• Core European bourses are choppy and mixed overall, Euro Stoxx 50 -0.1%, though the periphery is pressured on domestic debt downside; FTSE MIB -1.6%
• Stateside, US futures are pressured but have also been choppy/rangebound for the most part, RTY lags
• Dollar retains the bulk of its stellar BLS labour report gains, but eases from best levels; with peers mixed across the board
• BTPs drop as core-periphery spreads widen with Lagarde in focus, though USTs remain relatively resilient
• Crude benchmarks are pressured, perhaps taking impetus from broader sentiment, though geopols. continue to dominate.
• Looking ahead highlights include ECB’s Lagarde and German Chancellor Scholz/US President Biden Meeting

As of 11:20GMT/06:20EST

LOOKING AHEAD

• ECB’s Lagarde Speech, German Chancellor Scholz & US President Biden Meeting

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EUROPEAN TRADE

EQUITIES

• Core European bourses are choppy and mixed overall, Euro Stoxx 50 -0.1%, though the periphery is pressured on domestic debt downside; FTSE MIB -1.6%.
• Sectors are mixed overall though Basic Resources outperform on base metals while Energy/Utilities pulls-back given benchmark pricing and Friday's upside.
• Stateside, US futures are pressured but have also been choppy/rangebound for the most part, RTY lags.

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FX

• Dollar retains bulk of its stellar BLS labour report gains, but eases from best levels
• Loonie gets over Canadian LFS jobs release disappointment with aid from WTI crude holding a firm line.
• Aussie underpinned by iron ore prices, record retail sales data and plans to reopen international borders from February 21st.
• Euro hands back some ECB inspired upside, but even higher EGB yields should provide traction.
• Yuan undermined by PBoC setting a weak onshore fix, soft Chinese Caixin PMIs and more angst with the US over compliance to terms of Phase One trade deal.
• Turkish President Erdogan tested positive for COVID-19, according to Reuters.
• South Africa’s Eskom announced that loadshedding was suspended from Sunday evening amid a sufficient recovery in generation capacity, according to Reuters.
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FIXED INCOME

• BTPs fall and their EZ peers come tumbling after as the ECB's hawkish shift persists.
• Gilts down in sympathy post-BoE hike last Thursday and dissent for double the amount of tightening.
• US Treasuries holding above post-NFP lows as attention shifts from jobs back to inflation.

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COMMODITIES

• Crude benchmarks are pressured, perhaps taking impetus from broader sentiment; however, we remain elevated in the broader picture and geopols continue to dominate.
• Overnight, Brent tested but failed to successfully surpass USD 94.00/bbl.
• Focus on Macron/Putin talks today, though the Kremlin has downplayed the chance of a 'breakthrough' while Iranian talks are to recommence Tuesday.
• Spot gold/silver are contained and remain near multiple DMAs while base metals benefit from the return of China.
• Marathon’s Galveston Bay Refinery (593k bpd) and Valero’s Texas City refinery (225k bpd) were knocked out of production due to a power outage on Friday amid severe cold weather, according to Reuters.
• Saudi Arabia raised oil prices for customers in Asia, US and Europe, according to Bloomberg.
• Indian government is to express serious concern over crude oil price volatility; government to take up this topic with oil producing nations/groups, via Reuters.
• Gazprom says it does not intend to hold spot gas sales sessions on its electronic platform this week, via Reuters.
• Turkey lifted its ban on importing scrap metals from Lebanon, according to Reuters.

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NOTABLE EUROPEAN HEADLINES

• Downing Street reportedly fears that UK PM Johnson is close to a no-confidence vote with former vice-chairman of the 1922 Committee Sir Charles Walker warning the end is now 'inevitable', according to Independent.
• UK Business Minister Kwarteng said he doesn’t think it is inevitable that UK PM Johnson will be removed from his position, while it was also reported that PM Johnson appointed Steve Barclay as his new Chief of Staff, according to Reuters.
• Three cabinet ministers have turned on Chancellor Sunak and said that he should be sacked for disloyalty as PM Johnson fights to save his premiership, according to The Times.
• ECB’s Knot suggested they should end the asset purchasing program ASAP and that the first rate hike is possible in Q4 this year with a second hike likely early next year. Knot also said inflation in the Netherlands is very concerning and eurozone inflation to stay above 4% this year and will be higher in the Netherlands, while he thinks inflation will stay elevated longer than initially anticipated but then decline, according to Reuters.
• ECB's Kazaks says a July hike would imply an extremely quick and unlikely tapering pace, with an increased risk of persistent inflation net-new asset purchases become less necessary

DATA RECAP

• German Industrial Output MM (Dec) -0.3% vs. Exp. 0.4% (Prev. -0.2%, Rev. 0.3%)

US-SPECIFIC HEADLINES

• US CDC Director endorsed CDC ACIP for use of Moderna’s (MRNA) COVID-19 vaccine for adults aged 18 years and older, according to Reuters.
• Google (GOOG) is to be sued in a Stockholm court by a price runner for EUR 2.1bln; figure is a prelim. amount at a patent/market court.
• US is considering Chevron (CVX) request to take Venezuela oil for debt payments; no decision reached, according to Reuters sources.
• Tesla (TSLA) reduced impairment losses of around USD 101mln resulting in changes o carrying vlaue of its BTC; fair market of its BTC holdings was USD 1.99bln at end-2021.

