EU Mid-Market Update: Risk aversion sentiment continues to simmer ahead of next week's Fed meeting; PBoC cuts more policy rates.


- Risk aversion continued to percolate ahead of next week Fed meeting (recent re-pricing in Fed rate hike expectations with markets pricing in up to four hikes in 2022 with liftoff seen in March [some speculation it could be 50bps at that time].

- UK Dec Retail Sales data miss expectations.

- China PBoC cuts more policy rates (as anticipated; cuts Standing Lending Facility by 10bps.


- Japan Dec National CPI Y/Y: 0.8% v 0.9%e; CPI Ex-fresh food (core) Y/Y: 0.5% v 0.6%e.

- South Korea Vice Fin Min Ahn: confirmed size of extra budget at KRW14.0T and would issue KRW11.3T in bonds to finance it (Note: Extra budget could fan inflationary pressures and likely bolstering the case for the BOK to raise interest rates).

- China PBoC speculated to cut rates on Standing Liquidity Facility (SLF) loans in the near furure.


- UK Foreign Sec Truss called on allies to curb the rise of Russia and China; West to stand together against dictatorship and face down aggressors.

- UK Jan GfK Consumer Confidence: -19 v -15e (lowest since Feb 2021).


- Treasury Sec Yellen reiterated stance that inflation to remain above 2% in medium term but did expect it to come down near 2.0% by year end.

- Fed to seek public comment on Central Bank Digital Currency; Outlines potential benefits of CBDC.

Speakers/Fixed income/FX/Commodities/Erratum


Indices [Stoxx600 -1.37% at 476.74, FTSE -0.86% at 7,519.40, DAX -1.39% at 15,691.39, CAC-40 -1.19% at 7,108.68, IBEX-35 -1.18% at 8,710.92, FTSE MIB -1.26% at 27,223.00, SMI -1.02% at 12,432.79, S&P 500 Futures -0.09%].

Market Focal Points/Key Themes: European indices open lower across the board and stayed firmly in the red as the session wore on; all sectors start the day in the red; least negative sectors include consumer discretionary and financials; sectors among those leading to the downside include industrials and materials; wind turbine manufacturers under pressure after Siemens Gamesa cuts outlook; Photo-Me discloses take private offer; Playtech affirms recommendation of acquisition by Aristocrat after JKO Play withdraws; earnings expected during the upcoming US session include Schlumberger, IHS Markit and Ally Financial.


- Consumer discretionary: Boiron [BOI.FR] +10% (prelim sales), 4Imprint [FOUR.UK] +1% (trading update), NENT Group [NENT.B.SE] -6% (Netflix earnings).

- Energy: Siemens Gamesa Renewable Energy SA [SGRE.ES] -13% (prelim results; profit warning), Siemens Energy [ENR.DE] -11% (prelim results; profit warning).

- Industrials: Stellantis [STLA.FR] -4% (placement), Renault [RNO.FR] -2% (partnership with Geely).

- Technology: Playtech [PTEC.UK] -14% (withdrawal of one of received offers).


- German Chancellor Scholz stated that must avert further Russian aggression against Ukraine.

- EU's Sefcovic spoke with UK's Brexit negotiator Truss ahead of the upcoming meeting (Jan 24th) and stressed that needed to press on towards solutions within the Northern Irish Protocol.

- Poland Central Bank official Kochalski stated that the MPC might consider another 50bps rate hike in Feb (**Insight: Poland Central Bank has raised the Base Rate four times in the current tightening cycle by a total of 215bps. The last hike was in Jan 2022).

- Russia Foreign Min Lavrov stated that was grateful for US to hold security talks but was not expecting any breakthrough today.

- China PBoC cut the rate on the Standing Lending Facility (SLF) by 10bps (affects the overnigh, 1-day and 1-month rates; effective from Jan 17th.

- China Cabinet Advisor Zhu noted that potential GDP growth was seen between 5.0-6.0%; confident China could achieve 2022 GDP growth of ~5.5% [vs 8.1% in 2021]; Fed rate hike and balance sheet cut could have 'very big market impact'.

- US said to reply to Russia security proposals during week of Jan 24th.

Currencies/Fixed income

- Safe-haven flows favored the CHF, yen and USD pairs as risk aversion sentiment continued to percolate ahead of next week Fed meeting.

- EUR/USD at 1.1340 area with USD/JPY below the 114 level.

- US 10-year yield continued to move off the weekly highs of 1.90%. and tested 1.77% during the electronic session. Euro Zone and UK also seeing moves of approx 3bps tracking US 10-year action.

Economic data

- (UK) Dec Retail Sales (ex-auto/fuel) M/M: -3.6% v -0.8%e; Y/Y: -3.0% v +1.1%e.

