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- France, Germany and Euro Zone Feb Flash PMI’s show significant rotation towards Services sector as Services PMI beats for all, but Manufacturing misses. UK Flash PMI beat across the board, lifting GBP/USD and Gilt yields. Analysts note UK PMI creating a better case for 50bps at next BOE meeting. 12u Wall Mount Rack Cabinet
- German ZEW Survey continued its improving trend.
- Risk appetite facing headwinds as bond yield continue to rise, on back of European PMI data and weekend geopolitical tensions as US markets return from Monday holiday.
- Russia President Putin conducts ‘State of the Nation’ address, reiterating standard rhetoric against west and continuation of Ukraine military operation, just 3 days ahead of Ukraine invasion anniversary.
- Asia closed mixed with Hang Seng under-performing at -1.7%. EU indices are -0.2% to -0.8%. US futures are -0.4% to -0.7%. Gold -0.3%, DXY +0.1%; Commodity: Brent -0.6%, WTI +0.7%, TTF -2.3%; Crypto: BTC -0.5%, ETH -1.7%.
- RBA Feb Minutes noted that it had considered two option at meeting. The case for 25bps rate hike was stronger. A pause in tightening cycle was not an option.
- Australia Feb Preliminary PMI Manufacturing registered its 34th month of expansion (50.1 v 50.0 prior).
- Japan Feb Preliminary PMI Manufacturing registered its 4th straight contraction (47.4 v 48.9 prior); PMI Services: No est v 52.3 prior; PMI Composite: No est v 50.7 prior.
- BOJ Gov Kuroda reiterated stance that FX rates move on various factors.
Indices [Stoxx600 -0.26% at 463.44, FTSE -0.23% at 7,996.08, DAX -0.41% at 15,413.35, CAC-40 -0.41% at 7,305.21, IBEX-35 -0.29% at 9,254.66, FTSE MIB -0.68% at 27,410.00, SMI -0.19% at 11,244.80, S&P 500 Futures -0.62%].
Market focal points/key themes: European indices open lower across the board, but cut losses slightly following Flash PMI readings from major EU states and Russia's Pres Putin speech; On corporate front, shares of Credit Suisse extended losses over 5% to hit record low following the report that Swiss FINMA set to review comments made by Chairman related to the 'stabilization' of outflows; Shares of HSBC in London trade slightly lower following results and special dividend; earnings expected in the upcoming US session include Walmart, Korian, Home Depot and Palo Alto Networks.
- Consumer discretionary: Straumann [STMN.CH] +2.0% (reports FY22, guides FY23), Ryanair [RYA.IE] +2.0% (analyst action - initiated with overweight at Barclays), Edenred [EDEN.FR] -1.0% (reports Q4, affirms FY22-25).
- Energy: Engie [ENGI.FR] +5.0% (earnings).
- Financials: Credit Suisse [CSGN.CH] -5.5% (FINMA to review comments made by Chairman related to the 'stabilization' of outflows), HSBC [HSBA.UK] -1.5% (reports Q4), Deutsche Boerse [DB1.DE] -3.0% (analyst action - cut to hold at Jefferies).
- Healthcare: Smith & Nephew [SN.UK] +3.5% (earnings), Bavarian Nordic [BAVA.DK] -0.5% (rights offering).
- Industrials: Lufthansa [LHA.DE] +1.5% (analyst action - initiated with overweight at Barclays), Oerlikon [OERL.CH] -2.0% (reports FY22, guides FY23).
- Technology: Temenos [TEMN.CH] +1.5% (reports Q4 and provides FY23 and mid-term guidance), Zoo Digital Group [ZOO.UK] +18% (contract award).
- Materials: Glencore [GLEN.UK] -2.0% (wake of Antofagasta FY22 results which missed estimates), Versarien [VRS.UK] -20.5% (earnings).
- Sweden Central Bank (Riksbank) Dep Gov Floden stated that could not say that say rates were currently high. Recent Jan underlying inflation was worrying.
- Japan Cabinet Office (Govt) Feb Monthly Report maintained its overall economic assessment that domestic economy was recovering modestly but some weakness seen recently.
- China Top Diplomat Wang Yi stated that was willing to work with Russia to promote bilateral relations along direction set by two heads of state.
- China's new Central Committee to hold second plenum on Feb 26-28th; Vowed to attract more foreign investmen and strive to meet economic goals and discusses stabilizing economy; To better coordinate COVID control.
