Sample Category Title

Daily Pivots: (S1) 1.0502; (P) 1.0558 (R1) 1.0591; More.....

Break of 1.0520 support confirms resumption of fall from 1.0828. Intraday bias is back on the downside for 1.0339 low. As noted before, corrective rise from 1.0339 has completed at 1.0828 already. Fall from there is likely resuming larger down trend. Break of 1.0339 low will confirm our bearish view and target parity. On the downside, break of 1.0678 is needed to confirm completion of fall from 1.0828. Otherwise, outlook will remain mildly bearish in case of recovery.

In the bigger picture, whole down trend from 1.6039 (2008 high) is in progress. Such down trend is expected to extend to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. On the upside, break of 1.1298 resistance is needed to confirm medium term bottoming. Otherwise, outlook will stay bearish in case of rebound.

Daily Pivots: (S1) 1.2422; (P) 1.2451; (R1) 1.2502; More...

Intraday bias in GBP/USD remains neutral for the moment as it's staying in range of 1.2346/2705. Price actions from 1.1946 are viewed as a consolidation pattern, with rise from 1.1986 as the third leg. In case of another rise, we'd expect upside to be limited by 1.2774 to bring larger down trend resumption. On the downside, below 1.2346 will revive the case that such consolidation is completed at 1.2705 already. In that case, intraday bias will turn back to the downside for retesting 1.1946 low.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term bottoming yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

Daily Pivots: (S1) 1.0044; (P) 1.0075; (R1) 1.0127; More.....

The break of 1.0118 suggests that rebound from 0.9860 has resumed. Intraday bias in USD/CHF is turned back to the upside. As noted before, fall from 1.0342 could have finished at 0.9860 already. Current rise would now target a test on 1.0342. Based on neutral medium term outlook, we'd be cautious on topping at around 1.0342. On the downside, break of 0.9966 support is needed to confirm completion of the rebound. Otherwise, further rally will remain mildly in favor in case of retreat.

In the bigger picture, prior rejection from 1.0327 resistance argues that USD/CHF is staying in a medium term sideway pattern. In any case, decisive break of 1.0342 resistance is needed to confirm underlying strength. Otherwise, we'll stay neutral in the pair first. In case of another fall, we'd expect strong support from 0.9443/9548 support zone. Meanwhile firm break of 1.0342 will target 38.2% retracement of 1.8305 to 0.7065 at 1.1359.

Daily Pivots: (S1) 113.23; (P) 113.50; (R1) 113.94; More...

USD/JPY dips mildly today but stays in range of 111.58/114.94. Intraday bias stays neutral first and outlook is unchanged. Corrective fall from 118.65 could extend lower through 111.58. But we'd still expect strong support from 38.2% retracement of 98.97 to 118.65 at 111.13 to contain downside and bring rebound. On the upside, above 114.94 resistance should confirm completion of pull back from 118.65. In such case, intraday bias will be turned back to the upside for retesting 118.65.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Rejection from 125.85 and below will extend the consolidation with another falling leg before up trend resumption.

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The renewed optimism over global economic growth has rekindled investors' risk sentiment, resulting in global equities lurching to all-time highs this week. Asian markets were firmly bullish during trading on Wednesday with the risk-on trading mood encouraging participants to propel European markets to uncharted territories. Wall Street may be set to benefit further from the heightened speculations of tax cuts and deregulations boosting US economic growth. Although the current stock market rally is somewhat justifiable, the rising political risks across the globe and ongoing uncertainty could serve as ominous warnings questioning the sustainability of the rally. Stock markets could come under renewed selling pressure if anxiety from the developments in Europe and disappointments from Trump's pending economic policies sparks a fresh wave of risk aversion.

Sterling pressured by bears

Sterling found itself exposed to steep losses on Wednesday following the mixed economic data from the UK which revived some Brexit anxieties. Although Britain's economic growth accelerated faster than previously assumed in the final quarter of 2016 at 0.7%, the noticeable decline in business investment in the same quarter has already triggered concerns of how the rising uncertainty will impact investment this year. Sterling remains heavily influenced by the Brexit developments with further weakness expected as uncertainty haunts investor attraction towards the currency. The Sterling/Dollar remains heavily pressured on the daily charts and a breakdown below 1.2400 could encourage a further decline towards 1.2300.

