Yields remain in focus ahead of key rate decisions later this week

Notes/Observations

- Plethora of central bank decision this week (Wed: FOMC, Thursday, BOE, Fri: BOJ)

Asia:

- China Feb YTD Industrial Production Y/Y 35.1% v 32.2%e - China Feb YTD Retail Sales Y/Y: 33.8% v 32.0%e

- China Feb Surveyed Jobless Rate: 5.5% v 5.2% prior

- PBOC conducted MLF, but did not add liquidity on net basis

- China National Bureau of Statistics (NBS) stated that the domestic economic recovery was not solid yet but positive factors were rising; Q1 GDP could have a sharp rebound y/y

Coronavirus:

- Total global cases 119.9M (+1.1% vs. Fri); total deaths: 2.65M (+0.9% vs. Fri)

- Italy Health Min Speranza: Expect to see COVID cases decline starting in late Spring (Reminder: On Mar 12th Italy govt confirmed Lazio region, including Rome, would be put under lockdown starting Monday Mar 15th, amid rising COVID infections)

- Ireland and Netherlands suspended use of COVID vaccine (AZD1222) due to blood clot reports in Norway

- AstraZeneca [AZN.UK] stated that after conducting reviews it showed no evidence of an increased risk of blood clots from Covid-19 vaccine.

Europe:

- German Chancellor Merkel Christian Democratic Union (CDU) party lost elections in states, Baden-Wuerttemberg and Rhineland-Palatinate to Greens and Social Democrats (Insight: Local results seen as dealing a setback to CDU party chairman Armin Laschet of becoming chancellor in September elections)

Americas:

- Treasury Sec Yellen stated that inflation risk from stimulus was minor, more important to prevent scarring of the workforce

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 +0.54% at 425.36, FTSE +0.41% at 6,788.87, DAX +0.35% at 14,552.70, CAC-40 +0.41% at 6,071.05, IBEX-35 +0.51% at 8,689.00, FTSE MIB +0.98% at 24,350.50, SMI +0.36% at 10,879.28, S&P 500 Futures +0.32%]

Market Focal Points/Key Themes: European indices open modestly higher across the board and moved further into the green as the session progressed; sectors leading to the upside include materials consumer discretionary; financials and technology sectors are among those underperforming; AstraZeneca made assurances about their covid vaccine, with EMA saying they saw no need to stop vaccinations; Roche acquires GenMark; Webuild agrees to partial spin-off of Astaldi; no major earnings expected in forthcoming US session

Equities

- Consumer discretionary: H&M [HMB.SE] +2% (sales), Aryzta [ARYN.CH] +6% (earnings)

- Financials: Provident Financial [PFG.UK] -29% (trading update; investigation)

- Healthcare: Roche [ROG.CH] +1% (acquires Genmark Diagnostics), Molecular Partners [MOLN.CH] +5% (trial), AstraZeneca [AZN.UK] -1% (Ireland suspends use of vaccine)

- Industrials: Volkswagen [VOW3.DE] +3% (agreement with unions)

Speakers

- BOE Gov Bailey0reiterated stance that current lockdown was having less effect on economy compared to a year ago. Had a more balanced picture on risks and could see a spending of savings and viewed as an upside risk. Very helpful that furlough scheme to extend beyond end of covid restrictions. Would expect a pickup in inflation towards 2% in the coming months; but question was whether such gains are sustainable; not expecting inflation to rise to 4.0-5.0% area. BOE is not out of tools or firepower

- EU said to plan to be taking legal action on Monday, Mar 15th against the UK over its unilateral moves to change the Northern Ireland protocol

- Poland Central Bank Gov Glapinski reiterated stance of seeing near-zero probability of changing the Base Rate

Currencies/Fixed Income

- USD maintained a firm tone aided by yields. Some analysts noted that Treasury yields could rise to 2% by the end of 2021

- EUR/USD drifted lower to test 1.1920 before finding some stabilization. Dealers noted that coronavirus infections rising and restrictions being tightened in some EU countries. ECB recently pledged to ensure favorable financing conditions as market rates moved higher.

- USD/JPY hit fresh 9-month highs at 109.36 during the Asian session (highest since June 2020). Focus remains on various rate decisions. BOJ to unveil its policy review later this week

Economic data

- (FI) Finland Feb CPI M/M: 0.4% v 0.3% prior; Y/Y: 0.9% v 0.9% prior

- (FI) Finland Jan Final Retail Sales Volume Y/Y: 5.1% v 3.8% prelim

- (FI) Finland Jan GDP Indicator Y/Y: -3.7% v -4.0% prior

- (IN) India Feb Wholesale Prices (WPI) Y/Y: 4.2% v 4.0%e

- (DE) Germany Feb Wholesale Price Index M/M: 1.4% v 2.1% prior; Y/Y: 2.3% v 0.0% prior

- (DK) Denmark Feb PPI M/M: 1.4% v 0.9% prior; Y/Y: +3.1% v -1.0% prior

- (NO) Norway Feb Trade Balance (NOK): 25.1B v 22.4B prior

- (CZ) Czech Jan Retail Sales Y/Y: -8.0% v -7.1%e; Retail Sales (ex-auto) Y/Y: -9.0% v -5.8%e

