Notes/Observations

-Euro Area Feb inflation steady; core rate eases

- Fixed income continued to be the focus; various emerging markets failing to achieve target in recent issuance (South Korea, Indonesia, Russia)

- Risk sentiment hit some headwinds after China’s regulator warned about bubbles in the property sector and foreign markets

Asia:

- Reserve Bank of Australia (RBA) left policy steady with Cash Rate Target unchanged at 0.10% and 3-year Yield Target maintained at 0.10%

- Japan Jan Jobless Rate: 2.9% v 3.0%e

- South Korea Feb PMI Manufacturing registered its 5th month of expansion and highest since April 2010 (55.3 v 53.2 prior)

- China Banking and Insurance Regulatory Commission (CBIRC) Chairman Guo: To keep focusing on preventing financial risks; China to curb reckless capital expansion. Studying ways to effectively manage capital inflows to prevent violent movements in domestic markets

Coronavirus:

- Total global cases 114.4M (+0.3% d/d); total deaths: 2,.54M (+0.3% d/d)

Europe:

- Germany Econ Min Altmaier reiterated stance that wanted some businesses to reopen in March

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 +0.25% at 413.48, FTSE +0.43% at 6,616.55, DAX +0.20% at 14,040.20, CAC-40 +0.17% at 5,802.64, IBEX-35 -0.12% at 8,368.00, FTSE MIB -0.09% at 23,243.50, SMI +0.87% at 10,799.27, S&P 500 Futures -0.48%]

Market Focal Points/Key Themes: European indices open modestly lower but later turned to trade mixed; sectors among those trending higher are utilities and consumer discretionary; sectors with a downward bias are energy and financials; reportedly Boohoo could be subject to import ban by the US over labor practices; Renishaw founders formally start sale; FCA concludes investigation into Lookers; earnings expected during the upcoming US session include Target, AutoZone and Kohl’s

Equities

- Consumer discretionary: Lookers [LOOK.UK] +10% (probe ends), boohoo.com [BOO.UK] -5% (responds to media speculation)

- Financials: Swiss Life [SLHN.CH] -1% (earnings)

- Healthcare: Morphosys [MOR.DE] +2% (prelim results)

- Industrials: Signature Aviation [SIG.UK] +1% (earnings). Kion [KGX.DE] +6% (earnings)

- Technology: Renishaw [RSW.UK] +13% (formal sale)

Speakers

- ECB's De Guindos (Spain) stated that he saw 2021 inflation averaging above 1.0%. Rise in Jan inflation levels was largely due to base effects. Key to recovery would be the way in which the vaccination process was rolled out. Reiterated ECB stance that priority is to maintain favorable financing conditions

- Additional press reports that Germany to extend its modified virus lockdown restrictions until March 28th

- Italy govt said to likely seek extra stimulus as pandemic worsens

- Brazil Econ Min Guedes stated that the country was at risk of turning into another Argentina in 6 months but added he believed that Congress would approve reforms. Sustainable recovery demanded cash aid and reforms

- Japan Lower House passed ¥106.6T budget (record size)

Currencies/Fixed Income

- USD held onto its recent gains in a quiet EU session. Markets continued to watch bond yields as various central banks believed the recent pick up was sensible given the economic outlook and price action on yields remained orderly

- EUR/USD retested the 1.20 level for a 3-week low. Dealers took note of the weekly ECB QE stats and the deceleration in purchases relative to the previous reporting period,

- GBP/USD softer ahead of Wed’s budget speech by Chancellor of the Exchequer Sunak> Focus likely to be on the UK govt stance on its plan to address the nation’s budget deficit.

Economic data

- (FI) Finland Jan Unemployment Rate: 8.7% v 7.8% prior

- (DE) Germany Jan Retail Sales M/M: %-4.5 v +0.3%e Y/Y: -8.7% v +1.7%e

- (UK) Feb Nationwide House Price Index M/M: +0.7% v -0.3%e; Y/Y: 6.9% v 5.6%e

- (ES) Spain Feb Net Unemployment Change: +44.4K v +10.0Ke

- (CZ) Czech Republic Q4 Preliminary GDP (2nd reading) Q/Q: 0.6% v 0.3%e; Y/Y: -4.7% v -5.0%e

- (HU) Hungary Q4 Final GDP Q/Q: 1.4% v 1.1%e; Y/Y: -3.6% v -3.7%e

- (HU) Hungary Jan PPI M/M: 0.7% v 1.0% prior; Y/Y: 6.6% v 6.8% prior

- (BR) Brazil Feb FIPE CPI (Sao Paulo): 0.2% v 0.4%e

- (DE) Germany Feb Unemployment Change: +9.0K v -10.0Ke; Unemployment Claims Rate: 6.0% v 6.0%e

