- EU GDP data showed for the most part the Region held up in Q4 (Beats: France, Spain; Miss: Germany); Results largely viewed as a result of mechanical reopening on the economy but suggest a firm footing for 2022.
- USD poised for its best week in 7 months on hawkish Fed; recent strong US data; focus turns to ECB and BOE rate decisions next week.
- Companies due to report during the NY morning include Autoliv, Booz Allen Hamilton, Caterpillar, Church & Dwight, Charter Communications, Colgate, Chevron, LyondellBasell, Moog, Phillips 66, Synchrony Financial, VF Corp.
Asia
- Japan Jan Tokyo CPI Y/Y: 0.5% v 0.5%e; CPI (ex-fresh food) Y/Y: 0.2% v 0.3%e.
- Australia Q4 PPI Q/Q: 1.3% v 1.1% prior; Y/Y: 3.7% v 2.9% prior.
- South Korea Dec Industrial Production M/M: +4.3% v -0.3%e; Y/Y: 6.2% v 1.8%e.
- IMF commented on Japan monetary and fiscal policy. It reiterated BOJ must maintain accommodative monetary policy as it did not see Japan CPI hitting 2.0% target. Urged Japan to pull back on emergency pandemic support once the economy’s recovery from the pandemic was firmly in place. Also noted that japan needed to consider raising taxes on property and capital income.
Note: China holiday in focus: Shanghai to close all next week (Jan 31st thru Feb 4th); HK to close Feb Tues-Thru (Feb 1-3rd).
Europe
- UK Foreign Sec Truss (Brexit negotiator) stated that were having constructive talks on the Northern Ireland protocol and wanted to make significant progress by Feb.
- UK Chancellor Sunak said to be accused of blocking plans to invoke Article 16 and stalling progress on the Northern Ireland Protocol.
Americas
- President Biden reportedly told Ukraine President Zelenskiy that a Russian invasion was now virtually certain once the ground froze. Reaffirmed Ukraine of the readiness of the US to respond decisively if Russia further invaded Ukraine.
- US called for a UN Security Council meeting for Monday, jan 31st to discuss build of Russian troops on Ukraine border.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
Indices [Stoxx600 -1.22% at 464.58, FTSE -1.07% at 7,473.43, DAX -1.61% at 15,274.42, CAC-40 -1.37% at 6,927.79, IBEX-35 -1.22% at 8,599.50, FTSE MIB -1.29% at 26,536.00, SMI -0.92% at 12,065.12, S&P 500 Futures -0.07%].
Market Focal Points/Key Themes: European indices open generally lower and then moved further into the red as session progressed; better performing sectors include consumer discretionary and materials; sectors among those leading to the downside are technology and real estate; luxury subsector bolstered by better than anticipated earnings from LVMH; apparel subsector supported as well, in addition to H&M’s results; ConvaTec acquires Triad Life Sciences in the US; focus on CHMP decisions released later in the day; earnings expected during the upcoming US session include Autoliv, Caterpillar, Chevron and Colgate-Palmolive.
Equities
- Consumer discretionary: H&M [HMB.SE] +5.5% (earnings), Electrolux [ELUXB.SE] -5% (earnings).
- Financials: Unicredit [UCG.IT] +0.5% (earnings).
- Industrials: Signify [LIGHT.NL] +12% (earnings), Volvo [VOLVB.SE] -3.5% (earnings), Henkel [HEN3.DE] -8% (prelim results; new structure; buyback), SSAB [SSAB.SE] -0.5% (earnings), Wartsila [WRT1V.FI] -6% (earnings).
Speakers
- Germany Econ Min Habeck saw 2023 GDP growth at 2.3%. Looked to be back at pre-pandemic level in Q2 of 2022.
- Italy Center-Right Party stated that it would vote for Senate Speaker Casellati in Friday's Presidential vote (**Reminder: 5th round of voting in process. Parliament has yet to come to an agreement with a candidate to succeed President Mattarella).
- Russia Foreign Min Lavrov stated that Russia did not want war but will defend its interests. Stated that the West was ignoring Russia's interest but did see some rational elements in US security offers.
- Ukraine Central Bank Gov Shevchenko stated that had enough FX reserves to support UAH currency (Hryvnia).
Currencies/Fixed income
- USD having its best weekly performance in 7 months following the hawkish Fed stance on likely path of interest rates. Greenback also aided by better US data highlighted by the Q4 GDP registering its best annual growth in nearly four decades.
