TradeTheNews.com Staff
TradeTheNews.com
Notes/Observations
- Major EU PMI Manufacturing data mixed (Beats: France, Germany, Euro Zone; Misses: UK).
- Safe-haven flows continue to dominate sentiment; focus on tension surrounding Ukraine.
- Fed seen remaining hawkish at Wed’s FOMC meeting.
Asia
- Japan Jan Preliminary PMI Manufacturing registered its 12th month of expansion and highest since Jan 2018 (54.6 v 54.3 prior).
- Australia Jan Preliminary PMI Manufacturing registered its 20th month of expansion but the lowest since Aug (55.3 v 57.7 prior).
- Former China PBOC Advisor Yu Yongding stated that PBoC rate cuts were not enough to stabilize economy, favored more expansive fiscal policy.
Europe
- ECB's Holtzmann (Austria, hawk) See great deal of uncertainty about how long inflation will stay above 2% target.
- ECB’s Rehn (Finland) reiterated Council view that inflation drivers would subside during the course of 2022; Inflation seen back around target in the next two years. Speed of policy normalization will depend on incoming economic data.
- ECB's Makhlouf (Ireland) reiterated Council view of seeing inflation slowing during the course of 2022 but remaining over 2.0% target. Watchful for and 2nd round effects of inflation.
- UK Deputy PM Raab reiterated West view that Russia would face severe economic consequences if it tried to install a puppet regime in the Ukraine.
- UK Foreign Office said to accused Russia President Putin of planning to install a pro-Moscow figure as leader of Ukraine and that former Ukrainian lawmaker Yevheniy Murayev is a potential candidate (Note: Russia's Foreign Ministry rejected claim).
- UK Foreign Sec Truss (Brexit negotiator) stated that if there was a deal to be done on Northern Ireland protocol then needed to make it happen.
Americas
- US State Dept authorized the voluntary departure of US direct hire employees, ordered the departure of eligible family members from Embassy Kyiv (Ukraine).
- President Biden said to consider deploying troops to Eastern Europe and Baltics, considering deploying warships and aircraft to NATO allies.
- Sec of State Blinken stated that if a single additional Russian force entered Ukraine in an aggressive manner, this would trigger a swift, severe and significant response.
Energy
- US nuclear negotiator Malley noted that an Iran nuclear deal was seen as not likely without the release of four US prisoners.
Speakers/Fixed income/FX/Commodities/Erratum
Equities
Indices [Stoxx600 -1.60% at 466.86, FTSE -0.75% at 7,438.00, DAX -1.24% at 15,410.85, CAC-40 -1.48% at 6,964.00, IBEX-35 -1.32% at 8,579.50, FTSE MIB -1.65% at 26,615.00, SMI -1.72% at 12,143.50, S&P 500 Futures +0.15%].
Market Focal Points/Key Themes: European indices open lower across the board and advanced further into the red as the session wore on; sectors marginally higher include telecom and consumer discretionary; sectors among those leading to the downside are materials and technology; oil and gas subsector supported after crude prices start the day higher; KKR to acquire Accell through consortium; Wendell sells it’s Financial Services unit; Mowi to launch takeover of ATS; earnings expected during the upcoming US session include Halliburton, Steel Dynamics and IBM.
Equities
- Consumer discretionary: Accell Group [ACCEL.NL] +24% (to be acquired).
- Consumer staples: Unilever [UNA.NL] +6% (stake sale speculation), Mowi ASA [MOWI.NO] +0.5% (acquisition).
- Financials: Amigo Holdings [AMGO.UK] -52% (update on equity issue & scheme of arrangement).
- Healthcare: Koninklijke Philips [PHIA.NL] -2.5% (final earnings).
- Industrials: Renault [RNO.FR] +4% (EV investment).
- Technology: De La Rue [DLAR.UK] -27% (trading update).
Speakers
- ECB's Villerory (France) reiterated stance that ECB would do what was necessary to get inflation back to 2% target. Needed to progressively normalize monetary policy.
- France Fin Min Le Maire stated that would maintain its current economic outlook (**Reminder: On Jan 4th Le Maire reiterated its 2022 GDP growth forecast at 4.0%).
- EU Foreign Policy Chief Borrell stated that had continue strong coordination with US on Ukraine; nothing concrete on sanctions approach.
- NATO allies said to be sending more ships and aircraft to enhance deterrence in Eastern Europe.
- Saudi Oil Min Abdulaziz noted of a possible risk of energy shortages during the green transition.
- Iran official: Linking revival of 2015 nuclear agreement with release of US prisoners will make reaching a deal difficult.
