HomeContributorsFundamental AnalysisEuropean Market Update: Market Quiet In Post Nonfarm Payroll Price Action

European Market Update: Market Quiet In Post Nonfarm Payroll Price Action

Market quiet in post nonfarm payroll price action


Germany Dec Factory Orders register biggest monthly advance since July 2014 (5.2% v 0.7%e)



China Jan Caixin PMI Services saw its 1st sequential decline in 4 months ( 53.1 v 53.4 prior)

Australia Dec Retail Sales registered its 1st MoM decline since Aug 2015 (-0.1% v +0.3%e)

Japan Overall 2016 Real average monthly wages rose by 0.7% for its 1st rise in 5 years and biggest increase since 2010

Radiation at Fukushima plant hits 5-year high. The Japanese nuclear plant has recorded the highest radiation level since the 2011 earthquake


Germany Fin Min Schaeuble: Euro exchange rate is too low for German economy’s competitive position

Germany Econ Min Gabriel: Europe must not be divided further; need to give Italy, France and Portugal enough time to reduce their deficits as they enact structural reforms

UK Conservative MP Carmichael: Could be faced with prospect of leaving EU by ‘falling off a cliff’ (**Note: Comments from Carmichael viewed as a headwind on PM May’s Brexit plan as member of her party ‘criticized her strategy ahead of a mid-week vote on plan following debate)

France’s far-right party presented its Presidential Election Manifesto which vowed to fight globalization. Election to be followed by 6 months of talks with EU to regain 4 sovereign ties (monetary, legal, territorial and economic) and then hold referendum afterwards. Would aim to leave euro and re denominate French debt stock into new currency

New BoE Governor to replace Minouche Shafik will be announced this week by Treasury

Fitch affirmed Portugal sovereign rating at BB+; outlook Stable

Fitch affirmed Austria sovereign rating at AA+; outlook Stable


More than 100K visas had been revoked due to Trump administration travel restrictions order on 7 Muslim-majority countries

US Federal Judge in Seattle granted temporary nationwide restraining order on immigration ban (acting on requests from Washington/Minnesota states). Banned 90-day entry suspension of individuals from seven countries

Homeland Security official: Will comply with federal court ruling; have "suspended any and all actions" related to implementing President Trump’s immigration ban on 7 Muslim-majority countries

Fed’s Williams (moderate, non-voter): March rate hike was on the table, decision remained data-dependent; all FOMC meetings were live

Economic Data

(DE) Germany Dec Factory Orders M/M: 5.2% v 0.7%e; Y/Y: 8.1% v 4.2%e (biggest monthly advance since July 2014)

(NO) Norway Dec Industrial Production M/M: -2.7 v +0.7% prior; Y/Y: -1.4% v +1.3% prior

(NO) Norway Dec Manufacturing Production M/M: 1.1% v 0.3%e; Y/Y: -2.0% v -4.2% prior

(DE) Germany Jan Construction PMI: 52.0 v 54.9 prior

(EU) Euro Zone Feb Sentix Investor Confidence: 17.4 v 16.8e

Fixed Income Issuance:

None seen


Index snapshot (as of 10:00 GMT)

Indices [Stoxx50 flat at 3,278, FTSE +0.2% at 7,205, DAX flat at 11,656, CAC-40 +0.3% at 4,838, IBEX-35 +0.1% at 9,470, FTSE MIB -0.3% at 19,053, SMI +0.2% at 8,370, S&P 500 Futures +0.1%]

Market Focal Points/Key Themes: European equity indices are trading mixed but generally higher after a positive end to the Asian session; the major banking stocks trading mixed in the Eurostoxx with shares of BNP Paribas, BBVA and Intesa Sanpaolo trading higher, with shares of Deutsche Bank and Banco Santander trading lower; Commodity and mining stocks leading the gains in the FTSE 100 as copper trades higher intraday; homebuilder stocks trading sharply lower in the index, with the major high street retailers Dixons Carphone and Marks & Spencer the notable laggards.

Upcoming scheduled US earnings (pre-market) include Boardwalk Pipeline, CBOE Holdings, CNA Financial, Diamond Offshore, Fidelity & Guaranty, Haemonetics, Hasbro, Loews Corp, Mercury General, Newell Brands, Sysco Corp, and Tyson Foods.

