Focus on US jobs report

Notes/Observations

- Germany Dec Factory Orders register its 1st decline since April as stricter lockdown finally having an impact

- Focus on US Jan jobs report

Asia:

- RBA Quarterly Statement on Monetary Policy (SOMP) committed to maintaining highly supportive monetary policy, did not expect to meet unemployment, inflation goals until 2024 at the earliest

- RBA Gov Lowe stated that very significant monetary support would be needed for some time. Reiterated stance that Board wanted to see inflation sustainably in 2-3% range before raising cash rate. To achieve targets than would need a tighter labor market and stronger wage growth than we were currently predicting; likely not met before 2024

- India Central Bank (RBI) left its Key Rates unchanged (as expected); committed to raising the CRR by 100bps in coming months (Note: would take back the cut from Oct)

Coronavirus:

- Total global cases 104.8M (+0.4% d/d); death toll 2.28M (+0.6% d/d)

Europe:

- Italy Democratic Party (PD) chief Zingaretti: PD will support a Draghi govt; see 80-90% chance that Draghi will be able to form a govt

- UK government said to plan COVID 'vaccine passports' for tourists

Americas:

- Fed's George (Non-voter) stated that economic progress was encouraging, coronavirus would shape recovery; Economy to pick up once people resumed mobility

- House Speaker Pelosi, Hoyer and Committee Chairs to meet with President Biden on Friday at 9:45 AM EST

- White House to convene a National Security council to discuss Iran on Friday (Feb 5th

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 +0.37% at 411.06, FTSE +0.08% at 6,508.75, DAX +0.25% at 14,094.85, CAC-40 +0.97% 5,663.15, IBEX-35 +0.90% at 8,196.00, FTSE MIB +1.52% at 23,247.50, SMI -0.29% at 10,829.92, S&P 500 Futures +0.37%]

Market Focal Points/Key Themes: European indices open modestly higher; improved risk sentiment attributed to positive news of covid vaccinations; sectors among better performers are technology and health care; energy and telecom sectors among those trending lower; Signature Aviations agrees to be acquired by Browth Bidco; RTL sells SpotX unit to Magnite; reportedly STMicroelectronics and Renesas looking at partnership to acquire chip company in Europe; reportedly EDP to sell renewable assets; earnings expected during the upcoming US session include Aon, Linde, Spectrum Brands and Estee Lauder

Equities

- Consumer discretionary: Carlsberg [CARL.B.DK] +3% (earnings)

- Financials: BNP Paribas [BNP.FR] +3% (earnings)

- Healthcare: Sanofi-Aventis [SAN.FR] +2% (earnings)

- Industrials: Vinci [DG.FR] +5% (earnings), Skanska [SKA.B.SE] -3% (earnings), Signature Aviation [SIG.UK] -3% (confirms acquisition

Speakers

- BOE Broadbent stated that the path of economic recovery to depend on course of pandemic and vaccine rollout; to depend on how cautious people would be. Risks on both sides of unemployment forecasts. Too early to be sure of size of Brexit impact but saw its effect by reducing 1% off GDP

- Turkey Central Bank (CBRT) Gov Agbal stated that was not likely to consider rate cuts for a long time this year and added that rate hikes remained a possibility. Prices had shown upside risks to inflation

Currencies/Fixed Income

- USD ending its best week in three months

- EUR/USD drifted higher in a quiet session but was staying below the 1.20 level. Focus was on the upcoming US jobs report in the session.

- GBP/USD around the 1.37 area as the pair held onto gains after BOE poured cold water on the prospect of negative rates in the near-term. Comments from BOE member Broadbent did not distract from the central bank’s recent dampening of any prospect of negative interest rates in the near term

- Italy 10-year BTP yields staying lower as market participants’ remain confident that former ECB chief Draghi would succeed in forming a new government

Economic data

- (SE) Sweden Maklarstatistik Jan Housing Prices Y/Y: 13% v 13% prior; Apartment Prices Y/Y: 7% v 7% prior

- (ZA) South Africa Jan Gross Reserves: $54.8B v $54.8Be; Net Reserves: $52.0B v $51.9Be

- (DE) Germany Dec Factory Orders M/M: -1.9% v -1.0%e; Y/Y: 6.4% v 6.7%e (1st decline since April)

- (NO) Norway Dec Industrial Production M/M: 3.4% v 1.8% prior; Y/Y: +2.7% v -0.7% prior

- (NO) Norway Dec Manufacturing Production M/M: -0.2% v +1.5% prior; Y/Y: -1.2% v -0.9% prior

- (CN) Weekly Shanghai copper inventories (SHFE): 68.6K v 66.6K tons prior

- (FR) France Dec Trade Balance: -€3.4B v -€4.3Be; Current Account Balance: -€1.2B v -€1.4B prior

- (FR) France Q4 Preliminary Private Sector Payrolls Q/Q: -0.2% v -0.7%e

- (TW) Taiwan Jan CPI Y/Y: -0.2% v 0.0%e; CPI Core Y/Y: 0.1% v 0.2%e; WPI Y/Y: % v -3.9%e

- (CH) Swiss Jan Foreign Currency Reserves (CHF): 896.1B v 892.2B prior

- (AT) Austria Jan Wholesale Price Index M/M: 2.1% v 1.2% prior; Y/Y: -0.1% v -2.7% prior

- (RU) Russia Narrow Money Supply w/e Jan 29th (RUB): 13.59T v 13.64T prior

- (CZ) Czech Dec Retail Sales Y/Y: +2.6% v -1.5%e; Retail Sales (ex-auto) Y/Y: +3.7% v -1.6%e

