• US stocks finished mostly higher in which major indices gained for a 4th straight day, although futures were sold overnight as Meta shares slumped over 20% post-earnings
• Asian stocks were mostly negative and took their cues from the selling pressure in US equity futures and the Meta slump
• European futures are indicative of a slightly softer open with the Eurostoxx 50 future down by 0.2% after the cash market closed lower by 0.1% yesterday
• DXY remains subdued around the 96.00 mark, EUR/USD hovers near 1.13 and GBP/USD trades circa 1.3550 ahead of respective ECB and BoE policy announcements
• Looking ahead, highlights include EZ, UK & US Composite/Services PMI (Final), US Initial Jobless Claims, Factory Orders & ISM Services PMI, BoE & ECB Policy Announcements/Press Conferences, UK Ofgem Price Cap Update, Supply from Spain & France
• Earnings from Amazon, Eli Lilly, Biogen, ConocoPhillips, Penn, BT, Shell, Nokia, ING, Infineon, Intesa Sanpaolo, Publicis, Danske Bank and BBVA

US TRADE

• US stocks finished mostly higher in which the major indices gained for a 4th straight day after shrugging off negative ADP data and geopolitical risks, although futures were sold overnight as Meta shares slumped over 20% post-earnings.
• CLOSES: S&P 500 +0.94% at 4,589, Nasdaq 100 +0.80% at 15,140, Dow Jones +0.63% at 35,629, Russell 2000 -1.0% at 2,030.

APAC TRADE

EQUITIES

• Asian stocks were mostly negative and took their cues from the selling pressure in US equity futures and Meta slump.
• ASX 200 (-0.1%) was subdued by losses in tech but with downside stemmed by mining stocks and mixed-to-firm data.
• Nikkei 225 (-1.1%) weakened as Japan mulls a quasi-emergency extension for Tokyo and with earnings in focus.
• KOSPI (+2.6%) outperformed and played catch up to this week's gains on return from the Lunar New Year holiday.
• US equity futures were mostly pressured after almost USD 200bln was wiped off from Meta's value which weighed on other social media stocks; E-mini S&P -0.9%, E-mini Nasdaq 100 -2.1%.
• European futures are indicative of a slightly softer open with the Eurostoxx 50 future down by 0.2% after the cash market closed lower by 0.1% yesterday.

FX

• DXY remained subdued after yesterday’s selling pressure which briefly dragged the DXY to beneath the 96.00 level.
• EUR/USD consolidated around 1.1300 after retracing some of yesterday’s advances ahead of today's ECB meeting.
• GBP/USD is off highs but held on to most of the recent gains with a BoE hike of 25bps to 0.50% fully priced in for today.
• USD/JPY was kept rangebound and JPY-crosses were initially pressured by the risk aversion, but gradually recovered.
• Antipodeans lacked firm direction after somewhat mixed data releases from Australia and despite New Zealand PM Arden’s announcement of a phased border reopening which won't be fully completed until October.
• Brazilian Central Bank raised the Selic Interest Rate by 150bps to 10.75%, as expected. BCB said the decision was unanimous and noted an upcoming reduction in the pace of rate increases, but added that it is appropriate to advance the process of monetary tightening significantly.
• BoC Governor Macklem said there is some uncertainty about how quickly inflation will come down, with labour markets tightening and evidence of capacity pressures increasing, while BoC expects higher rates will be needed to bring inflation back to its 2% target, according to Reuters.

FIXED INCOME

• 10-year USTs traded relatively unchanged after the prior day’s mild gains and reclaim of the 128.00 level.
• 10-year JGBs were rangebound despite the risk aversion and following mixed results at the 30yr JGB auction.
• Bund futures conformed to the sideways price action.

COMMODITIES

• WTI and Brent were subdued after yesterday's fluctuations as OPEC+ stuck to its policy of 400k bpd increases.
• Spot gold remained flat at the recently reclaimed USD 1800/oz territory.
• Copper was marginally lower amid the risk averse mood and after resistance held at USD 4.50/lb.
• Algeria Energy Minister said oil production is to rise to 992k BPD in March and that OPEC+ decision to go ahead with production increases is due to Omicron not affecting global economies, according to Reuters.