- (UK) Dec Retail Sales (including auto/fuel) M/M: -3.7% v -0.6%e; Y/Y: %-0.9 v +3.4%e.

- (TR) Turkey Jan Consumer Confidence: 73.2 v 68.9 prior.

- (DK) Denmark Jan Consumer Confidence Indicator: -1.5 v -2.1 prior.

- (CN) Weekly Shanghai copper inventories (SHFE): 35.1K v 30.3K tons prior.

- (CH) Swiss Dec M3 Money Supply Y/Y: 1.7% v 1.9% prior.

- (RU) Russia Narrow Money Supply w/e Jan 14th (RUB): 14.39 T v14.61T prior.

- (PL) Poland Dec Sold Industrial Output M/M: -2.9% v -6.3%e; Y/Y: 16.7% v 13.1%e.

- (PL) Poland Dec Construction Output Y/Y: 3.1% v 7.7%e.

- (PL) Poland Dec Employment M/M: 0.0% v 0.1%e; Y/Y: 0.5% v 0.7%e.

- (PL) Poland Dec Average Gross Wages M/M: 10.3% v 8.2%e; Y/Y: 11.2% v 9.3%e.

- (PL) Poland Dec PPI M/M: 0.8% v 0.4%e; Y/Y: 14.2% v 13.5%e.

- (SL) Sri Lanka Dec National CPI (NCPI) Y/Y: 14.0% v 11.1% prior.

- (BE) Belgium Jan Consumer Confidence: -2 v -4 prior.

Fixed income issuance

- (IN) India sold total INR vs. INR240B indicated in 2023, 2026, 2035 and 2051 bonds.

- (ZA) South Africa sold total ZAR vs. ZAR1.2B indicated in I/L 2038, 2046 and 2050 Bonds.

Looking ahead

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

- 06:00 (IE) Ireland Dec PPI M/M: No est v 0.0% prior; Y/Y: No est v 0.2% prior.

- 06:00 (UK) DMO to sell £2.0B in 1-month, 3-month and 6-month bills (£0.5B, £0.5B and £1.0B respectively).

- 06:30 (CL) Chile Central Bank Traders Survey.

- 06:30 (IN) India Weekly Forex Reserve w/e Jan 14th: No est v $B prior.

- 06:45 (US) Daily Libor Fixing.

- 07:30 (EU) ECB chief Lagarde in WEF panel.

- 08:00 (UK) BOE Mann.

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

- 08:30 (CA) Canada Nov Retail Sales M/M: 1.2%e v 1.6% prior; Retail Sales (ex-auto) M/M: 1.2%e v 1.3% prior.

- 08:30 (US) Weekly USDA Net Export Sales.

- 09:00 (IT) Bank of Italy (BOI) Quarterly Economic Bulletin.

- 10:00 (US) Dec Leading Index: 0.8%e v 1.1% prior.

- 10:00 (EU) Euro Zone Jan Advance Consumer Confidence: -9.0e v -8.3 prior.

- 11:00 (EU) Potential sovereign ratings after European close.

- 11:30 (US) Treasury Sec Yellen at WEF.

- 13:00 (US) Weekly Baker Hughes Rig Count.


All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

Feed news Join Telegram

Recommended Content

Recommended Content

Editors’ Picks

AUD/USD bulls flirt with 0.7100 with eyes on Aussie Retail Sales, US PCE Inflation

AUD/USD bulls flirt with 0.7100 with eyes on Aussie Retail Sales, US PCE Inflation

AUD/USD holds onto the recently sidelined moves around 0.7100 as bulls and bears jostle over mixed clues heading into the key data on Friday. Also restricting the Aussie prices are downbeat statistics at home and looming economic fears over the largest customer China.


EUR/USD approaches 1.0750 key hurdle ahead of US PCE Inflation

EUR/USD approaches 1.0750 key hurdle ahead of US PCE Inflation

EUR/USD grinds higher around the weekly top, as well as monthly high, recently steady around 1.0735 as bulls await fresh clues during a lackluster Asian session on Friday. Shrinking Fed vs. ECB divergence appears the key catalyst to recall bulls, highlighting US PCE Price Index for April.


Gold bounces from $1,850, DXY remains soft on soaring market mood

Gold bounces from $1,850, DXY remains soft on soaring market mood

Gold price (XAU/USD) witnessed a minor pullback towards $1,850.00 in its initial trading hours but has bounced back sharply. The precious metal is displaying a balance auction in a range of $1,840.76-1,856.35 from Wednesday.

Gold News

Will Cardano price finally show its cards?

Will Cardano price finally show its cards?

Cardano price is preparing for a retest of $0.80. Still, jumping in early might be too risky. Traders should wait for confirmation signals.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!