• European bourses are firmer in a pick-up from a relatively contained open amid developments on the geopolitical front.
• Updates that some Russian troops are returning to base lifted US futures above Monday's best levels; ES +1.4%.
• On the Russian withdrawal, we are awaiting confirmation from a non-Russian source/outlet; meeting between Putin & Scholz is underway.
• USD and safe-haven FX pullback on the improvement in risk sentiment, occurring amidst an associated pullback in core debt.
• Positive geopolitical developments pushed crude benchmarks to session lows and Brent below the USD 94.00/bbl mark.
• Looking ahead, highlights include NY Fed Manufacturing & PPI Final Demand.

As of 11:10GMT/06:10EST

LOOKING AHEAD

• Click here for the Newsquawk FOMC Minutes preview
• Click here for the Week Ahead preview
• US NY Fed Manufacturing, PPI Final Demand, German-Russian meeting.

EUROPEAN TRADE

EQUITIES

• European bourses are firmer in a pick-up from a relatively contained open amid developments on the geopolitical front.
• Updates that some Russian troops are returning to base lifted US futures above Monday's best levels.
• In Europe, sectors are all in the green though Basic Resources is the relative underperformer amid additional monitoring from China re. iron ore.

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FX

• Greenback slips as markets draw encouragement from Russia recalling troops after completing drills.
• Euro especially relieved by less perceived risk of imminent invasion of Ukraine.
• Pound perky as risk sentiment picks up and UK earnings exceed expectations.
• Kiwi and Yuan firm as NZ and China improve FTA terms.
• Rouble up as Russia’s Lavrov says dialogue with West to continue and results are achievable.

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Notable FX Option Expiries, NY Cut:

• USD/JPY: 114.35 (200M), 114.65 (230M), 114.80-85 (333M), 115.00 (396M), 115.45-50 (400M), 115.70-75 (625M), 115.90-00 (1.2BN), 117.00 (220M)
• USD/CAD: 1.2550 (290M), 1.2600 (586M), 1.2695-00 (2.05BN)
• Full list available here

FIXED INCOME

• Core bonds back off in tandem with some Russian forces returning from drills.
• Gilts hold up better after well received 2032 DMO issuance in contrast to a so-so German Bobl sale.
• US Treasuries bear-steepen awaiting Wednesday's 20 year note supply.

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COMMODITIES

• Crude benchmarks were hit on the reported withdrawal of some Russian troops, in an unwinding of geopolitical premia after a relatively uneventful APAC session.
• Pressure that sent Brent below the USD 94.00/bbl mark, for instance.
• Spot gold/silver also deteriorated on the above update, as havens across the board waned; albeit, the yellow metal retains USD 1850/oz.
• China's NDRC and SAMR will reportedly be holding a meeting on iron ore in Qingdao on Feb 17th; Glencore (GLEN LN) and Trafigura are among those required to submit recent transaction data and port stockpiles, according to Chinese press.
• Iraq Federal Court deems Kurdish oil and gas law as unconstitutional, State News reports.
• Barclays raised its WTI and Brent price forecasts, both by USD 7/bbl, to USD 89/bbl and USD 92/bbl respectively, according to Reuters.

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CENTRAL BANKS

• China Security Journal suggested the PBoC may opt to cut the RRR or interest rate "later".
• RBA Minutes from the February meeting reiterated the Board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve. Members observed that inflation had picked up more quickly than the Bank had expected and underlying inflation was expected to increase further over coming quarters. The release made no explicit mention of the plausibility of a rate hike this year.
• CBA now sees an RBA rate hike in June 2022 (prev. view August 2022).
• BoJ Governor Kuroda said the central bank does not intend to conduct the 10yr JGB operation too often, will do as needed; weak JPY impact on domestic inflation is not that large at the moment, via Reuters.

CRYPTO

• Bitcoin continues to pick up and back away from a potential test of the USD 40k mark to the downside following pressure emerging at the tail-end of last week/over the weekend.

