• More German data highlighting that the domestic economy was experiencing a downturn (weaker Feb IFO survey)
  • Euro Zone Jan CPI saw the 2nd straight month where headline CPI YoY reading was below the ECB target of ‘around 2.0%
  • US-China trade talks remain in Focus; Trump expected to meet with China Vice-Premier


  • Japan Jan National CPI Y/Y: 0.2% v 0.2%e; CPI Ex-Fresh/Food (Core) Y/Y: 0.8% v 0.8%e; CPI Ex-Fresh Food/ Energy (Core-core) Y/Y: 0.4% v 0.4%e
  • BOJ Gov Kuroda met with PM Abe to discuss the domestic and global economies; affirmed main scenario that global economy to continue to grow but protectionism was a risk
  • RBA) Gov Lowe reiterated view that there was no strong case for a near-term change in cash rate, rate outlook was more evenly balanced than six months ago


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  • EU officials reportedly have indicated there have been no breakthroughs in Brexit discussions in Brussels; talks expected to continue next week
  • EU said to be expecting s UK PM May to be forced to request a three-month delay to Brexit if the British Parliament backed the Brexit deal but it was not signed off until an EU summit on March 21-22 (Insight: extension longer than three months would put the UK under pressure to take part in European elections on May 23-26 (something that both sides are keen to avoid)
  • As many as 25 members of UK govt said to be ready to vote for Brexit delay unless UK PM May ruled out no deal. Rebel Conservatives believe there are now enough MPs across the House of Commons to pass an amendment that would require May to extend article 50 rather than allow the UK to leave without a deal.
  • Germany govt to extend term Bundesbank President Weidmann for another eight years


  • President Trump expected to meet China Vice Premier Liu He on Friday (Feb 22) at 2:30 PM EST; meeting to occur at the White House . Trump administration said to counting on the Chinese leader’s special envoy, Liu He, to get Beijing to accept tough new strictures that are increasingly controversial in Beijing.
  • Bank of Canada (BOC) Gov Poloz reiterated stance that rates needed to head higher; path of rate rises toward the neutral range was highly uncertain Macro (UK) United Kingdom: Parliament is becoming increasingly defiant against the government, with a number of MP’s trying to prevent a no-deal exit scenario. The BBC, citing Conservative party member Andrew Percy, co-chairman of a group of MPs comprising both Leavers and Remainers, said that more than 30 Conservative MPs could rebel against the prime minster to try and block a no deal. In a letter to the government, the group states that “numerous members” of the group are prepared to back an amendment that would both delay Brexit and prevent a “no-deal” scenario. The House of Commons is due to vote again on Brexit next Wednesday. It is looking increasingly likely that May will not be able to win support for the withdrawal agreement, as the EU not willing to satisfy the British government’s desire for a legally-binding time-limit on the Irish backstop. (DE) Germany: Q4 GDP growth was confirmed at 0.0% q/q with the breakdown showing that investment, particularly public consumption, adding 0.3 percentage points to the headline figure. Equipment investment rose 0.7% q/q but with stock changed detracting -0.6 percentage points from the quarterly growth rate, the domestic economy stagnated, as did the external side, with a 0.7% q/q rise in imports in line with export growth during the quarter.



  • Indices [Stoxx600 +0.2% at 371.0, FTSE +0.3% at 7185, DAX +0.3% at 11455, CAC-40 +0.3% at 5213, IBEX-35 +0.2% at 9212, FTSE MIB +0.2% at 20256, SMI +0.2% at 9354, S&P 500 Futures +0.3%]
  • Market Focal Points/Key Themes: European Indices trade slightly higher across the board following a mixed session in Asia overnight and higher US futures. On the Brexit front reports suggested the EU expects UK PM May to be forced to request a three-month delay to Brexit which gave Cable a lift. On the corporate front shares of Sopra Steria trades over 20% higher on strong earnings, leading the gainers on the Eurostoxx 600. ASM International, ISS, Person, and Edenred are among other names trading higher on earnings. Meanwhile Saint Gobain and Valeo fall on a declines in profits, with Elekta another notable decliner following a reduction in profits and downgraded margin outlook. In other news Dairy Crest trades over 10% higher after Saputo is to acquire the company for 620p/shr; Provident Financial also rises on a firm offer by NSF in all stock proposal; Eutelsat declines following BPIfinance placement of 15.5M shares; Vodafone gains on a 5G agreement with Telecom Italia. In the US Kraft Heinz drops over 20% in the pre market following a miss in earnings and dividend cut with shares of Danone and Unilever trading slightly weaker in sympathy. Looking ahead notable earners include M, Wayfair, Autonation, Barnes Group and Cinemark among others.


