Notes/Observations

- Focus on FOMC rate decision. Fed expected to signal plans for their first interest rate hike since 2018.

- European stocks rally the most in six weeks ahead of FOMC decision.

- Companies due to report during the NY morning include Abbott Labs, ADP, Anthem, Amphenol, Boeing, Freeport-McMoRan, General Dynamics, Corning, Hess Corp, Kimberly-Clark, Knight-Swift Transportation, Monro, Norfolk Southern, Oshkosh, Progressive, AT&T, TE Connectivity.

Asia

- BOJ Summary of Opinions for Jan Meeting: Consumer inflation was likely to move above 1% as price pressure builds on changing corporate price setting behavior. CPI might temporarily approach 2% from April onward, though key was whether economy had momentum for such moves to be sustainable.

Europe

- France and Germany leaders (Macron and Scholz) stated they were united in the need for de-escalation in Ukraine, diplomatic talks to continue. Reiterated stance that Russia to pay a high price if it attacked Ukraine.

- Sue Grey’s report into possible UK lockdown breaches said to be largely complete and could be published on Wed, Jan 26th.

- EU's Sefcovic reportedly has told member states there is no prospect of an imminent breakthrough in the Northern Ireland Protocol negotiations.

- Italy center-left party rejected the center-rights 3 candidates for President in 2nd vote. Still hope to reach a deal with center-right on a consensus Presidential candidate.

- Goldman Sachs analyst: Current correction in global equity markets was unlikely to deepen much further and turn into a bear market.

Americas

- President Biden stated that might move some of the 8.5K US troops in the 'nearer term'; No intention of putting US forces in Ukraine.

- US said to be prepared to impose export controls on critical parts of the Russian economy if they decided to invade Ukraine.

Energy

- Weekly API Crude Oil Inventories: -0.9M v +1.4M prior.

- US Department of Energy announced the loan of 13.4M barrels of crude from the SPR to seven companies.

- Some OPEC+ delegates believed recent rally in oil prices had been stoked by geopolitical risks and fuel switching, and not demand, which could lead them to go ahead with 400K bpd hike as planned for March.

Speakers Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 +1.73% at 467.52, FTSE +1.71% at 7,497.31, DAX +1.98% at 15,423.91, CAC-40 +2.04% at 6,977.57, IBEX-35 +2.02% at 8,651.16, FTSE MIB +1.80% at 26,497.00, SMI +1.14% at 12,081.64, S&P 500 Futures +1.12%].

Market Focal Points/Key Themes: European indices open higher across the board and advanced further into the green as the session progressed; sectors leading to the upside include consumer discretionary and technology; while laggard sectors include telecom and financials; oil and gas subsector supported after crude price rose yesterday; EQT divests its ESG stake; Playtech affirms support of Aristocrat deal; Aareal receives improved offer from Atlantic; UK CMA issues enforcement order on National Express - Stagecoach merger; reportedly Imerys looking to sell its high temperature solutions unit; focus on conclusion of FOMC meeting later in the session; earnings expected through the rest of the day include Anthem, Oshkosh, ADT and Abbott.

Equities

- Consumer discretionary: Wizz Air [WIZZ.UK] +3% (earnings).

- Energy: Vestas Wind Systems [VWS.DK] +4% (prelim results).

- Healthcare: Lonza Group [LONN.CH] -1.5% (earnings), Essity [ESSITY.B.SE] -4% (raises prices; earnings).

- Industrials: Somero Enterprises [SOM.UK] +6% (trading update).

- Technology: Playtech [PTEC.UK] -2% (offer update).

- Materials: Wacker Chemie [WCH.DE] +5% (prelim results), Fresnillo [FRES.UK] -13% (production; outlook cut).

Speakers

- ECB's Simkus (Lithuania) stated that there was no evidence of significant change to ECB forecasts; inflation outlook was no reason to change path. ECB stood ready to act if economic situation changed but stress that should end bond buying before any rate hike.

- Japan PM Kishida reiterated that monetary policy specifics was up to the BOJ to decide; expected the central bank to keep up efforts to achieve the 2% inflation target.

- Russia Foreign Min Lavrov reiterated stance that West did not provide a constructive response to its security proposal then would take appropriate measures. To respond to the West's aggressive Ukraine steps.

- Russia govt spokesperson Peskov stated that sanctions directed on President Putin would be politically destructive (**Reminder: On Jan 26th President Biden noted that would consider sanctioning President Putin directly if Russia invaded Ukraine).

- China to start 3-year crackdown against money laundering that will be led by the PBOC and China police.

- OPEC+ delegates was said to expected to stick to plan for modest output hike.

Currencies/Fixed income

- USD mainly steady ahead of the FOMC rate decision. Market participants expecting to see a strong signal from the Fed of a 25bp hike to come in March with additional hikes afterwards.

- EUR/USD staying below the 1.13 handle while USD/JPY above 114 handle.

Economic data

- (SE) Sweden Dec PPI M/M: 2.8% v 1.3% prior; Y/Y: 20.1% v 18.1% prior.

- (SE) Sweden Dec Trade Balance (SEK): -5.5B v +0.6B prior.

- (DK) Denmark Dec Retail Sales M/M: -4.5% v -0.4% prior; Y/Y: 3.4% v 1.5% prior.

- (FR) France Jan Consumer Confidence: 99 v 99e.

- (ES) Spain Nov Total Mortgage Lending Y/Y: 29.0% v 30.3% prior; House Mortgage Approvals Y/Y:24.1 % v 27.9% prior.

- (CH) Swiss Jan Expectations Survey: 9.5 v 0.0 prior.

- (PL) Poland Dec Unemployment Rate: 5.4% v 5.4%e.