DATA RECAP

• UK ILO Unemployment Rate (Dec) 4.1% vs. Exp. 4.1% (Prev. 4.1%); Employment Change (Dec) -38k (Prev. 60k)
• UK Average Week Earnings 3M YY (Dec) 4.3% vs. Exp. 3.8% (Prev. 4.2%); Ex-Bonus (Dec) 3.7% vs. Exp. 3.6% (Prev. 3.8%)
• German ZEW Economic Sentiment (Feb) 54.3 vs. Exp. 55.0 (Prev. 51.7); Current Conditions (Feb) -8.1 vs. Exp. -6.0 (Prev. -10.2)
• EU ZEW Survey Expectations (Feb) 48.6 (Prev. 49.4)

US-SPECIFIC HEADLINES

• Federal investigators are probing block trading at Morgan Stanley (MS), Goldman Sachs (GS) and several hedge funds to examine whether bankers may have improperly tipped hedge-fund clients in advance of large share sales, according to WSJ sources.
• Intel (INTC) is to purchase Tower Semiconductor for USD 5.4bln. Echoes recent WSJ reports

Click here for the US Early Morning Note.

APAC TRADE

EQUITIES

• APAC stocks traded mostly lower following a similar handover from Wall Street.
• ASX 200 was subdued as the energy and mining names gave back some of yesterday’s gains, whilst the RBA minutes offered no fresh information.
• Nikkei 225 was pressured by its industrial sector and with a resilient Yen providing further headwinds.
• Hang Seng continued to be overpowered by the COVID situation in Hong Kong which prompted Chief Executive Lam to announce new measures to curb the spread.
• Shanghai Comp. bucked the trend and posted mild gains after the PBoC decided to inject CNY 300bln via 1yr MLF, albeit at a maintained rate of 2.85%.

NOTABLE APAC HEADLINES

• PBoC injected CNY 300bln via 1yr MLF at a maintained rate of 2.85%
• PBoC injected CNY 10bln via 7-day reverse repos at a maintained rate of 2.10% for a daily drain of CNY 10bln
• PBoC set USD/CNY mid-point at 6.3605 vs exp. 6.3595 (prev. 6.3664)
• China upgraded its free trade deal with New Zealand, effective April 7th, according to Reuters.
• China is said to strengthen regulations on the car-hailing sector, according to reports.
• China's cabinet says it will promote steady industrial growth, according to state media via Reuters; continue to stabilise commodity prices.
• Hong Kong Chief Executive said there are no plans for a widespread city lockdown, according to Bloomberg.

DATA RECAP

• Japanese GDP QQ (Q4) 1.3% vs. Exp. 1.4% (Prev. -0.9%)
• Japanese GDP QQ External Demand (Q4) 0.2% vs. Exp. 0.3%
• Japanese GDP QQ Private Consumption Preliminary (Q4) 2.7% vs. Exp. 2.2% (Prev. -1.3%)
• Japanese GDP QQ Annualised (Q4) 5.4% vs. Exp. 5.8% (Prev. -3.6%)
• Japanese GDP QQ Capital Expenditure (Q4) 0.4% vs. Exp. 0.5% (Prev. -2.3%)

GEOPOLITICS

• Kremlin spokesperson Peskov said Russian President Putin is "willing to negotiate", has always demanded negotiations and diplomacy; adding the Ukraine crisis was only one part of Russia's larger security concerns, via CNN
• US State Department advises US citizens to immediately depart Belarus, according to Bloomberg.
• US is reportedly closing its embassy in Kyiv and relocating diplomatic operations to Western Ukraine. US State Department ordered destruction of computer equipment amid warnings of Russian invasion, according to WSJ.
• Russia military says it is continuing set of drills involving almost all districts and navies, Interfax reports; some Western and Southern units are set to return to bases.
• Russian Kremlin says that warnings from the US that Russia is going to launch a fresh attack on Ukraine on Wednesday is "baseless hysteria", via Reuters.
• Russian lawmakers vote in favour of sending a resolution on the recognition of two breakaway regions in Eastern Ukraine to President Putin, via Reuters.
• EU's Borrell says if there is a war between Ukraine and Russia, Nordstream 2 will not become operational, via Reuters.
• Biden admin officials are reportedly running out of patience regarding talks on China's shortfalls under the Phase One deal, but the White House plans to let the talks play out before considering the next steps, according to Bloomberg sources. This is in-fitting with reports from last Monday.
• There are reports of Houthi militias firing a ballistic missile at Marib, Yemen, according to Al Arabiya.