German ZEW survey expected to show improvement

Notes/Observations

- US Treasuries lower ahead of Wed’s Fed meeting

- Germany's ZEW Survey expected to improve aided by prospects of a gradual easing of restrictions before the end of March

Asia:

- RBA Mar Minutes reiterated stance that negative rates were unlikely. Underlying terms inflation was expected to remain below 2.0% over both 2021 and 2022.

Coronavirus:

- Total global cases 120.2M (+0.3% d/d); total deaths: 2.66M (+0.3% d/d)

- French Health Ministry: A new variant has been found in region of Brittany (*8Note: initial analysis does not show it’s more serious or transmissible than other variants)

Europe:

- Euro Zone Ministers (Eurogroup) pledge to extend fiscal support through 2022’; To extend public support for the economy through 2021 and 2022 and would deal with rising debt only once recovery was on track.

- France Central Bank (BoF) Quarterly Economic Outlook raised its 2021 GDP growth forecast from 5.0% to 5.5% while cutting the 2022 GDP growth forecast from 5.0% to 4.0%

- ECB's Schnabel (Germany) stated that should not read too much into weekly purchase data under the PEPP. Extrapolating from weekly PEPP data may lead to misleading conclusions

- ECB's Centeno (Portugal) stated that was quite happy with the impact from the PEPP and had the flexibility to use all of PEPP or leave part of it but we needed to be humble about the future

- Chancellor of the Exchequer Sunak (Fin Min): spoke with US Treasury Sec Yellen about Special Drawing Rights (SDR) allocations; new SDR allocations would help low income countries

Americas:

- Biden administration said to be planning the first major federal tax hike since 1993 targeting those earning more than $400K a year

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 +0.48% at 425.12, FTSE +0.71% at 6,797.55, DAX +0.60% at 14,547.95, CAC-40 +0.17% at 6,046.12, IBEX-35 +0.55% at 8,683.00, FTSE MIB +0.62% at 24,289.50, SMI +0.83% at 10,957.98, S&P 500 Futures -0.01%]

Market Focal Points/Key Themes: European indices open higher across the board; sectors trending to the upside include consumer discretionary and industrials; energy and materials sectors among those underperforming; further countries suspend use of AstraZeneca covid vaccine; Nokia announces cost savings program; Volkswagen announces new EV, batter targets; earnings expected during the upcoming US session include Brinker, Jabil and Hartfort Financial Services

Equities

- Consumer discretionary:[NWG.UK] -1% (FCA investigation)

- Healthcare: Iliad [ILD.FR] +5% (earnings), Morphosys [MOR.DE] -8% (earnings)

- Industrials: Ferguson [FERG.UK] +1% (earnings), Volkswagen [VOW3.DE] +5% (targets)

- Technology:

- Telecom: Nokia [NOKIA.FI] -1% (business strategy)

Speakers

- ECB's Lane (Ireland, chief economist): Damage to the economy should be as little as possible due to enough policy support. Needed to make sure yield curves did not move ahead of the economy and impeded financing conditions

- BOE Gov Bailey saw inflation within the 2% target but did expect a flare-up in the immediate term inflation due to the effect of public support

- BOE Dep Gov Woods stated that a review of rules for the insurance sector after Brexit would take time to complete, would not lead to any radical departure or a reduction in capital requirements

- Sweden Central Bank (Riksbank) Gov Ingves stated that policy needed to remain expansionary due to considerable uncertainty. Imbalances must be addressed by various policy areas. Expected to use the entire QE envelope of SEK700B

- Sweden Central Bank (Riksbank) Gov Jansson saw inflation risks are balance and no need to make monetary policy less expansionary. Recent rise in inflation seen as transitory and underlying inflation was staying moderate. Rate cut relevant if confidence on inflation target was threatened

- Norway Finance Ministry stated that the domestic economy to be back at pre-pandemic level towards end-2022. Forecasted 2021 Mainland GDP growth at 4.5% and 2022 Mainland GDP growth at 3.4

- Czech Central Bank's Michl warned against premature rate hikes and could not predict now when hikes might start

- Bank of Korea (BOK) Feb Minutes saw One member note its was too early to talk of normalizing monetary policy ; one member noted that job growth would not be as fast as GDP recovery; one member noted that rising bond yields stemmed from economic recovery and one member stressed the need to focus on financial stability if economy recovered

- US Sec of State Blinken stated that China was using coercion and aggression in Hong Kong

Currencies/Fixed Income

- FX markets mainly was quiet in listless trading ahead of key rate decisions later in the week (Fed on Wed, BOE on Thurs, BOJ on Fri)

- EUR/USD steady at 1.1925 area. Euro continued to face headwinds as recent rise in the number of EU coronavirus cases had led to an extension of restrictions. Market participants awaiting the German ZEW Survey to gauge the sentiment of when the restrictions are lifted.

- GBP/USD was moving lower to probe the lower end of the 1.38 area. Focus on the upcoming BOE. Recent BOE speak has been optimistic on the growth front.