FOMC meeting minutes in focus

The improving sentiment towards the U.S economy, prospects of higher US rates and the relentless "Trump effect" have made the Dollar king again. Today's main focus will be the FOMC meeting minutes this evening which has the ability to fuel the current bull rally or potentially limit gains. If the FOMC minutes are in harmony with the recent hawkish comments from Fed official, then the Greenback may be installed with further inspiration to trade towards 102.00.

Commodity spotlight - Gold

Gold was sold-off incessantly on Tuesday with prices tumbling towards $1226 as the speculations of a US interest rate hike in March and renewed appetite for riskier assets dented attraction towards the metal. Despite the sharp decline, the yellow metal has staged a sharp rebound on the back of rising political risk and ongoing uncertainty across the board. The visible fact that Gold continues to display resilience despite Dollars resurgence continues to highlight how risk aversion in the background continues to keep the metal buoyed. From a technical standpoint, Gold remains bullish on the daily charts and a breakout above $1240 could encourage a further incline higher towards $1250.

Wednesday February 22: Five things the markets are talking about

With all the 'hawkish' rhetoric of late by FOMC members the general concern is that the Fed is caught behind the curve and that catching up likely won't be friendly to the market.

Currently, U.S bond market yields are showing a little bit of 'scepticism' on the growth and inflation story fuelled by high expectation over Trump's fiscal policy - both the Dow and S&P 500 continue their record-setting rises, but the 10-year Treasury yield is straddling atop of the +2.3%-2.6% range.

With much of the market trying to position for higher yields, any evidence of disappointment from Trumponomics could generate a massive paring back of the current short U.S debt positions and drag yields even lower.

Later today, the Fed releases the minutes from its most recent meeting (02:00pm EST), possibly giving investors a look into how members see Trump's policies.

Note: Fed's Harker (hawk, voter) reiterated view that 'three' rate hikes would be appropriate this year and would not take a March rate move off the table. The Fed's Mester (hawkish, non-voter) is also comfortable with interest rates going higher.

Other U.S data this morning should show the domestic housing market (10:00am EST) picking up in Q1.

1. Global equities again hit record levels

U.S. stocks hit record intraday highs yesterday as strong earnings from top retailers underscored the strength of the U.S. economy.

In Japan, the Nikkei (-0.1%) share average was little changed overnight, unable to extend a two-day winning run as the yen's retreat outright (¥113.04) capped the broader market. The broader Topix rallied +0.1%.

In Hong Kong, stocks are trading atop their 18-month highs, led by resource and property stocks, as sentiment was lifted by the city's firmer economic growth outlook and stronger China inflows. The Hang Seng index ended up +1.0%, the highest since Aug. 2015.

In China, its main share indexes rallied for a third consecutive day to approach their three-month highs. The blue-chip CSI300 index rose +0.2%, while the Shanghai Composite Index also added +0.2%.

In Europe, equity indices are trading generally positive, but mixed after German IFO came in better than consensus. Pharmaceuticals are the notable laggard in the Eurostoxx while financials are leading the gains in the FTSE 100. Commodity and mining stocks are trading sharply lower in the index.

U.S stocks are set to open little changed (+0.0%).

Indices: Stoxx50 +0.1% at 3,341, FTSE +0.3% at 7,295, DAX +0.2% at 11,992, CAC-40 +0.4% at 4,907, IBEX-35 -0.1% at 9,550, FTSE MIB -0.4% at 18,962, SMI -0.1% at 8,560, S&P 500 Futures flat

2. Oil prices under pressure, gold range bound

Global oil prices slipped overnight as the "mighty" dollar found support. Nevertheless, crude prices remain broadly confined atop of their multi-week highs after OPEC again signaled yesterday their optimism over its deal with other producers to curb output.

Brent crude is down -44c, or -0.8% at +$56.83, having touched its highest since Feb. 2 at +$56.20 yesterday. U.S light crude (WTI) is down -34c or -0.6% at +$53.99 a barrel.

Note: OPEC confirmed yesterday that January data showed conformity from member countries in the output cut at above +90%.

Also adding to the bullish sentiment, hedge funds have raised their combined net "long" position in the three main derivative contracts linked to Brent and WTI by +51m barrels last week.

Both gold and silver broke recent lows overnight, triggering some stop loss selling action as the 'big' dollar strengthened broadly ahead of this afternoons FOMC minutes. However, both precious metals have rebounded strongly ahead of the U.S open to finish roughly unchanged at +$1,236 and +$17.95 an ounce respectively.