- (IS) Iceland Q4 Current Account Balance: 22.1B v 2.9B prior

- (EU) Euro Zone Feb Advance CPI Estimate Y/Y: 0.9% v 0.9%e; CPI Core Y/Y: 1.1% v 1.1%e; CPI M/M: 0.2% v 0.2%e

Fixed income Issuance

- (ID) Indonesia sold total IDR17.0T vs. IDR30.0T target in bills and bonds

- (ZA) South Africa sold total ZAR6.6B vs. ZAR6.6B indicated in 2026, 2032 and 2036 bonds

- (ES) Spain Debt Agency (Tesoro) sold total €B vs. €6.0-7.0B indicated range in 6-month and 12-month bills

- (AT) Austria Debt Agency (AFFA) sold total €1.38B vs. €1.38B indicated in 2024 and 2031 RAGB bonds

- (UK) DMO sold £3.0B in new 0.375% Oct 2026 Gilts; Avg Yield: 0.454% v 0.039% prior; bid-to-cover: 2.53x v 2.78x prior; Tail: 0.3bps v 0.2bps prior

Looking Ahead

- (EU) Daily ECB Liquidity Stats

- (MX) Mexico Jan YTD Budget Balance (MXN): No est v -674.2B prior

- (US) Total Vehicle Sales data in session

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills

- 05:30 (DE) Germany to sell combined €600M in inflation-linked 2030 and 2046 bonds (Bundei)

- 05:30 (BE) Belgium Debt Agency (BDA) to sell 3-month and 6-month bills

- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO) (prior €622.0M with 10 bids recd)

- 06:00 (PT) Portugal Jan Industrial Production M/M: No est v 1.8% prior; Y/Y: No est v -4.4% prior

- 06:30 (UK) DMO to sell £1.25B in 0.5% Oct 2061 Gilts

- 06:30 (EU) ESM to sell €1.5B in 3-month Bills

- 06:45 (US) Daily Libor Fixing

- 07:00 (MX) Mexico Jan Leading Indicators M/M: No est v 0.37 prior

- 07:00 (BR) Brazil Jan PPI Manufacturing M/M: No est v 0.5% prior; Y/Y: No est v 18.2% prior

- 08:00 (SG) Singapore Feb Purchasing Managers Index (PMI): 50.8e v 50.7 prior; Electronics Sector Index: No est v 51.0 prior

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

- 08:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed)

- 08:30 (CA) Canada Dec GDP M/M: 0.1%e v 0.7% prior; Y/Y: -3.0%e v -2.8% prior; Quarterly GDP Annualized: 7.2%e v 40.5% prior

- 08:55 (US) Weekly Redbook LFL Sales data

- 09:00 (EU) Weekly ECB Forex Reserves

- 09:45 (US) Feb ISM New York: No est v 51.2 prior

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

- 10:00 (MX) Mexico Central Bank Economist Survey

- 10:30 (CA) Canada to sell 3-month, 6-month and 12-month bills

- 11:00 (DK) Denmark Feb Foreign Reserves (DKK): No est v 427.6B prior

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

- 14:00 (US) Fed’s Daly at Economic Club of New York

- 16:30 (AU) Australia Feb Performance of Construction Index: No est v 57.6 prior

- 16:30 (US) Weekly API Oil Inventories

- 16:45 (NZ) New Zealand Jan Building Permits M/M: No est v 4.9% prior

- 17:00 (AU) Australia Feb Final PMI Services: No est v 54.1 prelim; PMI Composite: No est v 54.4 prior

- 19:00 (NZ) New Zealand Feb Commodity Price Index: No est v 3.6% prior

- 19:01 (UK) Feb BRC Shop Price Index Y/Y: No est v -2.2% prior

- 19:30 (AU) Australia Q4 GDP Q/Q: 2.3%e v 3.3% prior; Y/Y: -2.0%e v -3.8% prior

- 19:30 (SG) Singapore PMI (whole economy): No est v 52.9 prior

- 19:30 (HK) Hong Kong Feb PMI (whole economy): No est v 47.8 prior

- 19:30 (JP) Japan Feb Final PMI Services: No est v 45.8 prelim; PMI Composite: No est v 47.6 prelim

- 20:01 (IE) Ireland Feb PMI Services: No est v 36.2 prior; PMI Composite: No est v 40.3 prior

- 20:45 (CN) China Feb Caixin PMI Services: 51.5e v 52.0 prior; PMI Composite: No est v 52.2 prior

- 21:35 (CN) China to sell 3-year and 7-year Upsized Bonds

- 22:00 (TH) Thailand to sell 4-year and 28-year bonds

- 22:30 (HK) Hong Kong to sell HK$1.0B in 15-Year Bonds

- 23:30 (TW) Taiwan to sell TWD170B in 12-month Certificate of Deposits (NCD )

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