• Equity bourses/futures under modest pressure with newsflow light after a weekend of heavy geopols & Berkshire numbers/commentary
• DXY under modest pressure but above Friday’s base, EUR benefitting from the softer USD; antipodeans lag, USD/JPY firmer
• Contained start with specifics light into ECB’s Lagarde for EGBs while USTs await US supply, Gilts modestly outperform
• Crude subdued despite significant geopolitical rhetoric, though no major escalation thus far. LNG digests QatarEnergy & Wafa updates/reports while metals diverge
• Looking ahead, highlights include US Dallas Fed Manufacturing Business Index, Japanese CPI, Comments from ECB’s Lagarde, Supply from the US.
• Click here for the Newsquawk Week Ahead.

EUROPEAN TRADE

EQUITIES

• European bourses are a touch softer, Stoxx 600 -0.3%, following a similar APAC handover as newsflow remains light on broader macro themes despite a handful of interesting equity-specific developments.
• Sectors have a similar negative tilt, Basic Resource & Energy names lag given benchmark pricing. Housing names within the UK are lagging after the commencement of a CMA investigation into the market.
• DAX 40, +0.2%, the relative outperformer and in close proximity to record levels for both cash and future at 17443 & 17487 respectively.
• Stateside, futures are essentially flat ES -0.1%, with some modest underperformance in the RTY -0.3%; weekend focus on Berkshire Hathaway numbers/commentary around "limited future growth prospects, citing scare transformative deals".
• Click here and here for the sessions European pre-market equity newsflow, including earnings from Post NL and updates for/from Housing, Airbus, Ryanair, Telecom's & more.
• Click here for more details.

FX

• DXY is a touch softer with the 103.79 trough just above Friday's 103.76 base before downside support via the 200 DMA at 103.69. Newsflow for the USD light, week's focal points are PCE & ISM Manufacturing on Thursday & Friday.
• EUR benefitting from the softer USD with specifics light ahead of potential remarks from ECB's Lagarde later in the session; while action is limited, the single currency has surpassed the 100- & 200-DMAs.
• A similar story for GBP but with EUR/GBP action hitting Cable a touch, nothing from BoE's Breeden or Pill thus far. Cable at 1.2675 and respecting Friday's 1.2649-1.2702 bounds.
• Antipodeans lag; no specific driver or catalyst, though potentially profit taking, positioning (RBNZ Wednesday) and the tepid risk tone weighing.
• USD/JPY modestly higher but remains shy of Friday's 150.77 best and by extension the YTD peak at 150.88; domestic CPI due afterhours.
• PBoC set USD/CNY mid-point at 7.1080 vs exp. 7.1998 (prev. 7.1064).
• Click here for more details.

FIXED INCOME

• Contained start with specifics light into ECB's Lagarde. Bunds near the unchanged mark despite printing above Friday's best at the start of the session. Since, EGBs have been fading and are modestly in the red at 133.06 at worst but well above Friday's 132.05 base.
• Gilts modestly outperforming, but action directionally and in terms of magnitudes in-fitting with Bunds but just a few hours behind given the lack of APAC trade for Gilts. Similarly surmounted Friday's 98.17 best before fading though, again in-fitting with Bunds, are well above that session's 97.10 base.
• USTs firmer but off best. Specifics light and the docket thin to start a key week aside from 2yr & 5yr supply. Yield curve currently under modest pressure and slightly flatter.
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COMMODITIES

• Subdued session for crude despite a slew of weekend geopols., though no major escalation thus far. WTI & Brent under modest pressure but have dipped below USD 76/bbl and tested USD 80.00/bbl respectively.
• LNG somewhat uneventful though the complex is digesting an extensive weekend announcement from QatarEnergy (details below). Elsewhere, exports via the Wafa oil field in Libya have closed due to protests, via BBG citing sources.
• Precious metals benefit from the tepid tone, softer USD and slightly weaker yields stateside in a quiet start to a key week of US data. By contrast, base metals are lower across the board given the general risk tone and thus far failing to benefit from the factors supporting precious peers.
• US Treasury official said on Friday the US is encouraged by 'significant progress' in the second phase of the Russian oil price cap.
• QatarEnergy CEO said Europe will continue to need gas as part of an energy mix for a very long time and Europe’s gas needs have not peaked, while QatarEnergy also stated that it may need to make additional orders of tankers to ship expanded LNG volumes.
• Exports from the Wafa oil field in western Libya and a subsea natural gas link to Italy were closed following protests, according to Bloomberg citing a person familiar with the matter.
• Click here for more details.