- EUR/USD at 1.1130 by mid-session and continued to lack any momentum on decent EU data. Better GDP data out of France and Spain largely viewed as a result of mechanical reopening on the economy but suggest a firm footing for 2022. Policy divergence between the Fed and ECB has battered the Euro. Focus turns to upcoming Euro Zone CPI data which is expected to confirm that the worst was over for price increases. Inflation data to reinforce ECB dovish stance and avoid any policy errors of tightening too soon.
- Hawkish Fed outlook helping USD/JPY broadly advance in the 115 neighborhood. BOJ Gov Kuroda a tad giddy as the weak yen aids both inflation and export outlook for Japan but kept the G7 rhetoric intact that was watching FX market carefully.
Economic data
- (NL) Netherlands Jan Producer Confidence Index: 9.0 v 10.2 prior.
- (FI) Finland Dec House Price Index M/M: -1.3% v -0.2% prior; Y/Y: 1.9% v 3.2% prior.
- (FR) France Q4 Preliminary GDP Q/Q: 0.7% v 0.5%e; Y/Y: 5.4% v 4.9%e.
- (FR) France Dec Consumer Spending M/M: 0.2% v 0.0%e; Y/Y: -5.1% v -5.2%e.
- (DE) Germany Dec Import Price Index M/M: 0.1% v 1.9%e; Y/Y: 24.0% v 26.2%e (Annual pace moves away from recent 50-year highs).
- (SE) Sweden Q4 GDP Indicator Q/Q: 1.4% v 1.0%e; Y/Y: 6.2% v 5.5%e.
- (SE) Sweden Dec GDP Indicator M/M: 0.3% v 0..3% prior; Y/Y: 7.0% v 6.2% prior.
- (SE) Sweden Dec Unemployment Rate: 7.3% v 7.5% prior; Unemployment Rate (seasonally adj): 8.0% v 8.2%e; Trend Unemployment Rate: 8.2% v 8.3% prior.
- (SE) Sweden Dec Retail Sales M/M: -4.4% v +0.1%e; Y/Y: 3.3% v 9.3%e.
- (SE) Sweden Dec Household Lending Y/Y: 6.8% v 6.6% prior.
- (NO) Norway Dec Retail Sales (includes auto/fuel) M/M: -3.1% v 0.0%e.
- (TR) Turkey Jan Economic Confidence: 100.8 v 98.2 prior.
- (CN) Weekly Shanghai copper inventories (SHFE): 40.4K v 35.1K tons prior.
- (FR) France Dec PPI M/M: 1.0% v 3.9% prior; Y/Y: 17.7% v 17.9% prior.
- (ES) Spain Q4 Preliminary GDP Q/Q: 2.0% v 1.4%e; Y/Y: 5.2 v 4.4%e.
- (CH) Swiss Jan KOF Leading indicator: 107.8 v 107.0 prior.
- (AT) Austria Dec PPI M/M: 1.5% v 1.5% prior; Y/Y: 16.7% v 15.3% prior.
- (SE) Sweden Jan Consumer Confidence: 90.1 v 98.3 prior; Manufacturing Confidence: 121.3 v 126.4prior; Economic Tendency Survey: 107.8 v 116.3 prior.
- (RU) Russia Narrow Money Supply w/e Jan 21st (RUB): 14.38T v 14.39T prior.
- (HK) Hong Kong Q4 Advance GDP Q/Q: 0.2% v 1.0%e; Y/Y: 4.8% v 5.0%e; Annual 2021 GDP Y/Y: 6.4% v 6.6%e.
- (DE) Germany Q4 Preliminary GDP Q/Q: -0.7% v -0.3%e; Y/Y: 1.4% v 1.8%e; GDP NSA (unadj) Y/Y: 1.4% v 1.8%e.
- (EU) Euro Zone Dec M3 Money Supply Y/Y: 6.9% v 6.8%e.
- (IT) Italy Jan Consumer Confidence Index: 114.2 v 116.5e; Manufacturing Confidence: 113.9 v 115.0e; Economic Sentiment: 105.4 v 112.7prior.
- (NO) Norway Jan Unemployment Rate: 2.6% v 2.7%e.
- (IS) Iceland Jan CPI M/M: 0.5 v 0.5% prior; Y/Y: 5.7% v 5.1% prior.
- (PT) Portugal Jan Consumer Confidence Index: -18.7 v -16.4 prior; Economic Climate Indicator: 1.9 v 2.0 prior.
- (EU) Euro Zone Jan Economic Confidence: 112.7 v 114.5e; Industrial Confidence: 13.9 v 15.0e; Services Confidence: 9.1 v 9.6e; Consumer Confidence (final): -8.5 v -8.5 advance.