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APAC TRADE

EQUITIES

• Asian stocks were mixed amid recent increases in global yields and after the blowout NFP data stoked bets for a more aggressive Fed rate hike in March, while geopolitical concerns also lingered.
• ASX 200 (-0.1%) was dragged lower by weakness in real estate, healthcare and financials although finished off its lows amid resilience in the commodity-related sectors and stronger than expected quarterly Retail Trade data.
• Nikkei 225 (-0.7%) suffered as Japan plans an extension of COVID-19 measures for Tokyo and other areas.
• Hang Seng (U/C) and Shanghai Comp. (+2.0%) were varied as Hong Kong stocks took a back seat to the outperformance in the mainland which re-opened for the first time since the Lunar New Year, while Chinese Caixin Services and Composite PMIs slowed but remained in expansion territory.

NOTABLE APAC HEADLINES

• PBoC injected CNY 20bln via 7-day reverse repos with the rate at 2.10% for a CNY 130bln net drain.
• PBoC set USD/CNY mid-point at 6.3580 vs exp. 6.3235 (prev. 6.3746)
• US officials said their patience is wearing thin regarding talks with China and they are seeking concrete action, while they added there are no real signs China will make up for shortfalls in purchase commitment under the Phase 1 trade deal, according to Reuters.
• China's NDRC expects China’s inflation risks to decline this year as adverse impacts of COVID and global supply shortages grow less sever, according to Bloomberg.
• China's A-share market is supported in the medium and long-term, while a gradual easing of investor concerns regarding the economy, capital flows and policies is expected, according to China Securities Journal.
• Chinese Center for Disease Control and Prevention chief epidemiologist said China will not adjust its zero-COVID policy for now, according to Global Times. It was also reported that China’s southern city of Baise imposed a lockdown affecting 4mln people after 98 tested positive for COVID-19, according to CCTV.
• Japan is planning to extend COVID-19 measures in Tokyo and other areas, according to Asahi.
• Australian PM Morrison said they will reopen borders to all visa holders on February 21st and that visitors coming to Australia must be double vaccinated, according to Reuters.
• RBI rescheduled its policy meeting by a day later to February 8th-10th due to a public holiday being announced in Maharashtra after the death of a legendary Bollywood singer, according to Reuters.

DATA RECAP

• Chinese Caixin Services PMI (Jan) 51.4 (Prev. 53.1); Composite PMI (Jan) 50.1 (Prev. 51.0)
• Australian Retail Trade (Q4) 8.2% vs. Exp. 8.1% (Prev. -4.4%)

GEOPOLITICS

• US National Security Adviser Sullivan said Russia could conduct military action on Ukraine within days and weeks or they could choose to pursue diplomacy. Sullivan added that Russian actions could take many forms including annexing Donbass, cyberattacks or a full-scale invasion of Ukraine, while in a separate interview he said military action could occur as early as tomorrow and could take several weeks, according to NBC News and ABC News.
• UK Foreign Secretary Truss said Russia’s actions show their claims to have no plans to invade Ukraine are false and she vowed to raise the cost if Russia takes further action, according to Reuters.
• Ukraine’s presidency said that the chance of a diplomatic solution is higher than military escalation, according to AFP News Agency.
• Russia's Kremlin says there has been nothing new in recent days on the Russian security guarantees; adds the West prefers not to mention this topic. Do not expect a turning point on Ukraine after Putin and Macron talks today.
• The issue of providing Moscow with legal security guarantees has become urgent, according to the head of the Russian Foreign Ministry's Department for Arms Control, speaking to Sputnik; adding this has pushed other aspects of their agenda into the background.
• Iran’s top security official Shamkhani tweeted that Tehran’s right to research and development cannot be curbed by a nuclear deal.
• Iranian nuclear talks are set to resume on Tuesday; "“Iran expects the necessary decisions to be made esp. in Washington…Lifting sanctions & benefiting from economic dividends of the deal is our red line", according to journalist Aslani.
• US Special Representative for North Korea Sung Kim is to visit Hawaii between February 10th-15th for a trilateral meeting with Japanese and South Korean officials, according to a statement cited by Reuters.