3. Sovereign yields out of sync on geo-political concerns

A muddy outlook on French election continues to drive investors to cut exposure to French government debt and embrace German bunds and U.S Treasuries.

The latest polls show right-wing presidential candidate Le Pen extending her lead in the first-round of voting.

Note: The odds of winning the second round are less likely, but any news that clouds the election outlook will lead investors to cut exposure.

Earlier this morning, Germany's two-year Schatz yield fell to a new record low of -0.91% as investors' run for safety continues. The 10-year Bund yield is trading at +0.27%, down from +0.31% yesterday. The drop in short-end German bund yields is weighing on the EUR, pushing it to multi-week lows against the dollar (€1.0502) and the yen (€118.69).

Elsewhere, it's the third time in less than six months that Australia has set a new borrowing record by issuing a +AUD$11B of 11-year debt notes in its biggest-ever bond transaction.

Note: Investors remain hungry for higher yields, despite concerns over Aussie budget deficits.

4. Dollar produces mixed results ahead of Fed Minutes

The 'mighty' dollar trades mixed against G7 currencies with rate differentials remaining the primary price driver. Both investors and dealers wait for the Fed's February minutes for more insight on looming rate hikes.

The EUR (€1.0506) has again failed to respond to better Euro data for the second consecutive session - German Feb IFO Survey and Eurozone CPI beat expectations. In the U.K, the pound trades under pressure (£1.2440) as mixed Q4 GDP data (see below) weighs on the currency. Sterling rallied initially as figures showed U.K. Q4 GDP was revised up to +0.7% q/q from +0.6%, but then fell as traders reacted to a -1% fall in business investment during the quarter, a possible sign that firms may be growing more cautious due to Brexit uncertainty.

USD/JPY (¥113.05) is softer in the wake of the BoJ's Governor Kuroda's comments overnight that oil prices had likely stopped weighing on CPI which dealers took as a potentially diminishing the need for bolder easing from the central bank.

5. UK Q4 growth revised up

The U.K. economy finished 2016 on a stronger footing than previously thought, with buoyant consumer spending and exports offsetting a slide in business investment.

Data this morning showed that growth on the quarter was revised up, to +0.7%, an annualized rate of +2.9%. However, growth over the year as a whole, though, was trimmed to +1.8% from +2%, reflecting a weaker performance in Q1 than previously calculated.

Note: The consensus expects the U.K. to slow this year as quickening inflation squeezes consumer spending.

Other data this morning reveals that the German economy may be back on track with the German Feb IFO Survey beating expectations as the Business Climate matches its high from Feb 2014 (111.0).

Also, the Eurozone January Final CPI reading confirmed that the annual pace hits its highest level since Feb 2013 with the core again hitting the upper range - +0.9%.

The DAX Index has edged lower in the Wednesday session, but briefly broke above the symbolic 12,000 level. Currently, the index is trading at 11,989.79 points. On the release front, German Ifo Business Climate improved to 111.0, beating the estimate of 109.6 points. Eurozone Final CPI remained at 0.9%, matching the forecast. Over in the US, the Federal Reserve will publish the minutes of the January policy meeting.

German numbers continue to impress this week. German Ifo Business Climate improved to 111.0 in February, up from 109.8 a month earlier. Inflation is pointing upwards, as PPI climbed o.7% in January, above the estimate of 0.3%. This marked a 3-month high. This was followed by strong Manufacturing PMI reports from Germany and the Eurozone, which continue to indicate expansion. On Thursday, Germany releases GDP and Consumer Climate.

Recent eurozone numbers have been steady, with the economy expanding and inflation levels moving upwards. Nonetheless, the ECB appears reluctant to make any changes to current monetary policy. The ECB released the minutes of its January policy meeting on Thursday. The minutes indicated that the central bank continues to have little appetite for reducing stimulus. Policymakers stated that the recent climb in inflation could prove to be temporary and there is political uncertainty ahead. France and Germany, the two largest economies in the eurozone, go to the polls later this year, as does the Netherlands. Inflation has moved close to the central bank's target of around 2 percent, prompting calls from Germany and elsewhere to tighten monetary policy. At this point in time, a majority of ECB policy makers are in favor of maintaining course the asset-purchase program, which ends in December. However, if growth and inflation numbers continue to climb, there will be increased pressure and louder voices calling for tighter monetary policy, which would be bearish for the stock market.