Economic data

- (FR) France Feb Final CPI M/M: 0.0% v -0.1%e; Y/Y: 0.6% v 0.4%e; CPI Ex-Tobacco Index: 104.24 v 104.12e

- (FR) France Feb Final CPI EU Harmonized M/M: 0.0% v 0.0%e; Y/Y: 0.8% v 0.7%e

- (ES) Spain Jan House transactions Y/Y: -15.4% v +3.7% prior

- (ZA) South Africa Q1 BER Consumer Confidence: -9 v -10e

- (HK) Hong Kong Feb Unemployment Rate: 7.2% v 7.1%e (highest since 2004)

- (NG) Nigeria Feb CPI Y/Y: 17.3% v 17.1%e

- (CZ) Czech Jan Current Account (CZK): 28.7B v 32.2Be

- (IT) Italy Feb Final CPI M/M: 0.1% v 0.1% prelim; Y/Y: 0.6% v 0.6% prelim

- (IT) Italy Feb Final CPI EU Harmonized M/M: -0.2% v -0.2% prelim; Y/Y: 1.0% v 1.0% prelim

Fixed income Issuance

- (ID) Indonesia sold total IDR18.9T vs. IDR30.0T target in bills and bonds

- (FR) France Debt Agency (AFT) opened its book to sell Jun 2044 green bond via syndicate; guidance seen +20bps to oats

Looking Ahead

- (BR) Brazil Jan Total Formal Job Creation: +188.7Ke v -67.9K prior

- 06:00 (DE) Germany Mar ZEW Current Situation Survey: -62.0e v -67.2 prior; Expectations Survey: 74.0e v 69.6 prior

- 06:00 (EU) Euro Zone Mar ZEW Expectations Survey: No est v 69.6 prior

- 06:00 (EU) Daily Euribor Fixing

- 06:00 (UK) DMO to sell £3.5B in 0.125% Jan 2024 Gilts

- 06:10 (EU) Daily ECB Liquidity Stats

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

- 06:30 (DE) Germany to sell €5.0B in 0% Mar 2023 Schatz

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

- 06:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO)

- 07:00 (BR) Brazil Mar FGV Inflation IGP-10 M/M: 2.8%e v 3.0% prior

- 07:00 (FI) Finland to sell €1.0B in 2030 and 2052 Bonds

- 07:30 (UK) DMO to sell £1.5B in 1.625% Oct 2054 Gilts

- 07:30 (EU) ESM to sell €1.5B in 6-Month Bills

- 07:45 (US) Daily Libor Fixing

- 08:00 (TR) Turkey to sell 2022 and 2025 bonds

- 08:30 (US) Feb Advance Retail Sales M/M: -0.5%e v +5.3% prior; Retail Sales (ex-auto): M/M: 0.1%e v 5.9% prior; Retail Sales (ex-auto/gas): -0.5%e v +6.1% prior; Retail Sales (Control Group): -0.9%e v +6.0% prior

- 08:30 (US) Feb Import Price Index M/M: 1.1%e v 1.4% prior; Y/Y: 2.7%e v 0.9% prior; Import Price Index (ex-petroleum) M/M: 0.4%e v 0.9% prior

- 08:30 (US) Feb Export Price Index M/M: 1.0%e v 2.5% prior; Y/Y: No est v 2.3% prior

- 08:30 (CA) Canada Jan Int'l Securities Transactions (CAD): No est v 5.1B prior

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

- 09:00 (PL) Poland Jan Current Account Balance: €3.1Be v €0.4B prior; Trade Balance: €0.9Be v €0.3B prior; Exports: €20.3Be v €19.8B prior; Imports: €19.5Be v €19.5B prior

- 09:00 (PL) Poland Feb CPI Core M/M: 0.2%e v 0.0% prior; Y/Y: 3.7%e v 3.7% prior

- 09:00 (UK) Daily Baltic Dry Bulk Index

- 09:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed)

- 09:15 (US) Feb Industrial Production M/M: 0.4%e v 0.9% prior; Capacity Utilization: 75.5%e v 75.6% prior; Manufacturing Production: 0.1%e v 1.0% prior

- 10:00 (US) Jan Business Inventories: 0.3%e v 0.6% prior

- 10:00 (US) Mar NAHB Housing Market Index: 84e v 84 prior

- 10:00 (EU) Weekly ECB Forex Reserves

- 10:45 (UK) BOE to buy £1.48B in APF Gilt purchase operation (over 20-years)

- 12:00 (RU) Russia Feb Industrial Production Y/Y: -2.1%e v -2.5% prior

- 13:00 (US) Treasury to sell 20-Year bonds

- 16:30 (US) Weekly API Oil Inventories

- 17:45 (NZ) New Zealand Q4 Current Account Balance (NZD): -2.9Be v -3.5B prior; Current Account to GDP Ratio: -0.8%e v -0.8% prior

- 19:00 (KR) South Korea Feb Unemployment Rate: 5.0%e v 5.4% prior

- 19:30 (AU) Australia Feb Leading Index M/M: No est v 0.3% prior

- 19:30 (AU) RBA's Kent online speech

- 19:50 (JP) Japan Feb Trade Balance: £420.0Be v -¥325.4B prior (revised from -¥323.9B); Adjusted Trade Balance: -£119.0Be v +¥392.8B prior; Exports Y/Y: 0.0%e v 6.4% prior; Imports Y/Y: +12.0%e v -9.5% prior

- 20:30 (SG) Singapore Feb Non-oil Domestic Exports M/M: -0.7%e v +7.0% prior; Y/Y: 6.1%e v 12.8% prior; Electronic Exports Y/Y: No est v 13.5% prior

- 21:10 (JP) BOJ Outright Bond Purchase Operation for 1~3 Years; 3~5 Years; 5~10 Years and 10~25 Years maturities

- 21:30 (KR) Bank of Korea (BOK) to sell KRW2.2T in 2-Year Bonds

- 23:00 (CN) China to sell 1-year and 10-year Upsize Bonds

- 23:30 (JP) Japan to sell 12-Month Bills