NOTABLE APAC HEADLINES

• Japan government is considering extending the COVID-19 quasi emergency for Tokyo, while Tokyo raised healthcare system alert to the highest level, according to NHK.
• New Zealand PM Ardern said the border will reopen in stages from February 27th in which vaccinated New Zealanders from Australia can travel quarantine free and its citizens elsewhere from March 13th, while Australians can travel quarantine free from July and the border will fully reopen to all visitors in October, according to reuters.

DATA RECAP

• Australian Building Approvals (Dec) 8.2% vs. Exp. -1.0% (Prev. 3.6%, Rev. 2.6%)
• Australian NAB Quarterly Business Confidence (Q4) 19 (Prev. -2)
• Australian Trade Balance (AUD)(Dec) 8.4B (Prev. 9.4B)
• Australian Exports MM (Dec) 1% (Prev. 2%)
• Australian Imports MM (Dec) 5% (Prev. 6%)

EUROPE-SPECIFIC HEADLINES

• UK Chancellor Sunak will conduct a press conference on Thursday amid energy bill price hikes with a major announcement to shield Brits from crippling heating bill rises, according to The Sun. Part of the announcement is expected to see poorer households provided council tax rebates, whilst all households are expected to see a GBP 200 reduction in energy bills, according to The Times and FT. This comes ahead of an expected announcement from OFGEM which could see the energy price cap rise by 50%
• Northern Ireland Agriculture Minister issued an order to halt Irish Sea Border checks, citing legal advice is to seek an agreement from power-sharing government on a way forward in the near future, according to Reuters.

GEOPOLITICS

• US President Biden said the decision to deploy troops is consistent with what he told Russian President Putin and State Department spokesman Price said sending US troops to Europe is in response to Russian behaviour, according to CNN and Reuters. Russia said new US troop moves in Europe are destructive, while Russia and the US will reportedly hold talks soon on embassy issues, according to Interfax and Tass.
• US President Biden and French President Macron affirmed their support for Ukraine's sovereignty and territorial integrity and they reviewed coordination on both diplomacy and preparations to impose economic costs on Russia if it invades Ukraine, according to the White House.
• UK PM Johnson's office said PM Johnson told Russian President Putin he has deep concern about Russia's current hostile activity on the Ukraine border and that any further incursion would be a tragic miscalculation, while he stressed the importance of dialogue and diplomacy, as well as the need to include Ukraine in talks, according to Reuters.
• Lithuanian President called for the US and Germany to commit more troops to the nation and send a message to Russia regarding the latter's military build up along Ukraine and Belarus, according to FT
• US-led coalition operation in Northern Syria near Turkey resulted in several civilian casualties, according to residents and rebel sources cited by Reuters.
• US State Dept. said it will take more steps against the Houthis after recent attacks, according to Sky News Arabia.

NOTABLE US HEADLINES

• Fed's Daly (2024 voter) said gradual rate hikes won't derail the economy and that even four or five hikes this year would still mean that Fed policy rate would remain below a “neutral” level of 2.5% which would still support the labour market, while she stressed data-dependency for the rate path, according to a MarketWatch interview.
• Fed supervision nominee Raskin said reducing inflation should be top priority for the Fed while sustaining a recovery and noted that bank supervisors must be attentive to risks inside and outside the financial sector, according to Reuters.
• Fed board nominee Cook said the Fed's most important task is tackling inflation and high inflation is a grave threat to a long, sustained expansion, while she is committed to keeping inflation expectations well anchored, according to Reuters.
• Fed board nominee Jefferson said the spike in inflation threatens to heighten expectations of future inflation and the Fed must remain attentive to this risk and ensure inflation declines to levels consistent with its goals, according to Reuters.
• Meta Platforms Inc (FB) Q4 2021 (USD): EPS 3.67 (exp. 3.84), Revenue 33.67bln (exp. 33.40bln). Facebook daily active users 1.93bln (exp. 1.95bln), Facebook monthly active users 2.91bln (2.95bln), sees Q1 rev. USD 27bln-29bln (exp. 30.25bln)