TradeTheNews.com Staff
TradeTheNews.com
Notes/Observations
- German IFO Survey registered its 1st improvement in 7 months.
- Focus remains on potential military conflict in Ukraine; geopolitical risk adding a new layer of safe haven support.
- Fed begins a two-day policy meeting (decision on Wed) with participants looking for hints of timing and pace of rate hikes.
Asia
- Singapore Central bank (MAS) continued its tightened policy in an intra-meeting move. To raise slightly the rate of appreciation of the S$NEER Policy bank. It did leave the width of band and level at which centered unchanged (Reminder: Singapore Central Bank (MAS) uses the currency rather than interest rates to guide the economy).
- South Korea Q4 Preliminary GDP Q/Q: 1.1% v 1.1%e; Y/Y: 4.1% v 3.9%e.
- Australia Q4 CPI Q/Q: 1.3% v 1.0%e; Y/Y: 3.5% v 3.2%e.
- RBC brought forward its forecast of the 1st RBA rate hike to Aug 2022 (prior Feb 2023).
- PBOC adding liquidity before Lunar New Year (occurs between Jan 31-Feb 6th).
- China Commerce Ministry (MOFCOM) Official Chen stated that would promote continuous recovery of consumption in 2022; faced a grim foreign trade situation this year.
- BOJ Gov Kuroda noted that rising commodity prices was a larger factor in pushing inflation up than a weaker yen currency. He added that the current weaker yen was not abnormal.
- Japan PM Kishida reiterates that was desirable to create positive cycle in which companies were able to pass along costs, wage increases and generate economic growth.
Europe
- Joint statement from EU's Sefcovic and UK's Truss: Today's meeting took place in a constructive atmosphere; Will meet for further talks next week.
- UK PM Johnson under pressure once again for having a birthday party during England’s first lockdown in 2020 that involved 30 staff members and communal cake (Note: Lockdown rules at the time banned most indoor gatherings of more than 2 people).
- Italian legislators unable to elect a new President in the first round, next vote on Tuesday. Analysts did not expect a verdict until Thursday. Draghi remained as the favorite.
- Deutsche Bank analysts brought forward its ECB rate liftoff to Dec 2022 with a 25 bps raise (prior forecast: 10 bps in Dec 2023).
Americas
- US put troops at certain home bases on standby in case they were needed to support evacuation of citizens from Ukraine.
- Pentagon officials presented Biden with several options at a recent Camp David meeting. Options included sending up to 5,000 troops to countries in Eastern Europe. This number could be increased by tenfold if things worsened.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
Indices [Stoxx600 +0.94% at 460.64, FTSE +0.93% at 7,365.04, DAX +0.99% at 15,159.35, CAC-40 +1.23% at 6,871.60, IBEX-35 +1.06% at 8,507.44, FTSE MIB +0.96% at 26,223.00, SMI +0.61% at 11,953.90, S&P 500 Futures -0.71%].
Market Focal Points/Key Themes: European indices open higher across the board and stayed in the green as the session progressed; sectors among those trending higher are materials and consumer; laggard sectors included real estate and financials; reportedly Lufthansa thinking of taking over Alitalia again, this time in partnership with MSC; Temasek acquires Testing facility from Bridgepoint; Salzgitter and Orsted enter strategic partnership; MTG sells ESL unit to Savvy; earnings expected during the upcoming US session include General Electric, 3M, Johnson & Johnson and Raytheon.
Equities
- Consumer discretionary: Royal Mail [RMG.UK] +5% (trading update), PostNL [PNL.NL] +4% (prelim earnings), Modern Times [MTGB.SE] +40% (divestment).
- Financials: Credit Suisse [CSGN.CH] -1% (prelim earnings).
- Technology: Logitech International [LOGN.CH] +9% (earnings), Netcompany [NETC.DK] -6% (earnings).
- Telecom: Ericsson [ERICB.SE] +8% (earnings).
Speakers
- German IFO Economists noted that the 2022 New Year began with a glimmer of hope but was too early to talk about any turnaround of the economic situation. It noted of a slight easing of the supply shortages in industry and delivery bottlenecks in retail have eased.
- London Police chief: To investigate the alleged Downing Street lockdown breeches.
- Russia govt spokesperson Peskov stated that US putting troops on alert raised tensions.
- China Vice Minister of Finance (MOF) Xu stated that would maintain spending level in 2022 and confirmed to have greater tax and fee cuts in 2022. New special bond quotas to balance growth and risk.
- Thailand said to be considering to regulate the use of digital assets as means of payments.
Currencies/Fixed income
- Safe haven flows remained in focus as a potential military conflict in Ukraine and a faster pace of Fed policy tightening were on the front burner. USD remained steady as Fed began its two-day policy meeting (decision on Wed). Participants were looking for hints of timing and pace of Fed rate hikes with speculation of liftoff as soon as March and three more hikes during the remainder of 2022.
- USD, JPY and CHF also remained the main beneficiaries of safe-haven flows. Monday saw NATO announced it was putting forces on standby and reinforcing eastern Europe with more ships and fighter aircraft (**Note: Russia previously denounced such moves as an escalation of tensions).
- EUR/USD remained around the 1.13 area as the Euro continued to be unable to capitalize on improvement in the region’s economic data.