Currencies/Fixed Income
- Safe-haven flows continue to dominate sentiment in session with market participant believing that the Fed seen remaining hawkish at Wed’s FOMC meeting. Focus also on the tensions surrounding Ukraine borders as NATO allies were said to be sending more ships and aircraft to enhance deterrence in Eastern Europe. US State Dept authorized the voluntary departure of US direct hire employees from Kiev.
- EUR/USD steady at 1.1320 area and unable to capitalize on better major EU PMI Manufacturing data. Various ECB members reiterated over the weekend the Council view of seeing inflation slowing during the course of 2022 but remaining over 2.0% target and would be watchful for and 2nd round effects of inflation.
- RUB currency was softer at nine-month lows as Ukraine tensions continued to percolate. USD/RUB moved beyond the 78 handle in the session. EU foreign ministers were due to discuss the crisis with US Sec of State Blinken later today.
Economic data
- (FI) Finland Dec PPI M/M: 2.9% v 0.9% prior; Y/Y: 23.3% v 21.1% prior.
- (MY) Malaysia mid-Jan Foreign Reserves: $116.2B v $116.9B prior.
- (CZ) Czech Jan Consumer Confidence Index: -16.8 v -17.0 prior; Business Confidence: 11.0 v 8.4 prior; Composite Index (Consumer & Business Confidence): 5.5 v 3.3 prior.
- (TW) Taiwan Dec Industrial Production Y/Y: 10.0% v 9.5%e.
- (FR) France Jan Preliminary Manufacturing PMI: 55.5 v 55.3e (14th month of expansion); Services PMI: 53.1 v 55.3e; Composite PMI: 52.7 v 54.7e.
- (TW) Taiwan Dec M2 Money Supply Y/Y: 8.0% v 8.3% prior; M1 Money Supply Y/Y: 12.8% v 14.2% prior.
- (DE) Germany Jan Preliminary Manufacturing PMI: 60.5 v 57.0e (19th month of expansion); Services PMI: 52.2 v 48.0e (moved back into expansion); Composite PMI: 54.3 v 49.4e.
- (EU) Euro Zone Jan Preliminary Manufacturing PMI: 59.0 v 57.5e (18th month of expansion); Services PMI: 51.2 v 52.0e; Composite PMI: 52.4 v 52.6e.
- (CH) Swiss weekly Total Sight Deposits (CHF): 724.8B v 724.5B prior; Domestic Sight Deposits: 657.4B v 655.1B prior.
- (IS) Iceland Dec Wage Index M/M: 0.0% v 0.3% prior; Y/Y: 7.3% v 7.5% prior.
- (PL) Poland Dec Real Retail Sales M/M: 14.9% v 17.2%e; Y/Y: 8.0% v 9.6%e; Retail Sales Y/Y: 16.9% v 18.7%e.
- (UK) Jan Preliminary Manufacturing PMI: 56.9 v 57.6e (20th straight expansion); Services PMI: 53.3 v 54.0e; Composite PMI: 53.4 v 54.0e.
Fixed income issuance
- None seen.
Looking ahead
- (UK) EU’s Sefcovic to meet UK Brexit negotiator Truss.
- Italy lawmakers to start voting for the next President.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (DE) Germany to sell combined €6.0B in 6-month and 12-month BuBills.
- 06:00 (IL) Israel Dec Unemployment Rate: No est v 4.5% prior; Unemployment Rate (including Covid Effect): No est v 6.5% prior.
- 06:00 (IL) Israel to sell bonds.
- 06:25 (BR) Brazil Central Bank Weekly Economists Survey.
- 06:45 (US) Daily Libor Fixing.
- 07:00 (IN) India announces details of upcoming bond sale (held on Fridays).
- 07:00 Turkey to sell fixed-rate and floating rate Bonds.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Dec Chicago Fed National Activity Index: No est v 0.37 prior.
- 09:00 (FR) France Debt Agency (AFT) to sell €4.4-5.6B in 3-month, 6-month and 12-month bills.
- 09:45 (US) Jan Preliminary Markit Manufacturing PMI: 56.7e v 57.7 prior; Services PMI: 54.8e v 57.6 prior; Composite PMI: No est v 57.0 prior.
- 17:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 97.9 prior.
- 18:00 (KR) South Korea Q4 Preliminary GDP Q/Q: 1.1%e v 0.3% prior; Y/Y: 3.9%e v 4.0% prior.
- 19:30 (AU) Australia Q4 CPI Q/Q: 1.0%e v 0.8% prior; Y/Y: 3.2%e v 3.0% prior.
- 19:30 (AU) Australia Dec Business Confidence: No est v 12 prior; Business Conditions: No est v 12 prior.
- 23:30 (HK) Hong Kong to sell 3-month and 6-month Bills.
- 22:35 (JP) Japan to sell 40-Year JGB Bonds.
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