European data continues to improve

Notes/Observations

- RBA keeps policy steady but retains easing bias

- Swiss Q4 GDP beats expectations

- German Jan Retail Sales handily beat expectations

Economic data

- (CH) Swiss Q4 GDP (beat); Q/Q: 0.6% v 0.3%e; Y/Y: 1.9% v 1.7%e

- (DE) Germany Jan Retail Sales (beat); M/M: 2.9% v 0.4%e; Y/Y: 5.3% v 3.0%e

- (TW) Taiwan Jan Export Orders (miss); Y/Y: 8.1% v 9.6%e

- (ES) Spain Feb Net Unemployment (beat); M/M: -13.5K v -2.9Ke

- (TR) Turkey Feb CPI data (mixed); M/M: 0.7% v 0.7%e; Y/Y: 7.6% v 7.4%e; CPI Core Index Y/Y: 7.7% v 8.2%e

- (UK) Citi/YouGov Feb poll: 12-month inflation expectations: 1.0% v 1.2% (lowest since Dec 2008)

- (UK) Feb Markit/CIPS UK Construction PMI: 60.1 v 59.0e (24th month of expansion)

- (EU) Euro Zone Jan PPI M/M: -0.9% v -0.7%e; Y/Y: -3.4% v -3.0%e

Fixed Income:

- (FI) Finland opened its book to sell 16-year bond; guidance seen at low teens bps to md-swaps

- (AT) Austria Debt Agency (AFFA) sold total €1.1B in 2019 and 2024 RAGB bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

**Equities**

Indices [Stoxx50 +0.2%, FTSE 100 +0.2% at 6,954, DAX -0.2% at 11,436, CAC-40 +0.3% at 4,932, IBEX-35 flat at 11,185, FTSE MIB +0.3% at 22,377, SMI -0.1% at 9,045, Athens Stock Exchange +1.4%, S&P 500 Futures -0.1% at 2,111]

- Market Focal Points/Key Themes: Equity markets open slightly higher, following gains in the US; Greek equities open higher; Glencore FY profits below ests; Barclays FY results in line, investment bank profits declined; UK homebuilder Taylor Wimpey beats ests

By Sector

- Industrials [Manz Automation M5Z.DE +4% (order awards); Safran SAF.FR -1.5% (share placement)]

- Financials [Barclays BARC.UK -1.5% ( FY results in line)]

- Basic Materials/Resources [Glencore GLEN.UK -3% (FY profits below ests)]

- Consumer Discretionary [Heidelberger HDD.DE +3% (acquisition)]

- Stoxx50 sectors [Basic Materials +0.7%, Consumer Non-Cyclical +0.6%, Technology +0.4%, Industrials +0.4%, Energy +0.2% Telecom +0.2%, Financials +0.1%, Utilities flat, Consumer Cyclical flat]

Speakers

- Sweden Central Bank (Riksbank) Gov Ingves have several options if CPI did not rise towards target. More measures are needed to address domestic household debt

- Sweden Central Bank (Riksbank) Skingsley reiterated of seeing signs that inflation might have bottomed; still prepared to take action

- European Banking Authority (EBA): Will not carry out EU-wide stress test in 2015

- EBRD chief Chakrabarti: Approve Greece as a recipient of its funding for projects through 2020

- Spain govt advisor Nadel: Greece will need a 3rd bailout program and would carry similar conditions to the first two bailout programs

- Russia Energy Min Novak: Gas talks in Brussels were difficult, but constructive, winter gas agreement is being followed. May consider gas discount for Ukraine from Q2.

- China Vice Fin Min Zhu: Domestic deflationary pressure not as great as in Europe; Reiterates proactive fiscal policy stance

- PBoC Dep Gov Yi Gang: CNY currency (Yuan) is basically stable and within a reasonable range; will not see large depreciation pressure on yuan. Fundamentals continue to support CNY currency

Currencies

- European continued to see some better news on the economic front but it failed to helped the EUR/USD stay above 1.12 level. The key support remains the Jan low of 1.1098. The pair drifted to test 1.11070 just ahead of the NY morning

- The USD/JPY failed to maintain any momentum above the 120 handle after a Japanese govt advisor stated that the pair's present levels were in the "upper limit of comfort zone."