  • Consumer discretionary: ISS [ISS.DK] +5.7% (Earnings), Sopra Steria [SOP.FR] +17.5% (Earnings), Edenred [EDEN.FR] +6.2% (earnings)
  • Consumer staples: Dairy Crest [DCG.UK] +13% (to be acquired)
  • Financials: Provident Financial [PFG.UK] +4% (Takeover offer)
  • Healthcare: Elekta [EKTAB.SE] -9% (earnings)
  • Industrials: Valeo [FR.FR] -2.9% (earnings), Saint Gobain [SGO.FR] -2.1% (earnings)
  • Technology: Wirecard [WDI.DE] +3.6% (CEO comments), Sartorius [SRT.DE] -4.2% (analyst downgrade), ASM International [ASM.NL] +7.5% (earnings)
  • Telecom: Eutelsat [ETL.FR] -4.2% (BPIfrance placement), Telecom Italia [TIT.IT] +2.9% (earnings, 5G agreement with Vodafone), Vodafone [VOD.UK] +1.2% (5G agreement)


  • ECB’s Nowotny (Austria): German growth expectations was likely to be revised down. Did not see need for raising liquidity but could consider special measures regarding bank lending . ECB had no conclusions on TLTRO. If economic slowdown was caused by one-off factors then TLTRO might not be needed. Had time until the summer to make a decision on TLTRO
  • EU Brexit Negotiator Barnier stated that could not exclude that Britain’s EU withdrawal was postponed but not up to me to decide. Stressed that more discussions were needed – not time
  • Sweden Central Bank (Riksbank) Feb Minutes: Economic developments have entered into a calmer phase; conditions for inflation around the 2% target has not changed
  • Riksbank Gov Ingves in Feb Minutes stated that needed to be watchful about inflation pressures with risks mostly on the downside; if materialized then policy might need to be adjusted. Slowly appreciating SEK currency to dampen inflation
  • Riksbank Dep Gov Skingsley in Feb Minutes: More pessimistic about global developments but more information was required before any adjustments might become relevant. Good conditions for inflation to remain close to 2% target; recent data supported this view
  • Riksbank; Floden in Feb Minutes stated that a rate hike in April was possible if SEK currency remained weak and inflation rose. Developments after the Dec meeting hadnot increased the likelihood of an increase in rates being appropriate in April; everything indicated that next hike to be in H2 2019
  • Sweden Central Bank (Riksbank) Gov Ingves (press comments) reiterated view that domestic economy was strong. Inflation was around the 2% target and should remain in that neighborhood
  • Poland Central Bank’s Lon saw interest rates staying steady at least until 2022and did not rule out additional easing if economic slowdown is pronounced
  • German IFO Institute commented that the domestic economy was experiencing a downturn with the weak phase expected to continue
  • China Foreign Ministry refuted press reports that it banned Australia coal imports. Stated that Chinese customs were strengthening quality and environmental checks on coal
  • China Politburo reiterated stance to keep economy within a reasonable range in 2019. Reiterated to implement pro-active fiscal and prudent monetary policy

Currencies/Fixed Income

  • EUR/USD moved off 2-week highs after the Feb German IFO survey suggested that the domestic economy was experiencing a downturn. Pair holding around the 1.1340 area just ahead of the US morning. Euro Zone Jan CPI saw the 2nd straight month where headline CPI YoY reading was below the ECB target of ‘around 2.0%
  • GBP/USD lower by 0.3% in the session. Reports circulated that EU expected UK PM May to be forced to request a three-month delay to Brexit.

