Notes/Observations

- Euro Zone Feb Prelim CPI at a record high since Euro launch at 5.8%.

- War in Ukraine and sanctions on Russia triggering a relentless surge in commodities.

- Crude extends its relentless rally above $110 a barrel; compounds inflation pressures.

- Safe haven flows dominated as economic sanctions, higher energy prices and heightened uncertainty from the war in Ukraine seen hitting global economic growth.

- Focus on Fed Chair Powell semi-annual testimony; likely to emphasize the uncertainty stemming from the war in Ukraine.

- OPEC Minister hold monthly meeting (Note: expected to maintain the 400K bpd increase pace).

Asia

- Australia Q4 GDP Q/Q: 3.4% v 3.5%e v -1.9% prior; Y/Y: 4.2% v 4.1%e.

- South Korea Jan Industrial Production M/M: +0.2% v -1.5%e; Y/Y: 4.3% v 6.4%e.

- South Korea Jan Retail Sales M/M: -1.9% v +2.0% prior; Y/Y: 4.5% v 6.5% prior.

Europe

- BOE's Mann (hawkish dissenter) noted that policy strategy it was very much a front load to counter expectations: UK inflation is headed to 7.25% in April; Bulk of inflation is coming from energy and goods Expectation was that goods prices will ease.

- BOE's Saunders (hawk dissenter) noted that CPI could stay above 2% target without action. Prompt tightening now could help limit the total scale of tightening that would be needed.

- Swiss National Bank Vice Chair Zurbruegg reiterated stance to maintain ability to intervene in FX markets if needed to ensure stability. Expected inflation to peak this year before falling in 2023, but too early to judge the possible long-term consequences of the current geopolitical crisis.

Americas

- President Biden State of the Union Address stressed that Putin had been met with wall of strength he never imagined, DOJ was assembling task force to go after crimes of Russia oligarchs; Confirmed closing off airspace to all Russia flights. Getting prices under control was the highest priority; Would soon send Congress a request to more pandemic related funding.

- Fed's Bostic (non-voter, hawk) stated that was open to four quarter-point increases in 2022if inflation continued to surprise on the high side; Inflation was elevated well above the Fed 2% baseline level. US was hard pressed to get inflation below 3% for rest of 2022.

- Fed's Mester (FOMC voter, hawk) stated that Ukraine situation added upside risk to inflation and downside risk to growth.

- Treasury Sec Yellen stated that G7 to formed a task force to focus on freezing and seizing assets of Russian elites.

- Treasury spokesperson: Sec Yellen spoke with EU's Dombrovskis and stressed that cooperation was needed for further measures against Russia.

Energy

- Weekly API Crude Oil Inventories: -6.1M v +6.0M prior.

- US DoE stated that would conduct an emergency sale of 30m bbl’s of crude oil from their strategic petroleum reserve in order to address market and supply disruptions due to Russia’ invasion of Ukraine.

- President Biden confirmed release additional oil from SPR as warranted.

Speakers/Fixed income/Fx/Commodities/Erratum

Equities

Indices [Stoxx600 0.00% at 443.02, FTSE +0.66% at 7,376.90, DAX +0.01% at 13,906.93, CAC-40 +0.16% at 6,406.49, IBEX-35 +0.10% at 8,196.75, FTSE MIB 0.00% at 24,363.00, SMI -1.30% at 11,708.48, S&P 500 Futures +0.63%].

Market Focal Points/Key Themes: European indices open mixed but turned negative as the session wore on; better performing sectors include consumer discretionary and health care; while sectors among those leading lower are financials and industrials; Shell shares supporting FTSE and AEX; oil and gas subsector supported after higher crude prices; Next Games acquired by Netflix; McKay to be acquired by Workspace; focus on conclusion of OPEC monthly meeting later in the day; earnings expected during the upcoming US session include Telecom Italia, Abercrombie & Fitch and Piaggio.

Equities

- Consumer discretionary: Just Eat-Takeaway [TKWY.NL] +2% (earnings), Persimmon [PSN.UK] +5% (earnings).

- Financials: Sberbank [SBER.UK] -95% (to be delisted from LSE; FY21 results).

