We are still waiting for key US inflation data Thursday.
EU equity is slightly higher while markets await US Dec CPI on Thursday. The MoM estimates for the last month have been revised lower.
ECB’s Villeroy and Holzmann make hawkish comments about further rate increases, but Villeroy is optimistic about growth by stating that France will not suffer a hard landing.
– China’s economic reopening is a major catalyst for oil and metals to rise. Due to milder weather than expected, European Nat Gas is lower.
Asia closed mixed, with Nikkei225 outperforming the market at +1.0%. EU indices are +0.2-0.8%. Futures in the USA are at +0.2% Gold +0.7%; DXY 0.0%; Commodity Brent +0.5%; WTI +0.4%; TTF -4.0%; Silver +1.7%; Copper +1.1%; Platinum +1.8%; and Crypto: BTC +1.2%, ETH +0.4%.
Asia
– Australia Nov CPI Y/Y: 7.4% v 7.2%e.
– Australia Nov Retail sales M/M: 1.4% vs 0.6%e.
BOJ Quarterly Survey: 85.0% expect an increase of prices within the next year (prior 85.7%).
– Official Saito of Japan’s govt: While interest rates are still low, the current situation won’t last forever.
Shirai, a former member of the BOJ Board, stated that USD excess strength will likely be corrected. US interest rates falling has not caused much Yen weakness.
Europe
ECB Centeno (Portugal), reiterates that rates are close to peaking if no external shocks occur.
France’s government will raise the retirement age to 64 years by 2030. It will gradually increase, starting in September 2023.
French unions are planning strike actions beginning Jan 19th to protest government pension reforms.
Americas
Fed’s Bowman said that he was looking for compelling indicators that inflation has peaked and that he had much more work to lower it.
Toast Insiders sell Stock worth US$264m, possibly signaling caution
President Biden asked Treasury Sec. Yellen to remain in her position ahead of any expected cabinet turnover.
Energie
– Weekly API Crude Oil Inventories: +14.9M v +3.3M prior.
Speakers/fixed income/FX/commodities/erratum
Equities
Indices [Stoxx 600 +0.55% at 448.16, FTSE +0.64% at 7,743.80, DAX +0.80% at 14,892.95, CAC-40 +0.70% at 6,917.86, IBEX-35 +0.15% at 8,725.76, FTSE MIB +0.22% at 25,420.00, SMI +0.54% at 11,222.10, S&P 500 Futures +0.21%].
Market Focal Points/Key Topics: European indices open higher; Materials and real-estate sectors are among the leading sectors in the green; lagging sectors include financials, consumer discretionary, and Thales denies any interest in Atos’ Evidian spinoff. Earnings expected for the upcoming US session include KB Home.
Awaiting key US inflation data on Thursday https://t.co/noBWlFtguK
— FXVNPRo (@fxvnpro) January 11, 2023
Equities
– Consumer discretionary PageGroup [PAGE.UK] +3.0% Q4 trading update, JD Sports Fashion[JD.UK] +5.5% Trading Update), Reach plc[RCH.UK] -21.5% Trading Update), J Sainsbury[SBRY.UK] -2.0% Trade update), Shop Apotheke Europe[SAE.DE] -1.5% Prelim Q4 Rev Misses Estimates
– Energy: Hurricane Energy (HUR.UK) +1.0% (FY22 Trading Update – Rev Beat and Initial FY23 Production Guidance), Vestas wind Systems [VWS.DK] +1.0%. (analyst action- Jefferies raised funds to buy).
Materials: Ferrexpo [FXPO.UK] 0.5% (reports Q4 Production), Lanxess (LXS.DE] 2.5% (analyst action- Morgan Stanley was made overweight).
– Healthcare Bayer [BAYN.DE] +2.0%
– Industrials: Barratt Developments [BDEV.UK] -1.0% (trading update), Airbus [AIR.FR] -1.0% (post close – reports FY22 deliveries).
– Technology: TeamViewer (TMV.DE) +3.5% (reportsQ4 billings), DarkTrace (DARK.UK]-13% (H1 Trading Update – Cuts FY23 rev, increases ad EBITDA margin).
Speakers
The ECB’s Holzmann (Austria), reiterates its stance that rates must rise substantially to reach levels that will be sufficiently restrictive to allow timely return to the 2% inflation goal. ECB will not alter its core inflation determination until it is lessened.
ECB’s Villeroy (France), stated that the ECB must be pragmatic about the pace of rate increases. France’s economy avoided a hard landing scenario and inflation reached its highest point in H1.
German VDMA Engineering Association: Nov Orders -14% y/y. Domestic Orders: -7%, Foreign Orders 17%
Russia will buy FX again via Chinese Yuan (CNY), starting Jan 13th, to fill the National Well.
– The Governor of the Philippines Central Bank, Medalla, stated that it was too soon to suggest a pause on the tightening cycle. It is unlikely that the central bank will do anything at these meetings, and rates rose on a smaller scale.
– China Commerce Ministry (MOFCOM), stated that it will continue to impose anti subsidy duties on distillers’ dry grains solvent (DDGS), imported from the US.
The China Commerce Ministry (MOFCOM), stated that they encourage banks to lend Chinese yuan (CNY)overseas.
Fixed income/currencies
– FX markets talked about terminal rates and how high they could go given recent sticky core inflation readings. On Tuesday, Fed Chair Powell didn’t give any policy guidance during a Stockholm panel discussion. The focus will shift to the US CPI data that is due out on Thursday. Dealers stated that a soft core CPI would encourage the markets to shift pricing ahead of the Fed’s February meeting.
Economic data
– (TR) Turkey Nov Current Account Balance: =$3.7B v -$4.0Be.