Germans go to the polls in September, as Chancellor Angela Merkel seeks a fourth term. However, she could be facing the toughest challenge yet in her lengthy political career. Merkel's Christian Democrats are in for a dogfight, as underscored by a poll by the Emnid Institute showed the center'left Social Democrats (SPD) climbing to top spot for the first time since 2006. The SPD has steadily gained ground since it chose Martin Schultz to lead the party in late January. Schultz is well-respected and is a former President of the European Parliament. Merkel remains a popular leader, but has seen her support erode over her open-door policy on refugees, which led to hundreds of thousands of migrants coming to Germany.

The Federal Reserve will be on center stage on Wednesday. The central bank finally pressed the rate trigger in December, a full year after the previous rate hike. Last week, Fed Chair Janet Yellen strongly hinted that that another hike is on the way, leaving the markets to speculate on the timing of a hike – will it be in March or June? Even though the US economy is solid and we could see several rate hikes in 2017, market uneasiness over the Trump administration continues to grow, dampening investor appetite for risk. Trump continues to have difficulty filling in key cabinet positions and the media continues to probe connections between Trump officials and Russia. Trump is yet to outline a clear and coherent economic policy, although he has promised to unveil a tax package in the next few weeks. After Trump's shock win in November, post-election euphoria boosted the markets. However, Trump's first month in office has been marked by controversy and confusion, which has unsettled the markets.

The Japanese yen has improved in the Wednesday session. Currently, USD/JPY is trading at the 113 level. In economic news, the US releases Existing Home Sales and the Federal Reserve will publish the minutes of the January policy meeting. Later in the day, Japan releases SPPI, an important inflation indicator. The forecast for the January report is 0.4%, unchanged from the December reading. On Thursday, the US releases unemployment claims, with an estimate of 242 thousand.

The Federal Reserve will be on center stage on Wednesday. The central bank finally pressed the rate trigger in December, a full year after the previous rate hike. Last week, Fed Chair Janet Yellen strongly hinted that that another hike is on the way, leaving the markets to speculate on the timing of a hike – will it be in March or June? Even though the US economy is solid and we could see several rate hikes in 2017, market uneasiness over the Trump administration continues to grow, dampening investor appetite for risk. Trump continues to have difficulty filling in key cabinet positions and the media continues to probe connections between Trump officials and Russia. Trump is yet to outline a clear and coherent economic policy, although he has promised to unveil a tax package in the next few weeks. After Trump's shock win in November, post-election euphoria boosted the markets. However, Trump's first month in office has been marked by controversy and confusion, which has unsettled the markets.

German Feb IFO Survey shows domestic economy back on track; UK GDP annual growth hits at 4-year lows

Notes/Observations

German Feb IFO Survey beats expectations with Business Climate matching high from Feb 2014; German economy back on track

Euro Zone Jan Final CPI reading confirmed that the annual pace hits its highest level since Feb 2013 while core has been in a 0.8%-0.9% range since last May

UK Q4 GDP data mixed (QoQ beat while YoY missed); annual pace slowed to its since Q1 2013

European shares hit new 14-month high, positive earnings boost; Lloyds profit hits 10-year high

Market awaits Fed Feb minutes for more insight on looming rate hikes

Overnight:

Asia:

China Jan Property Prices saw its growth rate slowed for 4th consecutive month as demand cooled in biggest cities (China avg all-70 new home prices y/y: 12.2% v 12.4% prior)

Bank of Japan (BOJ) Gov Kuroda reiterated view that more easing possible if needed to reach price target, but chances were small for a cut of Deposit Rate further into negative territory

Japan Fin Min Aso: No plan to issue negative yield JGB bonds at this time

RBA Gov Lowe reiterated Australia growth expectations of about 3% GDP for next 2 years and a gradual rise in inflation; Debt levels were impacting household spending

Europe:

UK House Of Lords passed draft Brexit Bill without a vote; moves onto its next stage

Senior German ruling party official Friedrich: Germany would not support more loans for Greece if the IMF did not participate in the bailout program

ESM's Regling stated that the fund could not make further payments to Greece without IMF involvement as would not be in line with what Govts have agreed

Americas:

Fed's Harker (hawk, voter) reiterated view that three rate hikes would be appropriate this year;would not take March rate move off the table

