HomeContributorsFundamental AnalysisProgress In Rolling Out Coronavirus Vaccinations Aiding Optimism

Progress In Rolling Out Coronavirus Vaccinations Aiding Optimism

Notes/Observations

  • Gains in equities and other riskier assets weigh on the safe-haven instruments; Progress in rolling out coronavirus vaccinations aiding optimism
  • Inflation trades remained the main market theme (aided by optimism on US fiscal stimulus and vaccine rollouts)
  • WTI oil above $60/barrel as cold weather in State of Texas seen as posing risk to global supplies (Note: Texas is said to be facing its coldest temperatures in > 30 years and the grid operator stated that rotating power outages were underway

Asia

  • Japan Q4 Preliminary GDP beat expectations (Q/Q: 3.0% v 2.5%e; GDP Annualized QoQ: 12.7% v 10.1%e); Japan Econ Min Nishimura noted the recovery was at the halfway point and still below pre-pandemic levels
  • Japan PM Suga stated in Parliament that govt was closely watching the forex moves.
  • Japan hit with 7.1 magnitude earthquake over the weekend on its east coast Saturday (near Fukushima), No reports of any irregularities or changes to radiations levels at nuclear power plants. No tsunami warning was issued

Coronavirus

  • Total global cases 108.8M (+1.0% vs. Fri); total deaths: 2.40M (+1.3% vs. Fri)
  • US cases and hospitalizations down to lowest since November
  • UK hit its initial vaccination target amid reports lockdown to ease in March.
  • WHO scientists said China has refused to hand over blood and water samples they requested after reports of links to pre-Wuhan COVID
  • National Security Advisory (NSA) Sullivan: US has “deep concerns” about the World Health Organization’s early COVID-19 investigation
  • Chinese Embassy in Washington: US has seriously undermined WHO in recent years and should not point fingers at others

Europe

  • Mario Draghi officially sworn in as PM after he confirmed he could form a govt and would accept post as Italy PM. Daniele Franco named as Fin Min (as speculated). The League’s Giorgetti to be Industry Min
  • UK PM Johnson called the feat of successfully vaccinated 15M individuals, a “significant milestone”. PM expected to announce soon that all schools would return March 8th as well adults could see some relaxations of current rules
  • UK Foreign Sec Raab said to consider scheme to issue vaccine passports so people could enter pubs, shops , and events

Americas

  • Senate voted 57-43 to acquit former President Trump of inciting the Capital Hill riots on Jan 6th

Energy

  • Russia Dep PM Novak: Nord Stream 2 gas pipeline will be built despite US attempts to delay construction

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

  • Indices [Stoxx600 +0.79% at 417.26, FTSE +1.33% at 6,677.37, DAX % at #, CAC-40 +1.04% at 5,762.88, IBEX-35 +1.83% at 8,186.00, FTSE MIB +0.84% at 23,607.50, SMI +0.07% at 10,887.77, S&P 500 Futures +0.40%]
  • Market Focal Points/Key Themes: European indices open higher across the board and advanced into the green as the session progressed; muted volume with China, Japan and US closed for holidays; positive geopolitical and covid news generally attributed to as cause of improved optimism; sectors leading to the upside include financials and materials; sectors underperforming include consumer discretionary and health care; Vivendi to distribute 60% UMG to shareholders; Lanxess acquires Emerald Kalama; Orkla acquires NutraQ; BorgWarner offers to acquire Acasol; US and Canadian markets closed for holiday; earnings expected later in the session include Michelin and BHP

Equities

  • Consumer discretionary: Vivendi [VIV.FR] +17% (UMG’s share capital distribution)
  • Energy: Royal Dutch Shell [RDSA.NL] +3% (work activities at Deer Park (Texas) refinery)
  • Healthcare: Targovax [TRVX.NP] +13% (FDA fast track resignation)
  • Industrials: Rolls-Royce [RR.UK] +3% (new CFO), Aker Solutions [AKSO.NO] -16% (earnings)

Speakers

  • German Economy Ministry stated that the outlook for industrial economy remained cautious in view of the pandemic. Export sector prospects were cautiously optimistic despite lockdown measures. Industrial sector to be less impacted by restrictions compared to last spring but extension and tightening of measures to weigh on Q1 GDP
  • EU Economic Commissioner Gentiloni (Italy): vaccine rollout crucial to economic forecast (**Reminder EU Commission updated its Winter Forecasts back on Feb 11th which cut 2021 EU-19 GDP from 4.2% to 3.8% while raising the 2022 EU-19 GDP from 3.0% to 3.8%

Currencies/ Fixed Income

  • EUR/USD creeping higher in a quiet session with the pair at 1.2140 by mid-session. Dealers noted that gains in equities and other riskier assets weighed on the safe-haven instruments; Progress in rolling out coronavirus vaccinations was also aiding optimism
  • GBP/USD was at 3-year highs as the UK government achieved its target of vaccinating 15 million people for Covid-19 with a first dose by mid-February. The milestone prompting economic rebound hopes as it underlined the potential for pound outperformance to continue in the near-term
  • USD/JPY was higher aided by comments from Japan PM Suga hat the govt was closely watching currencies. Pair at 105.40 by mid-session