– (ES) Spain Nov Industrial Production M/M: -0.7% v -0.4%e; Y/Y: -1.1% v +0.1%e; Industrial Output NSA (unadj) Y/Y: -1.8% v 2.1% prior.
– (CZ) Czech Dec CPI M/M: 0.0% v 0.4%e; Y/Y: 15.8% v 16.2%e.
– (CZ) Czech Nov Export Price Index Y/Y: 9.8% v 11.4% prior; Import Price Index Y/Y: 11.4% v 14.4% prior.
– (IT) Italy Nov Retail Sales M/M: +0.8% v -0.3%e; Y/Y: 4.4% v 1.2% prior.
– (IT), Bank of Italy Releases Banks & Money Monthly Statistics: Dec Gross NPLs (Gross Non-Performing Loans): EUR34.0B, compared to EUR34.7B before.
– (HU), Hungary Dec YTD Budget Balance – HUF: -4.753T vs -3.466T before
Fixed income issuance
– India sold total INR300B, compared to INR300B for 3-month, 6-month, and 12-month bills.
– Total DKK500M sold by (DK Denmark) in 3-month and 6-month bills
– (IT Italy Debt Agency (Tesoro), sold EUR7.0B vs. EUR7.0B shown in 12-month Bills; Avg yield: 3.086%, v 2.669% before; Bid-tocover: 1.39x; 1.42x prior.
– (NO). Norway sold NOK2.0B in comparison to NOK2.0B as indicated in 2.125% Bonds May 2032 Bonds, 3.04% v. 3.24%; Avg Yield is 3.04% v. 3.24%; bid-to cover: 2.90x; 3.20x before.
(SE) Sweden sold SEK15.0B vs. SEK15.0B as indicated in 3-month bills; Avg Yield is 2.6059% vs. 1.8376% before; Bid-to cover: 1.38x Vs 1.93x prior
Looking ahead
– (CO) Colombia Dec Consumer Confidence: -26.4e v -24.8 prior.
05:15 (CH), Switzerland to Sell 2030, 2035, and 2049 Bonds
– 05.25 (EU), Daily ECB Liquidity Stats.
– 05.30 (DE), Germany will sell EUR5.0B in the new 2.3% February 2033 Bunds.
– 06:00 (IE), Ireland Dec Unemployment Rate : No est. v 4.4% before.
– 06:00 (PT) Portugal Dec Final CPI M/M: No est v -0.3% prelim; Y/Y: No est v 9.6% prelim.
– 06:00 (PT) Portugal Dec Final CPI EU Harmonized M/M: No est v -0.4% prelim; Y/Y: No est v 9.8% prelim.
Czech Republic to Sell Bonds at 06:00
– 06:00 (RU), Russia OFZ Bond auction (if there is one).
Daily Libor Fixing at 06:45 in the US
– 07:00 (US), MBA Mortgage Applications w/e Jan 6, 2013: No est. v.-10.3%
– 07:00 (MX) Mexico Nov Industrial Production M/M: -0.3%e v +0.4% prior; Y/Y: 2.8%e v 3.1% prior; Manufacturing Production Y/Y: 4.8%e v 5.3% prior.
– 07:00 (BR) Brazil Nov Retail Sales M/M: -0.3%e v +0.4% prior; Y/Y: 1.9%e v 2.7% prior.
– 07:00 (BR) Brazil Nov Broad Retail Sales M/M: 0.p0%e v 0.5% prior; Y/Y: -0.7%e v +0.3% prior.
– 07:00 (UK), Weekly PM Question Time in the House
– 08:00 (UK), Daily Baltic Dry Bulk Index.
– 09:00 (FI), ECB’s Rehn Finland
– 10:30 (US), Weekly DOE Oil Inventories.
US Treasury will sell 17-Week Bills at 11:30
Canada to Sell 5 Year Bonds at 12:00 PM (CA).
– 13:00 U.S. Treasury to Sell 10-Year Notes Reopening
– 14:00 (AR) Argentina Nov Capacity Utilization: No est v 66.7% prior.
– 14:15 (ES) ECB’s De Cos (Spain).
16:45 (NZ), New Zealand Nov Building Permits M/M – No est. v. -10.7% before
18:30 (AU), Australia will sell combined A$3.0B for 3-month, 6-month, and 12-month bills.
– 18:50 (JP) Japan Nov BoP Current Account: +Y=481.0Be v -Y=64.1B prior; Adj Current Account: +Y=657.5Be v -Y=609.4B prior; Trade Balance (BOP): -Y=1.620Te v -Y=1.875T prior.
– 18:50 (JP) Japan Dec Bank Lending Y/Y: No est v 2.7% prior; Bank Lending (ex-trusts) Y/Y: No est v 3.0% prior.
– 19:30 (AU) Australia Nov Trade Balance (A$): 11.3Be v 12.2B prior; Exports M/M: No est v -1% prior; Imports M/M: No est v -1% prior.
– 20:30 (CN) China Dec CPI M/M: No est v -0.2% prior; Y/Y: 1.8%e v 1.6% prior; PPI Y/Y: -0.1%e v -1.3% prior.
– 20.10 (JP), BOJ Outright Bond Purchase Operation, 13 years; 510 years and 25 year maturities.
– 21:00 (JP) Japan Dec Tokyo Avg Office Vacancies: No est v 6.4% prior.
– 22:00 (TH) Thailand Dec Consumer Confidence: No est v 47.9 prior; Economic Confidence: No est v 42.0 prior.
– 22:00 (KR), South Korea Dec Total Housing Lending (KRW),: No est. v.1.058T before.
– 23:30 (TW), Taiwan will sell NT$30B 5-Year Bonds.