- Russia Dep PM Novak stated that the domestic oil output cuts in Mar 2023 would be calculated from Jan 2023's production level; Discussing cut proportions with companies.
- Russia Pres Putin Federal Council address stated that was in difficult times and would decide tasks of special military operation step by step; vowed to continue military operation in Ukraine. Reiterated they (West) started the war, we did everything to stop it.
- USD appeared to be supported by some risk-off sentiment.
- Better PMI Services data in Europe was the focus in the session which sent bond yields higher as Euro Zone's data showed a very resilient economy USD/JPY at 134.70 with focus on rising US bond yields. The 10-year JGB yield did retest abve the YYC upper band. Markets continue to believe that further policy tweaks to come by BOJ.
- Better PMI data for UK sent the GBP/USD off session lows to test back above 1.2060 level.
- NZD/USD at 0.6220 with focus on Wed RBNZ rate decision. Markets are pricing a 50 bps hike to bring benchmark interest rate to 4.75%.
- (FI) Finland Jan Unemployment Rate: 7.6% v 6.7% prior.
- (EU) EU27 Jan New Car Registrations: % v 12.8% prior.
- (UK) Jan Public Finances (PSNCR): -£29.0B v -£1.5B prior; PSNB (ex-banking groups): -£5.4B v +£7.9Be; Net Borrowing: -£6.2B v +£1.3Be; Central Government NCR: -£20.9B v +£23.1B prior.
- (CH) Swiss Jan Trade Balance (CHF): 5.1B v 2.8B prior; Real Exports M/M: 2.5% v 5.6% prior; Real Imports M/M: 0.2% v 0.3% prior; Watch Exports Y/Y: 8.6% v 6.0% prior.
- (SE) Sweden Q4 Industry Capacity: 90.1% v 90.2% prior.
- (ZA) South Africa Dec Leading Indicator: 20.5v 123.1 prior.
- (CH) Swiss Jan M3 Money Supply Y/Y: 0.0% v 0.1% prior.
- (FR) France Feb Preliminary Manufacturing PMI: 47.9 v 51.0e (moved back into contraction); Services PMI: 52.8 v 49.8e; Composite PMI: 5.6 v 49.6e.
- (DE) Germany Feb Preliminary Manufacturing PMI: 46.5 v 48.0e (8th straight contraction); Services PMI: 51.3 v 51.0e; Composite PMI: 51.0 v 50.3e.
- (EU) Euro Zone Feb Preliminary Manufacturing PMI: 48.5 v 49.3e;Services PMI: 53.0 v 51.0e;Composite PMI: 52.3 v 50.6e.
- (PL) Poland Jan Construction Output Y/Y: +2.4% v -5.4%e.
- (PL) Poland Jan Real Retail Sales M/M: -23.1% v -20.8%e; Y/Y: -0.3% v +1.0%e; Retail Sales (current prices) Y/Y: 15.1% v 16.3%e.
- (UK) Feb Preliminary Manufacturing PMI: 49.2 v 47.5e (7th straight contraction); Services PMI: 53.3 v 49.2e; Composite PMI: 53.0 v 49.1e.
- (DE) Germany Feb ZEW Current Situation Survey: -45.1 v -50.0e; Expectations Survey: 28.1 v 23.0e.
- (EU) Euro Zone Feb ZEW Expectations Survey: 29.7 v 16.7 prior.
- (ID) Indonesia sold total IDR12.0T vs. IDR14.0T target in Islamic bills and bonds (sukuk).
- (ES) Spain Debt Agency (Tesoro) opened its book to sell EUR-denominated 15-year SPGB bond via syndicate; guidance seen +12bps to SPGB.
- (SI) Slovenia Debt Agency opened its to sell EUR-denominated 10-year bonds; guidance seen +115bps to mid-swaps.
- (ZA) South Africa sold total ZAR3.9B vs. ZAR3.9B indicated in 2032, 2035 and 2040 bonds.
- (IL) Israel Feb 12-month CPI Forecast: No est v 2.6% prior.
- (FR) France Jan Retail Sales Y/Y: No est v -5.0% prior.
- (MX) Mexico CitiBanamex Survey of Economists.
- 05:15 (CH) Switzerland to sell 3-month Bills.
- 05:25 (EU) Daily ECB Liquidity Stats.
- 05:30 (DE) Germany to sell €5.0B in 2.20% Apr 2028 BOBL.
- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.
- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).
