Investors look to US CPI tomorrow

EU mid-market update: US futures stabilize after Monday rout; Oversold indicators flashing as draw-down comparisons are made; Investors look to US CPI tomorrow.

Notes/Observations

- European markets gained bullish momentum during first hour of trading, led by the DAX up ~1.0%, reversing a mixed open. FTSE 100 flat after early losses.

- After Monday’s rough ride—with Nasdaq down its worst since 2022 at -3.8%, and Bitcoin sliding to around $80K—US futures are showing a modest rebound, up roughly 0.3-0.5%. Equity volatility persists with the S&P 500 VIX elevated at 27.8, reflecting ongoing market jitters.

- Euro is trading at a four-month high near $1.09, as US dollar index weakens to four-month low at about 103.3.

- Attention centers on coalition politics as the German Greens signal optimism over a defense deal this week—a crucial variable for the SPD/CDU-led coalition's majority needed to pass key reforms like adjustments to the debt brake. Volkswagen reported a mixed set of results—profits missed but revenues beat, with guidance hinting at higher revenue in 2025 despite headwinds from tariffs, rising competition, and challenges in China.

- House Speaker Johnson may be facing multiple GOP holdouts on the continuing resolution to prevent a government shutdown, with Rep. Thomas Massie (R-Ky.) as the only public "no" and Reps. Kat Cammack (R-Fla.) and Beth Van Duyne (R-Texas) apparently remain undecided. Trump is actively lobbying House Republicans, while Vice President JD Vance is making a final push at a GOP meeting later today.

- Also, later today around 17:00ET Pres Trump set to deliver remarks at the Business Roundtable quarterly meeting, ahead of new 25% tariffs on imports of steel and aluminum expected to begin tomorrow.

- UK homebuilder names lifted after Persimmon outperformed estimates, guiding towards increased home completions for FY25. Taylor Wimpey, Barrat, Vistry, Bellway, Berkeley and Crest Nicholoson all higher.

- Ukrainian delegation is meeting US representatives in Saudi Arabia to discuss resource deals and a ceasefire, while behind-the-scenes Trump diplomacy continues with his envoy set to meet Putin.

- Asia closed mixed with KOSPI underperforming -1.3%. EU indices -0.1% to +0.8%. US futures +0.3-0.5%. Gold +0.7%, DXY -0.5%; Commodity: Brent +0.7%, WTI +0.6%; Crypto: BTC -0.8%, ETH -8.3%.

Asia

- Japan Q4 Final GDP revised lower (Q/Q: 0.6% v 0.7%Ee; GDP Annualized Q/Q: 2.2% v 2.8%e).

- Japan Jan Household Spending Y/Y: 0.8% v 3.7%e.

- President Trump and China President Xi said to be working on June summit with talks said to be in early phases. Some reports noted that Trump might meet with Xi in China as soon as April.

- Pres Trump's 25% tariffs on imports of steel and aluminum expected to begin Wed, Mar 12th.

- Japan Economy Minister Akazawa reiterated stance that overall assessment is that domestic economy to recover moderately; must be vigilant to downside risks from overseas, including impact of US policy.

- Japan Fin Min Kato noted that was monitoring impact of higher long term rates on economy. Reiterated would work on stable government bond issuance;

- Former BOJ official Momma believed that the next rate hike would likely be in Jun.

Europe

- Germany's Greens co-leader Brantner: Hopeful of defense deal this week - press [**Reminder: Two-thirds majority needed for changing Germany's constitution in regards to debt-brake reform, meaning CDU/CSU and SPD coalition would need another party to support the reform].

- UK Feb British Retail Consortium (BRC) LFL Sales Y/Y: 0.9% v 2.5% prior.

Americas

- President Trump reiterated view that US was not going to be subsidizing Canada any longer; US did not need energy, lumber or cars from Canada.

- President Trump stated that he would buy a Tesla to show support for Musk.

- House Minority Leader Jeffries (D-NY): House Democrats would not be complicit in supporting Republican Govt spending bill.

- US Budget Dir Vought expressed confidence that the stopgap funding Bill would pass House and Senate. Added that would need a few months to release the Budget.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.03% at 546.02, FTSE -0.17% at 8,585.34, DAX +0.76% at 22,779.57, CAC-40 +0.47% at 8,085.24, IBEX-35 +0.23% at 13,100.73, FTSE MIB -0.02% at 38,218.00, SMI -0.58% at 12,914.00, S&P 500 Futures +0.39%].

Market focal points/key themes: European indices open mixed and failed to gain direction through the early part of the session; higher yields offsetting optimism from increased spending; outperforming sectors include real estate and materials; underperforming sectors include health care and financials; Entra Eiendom rejects offer from Castellum; focus on US JOLTS data later in the day; earnings expected in the upcoming Americas session include Ciena and Eaton.

Equities

- Consumer discretionary: Lufthansa [LHA.DE] -2.0% (Delta Airlines cut outlook), HelloFresh [HFG.DE] -14.0% (prelim FY24 results, initial FY25 guidance).

- Consumer staples: Carl Zeiss [AFX.DE] +9.5% (Goldman Sachs raised to buy).

- Financials: Partners Group [PGHN.CH] +2.0% (FY24 results, above estimates).

- Healthcare: Novo Nordisk [NOVOB.DK] -3.0% (FDA says will not act against state-licensed Semaglutide pharmacies or physicians compounding the drug until April 22nd or the court's decision, whichever is later).

- Industrials: Volkswagen [VOW3.DE] +1.5% (FY24 results, mixed against guidance, sees FY25 profit flat and rev growing up to 5%), Rheinmetall [RHM.DE] +3.5% (US and Ukraine officials reportedly start meeting in Saudi Arabia), Henkel [HEN3.DE] -8.0% (earnings).

