Price action remains subdued ahead of key US/EU data in coming days

Notes/observations

- Focus on 2nd reading of US Q4 GDP data.

- RBNZ kept its policy steady and softened its previous threat to lift rates even further.

- Congress continues to work to avoid a partial shutdown from March 1st.

Asia

- Australia Jan CPI Y/Y: 3.4% v 3.6%e.

- RBNZ left the Official Cash Rate (OCR) unchanged at 5.50% (as expected) for its 5th straight pause in the current tightening cycle. Staff Projections lowered the OCR peak rate from 5.69% to 5.60%.

- RBNZ Gov Orr post rate decision press conference noted it had a strong consensus that interest rates were sufficient; many variables given confidence that policy was working. Did discuss a hike in rates, but certainly not a cut. Still concerned about underlying inflation and could not suffer any upward surprises.

- BOJ Exec Dir Shimizu stated that the likelihood of inflation target achievement as still not 'sufficiently high'.

- Hong Kong’s government delivered their 2024 budget with major easing measures for the property sector.

Americas

- Fed Discount Minutes: All regional Fed reserve banks voted to hold discount rate in Jan.

- Fed’s Bowman (voter, hawk) reiterated stance that remained cautious on monetary policy; Was willing to raise policy rate if inflation progress stalled or reversed.

- House Speaker Johnson offered Mar 8th and Mar 22nd as the new funding deadlines, expressed a willingness to delay funding deadlines.

- President Biden won the Michigan Primary.

Energy

- Weekly API Crude Oil Inventories: +8.4M v +7.2M prior.

- OPEC+ said to consider extending voluntary oil output cuts into the second quarter to provide additional support for the market. Could keep them in place until the end of the year.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.25% at #, FTSE -0.58% at 7,638.62, DAX +0.11% at 17,574.95, CAC-40 -0.11% at 7,939.80, IBEX-35 -0.26% at 10,087.42, FTSE MIB -0.40% at 32,575.00, SMI +0.29% at 11,473.20, S&P 500 Futures -0.49%].

Market Focal Points/Key Themes: European indices open mixed with a bias to the downside and failed to gain momentum through the early part of the session; better performing sectors include financials and health care; among underperforming sectors are technology and energy; materials subsector weighted down by continued price pressure on iron ore which affected Rio Tinto shares; personal care subsector under pressure following results from Reckitt Benckiser; Swisscom in exclusive negotiations to acquire Vodafone Italia; Nel looking at spinning off its Fueling unit; focus on release of second reading of US GDP later in the day; earnings expected in the upcoming Americas session include Salesforce, TJX Companies, Snowflake and HP.

Equities

- Consumer discretionary: Just Eat Takeaway.com [JET.UK] -4.0% (earnings), Casino Guichard-Perrachon [CO.FR] -7.0% (earnings).

- Consumer staples: Reckitt Benckiser [RKT.UK] -8.5% (earnings).

- Energy: Uniper [UN01.DE] +2.5% (final results; guidance).

- Healthcare: OSE Immunotherapeutics [OSE.FR] +55.0% (partnership with Abbvie), Idorsia Pharmaceuticals [IDIA.CH] +13.5% (partnership with Viatris).

- Industrials: Volkswagen [VOW3.DE] +1.0% (BYD has no plans to enter US; Apple said to stop EV development), Aston Martin Lagonda Global Holdings [AML.UK] -3.0% (earnings), Taylor Wimpey [TW.UK] -3.5% (earnings).

- Technology: Atos [ATO.FR] +2.5% (ends unit sale talks; prelim results), ASM International [ASM.NL] -2.5% (earnings; buyback; outlook), Worldline [WLN.FR] -11.0% (earnings).

- Telecom: Vodafone [VOD.UK] +3.5% (confirms prelim deal with Swisscom).

Speakers

- ECB’s De Guindos (Spain) stated that recent inflation outlook had been very positive. Needed to be sure that prices would move towards the 2% target. Rates would be cut once assured CPI moving towards target.

- EU Commission Chief Von der Leyen stated that the region needed to be prepared for risk of war; threat was not imminent but possible.

- China regulators said to have told some quantitative funds to stop taking new investments from clients and phase out existing Direct market access (DMA) products.

- Recent US sanctions on Russia's Sovcomflot threaten to dent Russian oil sales to India; Indian refiners said to be concerned the latest sanctions would create challenges in getting vessels for Russian oil and could drive up freight rates.

Currencies/fixed income

- USD was a tad firmer in the session but locked within recent ranges. Overall price action remained subdued as market participants’ awaited key data. Later today the US 2nd reading of Q4 GDP is due. Dealers noted that USD would likely to stay supported as recent "exuberance" over Fed easing was over. Markets currently view 97.5% chance of a pause at the Mar policy meeting and a 81% chance of a pause continuing in May.