NOTABLE EUROPEAN HEADLINES

• ECB is reportedly close to agreeing on a new monetary framework that some officials hope will pave the way to an ultimate revival of the interbank market, according to people familiar cited by Bloomberg.
• EU finance ministers reportedly clash over efforts to centralise markets supervision with Eurogroup President Donohoe noting there is a ‘strong diversity of views,’ and that member states disagree over the level of ambition to build a common supervisory regime as part of the roadmap to progress toward a capital markets union that the EU wants to settle by next month, according to Bloomberg.
• Hopes of a reversal in the UK's "tourist tax" in the upcoming budget are "diminishing" after the financial secretary to the Treasury warned of the complexities of such a move, according to The Times.

EARNINGS

• Berkshire Hathaway (BRK.B) - Operating earnings rise, driven by gains in its insurance units; Q4 operating earnings USD 8.481bln (vs 6.625bln Y/Y); FY23 operating earnings USD 37.35bln (vs 30.853bln Y/Y). Berkshire held USD 167.6bln in cash (vs 157.2bln Q/Q). Berkshire made USD 2.2bln of share buybacks in Q4 (vs USD 1.1bln in Q3); FY23 total repurchases were around USD 9.2bln. In his letter, Warren Buffett cautioned about limited future growth prospects, citing scarce transformative deals. He emphasised the challenge of finding significant investment opportunities both domestically and internationally. On future leadership transitions, Buffett said Greg Abel, who runs all non-insurance operations for Berkshire, is ready to be CEO of Berkshire tomorrow. +4.5% in pre-market trade.
• Broadcom (AVGO) - Broadcom is close to selling its end-user computing unit to private-equity firm KKR for USD 3.8bln, CNBC reports. KKR outbid other firms in the auction, and a deal may be announced soon, the report adds. +1.2% in pre-market trade.
• Li Auto Inc (LI) Q4 2023 (USD): EPS 0.75 (exp. 0.29), Revenue 5.88bln (exp. 5.48bln). +11.5% in pre-market trade.

NOTABLE US HEADLINES

• US Treasury Department issued a statement on the FSOC's meeting on Friday in which it noted that it is to closely monitor CRE markets and OCC staff were briefed on real estate market developments.
• Former US President Trump won the South Carolina Republican primary to defeat Nikki Haley in her home state, while Haley insisted that she is not giving up the fight, according to Sky News.

GEOPOLITICS

MIDDLE EAST

• Israeli PM Netanyahu said that they are all working on a hostage deal but he cannot say if they will have it, while he added that they will be weeks away from total victory once they begin the Rafah operation, according to a CBS interview.
• Israel's army presented at the war council meeting a plan to evacuate residents from fighting zones in Gaza, according to Al Jazeera. It was also reported that Israeli PM Netanyahu's spokesman said the war council approved a plan to supply the Gaza Strip with humanitarian aid, according to Al Arabiya.
• Israel’s Defense Minister said there will be no let up in Israeli action against Lebanon’s Hezbollah movement, even if a ceasefire and hostage deal is secured in Gaza, according to AFP.
• White House National Security Adviser Sullivan said Israel, Egypt, Qatar and the US came to a basic understanding of the basic contours of a hostage deal for a temporary ceasefire and the US is hopeful that an agreement could be reached in the coming days, although he noted that a deal is still under negotiation and there will have to be indirect discussions by Qatar and Egypt with Hamas. It was also reported that Egyptian security sources said Qatar will host mediated Hamas-Israel truce talks this week.
• Hezbollah said they targeted a gathering of Israeli enemy soldiers in the vicinity of the Marj site with a volcano missile and achieved a direct hit, according to Al Jazeera.
• US Central Command said Yemen's Houthis launched one anti-ship ballistic missile likely targeting MV Torm Thor in the Gulf of Aden on Saturday although the missile impacted water causing no damage nor injuries, while US forces shot down two one-way attack unmanned aerial vehicles over the southern Red Sea.
• US and UK forces conducted 9 air strikes in Sanaa, according to Al Masirah TV cited by Reuters.
• UKMTO received a report of a small fast boat behaving in an irregular manner 20NM east of UAE’s Khor Fakkan.
• Syrian Defence Ministry said its forces downed seven drones that tried to target military positions and villages in the vicinity of Hama and Idlib, according to state media.
• Palestinian Authority PM has submitted his resignation to the Palestinian President; "The next phase needs the administration of the PA for all Palestinian territories".
• Israeli strike targets Lebanon's Easter Baalbek for the first time since the Gaza war, according to Reuters sources.

