Markets await Putin's address to his Parliament on Crimea

Notes/Observations

- Russia President Putin formally notified his Parliament of Crimea's request to join Russia; said to be preparing his own list of sanctions on certain US/EU lawmakers

- RBA minutes show greater commitment to keeping rates steady

Economic Data

- (JP) Japan Feb Final Machine Tool Orders Y/Y: 26.1% v 26.0% prelim

- (DE) Germany Feb Wholesale Price Index: M/M: -0.1% v -0.1% prior; Y/Y: -1.8% v -1.7% prior

- (EU) EU27 Feb New Car Registrations: 8.0% v 5.5% prior

- (ES) Spain Q4 Labour Costs Y/Y: 2.1% v 0.2% prior

- (EU) ECB €20.0M borrowed in overnight loan facility vs. €2.0M prior; €36.8B parked in deposit facility vs. €23.5B prior - Daily Eurosystem Liquidity Conditions

- (IT) Italy Jan Total Trade Balance: €0.4B v €3.6B prior; Trade Balance EU: €1.3B v €0.2B prior

- (ES) Spain Jan Bad loan ratio: 13.5% (new methodology) v 13.6% prior

Fixed Income:

- (EU) EU opened book to sell €2.6B in Apr 2024 bond; guidance seen +10bps over mid-swaps

- (SE) Sweden opened book to sell USD-denominated benchmark 3-year notes; guidance seen at -2bps to mid-swaps

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

***Equities**

Indices [Stoxx50 -0.5%, FTSE 100 -0.2% at 6,558, DAX -0.5% at 9,139, CAC-40 -0.1% at 4,268, IBEX-35 -0.2% at 9,950, FTSE MIB -0.1% at 20,840, SMI flat at 8,163, S&P 500 Futures -0.2% at 1,847]

- Market Focal Points: European equity markets open lower following gains seen on Monday's session, UK supermarkets continue to report weaker than expected sales (Sainsbury), Online retailer Asos declines sharply on quarterly sales figures, Scania recommends rejection of bid from Volkswagen, Upcoming German ZEW survey, Greek bank Piraeus returns to the bond market for first time since before the EU debt crisis

By Sector

- Technology [MoneySupermarket.com MONY.UK -5% (share placement)]

- Consumer Discretionary [Asos ASC.UK -20% (concerns related to margins); Kuoni KUNN.CH +2% (raised dividend)]

- Consumer Staples [Sainsbury SBRY.UK -0.5% (quarterly sales below ests)]

- Industrials [Scania SCVB.SE -4% (recommended rejection of VW's offer), Imtech IM.NL -2% (FY results below ests)]

- Healthcare [Galapagos GLPG.BE +3% (data presentation), Ipsen IPN.FR +2% (data presentation)]

- Energy [Cairn Energy CNE.UK -5% (suspended buyback)]

- Stoxx50 Sectors [Consumer Cyclical -1.1%, Telecom -1%, Industrials -1%, Basic Materials -0.8%, Financials -0.7%, Consumer Non-Cyclical -0.6%, Technology -0.5%, Energy -0.5% Utilities -0.1%]

Speakers:

- Swiss Govt updated its economic forecasts in which it trimmed bit 2014 GDP and CPI outlook and maintained its 2015 forecasts. It noted that some risks remained for global economy while the Euro Zone recovery remained fragile. It added that it was virtually impossible at this time to assess long term economic consequences of Feb 9th vote to curb immigration

- Greece Infrastructure Min Chirsochoides stated that it targeted a return to bond market return before the May 25th EU Parliamentary elections

- Ukraine Acting PM Yatsenyuk: NATO membership not on agenda

- Russian lawmakers issues a statement urging US and EU nations to impose all of the same sanctions on all members of the Russian lower house (aka sign of unity)

- China PBOC and China Construction Bank said to be holding emergency talks over whether to bailout defaulting property developer Zhejiang Xingrun Real Estate

Currencies/Fixed Income:

- Quiet European session as markets awaited Russia President Putin address in Parliament on Crimea and key events out of Germany (results of the German ZEW survey and ESM ruling).

- The EUR/USD continued to hold above the 1.39 level as price action still ignored last week's remarks from ECB boss Draghi, who made it clear that EUR strength had become a policymaker concern.

- Tier-1 analyst commented that a wider CNY currency (Yuan) trading band posed risk to Euro on lower demand on reserve balancing. Wider trading band unlikely to directly influence G10 FX by itself but become more relevant via the reserve channel

- Yuan fell to CNY6.19 in onshore trade and was also within an earshot of the key 6.20 level offshore, where option barriers said to lurk.