- EUR/USD holding above 1.08 level with focus on a plethora of EU growth and inflation data in the coming sessions.

- USD/JPY inching back towards 151 area. BOJ Exec Dir Shimizu provided some yen softness after stating that the likelihood of inflation target be sustainably achieved was still not 'sufficiently high'.

- NZD currency (Kiwi) was softer after the RBNZ kept its policy steady and softened its previous threat to lift rates even further.

Economic data

- (NL) Netherlands Feb Producer Confidence Index: -4.2 v -4.4 prior.

- (FI) Finland Jan PPI M/M: +0.3% v -0.7% prior; Y/Y: -5.4% v -7.6% prior.

- (SE) Sweden Jan PPI M/M: +0.3% v -1.6% prior; Y/Y: -2.3% v -7.7% prior.

- (SE) Sweden Jan Trade Balance (SEK): 13.3B v 1.9B prior.

- (FI) Finland Dec Final Trade Balance: -€0.4B v -€0.3B prelim.

- (DK) Denmark Jan Retail Sales M/M: +0.4% v -0.9% prior; Y/Y: 5.8% v 4.7% prior.

- (TR) Turkey Feb Economic Confidence: 99.0 v 99.4 prior.

- (TR) Turkey Jan Trade Balance: -$6.2B v -$6.2Be.

- (CZ) Czech Jan PPI Industrial M/M: 2.5% v 2.2%e; Y/Y: -1.8% v -1.8%e.

- (SE) Sweden Feb Consumer Confidence: 82,7 v 82.7 prior; Manufacturing Confidence: 98.4 v 99.2 prior; Economic Tendency Survey: 90.5 v 90.6 prior.

- (IT) Italy Feb Consumer Confidence: 97.0 v 97.0e; Manufacturing Confidence: 87.3 v 88.7e; Economic Sentiment: 95.8 v 97.9 prior.

- (CH) Swiss Feb Expectations Survey: +10.2 v -19.5 prior.

- (IS) Iceland Feb CPI M/M: +1.3% v -0.2% prior; Y/Y: 6.6% v 6.7% prior.

- (PT) Portugal Feb Consumer Confidence: -24.4 v -26.9 prior; Economic Climate Indicator: 1.7 v 1.5 prior.

- (EU) Euro Zone Feb Economic Confidence: 95.4 v 96.6e; Industrial Confidence: -9.5 v -9.2e; Services Confidence: 6.0 v 9.0e; Consumer Confidence (final): -15.5 v -15.5 advance.

- (BE) Belgium Q4 Final GDP Q/Q: 0.3% v 0.4% prelim; Y/Y: 1.5% v 1.6% prelim.

Fixed income issuance

- (IN) India sold total INR340B vs. INR340B indicated in 3-month, 6-month and 12-month bills.

- (DK) Denmark sold total DKK2.14B in 3-month and 6-month Bills.

- (UK) DMO sold £4.0B in new 4.00% Oct 2031 Gilts; Avg Yield: 4.085% v 3.479% prior; bid-to-cover: 3.00x v 2.67x prior; Tail: 2.2bps v 0,2bps prior.

- (SE) Sweden sold SEK3.0B vs. SEK3.0B indicated in 1.75% Nov 2033 Bonds; Avg Yield: 2.5203% v 2.4048% prior, bid-to-cover: 2.29x v 4.01x prior.

- (NO) Norway sold NOK3.0B vs. NOK3.0B indicated in 3.00% Aug 2033 bonds; Avg Yield: 3.88% v 3.68% prior; bid-to-cover: 3.64x v 2.75x prior.

- (IT) Italy Debt Agency (Tesoro) sold total €8.25B vs. €7.5-8.25B indicated range in 5-year and 10-year BTP Bonds.

- Sold €3.75B vs. €3.5-3.75B indicated range in new 3.35% July 2029 BTP bonds; Avg Yield: 3.41% v 3.14% prior; Bid-to-cover: 1.40x v 1.35x prior.

- Sold €4.5B vs. €4.0-4.5B indicated range in new 3.85% July 2034 BTP bonds; Avg Yield: 3.91% v 3.69% prior; bid-to-cover: 1.36x v 1.68x prior.

- (IT) Italy Debt Agency (Tesoro) sold €1.5B vs. €1.0-1.5B indicated in Oct 2031 CCTeu (floating rate notes); Real Yield: 5.20% v 5.23% prior; bid-to-cover: 1.74x v 1.50x prior.

Looking ahead

- (BR) G20 Finance Ministers meeting in Sao Paulo.