- AUD rallied following the largely unexpected RBA decision to refrain from cutting rates. The AUD/USD was higher by 0.6% at 0.7815

**Political/In the Papers:

- (GR) Greece Fin Min Varoufakis: Greece will pay its debts due in March, Greece debt to the ECB is different from its debt to the IMF. There will be debt talks, will not use word haircut

Looking Ahead

All times listed for economic events are denominated in Eastern Standard Time (Add 5 hours for GMT equivalent)

- (CN) China People Political Consultative Conference

- (UK) Mexico President Nieto State Visit to UK

- (RU) EU's Malmstroem with Russia Econ Min Ulyukayev in Brussels

- (US) Fed's Mester speaks to Business Economists in Washington

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

- 05:30 (UK) DMO to sell £3.5B in 2% 2020 Gilts

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

- 06:45 (US) Daily Libor Fixing

- 07:00 (RU) Russia announces weekly OFZ bond auction

- 07:30 (SE) Sweden Central Bank (Riksbank) Dep Gov Jochnick

- 07:45 (US) Chain Store Sales

- 08:00 (SG) Singapore Feb Purchasing Managers Index: No est v 49.9 prior; Electronics Sector Index: No est v 50.5 prior

- 08:15 (US) Baltic Dry Bulk Index

- 08:30 (CA) Canada Dec GDP M/M: +0.2%e v -0.2% prior; Y/Y: 2.5%e v 1.9% prior; Quarterly GDP Annualized: 2.0%e v 2.8% prior

- 08:30 (CA) Canada Jan Industrial Product Price M/M: -0.8%e v -1.6% prior; Raw Materials Price Index M/M: -6.3%e v -7.6% prior

- 08:55 (US) Weekly Redbook Sales

- 09:00 (EU) Weekly ECB Forex Reserves:

- 09:00 (MX) Mexico Dec Gross Fixed Investment: 5.7%e v 4.7% prior -09:30 (NZ) Fonterra Global Dairy

- 09:45 (US) Feb ISM New York: No est v 44.5 prior

- 10:00 (US) Mar IBD/TIPP Economic Optimism: 47.5e v 47.5 prior

- 10:00 (DK) Denmark Feb Foreign Reserves (DKK): 729.1Be v 564.1B prior

- 10:00 (MX) Mexico Weekly International Reserves

- 10:30 (UK DMO) announces size of upcoming 2025 conventional Gilts

- 11:00 (IS) Iceland Q4 Current Account Balance (ISK): No est v 48B prior

- 11:00 (ZA) South Africa Central Bank (SARB) gov Mminele

- 11:30 (US) Treasury to sell 4-Week and 52-week Bills

- 15:15 (US) Fed chair Yellen on banking regulations

- 16:00 (KR) South Korea Feb Foreign Reserves: No est v $362.2B prior

- 16:30 (US) Weekly API Oil Inventories

- 16:45 (NZ) New Zealand Q4 Value of All Buildings Q/Q: 1.0%e v 1.5% prior

- 17:00 (US) Feb Total Vehicle Sales: 16.70Me v 16.56M prior; Domestic Vehicle Sales: 13.40Me v 13.31M prior

- 19:01 (UK) Feb BRC Shop Price Index Y/Y: No est v -1.3% prior

- 19:30 (AU) Australia Q4 GDP Q/Q: 0.6%e v 0.3% prior; Y/Y: 2.5%e v 2.7% prior

- 20:35 (JP) Japan Feb Services PMI: No est v 51.3 prior; Composite PMI: No est v 51.7 prior

- 20:45 (CN) China Feb HSBC Services PMI: No est v 51.8 prior; Composite PMI: No est v 51.0 prior

- 21:30 (HK) Hong Kong Feb HSBC Services PMI: No est v 49.4 prior

- 22:00 (CN) China to sell 10-year bonds