Economic data

  • (FI) Finland Dec Final Retail Sales Volume Y/Y: +2.8 v -0.3% prelim
  • (IN) India Jan Wholesale Prices Y/Y: 2.0% v 1.1%e
  • (DK) Denmark Q4 GDP Indicator Q/Q: 0.6% v 4.9% prior
  • (DK) Denmark Jan PPI M/M: 0.9% v 0.9% prior; Y/Y: -1.0% v -2.0% prior
  • (NO) Norway Jan Trade Balance (NOK): 23.1B v 12.1B prior
  • (ES) Spain Dec House transactions Y/Y: 3.7% v 1.9% prior
  • (TR) Turkey Jan Central Gov’t Budget Balance (TRY): -24.2B v -40.7B prior
  • (CZ) Czech Dec Current Account Balance (CZK): -3.9B v +2.9Be
  • (PL) Poland Jan Preliminary CPI M/M: 1.2% v 1.0%e; Y/Y: 2.7% v 2.4%e
  • (CH) Swiss weekly Total Sight Deposits (CHF): 704.3B v 704.3B prior; Domestic Sight Deposits: 643.1B v 640.2B prior
  • (IT) Italy Dec General Government Debt: €2.569T v €2.587T prior
  • (EU) Euro Zone Dec Industrial Production M/M: -1.6% v -0.8%e; Y/Y: -0.8% v -0.2%e
  • (EU) Euro Zone Dec Trade Balance (Seasonally adj): €27.5B v €25.0Be; Trade Balance NSA (unadj): €29.2B v €25.8B prior
  • (GR) Greece Jan CPI Y/Y: -2.0% v -2.3% prior; CPI EU Harmonized Y/Y: -2.4% v -2.4% prior

Fixed income Issuance

  • (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 6-month Bills; Avg Yield: 0.14% v 0.09% prior; Bid-to-cover: 2.28x v 2.85x prior

Looking Ahead

  • (EU) Euro-Area Finance Ministers (Eurogroup) meeting
  • (SK) Slovakia Debt Agency (Ardal) to sell €527M in 2024, 2029, 2030 and 2047 bonds
  • 05:10 (EU) Daily ECB Liquidity Stats
  • 05:30 (DE) Germany to sell combined €6.0B in 6-month and 12-month Bubills
  • 05:30 (NL) Netherlands Debt Agency (DSTA) to sell €1.0-3.0B in 3-month and 6-month bills
  • 06:00 (IL) Israel to sell bonds
  • 06:30 (IN) India Jan Trade Balance: -$14.8Be v -$15.4B prior; Exports Y/Y: No est v 0.1% prior; Imports Y/Y: No est v 7.6% prior
  • 06:30 (CL) Chile Central Bank Traders Survey
  • 06:45 (US) Daily Libor Fixing
  • 07:00 (TR) Turkey to sell 13.9% 2022 Bonds
  • 08:00 (PL) Poland Dec Current Account Balance: €1.0Be v €1.7B prior; Trade Balance: €0.7Be v €1.8B prior; Exports: €19.5Be v €23.0B prior; Imports: €18.4Be v €21.2B prior
  • 08:00 (UK) Daily Baltic Dry Bulk Index
  • 08:00 (IN) India announces details of upcoming bond sale (held on Fridays)
  • 08:00 (ES) Spain Debt Agency (Tesoro) announces size of upcoming issuance (bills and bonds)
  • 08:15 (CA) Canada Jan Annualized Housing Starts: 235.7Ke v 228.3K prior
  • 08:30 (CA) Canada Dec Manufacturing Sales M/M: +0.6%e v -0.6% prior
  • 09:00 (FR) France Debt Agency (AFT) to sell €5.1-6.3B in 3-month, 6-month and 12-month bills
  • 09:30 (UR) Ukraine Q4 Preliminary GDP Q/Q: 2.7%e v 8.5% prior; Y/Y: -0.8%e v -3.5% prior
  • 09:45 (EU) ECB weekly QE bond buying update
  • 10:00 (PE) Peru Jan Unemployment Rate: No est v 13.8% prior
  • 10:00 (PE) Peru Dec Economic Activity Index (Monthly GDP) Y/Y: -1.7%e v -2.8% prior
  • 11:00 (CO) Colombia Q4 GDP Q/Q: 5.7%e v 0.6% prior; Y/Y: -4.5%e v -9.0% prior; Full Year 2020 GDP Y/Y: No est v % prior
  • 11:00 (RU) Russia Jan Industrial Production Y/Y: +0.1%e v -0.2% prior
  • 11:30 (IL) Israel Jan CPI M/M: -0.3%e v -0.1% prior; Y/Y: -0.6%e v -0.7% prior
  • 14:00 (CO) Colombia Dec Economic Activity Index (Monthly GDP) Y/Y: No est v -3.4% prior
  • 16:00 (KR) South Korea Jan Import Price Index M/M: No est v 1.8% prior; Y/Y: No est v -10.2% prior
  • 16:00 (KR) South Korea Jan Export Price Index M/M: No est v -5.4% prior; Y/Y: No est v -0.1% prior
  • 16:45 (NZ) New Zealand Dec Net Migration: No est v 672 prior
  • 17:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 111.4 prior
  • 19:30 (AU) RBA Feb Minutes
  • 23:30 (JP) Japan Dec Tertiary Industry Index M/M: -0.6%e v -0.7% prior
  • 23:30 (HK) Hong Kong to sell 3-month. 6-month and 12-month Bills
  • 22:35 (JP) Japan to sell 5-year JGB bonds

 

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