- 05:25 (EU) Daily ECB Liquidity Stats.

- 05:30 (BE) Belgium Feb CPI M/M: No est v 0.5% prior; Y/Y: No est v 1.8% prior.

- 05:30 (DE) Germany to sell combined €1.5B in 15-year bonds (2 tranches).

- 06:00 (IE) Ireland Jan Retail Sales Volume M/M: No est v 0.9% prior; Y/Y: No est v 3.9% prior.

- 06:00 (BR) Brazil Feb FGV Inflation IGPM M/M: -0.5%e v 0.1% prior; Y/Y: -3.7%e v -3.3% prior.

- 06:00 (CZ) Czech Republic to sell 2032, 2035 and 2037 Bonds.

- 06:00 (RU) Russia OFZ Bond auction (2 tranches).

- 07:00 (US) MBA Mortgage Applications w/e Feb 23rd: No est v -10.6% prior.

- 07:00 (CL) Chile Jan Unemployment Rate: 8.6%e v 8.5% prior.

- 07:00 (UK) Weekly PM Question time in House.

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

- 08:30 (US) Q4 Preliminary GDP Annualized (2nd of 3 readings) Q/Q: 3.3%e v 3.3% prior; Personal Consumption: 2.7%e v 2.8% prior.

- 08:30 (US) Q4 Preliminary GDP Price Index (2nd of 3 readings) Q/Q: 1.5%e v 1.5% prior; Core PCE Q/Q: 2.0%e v 2.0% prior.

- 08:30 (US) Jan Advance Goods Trade Balance: -$88.4Be v -$87.9B prior (revised from -$88.5B).

- 08:30 (US) Jan Preliminary Wholesale Inventories M/M: 0.4%e v 0.4% prior; Retail Inventories M/M: 0.1%e v 0.8% prior.

- 08:30 (CA) Canada Q4 Current Account Balance: -$2.0Be v -$3.2B prior.

- 10:30 (US) Weekly DOE Oil Inventories.

- 10:30 (UK) BOE’s Mann (hawkish dissenter).

- 11:00 (RU) Russia Jan Real Retail Sales Y/Y: 7.0%e v 10.2% prior.

- 11:00 (RU) Russia Jan Unemployment Rate: 3.0%e v 3.0% prior; Dec Real Wages Y/Y: 6.8%e v 7.2% prior.

- 11:00 (RU) Russia Jan Industrial Production Y/Y: 4.1%e v 2.7% prior.

- 11:30 (US) Treasury to sell 17-Week Bills.

- 12:00 (US) Fed’s Bostic.

- 12:15 (US) Fed;s Collins.

- 12:45 (US) Fed’s Williams.

- 13:30 (MX) Mexico Central Bank (Banxico) Quarterly Inflation Report (QIR).

- 14:00 (BR) Brazil Jan Central Govt Budget Balance (BRL): +79.8Be v -116.1B prior.

- 14:10 (NZ) RBNZ Gov Orr testifies in Parliament.

- 18:50 (JP) Japan Jan Retail Sales M/M: +0.5%e v -2.6% prior (revised from -2.9%); Y/Y: 2.0%e v 2.3% prior (revised from 2.1%); Dept. Store, Supermarket Sales Y/Y: No est v 2.5% prior.

- 18:50 (JP) Japan Jan Preliminary Industrial Production M/M: -6.8%e v 1.4% prior; Y/Y: -1.6%e v -1.0% prior.

- 19:00 (NZ) New Zealand Feb ANZ Business Confidence: No est v 36.6 prior; Activity Outlook: No est v 25.6 prior.

- 19:01 (UK) Feb Lloyds Business Barometer: No est v 44 prior.

- 19:30 (AU) Australia Jan Retail Sales M/M: +1.5%e v -2.7% prior.

- 19:30 (AU) Australia Q4 Private Capex: 0.4%e v 0.6% prior.

- 19:30 (AU) Australia Jan Private Sector Credit M/M: 0.4%e v 0.4% prior; Y/Y: No est v 4.8% prior.

- 20:30 (JP) BOJ Board member Takata in Shiga.

- 20:30 (NZ) New Zealand to sell combined NZ$500M in 2028, 2033 and 2041 bonds.

- 21:00 (SG) Singapore Jan M2 Money Supply Y/Y: No est v 4.7% prior; M1 Money Supply Y/Y: No est v 2.1% prior.

- 21:00 (NZ) RBNZ Gov Orr.

- 22:35 (JP) Japan to sell 2-Year JGB Bonds.

- 23:00 (TH) Thailand Jan ISIC Manufacturing Production Y/Y: -5.0%e v -6.3% prior; Capacity Utilization: No est v 55.3% prior.