Sat, Jan 16, 2021 @ 02:59 GMT
Home Contributors Fundamental Analysis Awaiting The Fed Rate Decision, Likely To Signal Willingness To Provide Support...

Awaiting The Fed Rate Decision, Likely To Signal Willingness To Provide Support As Necessary

Notes/Observations

Asia:

  • China May CPI registered its slowest annual pace since Apr 2019 (Y/Y: 2.4% v 2.7%e)
  • South Korea May Unemployment Rate hits 10-year high (4.5% v 4.0%e)

Europe:

  • UK reported to reduce reliance on China for important imported goods (including telecoms kits)
  • BOE’s Cunliffe reiterated MPC view that negative rates remain one possible tool; BOE must consider impact of negative rates

Americas:

  • Canada and the United States said to extend a ban on non-essential travel to end of July

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

  • Indices [Stoxx600 % at #, FTSE -0.25% at 6,319.90, DAX -0.58% at 12,545.05, CAC-40 -0.21% at 5,084.66, IBEX-35 -0.40% at 7,721.00, FTSE MIB -0.48% at 19,834.50, SMI -0.22% at 10,163.63, S&P 500 Futures -0.13%]
  • Market Focal Points/Key Themes: European indices open modestly higher across the board but stalled to perform mixed later in the session; financial sector supported after ECB reportedly looking to set up “bad bank” for unpaid coronavirus debt; telecom and and healthcare worst performing sectors; reportedly CDP might take stake in Generali; focus on decision by FOMC later today; earnings expected in the upcoming US session include Guess? Graham and Chico’s

Equities

  • Consumer discretionary: Inditex [ITX.ES] +1.5% (earnings), Hornbach [HBH.DE] +6% (prelim earnings)
  • Financials: Paragon Banking [PAG.UK] +1% (earnings; dividend), Segro [SGRO.UK] -1% (trading update; placement)

Speakers

  • ECB’s Muller (Estonia): Additional increase in Pandemic bond buying fund (PEPP) not likely necessary if growth recovers. Sticking to capital key was important; puts a limit on PEPP
  • ECB’sKazimir (Slovakia): Increasing the Pandemic bond buying scheme (PEPP) helps to reduce deflation risk
  • ECB said to prepare bad bank plan to assist debts from coronavirus pandemic. The plan could see the ESM as a guarantor bad bank
  • OECD updated economic outlook which cut 2020 global growth forecast from +2.4% to -6.0% while raising 2021 global GDP growth forecast from 3.3% to 5.2%
  • South Korea Unification Ministry revoked 2 activist group licenses due to violation of rules by dropping anti-North Korea leaflets over North Korea cities (**Reminder: On Jun 8th North Korea state media announced it was cutting off communication lines with South Korea ‘completely’ (move was said to be in response to anti North Korean regime leaflets being sent from South Korea)
  • BoJ said to likely to keep policy steady at Jun meeting as it saw no pressing issues to force action. To assess the impact of measures taken so far

Currencies/Fixed Income

  • USD was soft in the session and near 3-month lows against major pairs ahead of Fed meeting. No change was expected on rates but dealers noted policy makers were likely to signal willingness to provide support as necessary
  • EUR/USD in the mid-1.13 neighborhood
  • USD/JPY lower by 0.3% to test 107.35 by mid-session.

Economic Data

  • (FI) Finland Apr Industrial Production M/M: -2.2% v +2.3% prior; Y/Y: -3.1% v +3.3% prior
  • (NO) Norway May CPI M/M:0.2 % v 0.1%e; Y/Y: 1.3% v 1.1 %e
  • (NO) Norway May CPI Underlying M/M: 0.1% v 0.1%e; Y/Y: 3.0% v 2.9%e
  • (NO) Norway May PPI M/M: -2.7% v -3.3% prior; Y/Y: -17.5% v -16.1% prior
  • (DK) Denmark May CPI M/M: -0.1% v -0.1%e; Y/Y: 0.0% v -0.1%e
  • (DK) Denmark May CPI EU Harmonized M/M: -0.1% v -0.1% prior; Y/Y: -0.2% v -0.1% prior
  • (FR) France Apr Industrial Production M/M: -20.1% v -20.0%e; Y/Y: -34.2% v -33.1%e
  • (FR) France Apr Manufacturing Production M/M: -21.9% v -18.1%e; Y/Y: -37.1% v -35.3%e
  • (CZ) Czech May CPI M/M: 0.2% v 0.1%e; Y/Y: 2.9% v 2.6%e (annual pace slowed for the 3rd straight reading and moved back within tolerance range)
  • (CZ) Czech Apr Export Price Index Y/Y: 3.1% v 1.1% prior; Import Price Index Y/Y: +0.7% v -0.3% prior
  • (TR) Turkey Mar Unemployment Rate: 13.2% v 13.6% prior
  • (SE) Sweden Apr Household Consumption M/M: -4.8% v -6.3% prior; Y/Y: -10.0% v -5.3% prior
  • (CN) China May mobile phone shipments y/y: +10.4% v +14% prior (2nd straight gain) – Industry Academy
  • (CN) China May M2 Money Supply Y/Y: 11.1% v 11.3%e; M1 Money Supply Y/Y: % v 5.7%e; M0 Money Supply Y/Y: % v 9.9%e
  • (CN) China May New Yuan Loans (CNY): 1.480T v 1.600Te
  • (CN) China May Aggregate Financing (CNY): 3.150Te v 3.094T prior (revised from 3.090T)
  • (GR) Greece May CPI Y/Y: -1.1% v -1.4% prior; CPI EU Harmonized Y/Y: -0.7% v -0.9% prior