Political/In the Papers:

- (EU) ECB's Weidmann: Strengthening growth potential will help the current account; surpluses are here to stay - comments from Kiel, Germany

- (AR) Moody's Downgrades Argentina Bond rating one notch to Caa1 from B3; Outlook raised to Stable from Negative citing its significant fall in official reserves to $27.5B from a high of $52.7B in 2011

- (US) NY State Attorney General Schneiderman opens investigation into possible unfair advantages offered to High Frequency Traders (HFT) by US exchanges

-(CN) China Feb all-70 new home prices m/m: 0.3% v 0.4% prior (6 months low); y/y: 8.7% v 9.6% prior

- (CN) PBoC drains CNY100B in 28-day repos (9th consecutive drain)

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 4 hours for GMT equivalent)

- (EU) EU's Ashton chairs Iran Nuclear Talks in Vienna

- (US) Federal Reserve begins 2-day FOMC Meeting (Decision on Wed)

- 05:30 (ZA) South Africa Q4 Non-Farm Payrolls Q/Q: No est v 0.2% prior; Y/Y: No est v 0.2% prior

- 05:30 (DK) Denmark to sell Bonds

- 05:30 (ES) Spain Debt Agency (Tesoro) to sell combined €2.0-3.0B in 3-Month and 9-Month Bills

- 06:00 (EU) ECB's Nouy testifies in Brussels

- 06:00 (DE) Germany Mar ZEW Current Situation: 52.0e v 50.0 prior; Expectations Survey: 52.0e v 55.7 prior

- 06:00 (EU) Euro Zone Mar ZEW Expectations Survey: No est v 68.5 prior

- 06:00 (EU) Euro Zone Jan Trade Balance (Seasonally Adj): €13.9Be v €13.7B prior; Trade Balance NSA: No est v €13.9B prior

- 06:00 (EU) Daily Euribor Fixing

- 06:00 (GR) Greece Debt Agency (PDMA) to sell €1.0B in 13-week Bills

- 06:15 (EU) ECB announces allotment in 7-Day Main Refinancing Tender at fixed 0.25% vs. €92.0Be

- 06:15 (CH) Switzerland to sell 3-month Bills

- 06:30 (HU) Hungary Debt Agency (AKK) to sell 3-Months Bills

- 06:30 (PT) Portugal Debt Agency (IGCP) holds reverse auction

- 07:00 (RU) Russia President Putin to address a joint session of Parliament

- 07:00 (TR) Turkey to sell New Zero Bonds

- 07:30 (EU) ESM to sell €2.5B in 6-month Bills

- 07:30 (CL) Chile Q4 GDP Q/Q: 0.3%e v 1.3% prior; Y/Y: 2.8%e v 4.7% prior; GDP Full Year 2013 Y/Y: No est v 5.6% prior

- 07:30 (CL) Chile Q4 Current Account Balance: -$4.0Be v -$3.4B prior

- 07:45 (US) Daily Libor Fixing

- 07:45 (US) Weekly ISCS Chain Store Sales

- 08:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: Expected to leve key rates unchanged; Expected to leave Benchmark Repurchase Rate unchanged at 10.00%; Expected to leave Overnight Lending Rate unchanged at 12.00%; Expected to leave Overnight Borrowing Rate unchanged at 8.00%

- 08:00 (EU) ECB allotment in 7-Day Term Deposit Tender to offset bond purchases in SMP program

- 08:30 (US) Feb CPI M/M: 0.1%e v 0.1% prior; Y/Y: 1.2%e v 1.6% prior

- 08:30 (US) Feb CPI Ex Food and Energy M/M: 0.1%e v 0.1% prior; Y/Y: 1.6%e v 1.6% prior

- 08:30 (US) Feb CPI NSA: 234.737e v 233.916 prior; CPI Core Index: 236.202e v 235.843prior

- 08:30 (US) Feb Housing Starts: 910Ke v 880K prior; Building Permits: 960Ke v 945K prior (revised from 937K)

- 08:30 (CA) Canada Jan Manufacturing Sales M/M: 1.0%e v -0.9% prior

- 08:55 (US) Weekly Redbook Retail sales

- 09:00 (DE) German Chancellor Merkel with Portugal PM Coelho in Berlin

- 09:00 (US) Jan Net Long-term TIC Flows: +$40.0Be v -$45.9Bprior; Total Net TIC Flows: No est v $119.6B prior

- 09:00 (PL) Poland Feb Average Gross Wages M/M: +0.5%e v -9.9% prior; Y/Y: 3.2%e v 3.4% prior

- 09:00 (PL) Poland Feb Employment M/M: 0.0%e v 0.3% prior; Y/Y: 0.2%e v 0.0% prior

- 10:00 (BR) Brazil Central bank Gov Tombini testifies to Senate

- 10:45 (UK) BOE to buy £1.35B in APT operation with residual maturity over 15 years; bid to cover: x v 1.48 prior

- 11:00 (US) Fed to purchase $1.00-1.25B in bonds

- 11:30 (US) Treasury to sell $35B in 4-week Bills

- 11:30 (UK) DMO announcement of size in upcoming 0.25% I/L 2052 Gilts

- 11:55 (CA) Bank of Canada Govr Poloz speaks in Halifax

- 12:00 (FI) Finland Fin Min Urpilainen speaks in Kotka

- 13:45 (UK) BOE Gov Carney in London

- 16:30 (US) Weekly API Oil Inventories

- 19:50 (JP) Japan Feb Trade Balance: N-¥600.9Be v -¥2.790T prior; Adjusted Trade Balance: -¥893.6Be v -¥1.8188T prior

- 22:10 (JP) BOJ Board Member Kiuchi speaks in Shiga