Risk off for equities as Bitcoin tears above $70K

Notes/observations

- Czech, Norway and Denmark CPI continue to moderate lower, with Denmark leading disinflation path, now at 0.8% YoY.

- Poland Central Bank, which has tended to lead major central banks in monetary policy cycles, sees comment from member Kochalski that rates are likely to stay on hold until the end of year.

- Bitcoin breaches $70K for fresh highs ahead of technical halving event and momentum from ETF approvals.

- Continued attention on upcoming Japan wage talks. Japan PM Kishida plans 3-way meeting with govt, labor and corporate management on Mar 13th to strengthen support for higher wages. Business Lobby Chairman reinforced belief BOJ will normalize policy but is unsure of timing.

- Asia closed mixed with Nikkei225 underperforming at -2.1%. EU indices are lower by -0.3% to -2.5%. US futures are -0.1% to -0.3%. Gold -0.1%, DXY 0.0%; Commodity: Brent +0.3%, WTI +0.3%, TTF -3.3%; Crypto: BTC +2.7%, ETH +1.8%.

Asia

- China Feb CPI Y/Y: 0.7% v 0.3%e; PPI Y/Y:-2.7% v -2.5%e.

- Japan Q4 Final GDP revised higher from prelim readings and avoids a technical recession).

Global conflict/tensions

- Efforts to pause Israel-Hamas conflict falls apart as Ramadan begins (**Note: Egypt said to have been in contact with Hamas/Israel officials and others to try and restart negotiations to reach Gaza truce during month of Ramadan).

- Israel PM Netanyahu stated that he intended to press ahead with invasion of Rafah despite President Biden’s warning that such a move would cross a red line.

- Taiwan top security official: China running joint combat readiness patrols near country every 7-10 days on average.

Europe

- Portugal center-right coalition won a narrow victory in snap elections but failed to win an outright majority in Parliament. Socialist Leader Santos conceded defeat (**Insight: Hung Parliament sets the stage for difficult negotiations in the days and weeks ahead).

- Fitch raised Turkey sovereign rating one notch to B+ from B; Outlook Positive.

Americas

- Senate cleared a funding package on Friday to avert a partial govt shutdown.

- President Biden commented on the campaign trail over the weekend that he believed the Fed would lower interest rates but nothing was a guarantee.

Speakers/fixed income/FX/commodities/erratum

Equities

Indices [Stoxx600 -0.40% at 501.26, FTSE -0.19% at 7,645.35, DAX -0.72% at 17,683.25, CAC-40 -0.36% at 7,999.07, IBEX-35 -0.16% at 10,289.50, FTSE MIB -0.71% at 33,165.00, SMI +0.02% at 11,649.90, S&P 500 Futures -0.17%].

Market Focal Points/Key Themes: European indices open generally lower but recovered some of the initial losses through the early part of the trading session; among sectors holding on to the green are utilities and real estate; sectors leading into the red include technology and industrials; Eliott walks away from Cury’s deal; reportedly Telefonica and Saudi Telecom considering rival bids for Avatel; earnings expected in the upcoming US session include Leonardo and Caisey’s.

Equities

- Consumer discretionary: Currys [CURY.UK] -9.0% (Elliot does not intend to make offer), Hugo Boss [BOSS.DE] +1.5% (analyst action).

- Energy: Spie [SPIE.FR] +1.5% (agreement to acquire ICG Group).

- Financials: Hypoport [HYQ.DE] -1.5% (final results), Vanquis Banking [VANQ.UK] -37.5% (trading update).

- Healthcare: Sanofi [SAN.FR] +1.5% (trial data).

- Telecom: Telecom Italia [TIT.IT] +1.0% (provides FY24-26 targets).

- Technology: BE Semiconductor [BESI.NL] -10.5%, ASML [ASML.NL] -2.5% (BESI analyst action; broad weakness in global chip names).

- Real Estate: Leg Immobilien [LEG.DE] +4.0% (results).

Speakers

- ECB's Kazimir (Slovakia, hawk) commented that cutting rates now would be premature; Confidence to cut rates would come in June when threshold was achieved. Needed more hard evidence that confidence threshold would be reached. Preferred smooth and steady easing. Inflation was slowing but not yet there; disinflation process remained fragile.

- Poland Central Bank (NBP) Member Kochalski commented that interest rates were likely to stay on hold until the end of 2024.

- Poland Central Bank (NBP) Inflation Report (QIR) raised the 2024 GDP growth from 2.9% to 3.5% and raised 2025 GDP growth from 3.5% to 4.2%. QIR cut the 2024 CPI forecast from 4.6% to 3.0% and cut 2025 CPI forecast from 3.7% to 3.4%.

- Turkey Fin Min Simsek stated that the govt to continue to tighten fiscal policy to help the central bank reduce inflation.

- Japan Business Lobby (Keidanren) Chairman commented that was a high possibility BOJ would normalize policy in near future but not sure if it would be occurring t\at the Mar meeting (**Note: Decision on Mar 19th).

Currencies/fixed income

- FX markets were quiet to begin the week as focus remained on when key advance economy central banks (Fed, BOE, ECB and SNB) would likely to start cutting interest rates. Focus on upcoming US CPI data (Tuesday).

