• European bourses (Eurostoxx 50 unch.) trimmed early gains as NATO Sec. Gen. Stoltenberg pushed back on claims of Russian troop withdrawals, adding he is yet to see signs of a de-escalation.
• US futures (ES -0.1%) sit in minor negative territory amid the pullback in risk sentiment; traders await US retail sales and FOMC minutes.
• DXY down to new sub-96.00 WTD low; safe-havens lag while AUD and EUR lead though EUR/USD op ex looms.
• US Treasuries lag ahead of busy agenda, Bunds consolidate after strong 10yr issuance.
• WTI and Brent remain firmer on the session but reside within overnight ranges, in European hours the benchmarks have been moving on geopolitical updates from Russia & NATO.
• Chinese PPI and CPI Y/Y printed below expectations, and both cooled from the prior; UK CPI surpassed expectations.
• Looking ahead, highlights include US Retail Sales, Export/Import Prices, Japanese Trade Balance, FOMC Minutes, Fed’s Kashkari, supply from the US.

As of 11:00GMT/06:00EST

LOOKING AHEAD

• Click here for the Newsquawk FOMC Minutes preview
• Click here for the Week Ahead preview
• US Retail Sales, Export/Import Prices, Japanese Trade Balance, FOMC Minutes, Fed’s Kashkari, supply from the US.

EUROPEAN TRADE

EQUITIES

• European bourses (Eurostoxx 50 unch.) trimmed early gains as NATO Sec. Gen. Stoltenberg pushed back on claims of Russian troop withdrawals, adding he is yet to see signs of a de-escalation.
• US futures (ES -0.1%) sit in minor negative territory amid the pullback in risk sentiment; traders await US retail sales and FOMC minutes.
• Sectors in Europe are a mixed bag with Basic Resources and Energy top of the leaderboard amid strength in underlying commodity prices.

Click here for more detail.

FX

• DXY down to new sub-96.00 WTD low as markets continue to weigh up conciliation from Russia against caution from the West and scepticism from NATO.
• Loonie bounces pre-Canadian CPI and Sterling bid post-firmer than forecast UK inflation data with Cable hovering above the 50% Fib of its 2022 range so far at 1.3554, while EUR/GBP respects resistance circa 0.8400.
• Aussie and Euro inch closer to round numbers at 0.7200 and 1.1400 respective after breaching upside chart levels, but Eur/Usd faces decent 1.5 bn or so option expiry interest between 1.1395-1.1405.
• Safe haven Yen and Franc lag, but latter yet to close below a key technical pivot at 115.67.

Click here for more detail.

Notable FX Option Expiries, NY Cut:

• EUR/USD: 1.1100 (2.165BN), 1.1200 (470M), 1.1215-25 (800M), 1.1250 (787M), 1.1290-00 (480M), 1.1315 (283M), 1.1345-55 (675M), 1.1375 (260M), 1.1395-05 (1.46BN), 1.1425-30 (690M), 1.1450-60 (860M), 1.1465-75 (840M), 1.1550 (278M), 1.1700 (328M)
• Full list available here

FIXED INCOME

• Solid demand for 10 year German issuance helps Bunds consolidate recovery gains off new cycle low.
• Gilts also off worst levels as NATO raises more doubt about Russia recalling troops from the border with Ukraine.
• US Treasuries lag ahead of busy agenda including primary data, 20 year note supply and January's FOMC minutes

Click here for more detail.

COMMODITIES

• WTI and Brent remain firmer on the session but reside within overnight ranges, in European hours the benchmarks have been moving on geopolitical updates from Russia & NATO.
• Currently, Brent is holding above the USD 94.00/bbl mark but remains shy of the USD 94.60/bbl session high.
• US Private Inventory Data (bbls): Crude -1.1mln (exp. -1.6mln), Cushing -2.4mln, Gasoline -0.9mln (exp. +0.6mln), Distillates -0.5mln (exp. -1.5mln).
• Iraqi Kurdistan Regional Government PM says it has discussed possible gas and renewable energy investment with the Qatar Energy Minister, via Reuters.
• Spot gold/silver are little changed overall as the yellow metal holds onto the USD 1850/oz mark, awaiting fresh drivers and looking to US data/Fed speak & minutes.