Fixed income issuance

- (SE) Sweden sold total SEK2.5B vs. SEK2.5B indicated in 2023 and 2032 Bonds.

- (NO) Norway sold total NOK2.0B vs. NOK2.0B indicated in 3% Mar 2024 bonds; Avg Yield: 1.53% v 1.17% prior; Bid-to-cover: 5.33x v 4.72x prior.

- (UK) DMO sold £600M in 0.125% Mar 2051 Inflation-Linked Gilts (UKTi); Real Yield: -2.191% v -2.261% prior; bid-to-cover: 2.04x v 2.37x prior.

- (IT) Italy Debt Agency (Tesoro) sold €3.75B vs. €3.25-3.75B indicated range in 0.00% Nov 2023 BTP bonds; Avg Yield: -0.13%; bid-to-cover: 1.41x.

- (IT) Italy Debt Agency (Tesoro) sold total €1.0B vs. €0.75-1.25B indicated range in I/L 2026 and 2041 Bonds (BTPei).

Looking ahead

- (RO) Romania Dec M3 Money Supply Y/Y: No est v 14.7% prior.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (DE) Germany to sell €4.0B in 0.0% Feb 2032 Bunds; Avg Yield: % v -0.09% prior; bid-to-cover: x v 1.46x prior (Jan 5th 2022).

- 05:30 (EU) ECB monthly allotment in 3-month LTRO tender.

- 06:00 (FR) France Q4 Total Jobseekers: No est v 3.307M prior.

- 06:00 (BR) Brazil Jan FGV Construction Costs M/M: 0.6%e v 0.3% prior.

- 06:00 (RU) Russia cancelled planned OFZ Bond auction.

- 06:00 (CZ) Czech Republic to sell 2029, 2032 and 2037 bonds.

- 06:45 (US) Daily Libor Fixing.

- 07:00 (US) MBA Mortgage Applications w/e Jan 21st: No est v 2.3% prior.

- 07:00 (MX) Mexico Nov Retail Sales M/M: 0.2%e v 0.3% prior; Y/Y: 3.1%e v 5.3% prior.

- 07:00 (BR) Brazil mid-Jan IBGE Inflation M/M: 0.4%e v 0.8% prior; Y/Y: 10.1%e v 10.4% prior.

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

- 07:30 (BR) Brazil Dec Current Account Balance: -$6.3Be v -$6.5B prior; Foreign Direct Investment (FDI): $3.1Be v $4.6B prior.

- 08:00 (PL) Poland Dec M3 Money Supply M/M: 1.5%e v 1.9% prior; Y/Y: 9.9%e v 10.1% prior.

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

- 08:30 (US) Dec Advance Goods Trade Balance: -$96.0Be v -$97.8B prior.

- 08:30 (US) Dec Preliminary Wholesale Inventories M/M: 1.2%e v 1.4% prior; Retail Inventories M/M: 1.5%e v 2.0% prior.

- 10:00 (CA) Bank of Canada (BOC) Interest Rate Decision: Expected to leave Interest Rates unchanged at 0.25%.

- 10:00 (US) Dec New Home Sales: 760Ke v 744K prior.

- 10:30 (US) Weekly DOE Oil Inventories.

- 11:00 (RU) Russia Dec PPI M/M: 1.1%e v 2.7% prior; Y/Y: 28.8%e v 29.2% prior.

- 12:30 (BR) Brazil Dec Total Federal Debt (BRL): No est v 5.499T prior.

- 13:00 (US) Treasury to sell 2-year FRN.

- 14:00 (US) FOMC Interest Rate Decision: Expected to leave Interest Rates unchanged between 0.00-0.25% range; Expected to leave Interest on Reserve Balances Rate (IOER) unchanged at 0.15%.

- 14:00 (AR) Argentina Nov Shop Center Sales Y/Y: No est v 160.8% prior; Supermarket Sales Y/Y: No est v 5.2% prior.

- 14:30 (US) Fed Chair Powell post rate decision press conference.

- 16:00 (CL) Chile Central Bank (BCCh) Interest Rate Decision: Expected to raise Overnight Target Rate by 125bps to 5.25%.

- 16:00 (KR) South Korea Feb Manufacturing Survey: No est v 92 prior; Non-Manufacturing Survey: No est v 78 prior.

- 16:00 (NZ) New Zealand Government 5-Month Financial Statements.

- 16:45 (NZ) New Zealand Q4 CPI Q/Q: 1.3%e v 2.2% prior; Y/Y: 5.8%e v 4.9% prior.

- 18:30 (AU) Australia Dec Leading Index M/M: No est v 0.1% prior.

- 19:30 (AU) Australia Q4 Import Price Index Q/Q: 1.4%e v 5.4% prior; Export Price Index Q/Q: -2.9%e v +6.2% prior.

- 20:00 (PH) Philippines Dec Trade Balance: -$4.5Be v -$4.7B prior; Exports Y/Y: 7.5%e v 6.6% prior; Imports Y/Y: 29.5%e v 36.8% prior.

- 20:30 (CN) China Dec Industrial Profits Y/Y: No est v -9.6% prior.

- 21:00 (PH) Philippines Q4 GDP Q/Q: 3.0%e v 3.8% prior; Y/Y: 6.4%e v 7.1% prior; 2021 Annual GDP Y/Y: 5.1%e v -9.6% prior (revise from -9.5%.

- 21:00 (KR) South Korea Dec Department Store Sales Y/Y: No est v 9.6% prior; Discount Store Sales Y/Y: No est v -10.3% prior.

- 22:35 (JP) Japan to sell 2-Year JGB Bonds.

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