- Technology: SAP [SAP.DE] -1.0% (Oracle results).

-Real Estate: Persimmon [PSN.UK] +4.5% (FY24 results, above estimates, guides initial FY25).

Speakers

- ECB’s Rehn (Finland) noted that was keeping options open on rates.

- Sweden Central Bank (Riksbank) Gov Thedeen reiterated view that saw signs of an economic rebound; Recent inflation was higher than expected. Riksbank had the tools and was prepared to act on inflation.

- Norway Fin Min Stoltenberg commented that inflation remained on declining trend but recent CPI data showed need for prudent policy.

- US and Ukraine officials said to have begun their meeting in Saudi Arabia. Saudi Crown Prince and Ukraine President Zelenskiy said to discuss efforts to achieve sustainable peace in Ukraine.

- BOJ noted that financial institutions had sufficient capacity to absorb losses.

Currencies/fixed income

- USD continued to be on soft footing with the Dollar Index at a 4-month low as concerns amounted that the US economy was losing momentum. Focus on the upcoming JOLTS job opening data later today.

- EUR/USD hit a 4-month high as it tested the 1.09 level during the session. Some optimism on the German fiscal front aided the EUR currency. Dealers noted that German election winner Friedrich Merz's spending package could be approved in parliament as the Green party uttered some optimism.

- USD/JPY hovered around the 147 level after Japan Q4 GDP data was revised lower. The data pushed back some of the optimism of a potential BOJ rate hike in the near future.

- 10-year German Bund yield at 2.86% and 10-year Gilt yield at 4.63%. 10-year Treasury yield at 4.19%.

Economic data

- (NL) Netherlands Feb CPI M/M: +1.1% v -0.2% prior; CPI (final) Y/Y: 3.8% v 3.8% prelim.

- (NL) Netherlands Feb Final CPI EU Harmonized M/M:1.4% v 1.4% prelim; Y/Y: 3.5% v 3.5% prelim.

- (JP) Japan Feb Preliminary Machine Tool Orders Y/Y: 3.5% v 4.7% prior.

- (DK) Denmark Jan Current Account Balance (DKK): 33.9 v 34.0B prior.

- (TR) Turkey Jan Retail Sales Y/Y: 12.5% v 14.0% prior.

- (HU) Hungary Feb CPI M/M: 0.8% v 0.5%e; Y/Y: 5.6% v 5.3%e.

- (CZ) Czech Feb Final CPI M/M: 0.2% v 0.2% prelim; Y/Y: 2.7% v 2.7% prelim.

Fixed income issuance

- (ID) Indonesia sold total IDR12.0T vs. IDR10.0T target in Islamic bills and bonds (sukuk).

- (EU) European Union opens book to sell Dec 2035 NGEU bonds via syndicate; guidance seen +67bps to mid-swaps.

- (UK) DMO opened its book to sell 1.875% Sept 2049 Inflation-linked Gilts (UKTi) via syndicate; guidance seen 1.0-1.5bps to 2048 I/L Gilts.

- (ZA) South Africa sold total ZAR3.75B vs. ZAR3.75B indicated in 2033, 2038 and 2040 bonds.

- (ES) Spain Debt Agency (Tesoro) sold total €2.38B vs. €2.0-3.0B indicated range in 3-month and 9-month bills.

Looking ahead

- 06:00 (US) Feb NFIB Small Business Optimism: 101.0e v 102.8 prior.

- 06:00 (EU) Daily Euribor Fixing.

- 6:00 (CH) Switzerland to sell 3-month Bills.

- 06:25 (EU) Daily ECB Liquidity Stats.

- 6:30 (DE) Germany to sell €4.5B in 2.2% Mar 2027 Schatz.

- 6:30 (BE) Belgium Debt Agency (BDA) to sell combined €2.6B in 3-month and 12-month Bills.

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

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

- 6:30 (TR) Turkey to sell Bonds (2 tranches).

- 07:00 (FI) Finland to sell €1.0-2.0B in 9-month and 12-month bills.

- 06:30 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

- 07:30 (CL) Chile Central Bank Economist Survey.

- 08:00 (BR) Brazil Jan Industrial Production M/M: 0.4%e v -0.3% prior; Y/Y: 2.3%e v 1.6% prior.

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

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

- 09:30 (UR) Ukraine Q4 GDP Q/Q: No est v 0.2% prior; Y/Y: No est v 2.0% prior.

- 10:00 (US) Jan JOLTS Job Openings: 7.665Me v 7.600M prior.

- 10:30 (CA) Canada to sell 3-month, 6-month and 12-month bills.

- 11:30 (US) Treasury to sell 6-Week Bills.

- 12:00 (US) USDA World Agricultural Supply and Demand Estimates (WASDE) Crop Report.

- 13:00 (US) Treasury to sell 3-Year Notes.

- 16:30 (US) Weekly API Oil Inventories.

- 17:45 (NZ) New Zealand Feb Total Card Spending M/M: No est v 0.0% prior; Retail Card Spending M/M: No est v -1.6% prior.

- 19:00 (KR) South Korea Feb Unemployment Rate : 3.0%e v 2.9% prior.

- 19:50 (JP) Japan Q1 BSI Large All Industry Q/Q: No est v 5.7 prior; Large Manufacturing Q/Q: No est v 6.3 prior.

- 19:50 (JP) Japan Feb PPI M/M: -0.1%e v 0.3% prior; Y/Y: 4.0%e v 4.2% prior.

- 21:10 (KR) Bank of Korea to sell KRW500B in 1-year Bonds.

- 23:00 (TH) Thailand to sell THB30B in 2028 Bonds.

- 23:35 (JP) Japan to sell 20-year JGB Bonds.