Click here for more detail.

CENTRAL BANKS

• PBOC Governor Yi Gang expects China's economic growth to return to potential this year; China will keep accommodative monetary policy flexible, according to Reuters.
• Chinese press suggests the PBoC LPR will be maintained in February.
• BoJ Governor Kuroda says fixed-rate bond purchase offer was made amid the "unusual" market situation, via Reuters; if situation become unusual again could use such tools.

CRYPTO

• Bitcoin is modestly softer on the session and continues to consolidate around Tuesday's parameters.

NOTABLE EUROPEAN HEADLINES

• ECJ has dismissed Hungarian and Polish challenges to rule of law conditionality mechanism. As expected

DATA RECAP

• UK CPI YY (Jan) 5.5% vs. Exp. 5.4% (Prev. 5.4%); MM (Jan) -0.1% vs. Exp. -0.2% (Prev. 0.5%)
• UK Core CPI YY (Jan) 4.4% vs. Exp. 4.3% (Prev. 4.2%); MM (Jan) -0.4% vs. Exp. -0.4% (Prev. 0.5%)

US-SPECIFIC HEADLINES

• US CDC lowered its COVID alert level for cruise ships to "High" from "Very High", according to Reuters.

Click here for the US Early Morning Note.

APAC TRADE

EQUITIES

• APAC stocks traded higher following the optimism seen in European and US peers yesterday.
• ASX 200 was kept afloat by its Healthcare sector, although gains were capped by losses in Energy and Metal names.
• Nikkei 225 and KOSPI both benefitted from a strong tech sector, whilst the former also benefits from favourable Yen dynamics.
• Hang Seng and Shanghai Comp. conformed to the regional gains, although the latter lacks momentum after a daily PBoC drain and following yesterday’s maintained MLF rate – which likely means the February LPRs will also be held.

NOTABLE APAC HEADLINES

• 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 6.3463 vs exp. 6.3492 (prev. 6.3605)
• Policymakers in Beijing are expressing growing concerns that China will face “unprecedented difficulty” in stabilising trade this year, according to SGH Macro.

DATA RECAP

• Chinese CPI YY (Jan) 0.9% vs. Exp. 1.0% (Prev. 1.5%)
• Chinese CPI MM (Jan) 0.4% vs. Exp. 0.5% (Prev. -0.3%)
• Chinese PPI YY (Jan) 9.1% vs. Exp. 9.5% (Prev. 10.3%)

GEOPOLITICS

• Russia is preparing to withdraw additional military columns from Crimea following military drills, via Reuters citing Ifx
• NATO Secretary General Stoltenberg says they are yet to see any Russian de-escalation, Russia is continuing with its military buildup. Continue to convey message that we are prepared to talk. Messages on diplomacy from Moscow, Russia are proving some grounds for cautious optimism. Russia has always moved forces back and forth, movement is not confirmation of a withdrawal.
• Russia does not plan to move its embassy in Ukraine from Kiev, a source told Sputnik.
• Russia's EU representative says he can confirm that there will be no invasion today, no escalation, neither next week nor next month.
• Russia will not partake in the special-OSCE meeting regarding Belarus military exercises, via Reuters citing Tass.
• NATO frigates tried to conduct electronic reconnaissance of Russian ships in the Mediterranean, according to Sputnik
• Ukraine Defence Ministry says the unprecedented DDoS attack is still ongoing, attackers succeeded in locating code vulnerabilities.
• French President Macron is to speak with Chinese President Xi on Wednesday, according to an Elysee official.
• G7 finance ministers' meeting delayed to March 1st, according to Reuters sources.
• Iranian Foreign Minister said the US failed to address Iran's demands regarding guarantees that no party will be able to abandon the nuclear deal, according to FT.