- (HU) Hungary Dec Industrial Production M/M: -2.4% v -1.0% prior; Y/Y: 1.1% v 4.7%e

- (TW) Taiwan Jan Foreign Reserves: $541.5B v $529.9B prior

- (SE) Sweden Dec Private Sector Production M/M: -0.5% v +0.8% prior; Y/Y: -1.5% v -0.9% prior

- (SE) Sweden Dec Industrial Orders M/M: 2.2% v 3.3% prior; Y/Y: 8.2% v 5.2% prior

- (SE) Sweden Dec Industry Production Value Y/Y: 5.9% v 1.2% prior; Service Production Value Y/Y: -3.0% v -1.8% prior

- (SE) Sweden Dec Household Consumption M/M: -0.4% v -0.7% prior; Y/Y: -6.3% v -5.0% prior

- (SE) Sweden Jan Budget Balance (SEK): +7.7B v -125.9B prior

- (UK) Jan Halifax House Price Index M/M: -0.3% v +0.2% prior; Y/Y: 5.4% v 6.0% prior

- (IT) Italy Dec Retail Sales M/M: 2.5% v 1.6%e; Y/Y: -3.1% v -4.8%e

Fixed income Issuance

- (ZA) South Africa sold total ZAR1.71B vs. ZAR2.0B indicated in I/L 2025, 2033 and 2050 Bonds

Looking Ahead

- (UR) Ukraine Jan Official Reserve Assets: No est v $29.1B prior

- (IT) Bank of Italy (BOI) Dec Balance sheet aggregates

- 05:10 (EU) Daily ECB Liquidity Stats

- 05:30 (BE) Belgium Debt Agency (BDA) to sell Bonds via ORI Auction

- 06:00 (UK) DMO to sell £3.5B in 1-month, 3-month and 6-month bills (£0.5B, £1.0B and £2.0B respectively)

- 06:00 (IE) Ireland Jan Live Register Monthly Change: No est v -9.4K prior; Live Register Level: No est v 193.7K prior

- 06:00 (BR) Brazil Jan FGV Inflation IGP-DI M/M: 2.7%e v 0.8% prior; Y/Y: 26.3%e v 23.1% prior

- 06:30 (IN) India Weekly Forex Reserve w/e Jan 29th: No est v $585.3B prior

- 06:45 (US) Daily Libor Fixing

- 07:00 (IN) India announces upcoming bill issuance (held on Wed)

- 07:00 (MX) Mexico Nov Gross Fixed Investment: -10.8%e v -14.7% prior

- 07:00 (CL) Chile Dec Nominal Wage M/M: No est v 0.9% prior; Y/Y: No est v 4.6% prior

- 08:00 (RU) Russia Jan Official Reserve Assets: $594.0Be v $595.8B

- 08:00 (PL) Poland Jan Official Reserves: No est v $154.3B prior

- 08:00 (PL) Poland Central Bank (NBP) Dec Minutes (2 meetings ago)

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

- 08:30 (US) Jan Change in Nonfarm Payrolls: +105Ke v -140K prior; Change in Private Payrolls: +163Ke v -95K prior; Change in Manufacturing Payrolls: +30Ke v +38K prior

- 08:30 (US) Jan Unemployment Rate: 6.7%e v 6.7% prior; Underemployment Rate: No est v 11.7% prior; Labor Force Participation: 61.5%e v 61.5% prior

- 08:30 (US) Jan Average Hourly Earnings M/M: 0.3%e v 0.8% prior; Y/Y: 5.0%e v 5.1% prior; Average Weekly Hours: 34.7e v 34.7 prior

- 08:30 (US) Dec Trade Balance: -$65.7Be v -$68.1B prior

- 08:30 (CA) Canada Jan Net Change in Employment: -40.0Ke v -57.2K prior (revised from -62.6K); Unemployment Rate: 8.9%e v 8.8% prior (revised from 8.6%); Full Time Employment Change: No est v +42.7K prior (revised from +36.5K); Part Time Employment Change: No est v -95.4K prior (revised from -99.0K); Participation Rate: 64.9%e v 65.0% prior (revised from 64.9%); Hourly Wage Rate Y/Y: 5.6%e v 5.4% prior

- 08:30 (CA) Canada Dec Int'l Merchandise Trade (CAD): -3.0Be v -3.3B prior

- 08:30 (UK) BOE Gov Bailey with MPC’s Tenreyro

- 09:30 (TR) Turkey Jan Cash Budget Balance (TRY): No est v -46.7B prior

- 10:00 (CA) Canada Jan Ivey Purchasing Managers Index (seasonally adj): No est v 46.7 prior; PMI (unadj): No est v 53.9 prior

- 11:00 (RU) Russia Jan CPI M/M: 0.9%e v 0.8% prior; Y/Y: 5.3%e v 4.9% prior

- 11:00 (RU) Russia Jan CPI Core M/M: 0.6%e v 0.5% prior; Y/Y: 4.6%e v 4.2% prior

- 11:00 (EU) Potential sovereign ratings after European close

- 13:00 (US) Weekly Baker Hughes Rig Count data

- 15:00 (US) Dec Consumer Credit: $12.0Be v $15.3B prior

- 19:00 (CO) Colombia Jan CPI M/M: 0.5%e v 0.4% prior; Y/Y: 1.7%e v 1.6% prior

- 19:00 (CO) Colombia Jan CPI Core M/M: No est v 0.4% prior; Y/Y: No est v 1.0% prior