Fixed Income Issuance

  • (DE) Germany opened its book to sell EUR-denominated 0.0% Aug 2050 bund via syndicate; guidance seen 4.5bps to benchmark
  • (FI) Finland opened its book to sell EUR-denominated 20-year bonds via syndicate; guidance seen +14bps to mid-swaps
  • Croatia opens book to sell EUR-denominated 11-year note; guidance seen +210bps to mid-swaps
  • (IN) India sold total INR450B vs. INR450B indicated in 3-month, 6-month and 12-month bills
  • (DK) Denmark sold total DKK10.9B in 3-month, 6-month, 9-month and 12-month bills
  • (SE) Sweden sold total SEK15.0B vs. SEK15.0B indicated in 3-month and 9-month Bills
  • (IT) Italy Debt Agency (Tesoro) sold €7.0B vs. €7.0B indicated 12-month bills; Avg Yield: 0.014% v 0.248% prior; Bid-to-cover: 1.73x v 1.71 x prior
  • (UK) DMO sold £900M in 0.125% 2036 Inflation-linked bonds (UKTi); Real Yield: -2.550% v -2.263% prior; Bid-to-cover: 2.52x v 2.54x prior

Looking Ahead

  • (MX) Mexico May Nominal Wages: No est v 5.5% prior
  • (MX) Mexico May ANTAD Same-Store Sales Y/Y: No est v -22.9% prior
  • 05:30 (PT) Portugal Debt Agency (IGCP) to sell €1.25-1.5B in 2026 and 2030 OT bonds
  • 05:30 (GR) Greece Debt Agency (PDMA) to sell €1.0B in 12-month Bills
  • 05:30 (ZA) South Africa announces details of next bond auction (held on Tuesdays)
  • 06:00 (IL) Israel May Consumer Confidence: No est v 29 prior
  • 06:00 (ZA) South Africa Q2 BER Business Confidence: No est v 18 prior
  • 06:00 (CZ) Czech Republic to sell 2027, 2031 and 2040 bonds
  • 06:00 (RU) Russia to sell OFZ bonds (2 tranches)
  • 06:00 (SE) Sweden Central Bank (Riksbank) Gov Ingves
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (US) MBA Mortgage Applications w/e Jun 5th: No est v -3.9% prior
  • 07:00 (DE) ECB’s Schnabel (Germany) at Online Seminar
  • 07:00 (UK) Weekly PM Question time in House
  • 07:00 (CZ) Czech Central Bank to comment on CPI data
  • 07:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (3-7 years)
  • 08:00 (HU) Hungary Central Bank May Minutes
  • 08:00 (BR) Brazil May IBGE Inflation M/M: -0.5%e v -0.3% prior; Y/Y: 1.8%e v 2.4% prior
  • 08:30 (US) May CPI M/M: 0.0%e v -0.8% prior; Y/Y: 0.3%e v 0.3% prior
  • 08:30 (US) May CPI (ex-food/energy) M/M: 0.0%e v -0.4% prior; Y/Y: 1.3%e v 1.4% prior
  • 08:30 (US) May CPI Index NSA: 256.813e v 256.389 prior; CPI Core Index SA: 265.601e v 265.601 prior
  • 08:30 (US) May Real Avg Hourly Earning Y/Y: No est v 7.5% prior; Real Avg Weekly Earnings Y/Y: No est v 6.9% prior
  • 08:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (7-20 years)
  • 09:30 (ES) ECB’s de Guindos (Spain) at Irish online event
  • 09:45 (UK) BOE to buy £1.5B in APF Gilt purchase operation (20+ years)
  • 10:30 (US) Weekly DOE Crude Oil Inventories
  • 14:00 (US) FOMC Interest Rate Decision: Expected to leave Target Range unchanged between 0.00-0.25%
  • 14:00 (US) May Monthly Budget Statement: -$544.0Be v -$737.9B prior
  • 14:30 (US) Fed Chief Powell post rate decision press conference
  • 15:00 (AR) Argentina Apr Capacity Utilization: No est v 51.6% prior
  • 18:45 (NZ) New Zealand May Retail Card Spending M/M: +60.0%e v -46.8% prior; Total Card Spending M/M: No est v -48.0% prior
  • 19:01 (UK) May RICS House Price Balance: -24%e v -21% prior
  • 19:50 (JP) Japan Q2 BSI Large All Industry Q/Q: -38.4%e v -10.1 prior; Large Manufacturing Q/Q: No est v -17.2 prior
  • 20:30 (AU) Australia to sell 3-month, 6-month ad 12-month bills
  • 21:00 (AU) Australia Jun Consumer Inflation Expectation Survey: No est v 3.4% prior
  • 22:00 (JP) Japan May Tokyo Office vacancies: No est v 1.56 prior
  • 22:05 (NZ) New Zealand to sell 2023, 2029 and 2037 bonds
Trade The Newshttp://www.tradethenews.com/
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.

Featured Analysis

Learn Forex Trading