- 06:00 (UK) Feb CBI Industrial Trends Total Orders: -14e v -17 prior; Selling Prices: 35e v 41 prior.
- 06:00 (IL) Israel Dec Manufacturing Production M/M: No est v 3.9% prior.
- 06:30 (UK) DMO to sell £3.5B in 0.50% Jan 2029 Gilts.
- 06:30 (EU) ESM to sell €1.1B in 6-month Bills.
- 07:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).
- 07:00 (MX) Mexico Dec Retail Sales M/M: -0.3%e v -0.2% prior; Y/Y: 3.2%e v 2.4% prior.
- 08:00 (RO) Romania Central Bank (NBR) Feb Minutes.
- 08:00 (UK) Daily Baltic Dry Bulk Index.
- 08:30 (US) Feb Philadelphia Fed Non-Manufacturing Regional Index: No est v -6.5 prior.
- 08:30 (CA) Canada Jan CPI M/M: +0.7%e v -0.6% prior; Y/Y: 6.1%e v 6.3% prior; CPI Core-Median Y/Y: 4.9%e v 5.0% prior; CPI Core-Trim Y/Y: 5.2%e v 5.3% prior; Consumer Price Index: 154.0e v 153.1 prior.
- 08:30 (CA) Canada Dec Retail Sales M/M: +0.5%e v -0.1% prior; Retail Sales (ex-auto) M/M: -0.1%e v -0.6% prior.
- 09:45 (US) Feb Preliminary S&P/Markit Manufacturing PMI: 47.4e v 46.9 prior; Services PMI: 47.3e v 46.6 prior; Composite PMI: 47.5e v 46.6 prior.
- 10:00 (US) Jan Existing Home Sales: 4.10Me v 4.02M prior.
- 11:00 (SE) Sweden Central Bank (Riksbank) Dep Gov Ohlsson.
- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.
- 11:30 (US) Treasury to sell 52-Week Bills.
- 13:00 (US) Treasury to sell 2-Year Notes.
- 16:00 (KR) South Korea Mar Business Manufacturing Survey: No est v 65 prior; Non-Manufacturing Survey: No est v 70 prior.
- 16:45 (NZ) New Zealand Jan Trade Balance (NZ$): No est v -0.5B prior; Exports: No est v 6.7B prior; Imports: No est v 7.2B prior.
- 18:00 (NL) Netherlands Jan House Price Index M/M: No est v -2.3% prior; Y/Y: No est v 2.7% prior.
- 18:30 (AU) Australia Jan Westpac Leading Index M/M: No est v -0.1% prior.
- 18:50 (JP) Japan Jan PPI Services Y/Y: 1.5%e v 1.5% prior.
- 19:30 (AU) Australia Q4 Wage Price Index Q/Q: 1.0%e v 1.0% prior; Y/Y: 3.5%e v 3.1% prior.
- 19:30 (AU) Australia Q4 Construction Work Done: 1.5%e v 2.2% prior.
- 20:00 (NZ) Reserve Bank of New Zealand (RBNZ) Interest Rate Decision: Expected to raise Official Cash Rate (OCR) by 50bps to 4.75%.
- 21:00 (NZ) New Zealand Jan Credit Card Spending M/M: No est v -1.6% prior; Y/Y: No est v 12.4% prior.
- 22:00 (KR) South Korea Q4 Short Term External Debt: No est v $170.9B prior.
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The AUD/USD pair is attempting to build a short-term cushion around 0.6850 in the early Asian session. The Aussie asset is expected to deliver more weakness after surrendering the 0.6850 cushion.
The EUR/USD pair has retreated after facing selling interest around 1.0650 in the early Tokyo session. The major currency pair remained extremely volatile as upbeat United States preliminary S&P PMI data resulted in accelerating odds for the continuation of the policy tightening spell by the Federal Reserve (Fed).
Gold price (XAU/USD) holds lower grounds near $1,835, following a two-day downtrend, as markets await the key Federal Open Market Committee’s (FOMC) Monetary Policy Meeting Minutes during early Wednesday.
While Bitcoin is still widely considered the safest investment when it comes to cryptocurrencies, over the last few years, altcoins have also emerged with solid potential.
“The Reserve Bank of New Zealand (RBNZ) has a responsibility to address inflation”, New Zealand (NZ) Deputy Prime Minister and Finance Minister Grant Robertson said on Monday. And that’s exactly what Governor Adrian Orr is expected to deliver this Wednesday at 01:00 GMT.
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