- Industrials: Ryanair [RYA.UK] -1% (traffic; comments on Ukraine), Metso Outotec [MOCORP.FI] -2.5% (ceases deliveries to Russia).

Speakers

- Spain PM Sanchez stated that a return to fiscal rules was not reasonable. To extend energy tax breaks until Jun 30th.

- German Bundesbank annual Report noted that inflation could average 5.0% in 2022. ECB must keep eyes on normalizing policy.

- German Bundesbank Gov Nagel commented that monetary policy must be on guard over high inflation and if price stability required it then ECB must adjust its policy course.

- Russia Finance Ministry said to back ending the VAT on gold purchases and viewed gold as an alternative to the USD.

- Russia and Ukraine officials could continue talks later this week. Ukraine Presidential advisor later added that more talks were under consideration.

- Russia Foreign Min Lavrov reiterated stance that will not allow Ukraine to obtain nuclear weapons. World War III would be nuclear and destructive.

- Russia govt spokesperson Peskov stated that the domestic economy would withstand sanctions pressure. President Putin feels strong public support for Ukraine operation.

- EU said to approve sanctions on Belarus

- China PBOC reiterated stance to further 'enrich' macroprudential policy toolbox in 2022. Reiterated to step up counter-cyclical adjustment function.

- China Foreign Ministry Spokesperson Wang Wenbin reiterated govt stance that hoped Russia and Ukraine continue to talk.

- China banking and insurance regulator (CBIRC) chief stated that would NOT participate in Western Financial sanctions on Russia.

- OPEC+ said to maintain its existing policy of gradual oil output increases.

Currencies/ Fixed income

- Safe-haven demand continued for the USD amid the escalating Russia-Ukraine military conflict darkened the economic outlook. Focus turns to Fed Chair Powell and his upcoming semi-annual testimony. The Fed likely to emphasize the uncertainty stemming from the war in Ukraine.

- EUR/USD hit fresh 21 month lows as the pair moved below the 1.11 handle as Russia shifted tactics to intensify war in Ukraine. EUR stands at its lowest level against since June 2020. Markets note that economic impact of crisis to cost Europe far more than the US. Some analysts have stated that ECB should intervene in FX to strengthen the Euro to avoid a vicious inflationary spiral.

- GBP/USD trading below the 1.33 level as market participants scale back its interest rate rise expectations for the Bank of England amid the Russia-Ukraine crisis despite the prospect of UK inflation accelerating on the surge in energy prices.

Economic data

- (UK) Feb Nationwide House Price Index M/M: 1.7% v 0.6%; Y/Y:12..6% v 10.8%e.

- (NO) Norway Q4 Current Account Balance (NOK): 275.3B v 161.7B prior.

- (FR) France Jan YTD Budget Balance: -€15.9B v -€170.7B prior.

- (ES) Spain Feb Net Unemployment Change: -11.4K v +17.2K prior.

- (AT) Austria Feb Preliminary CPI M/M: +1.3% v -0.1% prior; Y/Y: 5.9% v 5.0% prior.

- (HU) Hungary Q4 Final GDP Q/Q: 2.0% v 2.1% prelim; Y/Y: 7.1% v 7.2% prelim.

- (DE) Germany Feb Net Unemployment Change: -33.0K v -22.5Ke; Unemployment Claims Rate: 5.0% v 5.1%e.

- (IS) Iceland Q4 Current Account Balance (ISK): -44.2B v +17.0B prior.

- (EU) Euro Zone Feb Advance CPI Estimate Y/Y: 5.8% v 5.6%e (record high); CPI Core Y/Y: 2.7% v 2.6%e.

Fixed income issuance

- (IN) India sold total INR260B vs. INR260B indicated in 3-month, 6-month and 12-month bills.

- (DK) Denmark sold total DKK2.66B in 2024 and 2031 DGB bonds.

- (SE) Sweden sold SEK5.0B vs. SEK5.0B indicated in 12-month bills; 12-month bills; Avg Yield: 1.72% v 1.45% prior; bid-to-cover: 3.93x v 4.01x priorr.

- (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 1.75% Mar 2025 Bonds; Avg Yield: % v 1.45% prior; bid-to-cover: x v 4.01x prior.

