Notes/Observations
North Korea conducts its third nuclear test since 2006 and first since Kim Jong Un took power; more tests could come
Russia Central Bank (CBR) left its key rates unchanged (as expected)
US Undersecretary for International Affairs Brainard: US supported Japan efforts to reinvigorate growth and end deflation. JPY hit fresh 33-month lows against the greenback; Nikkei end up almost 2%
G7 issues standard statement on FX re-emphasizing commitment to market determined currency rates; seemed supportive of Japan's move to combat deflation
GBP hits 6-month lows against the USD, trade below 1.55.75 ahead of Wed quarterly inflation report
European debt auctions mixed at best
Spain sold upper end of range at lower bid-to-cover ratios
Italy 12-month yield at 2-month highs with lower bid-to-cover
Greece 13-week auction was solid
Economic Data
(ID) Indonesia Central Bank left its Reference Rate unchanged at 5.75%; as expected
(FR) France Dec Current Account: -€3.6B v -€3.5Be
(EU) ECB: €42M borrowed in overnight loan facility vs. €0.0M prior; €159.2B parked in deposit facility vs. €157.2B prio
(CH) Swiss Jan CPI M/M: -0.3% v -0.3%e; Y/Y: -0.3% v -0.3%e
(RU) Russia Central Bank (CBR) left its key rates unchanged (as expected) with Refinancing Rate unchanged at 8.25%; Overnight Deposit Rate unchanged at 4.50%; Overnight Auction-Based Repo unchanged at 5.50%
(CZ) Czech Dec Current Account (CZK): -24.3B v -13.0Be
(UK) Jan PPI Input M/M: 1.3% v 0.9%e; Y/Y: 1.8% v 1.0%e
(UK) Jan PPI Output M/M: 0.2% v 0.2%e; Y/Y: 2.0% v 2.0%e
(UK) Jan PPI Output Core M/M: 0.2% v 0.1%e; Y/Y: 1.4% v 1.4%e
(UK) Dec ONS House Price Y/Y: 3.3% v 2.0%e
(UK) Jan CPI M/M: -0.5% v -0.5%e; Y/Y: 2.7% v 2.7%e; CPI Core: 2.3% v 2.4%e
(UK) Jan RPI M/M: -0.4% v -0.5%e; Y/Y: 3.3% v 3.2%e; RPI- Ex`Mortgage Interest Payments (RPIX): 3.3% v 3.2%e; Retail Price Index: 245.8 v 245.6e
Fixed Income:
(NL) Netherlands Debt Agency (DSTA) sold €2.685B €3.0B in 1.25% 2018 DSL bond; Avg Yield 0.884% v 0.861% prior
(ZA) South Africa sold total ZAR2.1B vs. ZAR2.1B indicated in 2036, 2041 and 2048 Bonds
(ES) Spain Debt Agency (Tesoro) sold total €5.55B vs. €4.5-5.5B in 6-Month and 12-Month Bills
Sold €2.55B in 6-month Bills; Avg Yield: 0.859% v 0.888% prior; Bid-to-cover: 2.88x v 3.85x prior; Max Yield: 0.880% v 0.920% prior; Tail: bps v 3.2bps
Sold €3.02B in 12-month Bills; Avg Yield: 1.548% v 1.472% prior; Bid-to-cover: 1.97x v 2.21x prior; Max Yield 1.580% v 1.520% prior; Tail: bps v 4.8bps prior
(IT) Italy Debt Agency (Tesoro) sold €8.5B vs. €8.5B in 12-month Bills; Avg Yield 1.094% v 0.864% prior; Bid-to-cover: 1.38x v 1.79x prior
(GR) Greece Debt Agency (PDMA) sold €1.3B vs. €1.0B indicated in 13-week bills; Avg Yield 4.05% v 4.07% prior; Bid-to-cover: 1.76x v 1.75x
(CH) Switzerland sold CHF1.239B in 3-Month Bills: Yield: -0.091% v -0.090% prior
(EU) ECB allotted €128.7B vs. 129Be in 7-day Main Refi Tender at fixed 0.75%
(EU) ECB allotted €7.7B vs. €10Bein 1-month MRO at fixed 0.75%
(HU) Hungary Debt Agency (AKK) sold HUF 50B vs. HUF50B indicated 3-Months Bills; Avg Yield 5.28% v 5.30% prior; Bid-to-cover: 1.94x v 1.75x prior
(DE) Germany sold €953M in 0.75% I/L April 2018 Bobl; Avg Yield -0.780% v -0.860% prior; Bid-to-cover:1.9 x v 1.5x prior
(BE) Belgium Debt Agency sold total €3.01B vs. €2.8-3.3B indicated in 3-month and 12-month Bills
Sold €1.52B in 3-month Bills; Avg Yield 0.39% v +0.038% prior; Bid-to-cover: 2.5x v 2.42x prior
Sold €1.49B in 12-month Bills; Avg yield 0.1654% v 0.110% prior; Bid-to-cover: 1.8x v 2.06x prior
(UK) BOE allotted £270M vs. £2.5B target in 6-month Extended Collateral Term Repo (ECTR) Lending Program
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
Indices: FTSE 100 +0.10% at 6283, DAX -0.30% at 7,608, CAC-40 -0.10% at 3,648, IBEX-35 +0.10% at 8,087, FTSE MIB -0.50% at 16,454, SMI -0.10% at 7,403, S&P 500 Futures -0.20% at 1,511
Equity markets are currently mixed. Italy's FTSE MIB and Germany's DAX have underperformed, while slight gains have been seen in the UK and Spain. In terms of the banking sector, UK banks are leading the gains, following results out of Barclays. Banks in Germany, Italy and Spain have underperformed. Resource related firms are mostly lower, in line with the declines in commodity prices. Big movers on today's session include Barclays (+4%), Finmeccanica (-8%), L'Oreal (+4%), Rexel (+5%) and TomTom (-7%).
UK movers [Barclays +3% (FY results, cost cutting measures)]
Germany movers [ThyssenKrupp -1.5% (Q1 results),Continental -1% (Michelin earnings)]
France movers [L'Oreal +4.5% (FY12 results, buyback),Rexel +4% (FY12 results); Michelin -3.5% (FY12 results),Danone -1.5% (broker commentary), Faurecia -0.50% (FY13 outlook), Hermes flat (FY12 sales)]
Italy movers [Finmeccanica -10% (CEO arrested as part of corruption probe), RCS Media -2.5% (capital raise speculation),Ansaldo -2% (Finmeccanica probe), Telecom Italia -0.50% (ratings downgrade)]
Spain movers [Colonial +4% (debt refinancing talks)]
The Netherlands movers [TomTom -8% (FY13 sales outlook)]
Norway movers [Norsk Hydro +1.5% (Q4 results), Yara International +0.20% (Q4 results)]