Fed's Mester (hawkish, non-voter): Comfortable with interest rates going higher

Energy:

Iran Oil Min Zanganeh: Crude oil above $60/bbl would hurt OPEC

Economic data

(DE) Germany Feb IFO Business Climate: 111.0 v 109.6e (matches high from Feb 2014); Current Assessment: 118.4 v 116.6e, Expectations Survey: 104.0 v 103.0e

(IT) Italy Jan Final CPI (Including Tobacco) M/M: 0.3% v 0.2% prelim; Y/Y: 1.0% v 0.9% prelim

(IT) Italy Jan Final CPI EU Harmonized M/M: -1/7% v -2.0% prelim; Y/Y: 1.0% v 0.7%e

(CH) Swiss Feb Credit Suisse Expectations Survey: 19.4 v 18.5 prior

(UK) Q4 Preliminary GDP (2nd reading) Q/Q: 0.7% v 0.6%e; Y/Y: 2.0% v 2.2%e (lowest annual pace since Q1 2013)

(UK) Q4 Preliminary Private Consumption Q/Q: 0.7% v 0.7%e, Government Spending Q/Q: 0.2% v 0.1%e; Gross Fixed Capital: 0.0% v 0.2%e; Exports Q/Q: +4.1% v +2.0%e; Imports Q/Q: -0.4% v +0.3%e

(UK) Q4 Preliminary Total Business Investment Q/Q: -1.0% v +0.1%e; Y/Y: -0.9% v +0.3%e

(EU) Euro Zone Jan CPI M/M: -0.8% v -0.8%e; Y/Y (Final Reading): 1.8% v 1.8%e; CPI Core Y/Y (Final Reading): 0.9% v 0.9%e

Fixed Income Issuance:

(IN) India sold total INR110B vs. INR100B indicated in 3-month and 6-month Bills

(ES) Spain Debt Agency (Tesoro) opened its book EUR-denominated July 2033 SGPB bonds via syndicate; guidance seen low +120bps area to mid-swaps

(DK) Denmark sold total DKK2.605B in 2018 and 2027 Bonds

(SE) Sweden sold total SEK3.0B vs. SEK3.0B indicated in 2025 and 2032 bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Index snapshot (as of 10:00 GMT)

Indices [Stoxx50 +0.1% at 3,341, FTSE +0.3% at 7,295, DAX +0.2% at 11,992, CAC-40 +0.4% at 4,907, IBEX-35 -0.1% at 9,550, FTSE MIB -0.4% at 18,962, SMI -0.1% at 8,560, S&P 500 Futures flat]

Market Focal Points/Key Themes: European equity indices are trading generally positive but mixed after German IFO came in better than consensus, and as market participants await the FOMC meeting minutes scheduled later today; Asian session ending positive overnight adding to positive sentiment; shares of Bayer the notable laggard in the Eurostoxx after releasing their Q4 results; shares of Lloyds Banking Group leading the gains in the FTSE 100 after releasing their Q4 results, with shares of homebuilder Barratt Developments also trading notably higher after releasing their H1 results; Commodity and mining stocks trading sharply lower in the index as copper and energy prices trade lower intraday.

A plethora of upcoming scheduled US earnings (pre-market) include ACCO Brands, Chico's FAS, Clean Harbors, Conduent, DISH Network, Eaton Vance, Expeditors, The Geo Group, Garmin, Welltower, HollyFrontier, HSN, Host Hotels & Resorts, Lamar Advertising, ClubCorp, Norwegian Cruise Line, NiSource, Nationstar Mortgage, Pinnacle Entertainment, Sinclair Broadcast, Six Flags, Stepan, Southern Company, Summit Materials, TJX Companies, Toll Brothers, Tri Pointe Homes, Univar, United Therapeutics, William Lyon, and Wolverine World Wide.