- (UK)DMO sold £3.25B in 0.25% Jan 2025 Gilts; Avg Yield: 0.952% v 0.690% prior; bid-to-cover: 1.91x v 1.96x prior; tails: 2.5bps v 0.8bps prior.

Looking Ahead

- (MX) Mexico Jan YTD Budget Balance (MXN): No est v -757.8B prior.

- OPEC and Non-OPEC Ministerial meeting by Videoconference.

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

- 05:30 (HU) Hungary Debt Agency (AKK) switch auction.

- 05:30 (DE) German to sell €1.5B in 0.00% Aug 2030 Bunds.

- 06:00 (IE) Ireland Feb Unemployment Rate: No est v 5.3% prior.

- 06:00 (EU) EU Commission to sell combined €5.0B in 3-month and 6-month bills.

- 06:45 (US) Daily Libor Fixing.

- 07:00 (US) MBA Mortgage Applications w/e Feb 25th: No est v -13.1% prior.

- 07:00 (MX) Mexico Jan Leading Indicators M/M: No est v -0.20 prior.

- 07:00 (MX) Mexico Feb Vehicle Domestic Sales: No est v 78.6K prior.

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

- 08:00 (SG) Singapore Feb Purchasing Managers Index: 50.6e v 50.6 prior; Electronics Sector Index: No est v 50.8 prior.

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

- 08:15 (US) Feb ADP Employment Change: +375Ke v -301K prior.

- 09:00 (US) Fed’s Evans.

- 09:30 (US) Fed’s Bullard.

- 10:00 (CA) Bank of Canada (BOC) Interest Rate Decision: Expected to raise Interest Rate by 25bps to 0.50%.

- 10:00 (US) Fed Chair Powell testifies before House.

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

- 11:00 (RU) Russia Jan Real Retail Sales Y/Y: 3.9%e v 5.4% prior.

- 11:00 (RU) Russia Jan Unemployment Rate: 4.2%e v 4.3% prior.

- 11:00 (RU) Russia Dec Real Wages Y/Y: 2.5%e v 3.4% prior.

- 11:00 (DK) Denmark Feb Foreign Reserves (DKK): No est v 530.7B prior.

- 11:00 (IE) ECB’s Lane (Ireland, chief economist).

- 12:00 (BR) Brazil Central Bank Weekly Economists Survey.

- 13:30 (UK) BOE’s Tenreyro.

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

- 14:00 (US) Federal Reserve Beige Book.

- 15:00 (UK) BOE’s Cunliffe.

- 16:00 (NZ) New Zealand Government 7-Month Financial Statements.

- 16:00 (NZ) New Zealand Government 7-No est v 56.4 prelim; PMI Composite: No est v 55.9 prelim.

- 16:30 (US) Fed’s Logan.

- 18:00 (KR) South Korea Q4 Preliminary GDP (2nd reading) Q/Q: 1.1%e v 1.1% advance; Y/Y: 4.1 v 4.1% advance; Overall 2021 Annual GDP Y/Y: No est v 4.0% prior.

- 19:00 (NZ) New Zealand Feb Commodity Price Index: No est v 1.0% prior.

- 19:30 (AU) Australia Jan Trade Balance: A$9.1Be v A$8.4B prior; Exports M/M: 6%e v 1% prior; Imports M/M: 3%e v 5% prior.

- 19:30 (AU) Australia Jan Building Approvals M/M: -3.0%e v +8.2% prior; Private Sector Houses M/M: No est v -1.8% prior.

- 19:30 (JP) Japan Feb Final Services PMI: No est v 42.7 prelim; PMI Composite: No est v 44.6 prelim.

- 19:30 (HK) Hong Kong Feb PMI (whole economy): No est v 48.9 prior.

- 19:30 (SG) Singapore Feb PMI (whole economy): No est v 54.4 prior.

- 20:01 (IE) Ireland Feb PMI Services: No est v 56.2 prior; PMI Composite: No est v 56.5 prior.

- 20:30 (JP) BOJ’s Nakagawa.

- 20:45 (CN) China Feb Caixin PMI Services: 50.8e v 51.4 prior; PMI Composite: No est v 50.1 prior.

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.

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