Equities (as of 09:50 GMT)

Consumer Discretionary: [Capita CPI.UK +1.1% (staff arrested), Ryanair RYA.UK -1.6% (Q3 results)]

Healthcare: [Ablynx ABLX.BE +1.7% (Submits MAA to the EMA for approval of caplacizumab), Genmab GEN.DK +1.4% (raises FY16 outlook), Innate Pharma IPH.FR -20.2% (top line results from EffiKIR trial)]

Industrials: [Hexagon HEXAB.SE -2.4% (cost savings program, Q4 results, new Chairman), Norwegian Air NAS.NO -2.4% (Jan metrics)]

Technology: [DKSH Holding DKSH.CH +7.8% (FY16 results)]

Telecom: [TDC TDC.DK -0.3% (divests subsidiary TDC Hosting, trims outlook), Telecom Italia TIT.IT +3.4% (Q4 results)]


SNB’s Maechler reiterated the view that CHF currency (Swiss franc) was overvalued, especially against euro. If interest rates were not negative, franc would be stronger. Expected Swiss job market to improv

German Ifo institute: Gauges for business climate, current assessment and expectations improved in 1Q as euro-area recovery gains momentum

Brazil Fin Min Meirelles noted that a single digit interest rate was depended on inflation slowdown

Russia Dep Foreign Min Ryabkov: Recent Iran missile launch did not violate sanctions agreement. Did not agree with Trump’s assessment that Iran was a terrorist State

China said to target Urban Unemployment Rate to be below 5% in period through 2020 (**Note: 2016 urban unemployment rate 4.02%)


USD remained in recent ranges against the majors as dealers continue to digest the Friday’s jobs report. The headline figure of Friday’s nonfarm payrolls report for January showed a greater-than-expected rise in job growth, the unemployment rate edged up and wage growth was disappointing

The 112 area remained key support for the USD/JPY pair. Abenomics received another boost to its credibility after Japan’s Overall 2016 Real average monthly wages rose by 0.7% for its 1st rise in 5 years and biggest increase since 2010

EUR/USD hovered around the mid-1.07 area as dealers awaited ECB’s Draghi’s testimony at the European Parliament for clues on the outlook for the central bank’s stimulus program.

Precious Metals- Gold and Silver benefited from technical buying. Copper prices continued its surge as hedge funds made record bets amid supply threats were back in focus


Oil – Both WTI and Brent crude oil traded initially higher on a weaker US dollar and concerns that new US sanctions on Iran may affect crude supplies. Metals- Gold and Silver benefited from technical buying. Copper prices continue surge as hedge funds make record bets amid supply threats come back in focus.

Fixed Income:

Bund futures trade at 162.78 up 27 ticks in quieter trade, continuing momentum higher after Friday’s US Non Farm Payroll report. Having traded a high of 162.90 further continuation sees 163.01 followed by 163.38. A reversal lower sees support remaining at 161.96, 161.49 then 161.19 followed by 160.80.

Gilt futures trade at 124.65 up 12 ticks reversing earlier losses, despite a rebound in Equities as the Yield curve flattens slightly. Support moves to 124.08 followed by 123.58 , 123.17 with Dec low at 122.08 the eventual target. Resistance lies just above highs at 124.73 followed by 125.19. Short Sterling futures trade flat to 2bp higher with Jun17Jun18 continuing to flatten trading at 21/22bp.

Monday’s liquidity report showed Friday’s excess liquidity rose to €1.318T up €7B from €1.311T prior. Use of the marginal lending facility rose to €171M from €107M prior.

Corporate issuance saw the week ended with $43.3B via 31 tranches, with volume YTD standing at $187.9B. Euro denominated issuance saw €16.7B come to market led by financial firms, with Bank of America’s 3 part deal accounting for over half this weeks volume.

Looking Ahead

(IL) Israel Central Bank (BOI) Jan Minutes

05:25 (BR) Brazil Central Bank Weekly Economists Survey

05:30 (EU) ECB’s Smets (Belgium) with Bank of International Settlements(BIS) Caruana at Conference in

05:30 (DE) Germany to sell €2.0B in 6-month Bubills

05:30 (NL) Netherlands Debt Agency (DSTA) to sell €2.0-4.0B in 3-month and 6-month Bills

05:30 (PL) Poland to sell Bills – 06:00 (IL) Israel to sell Bonds

06:30 (CL) Chile Dec Economic Activity (Monthly GDP) M/M: 1.0%e v 0.7% prior; Y/Y: 1.0%e v 0.8% prior

06:30 (TR) Turkey Jan Real Effective Exchange Rate (REER): No est v 92.16 prior

06:30 (EU) EU’s Juncker with France PM Cazeneuve in Brussels

06:45 (US) Daily Libor Fixing – 07:00 (IN) India announces details of upcoming bond sale (held on Fridays)

08:00 (ES) Spain Debt Agency (Tesoro) announces size of upcoming actions in week

08:20 (BR) Brazil Jan Vehicle Production: No est v 200.9K prior; Vehicle Sales: No est v 204.3K prior, Vehicle Exports: No est v 62.9K prior

08:50 (FR) France Debt Agency (AFT) to sell €6.1-7.3B in 3-month, 6-month and 12-month Bills

09:30 (EU) ECB announces Covered-Bond Purchases

09:35 (EU) ECB calls for bids in 7-Day Main Refinancing Tender

09:50 (UK) Bank of England Bond Buying Operation (APF Gilt purchase operation between 3-7 years)

10:00 (FR) France Presidential Candidate Fillon

11:30 (US) Treasury to sell 3-Month and 6-Month Bills

16:30 (US Fed’s Harker (hawk, voter) speaks about Payment Systems in San Diego

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