- EUR/USD at 1.0940 area just off its recent two-month highs made on Friday. Euro aided by the recent US payroll report that showed significant back month lower revisions and softer wage data for the US.

- USD/JPY remained below 147 level as markets continued to anticipate BOJ soon exiting its negative interest rate policy. Focus on the key wage talks set for Wed, Mar 13th.

Economic data

- (NL) Netherlands Jan Manufacturing Production M/M: -4.7% v +6.8% prior; Y/Y: -5.5% v -3.3% prior; Manufacturing Sales Y/Y: -7.6% v -16.3% prior.

- (SE) Sweden SEB Feb Swedish Housing-Price Indicator: 32 v 25 prior.

- (FI) Finland Jan Current Account Balance: -€0.1B v €0.0B prior.

- (JP) Japan Feb Preliminary Machine Tool Orders Y/Y: -8.0% v -14.0% prior.

- (NO) Norway Feb CPI M/M: 0.2% v 0.4%e; Y/Y: 4.5% v 4.7%e.

- (NO) Norway Feb CPI Underlying M/M: 0.4% v 0.6%e; Y/Y: 4.9% v 5.3%e.

- (NO) Norway Feb PPI M/M: -2.5% v -3.2% prior; Y/Y: -12.6% v -12.9% prior.

- (DK) Denmark Feb CPI M/M: 0.5% v 0.9% prior Y/Y: 0.8% v 1.2% prior.

- (DK) Denmark Feb CPI EU Harmonized M/M: 0.4% v 1.0% prior Y/Y: 0.6% v 0.9% prior.

- (DK) Denmark Jan Current Account Balance (DKK): 25.5B v 34.5B prior; Trade Balance (ex-shipping): 10.5B v 7.5B prior.

- (TR) Turkey Jan Unemployment Rate: 9.1% v 8.9% prior.

- (TR) Turkey Jan Retail Sales Y/Y: 13.3% v 14.0% prior.

- (ES) Spain Jan Adjusted Retail Sales Y/Y: 0.3% v 3.0%e; Retail Sales (unadj) Y/Y: 2.1% v 1.1% prior.

- (CZ) Czech Feb CPI M/M: 0.3% v 0.4%e; Y/Y: 2.0% v 2.1%e (back at target for the 1st time since Apr 2018).

- (CH) Swiss Feb SECO Consumer Confidence: -42.3 v -41.0 prior.

- (CH) Swiss weekly Total Sight Deposits (CHF): 477.4B v 478.5B prior; Domestic Sight Deposits: 468.4B v 467.9B prior.

Fixed income issuance

- (PL) Poland opened its book to sell USD-denominated 5-year, 10-year and 30-year bonds via syndicate.

- (EU) ESM opened its book to sell 5-year bonds; guidance seen +8bps to mid-swaps.

Looking ahead

- (EU) European Finance Ministers (Eurogroup) in Brussels.

- (IL) Israel Central Bank (BOI) Feb Minutes.

- (MX) Mexico ANTAD Feb Same-Store Sales Y/Y: No est v 3.5% prior.

- (CO) Colombia Feb Consumer Confidence: No est v -7.9 prior

- 06:00 (EU) Daily Euribor Fixing.

- 06:25 (EU) Daily ECB Liquidity Stats.

06:30 (DE) Germany to sell combined €4.0B in 3-month and 9-month BuBills.

- 07:00 (PT) Portugal Jan Trade Balance: No est v -€2.3B prior.

- 07:00 (TR) Turkey to sell bonds (2 tranches).

- 07:00 (IL) Israel to sell combined ILS2.0B indicated in 2027, 2029, 2030 and 2035 bonds.

- 08:00 (UK) BOE Quarterly Bulletin.

- 08:00 (CZ) Czech Central Bank (CNB) comments on CPI data.

- 09:00 (UK) Daily Baltic Dry Bulk Index.

- 10:00 (FR) France Debt Agency (AFT) to sell €5.6-7.2B in 3-month, 6-month and 12-month bills.

- 11:00 (US) NY Fed Feb 1-year Inflation Expectations Survey: No est v 3.0% prior.

- 11:30 (US) Treasury to sell 13-Week and 26-Week Bills.

- 13:00 (US) Treasury to sell 3-Year Notes.

- 17:45 (NZ) New Zealand Feb Total Card Spending M/M: No est v 2.0% prior; Retail Card Spending M/M: No est v 1.7% prior.

- 18:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 81.1 prior.

- 19:50 (JP) Japan Q1 Large All Industry Q/Q: No est v 4.8% prior; Large Manufacturing Q/Q: No est v 5.7% prior.

- 19:50 (JP) Japan Feb PPI M/M: 0.1%e v 0.0% prior; Y/Y: 0.6%e v 0.2% prior.

- 20:30 (AU) Australia Feb Business Confidence: No est v 1 prior; Business Conditions: No est v 6 prior.

- 21:00 (PH) Philippines Jan Trade Balance: -$4.7Be v -$4.0B prior; Exports Y/Y: +6.9%e v -0.5% prior; Imports Y/Y: -4.6%e v -5.1% prior.

- 23:35 (JP) Japan to sell 5-Year JGB Bonds.