- (CZ) Czech Feb PPI Industrial M/M: 0.7% v 0.5%e; Y/Y: 1.4% v 1.2%e

- (CZ) Czech Jan Export Price Index Y/Y: 3.8% v 2.3% prior; Import Price Index Y/Y: +0.4% v -0.7% prior

- (TR) Turkey Feb Central Gov't Budget Balance (TRY): +23.2B v -24.2B prior

- (SE) Sweden Feb CPI M/M: 0.3% v 0.6%e; Y/Y: 1.4% v 1.6%e; CPI Level: 339.01 v 339.95e

- (SE) Sweden Feb CPIF M/M: 0.3% v 0.6%e; Y/Y: 1.5% v 1.8%e

- (SE) Sweden Feb CPIF (ex-energy) M/M: 0.2% v 0.5%e; Y/Y: 1.2% v 1.6%e

- (PL) Poland Feb CPI M/M: 0.5% v 0.6%e; Y/Y: 2.5% v 2.6%e

- (CH) Swiss weekly Total Sight Deposits (CHF): 702.8B v 703.1B prior; Domestic Sight Deposits: 631.8B v 636.0B prior

- (IT) Italy Jan General Government Debt: €2.603T v €2.569T prior (record level)

Fixed income Issuance

- None seen

Looking Ahead

- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays)

- (UR) Ukraine Central Bank (NBU) Mar Minutes

- (PE) Peru Jan Economic Activity Index (Monthly GDP) Y/Y: No est v 0.5% prior

- (EU) Euro-Area Finance Ministers (Eurogroup) meeting

- 06:00 (EU) Daily 3-Month Euribor Fixing:

- 06:00 (NO) Norway to sell NOK6.0B in 12-month Bills; Avg Yield: % v 0.20% prior; Bid-to-cover: x v 2.02x prior

- 06:10 (EU) Daily ECB Liquidity Stats

- 06:25 (BR) Brazil Central Bank Weekly Economists Survey

- 06:30 ((DE) Germany to sell €4.0B in 12-month BuBills; Avg Yield: % v -0.6278% prior; Bid-to-cover: x v 1.44x prior (Feb 22nd 2021)

- 06:30 (NL) Netherlands Debt Agency (DSTA) to sell 3-month and 6-month bills

- 07:00 (IE) Ireland Jan Trade Balance: No est v €5.5B prior

- 07:00 (IL) Israel to sell 2023, 2025, 2030, 2037 and 2051 bonds (6 tranches)

- 07:00 (RO) Romania to sell RON300M in 4.15% 2028 Bonds

- 07:30 (IN) India Feb Trade Balance: -$12.9Be v -$14.5B prior; Exports Y/Y: No est v 6.2% prior; Imports Y/Y: No est v 2.0% prior

- 07:45 (US) Daily Libor Fixing

- 08:00 (BR) Brazil Jan Economic Activity Index (Monthly GDP) M/M: 0.5%e v 0.6% prior; Y/Y: -1.3%e v +1.3% prior

- 08:00 (TR) Turkey to sell 2027 and 2030 bonds

- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays)

- 08:15 (CA) Canada Feb Annualized Housing Starts: 247.5Ke v 282.4k prior

- 08:30 (US) Mar Empire Manufacturing: 14.5e v 12.1 prior

- 08:30 (CA) Canada Jan Manufacturing Sales M/M: 2.5%e v 0.9% prior

- 09:00 (CA) Canada Feb Existing Home Sales M/M: No est v 2.0% prior

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

- 10:00 (FR) France Debt Agency (AFT) to sell €5.0-6.2B in 3-month, 6-month, 9-month and 12-month bills

- 10:45 (EU) ECB weekly QE bond buying update

- 10:45 (UK) BOE buys £1.48B in APF Gilt purchase operation (3-7 years); bid-to-cover: x

- 11:00 (CO) Colombia Jan Manufacturing Production Y/Y: -1.9%e v +1.5% prior

- 11:00 (CO) Colombia Jan Retail Sales Y/Y: -6.7%e v -2.8% prior

- 11:00 (PE) Peru Feb Unemployment Rate: No est v 13.0% prior
(PE) Peru Jan Economic Activity Index (Monthly GDP) Y/Y: No est v 0.5% prior

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

- 12:30 (IL) Israel Feb CPI M/M: +0.1%e v -0.1% prior; Y/Y: -0.2%e v -0.4% prior

- 15:00 (CO) Colombia Jan Industrial Production Y/Y: No est v -5.4% prior

- 16:00 (US) Jan Total Net TIC Flows: No est v -$0.6B prior; Net Long-term TIC Flows: No est v $121.0B prior

- 17:00 (KR) South Korea Feb Import Price Index M/M: No est v 2.8% prior; Y/Y: No est v -6.7% prior

- 17:00 (KR) South Korea Feb Export Price Index M/M: No est v 1.8% prior; Y/Y: No est v -2.3% prior

- 18:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 111.9 prior

- 20:30 (AU) Australia Q4 House Price Index Q/Q: 1.9%e v 0.8% prior; Y/Y: 2.7%e v 4.5% prior

- 20:30 (AU) RBA Mar Minutes

- 23:00 (TH) Thailand Central Bank to sell 3-month bills

- 23:30 (HK) Hong Kong to sell 3-month, 6-month and 12-month Bills