OTHER

• Ukrainian President Zelensky said he hopes a peace summit in Switzerland will take place in spring and a peace plan prepared with partners in Switzerland will be presented to Russia. Zelensky said that the current moment is the most difficult for Ukrainian unity and that improving troop rotations is critical to the war effort, while he also noted there is a clear plan for a new Ukrainian offensive but didn't give details and said Russian forces will attempt another offensive in late May or summer.
• Ukrainian President Zelensky said a US aid package is needed within a month and is essential to support troops on the battlefield, according to FT. It was separately reported that Zelensky and Canadian PM Trudeau signed a bilateral security agreement during a ceremony in Kyiv and Zelensky stated via Telegram that Canada is to provide more than CAD 3bln in financial and defence aid this year. Zelensky also signed a security agreement with Italian PM Meloni, while Meloni stated that Italy committed to military support for Ukraine and said peace cannot mean surrender, according to Reuters.
• G7 Leaders’ statement stated they remain convinced that they can ensure Ukraine prevails in fighting for its future and will help Ukraine meet its urgent financing needs, while it added that Ukraine can count on their support for as long as it takes.
• UK PM Sunak called for Western countries to be more aggressive in seizing frozen Russian assets and passing the proceeds on to Ukraine to finance its defence, according to Bloomberg.
• Ukraine attacked Russia’s Novolipetsk Steel plant with drones which caused a major fire at the facility, according to Reuters.
• Russian Defence Ministry said Russian forces took a more advantageous position near Avdiivka and rebuffed seven Ukrainian counterattacks, according to Reuters.
• Russia’s Deputy Foreign Minister said contact with the US over nuclear weapons in space has proven to be unproductive, while he added that the US has not presented any proof of allegations that Russia wants to put nuclear weapons in space.
• US military aircraft intercepted a balloon over Utah on Friday which was said to be small and not manoeuvrable, while the balloon was allowed to continue flying as the US concluded the balloon was not a threat to civil aviation or national security.
• G7 Finance Ministers and Central Bankers are reportedly expected to gold a meeting on 28th Feb to discuss strengthening sanctions against Russia, according to Kyodo.

CRYPTO

• Bitcoin is a touch firmer on the session after eclipsing USD 51k in short order but is yet to convincingly move much higher with specifics light and general newsflow limited.

APAC TRADE

• APAC stocks were mostly subdued amid a lack of fresh catalysts ahead of month-end and this week's key data releases including the Fed's preferred inflation gauge, while weekend macro newsflow was light and dominated by geopolitical commentary.
• ASX 200 finished flat after failing to sustain its early gains with price action indecisive amid a slew of earnings.
• Nikkei 225 outperformed on its return from the long weekend and extended on record levels.
• Hang Seng and Shanghai Comp. marginally declined with weakness seen in Hong Kong consumer stocks, while the mainland was also pressured amid ongoing frictions after China's MOFCOM slammed the latest USTR report on China's WTO compliance.

NOTABLE HEADLINES

• China's Mofcom commented regarding the US report about China's WTO compliance in which it noted that the US falsely claims China has created 'overcapacity' which fully reflects the US side's 'unilateralism and hegemonic behaviour'. Mofcom added the US side ignores the 'great achievements' made by China in fulfilling its WTO commitments and denies the important contribution made by China to the multilateral trading system and world economy, according to Reuters.
• China's Commerce Minister said China is willing to work with New Zealand to implement a free trade agreement and continue to strengthen cooperation in the process of joining the CPTPP.
• US Deputy Treasury Secretary Adeyemo said on Friday that it is clear the Chinese economy is facing challenges from the property sector and demographics, while he is not concerned about headwinds from China's economic challenges but has concerns about China's excess production capacity flowing to global markets.

DATA RECAP

• Japanese Services PPI YY (Jan) 2.1% vs Exp. 2.4% (Prev. 2.4%)