Equities (as of 09:50 GMT)

Consumer Discretionary: [Accor AC.FR -2.0% (FY16 results), Hays HAS.UK -3.6% (H1 results), TER Beke TERB.BE +0.4% (FY16 results), Tom Tailor TTI.DE +5.9% (prelim FY16 results), UBM UBM.UK +4.6% (FY16 results), Wolters Kluwer WKL.NL +2.7% (FY16 results)]

Energy: [Petrofac PFC.UK +2.6% (FY16 results), RWE RWE.DE -0.4% (prelim FY16 results)]

Financials: [Lloyds Banking Group LLOY.UK +3.8% (Q4 results), Scor SCR.FR +3.7% (FY16 results), Serco Group SRP.UK -12.6% (FY16 results)]

Healthcare: [Bayer BAYN.DE -2.2% (Q4 results), Fresenius Medical Care FME.DE +3.1% (Q4 results), Fresenius SE FRE.DE +1.4% (Q4 results), Indivior INDV.UK -13.5% (FY16 results, names new CFO)]

Industrials: [ABB ABBN.CH +0.1% (South Korean subsidiary embezzlement), Air France AIR.FR -0.4% (FY16 results), Barratt Developments BDEV.UK +2.3% (H1 results)]

Technology: [Atos ATO.FR +2.4% (FY16 results)]

Telecom: [Telefonica Deutschland O2D.DE +4.1% (Q4 results)]

Utilities: [Iberdrola IBE.ES -0.4% (FY16 results)]

Speakers

German IFO Economists commented that after a slow start to the year, the economy was back on track and saw no Trump effect on domestic economy while consumption remained solid support

BOJ said to consider announcing specific dates on when it will conduct Japanese government bond-buying operations

Japan Fin Min Aso reiterated govt view that 2nd phase of planned sales tax increase still planned for Oct 2019 - Parliament comments

Russia Feb MTD oil production at 11.10M bpd (compares to 11.11M in Jan)

Russia Energy Min Novak: No plan to convince US oil producers to join production cut

Qatar Energy Min Al Sada (OPEC President): OPEC agreement on oil production would reduce high inventory levels and rebalance the market later in 2017

Currencies

USD was mixed against the majors with diverging rate path remaining the primary price driver. Market awaited Fed Feb minutes for more insight on looming rate hikes

The EUR/USD again failed to respond to better European data for the 2nd staright session. German Feb IFO Survey beat expectations with Business Climate matching high from Feb 2014; German economy back on track. Nonetheless the ECB still seen maintaining its easing mode for an extended period.

Mixed Q4 GDP data for the UK weighed upon the GBP currency. GBP/USD pair saw its small gains dissipate as the annual pace slowed to its since Q1 2013

USD/JPY was softer in the wake of BOJ Gov Kuroda comments in Asia that oil prices had likely stopped weighing on CPI which dealers took as a potentially diminishing the need for bolder easing from the central bank.

Fixed Income:

Bund futures trade at 165.01 up 60 ticks trading at the highest level seen since November despite stronger Equities and better then expected German IFO data. Continuation higher targets 165.29 followed by 165.64. Support remains at 164.05 then 163.62, 163.13, 162.92 followed by 162.44.

Gilt futures trade at 126.41 up 34 ticks after mixed prelim GDP figures out of the UK with an improvement m/m, but a revision lower on a y/y basis. Resistance remains at 126.70 followed by 127.16. Support remains at 125.63 then 125.30. Short Sterling trade flat to up 1bp with Jun17Jun18 remaining at 13/14bp

Wednesday liquidity report showed Tuesday's excess liquidity fell to €1.285T down €16B from €1.301T prior. Use of the marginal lending facility fell sharply to €177M from €1.54B prior.

Corporate issuance saw $5.15B come to market via 5 issuers headlined by Korea Dev Bank $1.5B 3 part offering. and Parker Hannifin $1.3B 2 part offering. Analysts see weekly issuance to be in the $15-20B range.

Looking Ahead

(DE) German Chancellor Merkel with IMF chief Lagarde in Berlin

05:30 (EU) ECB allotment in 3-month LTRO tender

05:30 (DE) Germany to sell €1.0B in 2.5% July 2044 Bunds

06:00 (IE) Ireland Jan PPI M/M: No est v 0.5% prior; Y/Y: No est v 1.3% prior

06:00 (BR) Brazil Feb FGV Consumer Confidence: No est v 79.3 prior

06:00 (BR) Brazil Feb FGV Construction Costs M/M: 0.4%e v 0.3% prior

06:00 (RU) Russia to sell combined RUB30B in 2022 and 2031 OFZ Bonds

06:00 (CZ) Czech Republic to sell Bonds

06:30 (TR) Turkey Feb Real Sector Confidence (Seasonally Adj): No est v 100.5 prior; Real Sector Confidence NSA (unadj): No est v 97 prior