Economic Data

  • (DE) Germany Q4 Final GDP Q/Q: 0.0% v 0.0%e; Y/Y: 0.6% v 0.6%e; GDP NSA (unadj) Y/Y: 0.9% v 0.9%e
  • (DE) Germany Q4 Private Consumption Q/Q: 0.2% v 0.1%e; Government Spending Q/Q: 1.6% v 0.6%e; Capital Investment Q/Q: 0.9% v 0.7%e
  • (TR) Turkey Feb Real Sector Confidence (Seasonally Adj): 96.9 v 95.4 prior; Real Sector Confidence NSA: 97.2 v 93.0 prior
  • (TR) Turkey Feb Capacity Utilization: 74.0% v 74.4% prior
  • (MY) Malaysia mid-Feb Foreign Reserves: $102.3B v $102.1B prior
  • (CH) Swiss Q4 Industrial Output Y/Y: 5.1% v 0.8% prior; Industry & Construction Output Y/Y: 3.8% v 0.8% prior
  • (CN) Weekly Shanghai copper inventories (SHFE): 217.8K v 207.1K tons prior
  • (AT) Austria Jan CPI M/M: -0.8% v +0.1% prior; Y/Y: 1.7% v 1.9% prior
  • (RU) Russia Narrow Money Supply w/e Feb 15th (RUB): 10.30T v 10.20T prior
  • (TW) Taiwan Jan Export Orders Y/Y: -6.0% v -8.7%e
  • (TW) Taiwan Q4 Current Account Balance: $18.7B v $14.0B prior
  • (HK) Hong Kong Jan CPI Composite Y/Y: 2.4% v 2.6%e
  • (DE) Germany Feb IFO Business Climate: 98.5 v 98.9e; Current Assessment: 103.4 v 103.9e; Expectations Survey: 93.8 v 94.3e
  • (IS) Iceland Jan Wage Index 0.3% v 0.0% prior; Y/Y: 5.8% v 6.0% prior
  • (NO) Norway Q1 Consumer Confidence: 2.9 v 14.6 prior
  • (EU) Euro Zone Jan Final CPI Y/Y: 1.4% v 1.4%e; CPI Core Y/Y: 1.1% v 1.1%e; CPI M/M: -1.0% v -1.1%e

Fixed Income Issuance

  • (IN) India sold total INR120B vs. INR120B indicated in 2024, 2029, 2033 and 2044 bonds
  • (ZA) South Africa sold ZAR650M vs. ZAR650M indicated in I/ L 2025, 2033 and 2050 bonds
  • (IT) Italy Debt Agency (Tesoro) sold total €B vs. €0.75-1.25B indicated range in I/L 2023 and 2032 Bonds (BTPei)
  • (IT) Italy Debt Agency (Tesoro) sold €2.25B vs. €1.75-2.25B indicated in Zero Coupon Nov 2020 CTZ; Avg Yield: 0.592% v 0.366% prior; Bid-to-cover: 1.82x v 1.47x prior

Looking Ahead

  • 06:00 (UK) Feb CBI Retailing Reported Sales: 5e v 0 (nil) prior; Total Distribution: No est v 13 prior
  • 06:00 (IE) Ireland Jan PPI M/M: No est v 0.5% prior; Y/Y: No est v -9.9% prior
  • 06:00 (BR) Brazil Feb FGV Consumer Confidence: No est v 96.6 prior
  • 06:00 (UK) DMO to sell €3.5B in 1-month, 3-month and 6-month bills (£0.5B, £1.5B and £1.5B respectively)
  • 06:30 (IS) Iceland to sell 6-month bills
  • 06:30 (IN) India Weekly Forex Reserves w/e Feb 15th: No est v $398.1B prior
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (CL) Chile Jan PPI M/M: No est v -0.2% prior
  • 08:00 (PL) Poland Jan M3 Money Supply M/M: -0.9%e v +2.6% prior; Y/Y: 9.4%e v 9.2% prior
  • 08:00 (UK) Baltic Dry Bulk Index
  • 08:00 (IN) India announces upcoming bill issuance (held on Wed)
  • 08:15 (US) Fed’s Bostic (dove, non-voter) in NY
  • 08:30 (CA) Canada Dec Retail Sales M/M: -0.3%e v -0.9% prior; Retail Sales (ex-auto) M/M: -0.3%e v -0.6% prior
  • 08:30 (US) Weekly USDA Net Export Sales
  • 09:00 (BE) Belgium Feb Business Confidence: No est v -1.5 prior
  • 10:00 (FR) ECB’s Villeroy (France) in Lisbon
  • 10:15 (US) Fed’s Willams (moderate, voter) in NY
  • 10:30 (EU) ECB’s Draghi in Italy
  • 12:00 (US) Fed’s Vice Chair Clarida (moderate, voter) in NY
  • 13:00 (US) Weekly Baker Hughes Rig Count data
  • 13:30 (US) Fed’s Bullard (dove, voter) in NY
  • 13;30 (US) Fed’s harker (non-voter, moderate) on panel
  • 13;30 (US) Fed’s Quarles (hawk, voter)
  • (CO) Colombia Central Bank holds Monetary Policy Meeting
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