- (BE) Belgium Q4 Preliminary GDP Q/Q: +0.5% v 2.0% prior; Y/Y: 5.6% v 4.9% prior.
- (IT) Italy Dec PPI M/M: 0.9% v 1.4% prior; Y/Y: 27.8% v 27.3% prior.
Fixed income issuance
- (DK) Denmark sold total DKK220M in 3-month, 6-month, 9-month and 12-month Bills.
- (ZA) South Africa sold total ZAR vs. ZAR1.2B indicated in I/L 2029, 2038 and 2050 Bonds.
- (IN) India sold total INR vs. INR240B indicated in 2028, 2032 and 2061 bonds.
- (IT) Italy Debt Agency (Tesoro) sold total €6.5B vs. €5.5-6.5B indicated rangein 5-year and 10-year BTP bonds.
- Sold €3.0B vs. €2.5-3.0B indicated range in 0.00% Aug 2026 BTP bonds; Avg Yield: 0.50% v 0.19% prior; Bid-to-cover: 1.53x v 1.52x prior (Nov 30th 2021).
- Sold €3.5B vs. €3.0-3.5B indicated range in 0.95% Jun 2032 BTP; Avg Yield: 1.39% v 1.02% prior; bid-to-cover: 1.38x v 1.47x prior.
- (IT) Italy Debt Agency (Tesoro) sold €1.5B vs. €1.0-1.5B indicated range in 0.65% Apr 2029 Floating Rate Note (CCTeu); Avg Yield: 0.08% v 0.02% prior; Bid-to-cover: 1.63x v 1.49x prior.
Looking ahead
- (BE) Belgium Jan CPI M/M: No est v 0.1% prior; Y/Y: No est v 5.7% prior.
- (BR) Brazil Dec Central Govt Budget Balance (BRL): No est v 3.9B prior.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 06:00 (BR) Brazil FGV Inflation IGPM M/M: 2.0%e v 1.3% prior; Y/Y: 17.1%e v 17.7% prior.
- 06:00 (IE) Ireland Dec Retail Sales Volume M/M: No est v 0.6% prior; Y/Y: No est v 16.3% prior.
- 06:00 (PT) Portugal Retail Sales M/M: No est v 2.8% prior; Y/Y: No est v 9.9% prior.
- 06:00 (UK) DMO to sell £2.0B in 1-month, 3-month and 6-month bills (£0.5B, £0.5B and £1.0B respectively).
- 06:30 (IN) India Weekly Forex Reserve w/e Jan 21st: No est v $635.0B prior.
- 06:45 (US) Daily Libor Fixing.
- 07:00 (IN) India announces upcoming bill issuance (held on Wed).
- 07:00 (ZA) South Africa Dec Monthly Budget Balance (ZAR): +42.5Be v -21.8B prior.
- 07:00 (BR) Brazil Nov National Unemployment Rate: 11.7%e v 12.1% prior.
- 07:30 (BR) Brazil Dec Total Outstanding Loans (BRL): No est v 4.575T prior; M/M: 1.0%e v 1.8% prior; Personal Loan Default Rate: No est v 4.3% prior.
- 07:30 (IS) Iceland to sell 7.5% Oct 2022 RIKB bond.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:00 (ES) Spain Debt Agency (Tesoro) on upcoming bond issuance.
- 08:30 (US) Q4 Employment Cost Index (ECI): 1.2%e v 1.3% prior.
- 08:30 (US) Dec Personal Income: 0.5%e v 0.4% prior; Personal Spending: -0.6%e v +0.6% prior; Real Personal Spending (PCE): -1.1%e v 0.0% prior.
- 08:30 (US) Dec PCE Deflator M/M: 0.4%e v 0.6 % prior; Y/Y: 5.8%e v 5.7% prior.
- 08:30 (US) Dec PCE Core Deflator M/M: 0.5%e v 0.5% prior; Y/Y: 4.8%e v 4.7% prior.
- 10:00 (US) Jan Final University of Michigan Confidence: 68.7e b 68.8 prelim.
- 11:00 (EU) Potential sovereign ratings after European close.
- 13:00 (US) Weekly Baker Hughes Rig Count.
- 13:00 (CO) Colombia Central Bank Interest Rate Decision: Expected to raise Overnight Lending Rate by 75bps to 3.75%.
Weekend (Sat release)
- (CN) China Jan PMI Manufacturing (Govt official): 50.0e v 50.3 prior; Non-Manufacturing PMI: 50.5e v 52.7 prior; Composite PMI: No est v 52.2 prior.
- (CN) China Jan Caixin PMI Manufacturing: 50.0e v 50.9 prior.
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