06:30 (TR) Turkey Feb Capacity Utilization: 74.7%e v 75.5% prior

06:30 (CL) Chile Central Bank's Traders Survey

06:45 (US) Daily Libor Fixing

07:00 (US) MBA Mortgage Applications w/e Feb 17th: No est v -3.7% prior

07:00 (BR) Brazil Mid-Feb IBGE Inflation IPCA-15 M/M: 0.5%e v 0.3% prior; Y/Y: 5.0%e v 5.9% prior

07:00 (UK) PM May weekly question time in House of Commons

07:45 (US) Weekly Goldman Economist Chain Store Sales

08:15 (UK) Baltic Dry Bulk Index

08:30 (CA) Canada Dec Retail Sales M/M: 0.6%e v 0.2% prior; Retail Sales Ex Auto M/M: 0.6%e v 0.1% prior

08:55 (US) Weekly Redbook Sales

09:00 (BE) Belgium Feb Business Confidence: 0.9e v 0.5 prior

09:00 (MX) Mexico Q4 Final GDP Q/Q: 0.0%e v 0.6% prelim; Y/Y: 2.2%e v 2.2% prelim, 2016 GDP Y/Y: No est v 2.5% prior

09:00 (MX) Mexico Dec IGAE Economic Activity Index (Monthly GDP) Y/Y: No est v 3.7% prior

10:00 (US) Jan Existing Home Sales: 5.54Me v 5.49M prior

11:00 (CO) Colombia Q4 GDP Q/Q: No est v 0.3% prior; Y/Y: No est v 1.2% prior; 2016 GDP: No est v 3.1% prior

11:30 (US) Treasury to sell 2-Year Floating Rate Notes Reopening

12:00 (CA) Canada to sell 2-Year Bonds - 13:00 (US) Treasury to sell 5-Year Notes

14:00 (US) FOMC Meeting Minutes from Feb 1st

14:00 (CO) Colombia Dec Economic Activity Index (Monthly GDP) Y/Y: No est v 1.1% prior

16:00 (BR) Brazil Central Bank (BCB) Interest Rate Decision: Expected to cut Selic Rate by 75bps to 12.25%

16:30 (US) Weekly API Oil Inventories

(CO) Colombia Jan Industrial Confidence: No est v -1.2 prior; Retail Confidence: No est v 20.3 prior

EUR/USD briefly breaks 1.0500 as French political worries continue to weigh on the single currency.

Euro briefly touched 1.0497 in early Europe trading, ignoring better than expected German IFO data (actual 111 vs 109.6 expected). Political considerations seem to be closer to the front of traders minds as Ms Le Pen continues to extend her lead in French Presidential polls.

Readers will remember that we have consistently said since last year that political risk in the form of Federal Elections in France, Netherlands and Germany represent the greatest source of volatility in Europe for 2017. Make no mistake that the populism that has sacked the status quo in Britain and the United States is alive and well i9n Europe as well.

Yield spreads in the 10-year France/Germany bonds have moved out to 78 bps with the German 2-year yield falling to around -0.90%. Better data generally in the Eurozone seems unable to hide the shaky foundations of the Euro at the moment.

Rattling the Euro's cage will also be better than expected UK Q4 GDP data (+0.7% vs 0.6% expected), and the passing of the Brexit Bill's 1st reading in the House of Lords. As history has repeatedly shown, those British just won't roll over in the face of being told what to do by the Europeans. Some history lessons are just never learnt.

In fairness the GBP is also a little lower this morning as the USD, in general, is stronger across the board (for now), further compounding Euros woes.

Looking at the daily chart, EUR/USD has resistance at 1.0600, the 55-day moving average, with support at 1.0497 the daily low and then 1.0450 the low from the 11th January. A daily close below here from a technical perspective sets up a move to 12-month lows in the 1.0340/50 region. This, however, may be difficult to sustain ahead of Trumps 28th February speech and the mid-March FOMC meeting. A break back above 1.0600/20 moves us back into the 1.0500/1.0800 holding pattern we have been circling in since the start of the year.

As a final note Eurozone Annual CPI has just come out at +1.8% YoY, as expected. This is the highest level apparently since early 2013. The EUR/USD is unmoved at 1.0505 and although CPI seems to be responding to the ECB's stimulus, the price action, or lack or reaction further reinforces the view that it is politics, not economics driving the markets at the moment. As if this is a surprise!!