- Stronger inflation data out of Australia had several analyst bring forward their calls for the 1st potential RBA rate hike to later this year.
Economic data
- (FI) Finland Dec Unemployment Rate: 6.7% v 6.0% prior.
- (UK) Dec Public Finances (PSNCR): £18.1B v £37.0B prior; Public Sector Net Borrowing: £16.1B v £16.1Be; Central Government NCR: £16.3Bv £13.1B prior; PSNB (ex-banking groups): £16.8B v £17.5Be.
- (TR) Turkey Jan Real Sector Confidence (seasonally adj): 111.9 v 110.1 prior; Real Sector Confidence NSA (unadj): 109.5 v 106.1 prior.
- (ZA) South Africa Nov Leading Indicator: 125.9 v 125.2 prior.
- (ES) Spain Dec PPI M/M: 3.8% v 1.3% prior; Y/Y: 35.9% v 32.2% prior (annual pace at a 5 decade high).
- (HU) Hungary Nov Average Gross Wages Y/Y: 10.1% v 8.9%e.
- (DE) Germany Jan IFO Business Climate Survey: 95.7 v 94.5e (1st improvement in 7 months); Current Assessment Survey: 96.1 v 96.1e; Expectations Survey: 95.2 v 93.0e.
Fixed income issuance
- (IN) India sold total INR260B vs. INR260B indicated in 3-month, 6-month and 12-month bills.
- (ID) Indonesia sold total IDR11.0T vs. IDR11.0T target in Islamic bills and bonds (sukuk).
- (FR) France Debt Agency (AFT) opened its book to sell €3.0B in new 30-year inflation-linked bond (Oatei) via syndicate; guidance seen +16bps to Oats.
- (ZA) South Africa sold total ZAR3.9B vs. ZAR3.9B indicated in 2026, 2035 and 2040 bonds.
- (NL) Netherlands Debt Agency (DSTA) sold €1.99B vs. €1.0-2.0B indicated range in 0% Jan 2052 DSL bonds; Avg Yield: % v 0.275% prior.
- (AT) Austria Debt Agency (AFFA) sold total €2.0B vs. €2.0B indicated in 3-month and 6-month bills.
Looking ahead
- (NG) Nigeria Central Bank Interest Rate Decision: Expected to leave Interest Rates unchanged at 11.50% (no set time).
- 05:15 (CH) Switzerland to sell 3-month Bills.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.
- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).
- 06:00 (UK) Jan CBI Industrial Trends Total Orders: 22e v 24 prior; Selling Prices: 63e v 62 prior; Business Optimism: 8e v 2 prior.
- 06:00 (BR) Brazil Jan FGV Consumer Confidence: No est v 75.5 prior.
- 06:45 (US) Daily Libor Fixing.
- 07:00 (TR) Turkey to sell Bonds.
- 07:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).
- 07:00 (MX) Mexico Nov IGAE Economic Activity Index (Monthly GDP) M/M: +0.3%e v -0.2% prior; Y/Y: +1.0%e v -0.7% prior.
- 08:00 (HU) Hungary Central Bank (MNB) Interest Rate Decision: Expected to raise the Base Rate by 30bps to 2.70%.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Philadelphia Fed Non-Manufacturing Index: No est v 28.3 prior.
- 08:55 (US) Weekly Redbook LFL Sales data.
- 09:00 (US) Nov FHFA House Price Index M/M: 1.0%e v 1.1% prior.
- 09:00 (US) Nov S&P Case-Shiller House Price Index (20-city) M/M: 0.93%e v 0.92% prior; Y/Y: 18.00%e v 18.41% prior.
- 09:00 (US) Nov S&P Case-Shiller House Price Index (Overall) Y/Y: No est v 19.08% prior.
- 09:00 (BE) Belgium Jan Business Confidence: No est v 3.6 prior.
- 09:00 (EU) ECB weekly QE bond buying update.
- 09:00 IMF updates its World Economic Outlook (WEO).
- 09:00 (HU) Hungary Central Bank Gov Matolcsy post rate decision statement.
- 09:00 (EU) Weekly ECB Forex Reserves.
- 10:00 (US) Jan Consumer Confidence: 111.1e v 115.8 prior.
- 10:00 (US) Jan Richmond Fed Manufacturing Index: 14e v 16 prior.
- 13:00 (US) Treasury to sell 5-year notes.
- 14:00 (AR) Argentina Nov Economic Activity Index (monthly GDP) M/M: No est v -0.8% prior; Y/Y: No est v 16.7% prior.
- 16:00 (KR) South Korea Jan Consumer Confidence: No est v 103.9 prior.
- 16:30 (US) Weekly API Oil Inventories.
- 16:45 (NZ) New Zealand Dec Trade Balance (NZD): No est v -0.9B prior; Exports: No est v 5.9B prior; Imports: No est v 6.7B prior.
- 18:50 (JP) Japan Dec PPI Services Y/Y: 1.0%e v 1.1% prior.
- 20:10 (JP) BOJ to buy 3-5-year, 5-10-year bonds.
- 21:00 (NZ) New Zealand Dec Credit Card Spending M/M: No est v 4.5% prior; Y/Y: No est v -0.1% prior.
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