• European equities have drifted from the positive cash open despite a lack of news flow; US equity futures have largely given up earlier gains, NQ remains the outperformer post-Amazon
• DXY is contained but with a negative bias as EUR extends further, GBP pullsback and antipodeans lag
• Core EGB benchmarks came under further pressure in early-European hours on further hawkish repricing; USTs remain relatively contained
• WTI and Brent continue to grind higher in a continuation of yesterday's upward momentum as the Brent-WTI arb contracts further
• Looking ahead, highlights include US & Canadian Labour Market Reports

As of 11:30GMT/06:30EST

LOOKING AHEAD

• US & Canadian Labour Market Reports.

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EUROPEAN TRADE

EQUITIES

• European equities have drifted lower from the mildly positive cash open despite a lack of news flow.
• European sectors have tilted to a more defensive bias, but Energy outpaces as crude prices remain firm.
• US equity futures have largely given up earlier gains, NQ remains the outperformer post-Amazon whilst RTY and YM lag.
• After-earnings price action see Amazon +11.6%, Snap +45% and Ford -6.5% premarket.

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FX

DXY is contained with a negative-bias in pre-NFP trade, while EUR continues to outpace but GBP pullsback on EUR/GBP action.

Antipodeans lag following a dovish RBA SOMP, but NZD is somewhat cushioned by AUD/NZD.

JPY remains resilient with USD/JPY holding below 115.00

NATO Chief Stoltenberg will be appointed as Governor of the Norges Bank, via Daily VG; Deputy Governor Bache will be the acting Norges Bank Governor from March 1st until Stoltenberg takes over.

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Notable Expiries, NY Cut:

• EUR/USD: 1.1400 (1.36BLN)
• USD/JPY: 114.00 (1.04BLN)
• USD/CAD: 1.2600-10 (1.0BLN), 1.2690-00 (900M)
• Click here for the full list.

FIXED INCOME

• Core EGB benchmarks came under further pressure in early-European hours on further hawkish repricing.
• Action that sent the German 5yr yield positive and the 10yr to a test of 0.20%.
• The Periphery remains hampered with spreads widening further and focus turning to potential looming 30yr syndication via Spain.

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COMMODITIES

• WTI and Brent continue to grind higher in a continuation of yesterday's upward momentum, focus remains very much on geopolitics this morning.
• Brent-WTI arb continues to contract amid China-Russian deals and the ongoing Texas freeze.
• Citi recommended selling December 2022 Brent crude futures on expected inventory builds this year and it targets up to 20% downside in Brent December 2022 prices during H2.
• Spot gold and silver are modestly firmer but remain in recent ranges and near multiple DMAs

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NOTABLE EUROPEAN HEADLINES

• ECB Survey of Professional Forecasters (SPF): 2022 inflation seen at 3.0% (vs 3.2% seen by ECB staff); 2023 seen at 1.8% (in line with ECB Staff)
• ECB's Muller says they are ready to adjust plans for near future if needed, ECB may review how quickly to end bond buying, via Bloomberg.
• ECB's Kazimir expects EZ inflation to remain higher for longer than they had expected, inflation risks are clearly to the upside, via Reuters.
• BoE's Pill says the UK economy is facing difficult challenges, trying to avoid the emergence of second-round effects from energy shocks, via Bloomberg; need to be cautious when communicating on where the neutral rate is.
• UK Cabinet ministers reportedly believe there is a 50-50 chance whether PM Johnson will be forced out of office, according to The Times.
• Some Senior UK Ministers have called for the government to rethink net-zero plans as the pace of the shift is too fast and increasing consumer costs, according to The Telegraph.

DATA RECAP

• UK Markit/CIPS Construction PMI (Jan) 56.3 vs. Exp. 54.3 (Prev. 54.3)

US-SPECIFIC HEADLINES

• US President Biden will sign executive order today requiring 'project labour agreements' in federal construction projects valued over USD 35mln which will apply to USD 262bln in federal contracting construction projects and impact almost 200k workers
• Amazon.com Inc (AMZN) Q4 2021 (USD): EPS 27.75 (exp. 3.68), Revenue 137.41bln (exp. 137.56bln); confirmed Prime membership price hikes and USD 11.8bln gain from Rivian. Shares rose 14% after-hours.

APAC TRADE

• Asian stocks eventually traded mostly positive with early indecision seen after the tech-related turbulence in US.
• ASX 200 (+0.6%) lacked direction for most the session before a late surge lifted the index above 7,100.
• Nikkei 225 (+0.7) was initially contained by a pullback in USD/JPY, although earnings continued to drive price action.
• Hang Seng (+3.2%) outperformed on return from a three-day closure with autos underpinned by a jump in deliveries and sports brands bid heading into the official start of the Beijing 2022 Winter Olympics.

NOTABLE APAC HEADLINES

• RBA Quarterly Statement on Monetary Policy reiterated that the board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve, while it noted that a further improvement of the labour market is anticipated and ending bond purchases does not suggest a rate hike in the future.

DATA RECAP

• South Korean CPI MM (Jan) 0.6% vs. Exp. 0.4% (Prev. 0.2%); YY (Jan) 3.6% vs. Exp. 3.3% (Prev. 3.7%)

GEOPOLITICS

• Russian President Putin told Chinese President Xi that China-Russian trade will reach USD 200bln; Russian oil firms have prepared plans for supplies to China; offers to supply 10bcm of gas per year from Russia's Far East.
• Russia's CNPC and Russia's Gazprom have agreed a 30yr deal of gas from Russia via a new pipeline, according to Reuters sources (subsequently confirmed); supplies to start in two-three years, hitting 10 BCM/yr around 2026.
• Kremlin says Russian and Chinese leaders discussed broadening trade in national currencies due to the unpredictability of the USD trade, via Reuters.
• Russian Foreign Minister Lavrov describes the allegation that they are preparing a fake video as a pretext for war in Ukraine as 'nonsense', via Ria.
• US Secretary of State Blinken announced the State Department is imposing visa restrictions on multiple Belarusian nationals for involvement in 'serious, extraterritorial counter-dissident activity', according to Reuters.