• European equities are mixed, whilst US futures are entirely in the red, with Nvidia weighing on the NQ
• Dollar is firmer and reclaims 104 status, focus remains on USD/JPY with YTD high in sights; Kiwi underperforms following a dovish hold at the RBNZ
• Bonds are incrementally firmer with specifics light and supply heavy, awaiting US GDP 2nd estimate
• Crude and base metals are hampered by the firmer Dollar
• Looking ahead, US GDP (2nd), PCE Prices Prelim. (Q4), Japanese Retail Sales, Comments from Fed's Bostic, Collins, Williams & BoE's Mann.

EUROPEAN TRADE

EQUITIES

• European bourses, (Stoxx600 -0.1%), are mixed, but with clear underperformance in the AEX (-0.7%), after poor results from chip-maker ASM International (-3.8%).
• European sectors hold a negative tilt; Optimised Personal Care Drug and Grocery is dragged down by Reckitt (-8.9%) post-earnings, whilst Mercedes-Benz (+1.7%) drives Autos higher.
• US Equity Futures (ES -0.5%, NQ -0.9%, RTY -0.8%) are entirely in the red, paring back most of the gains seen in the prior session, with underperformance in the NQ hampered by Nvidia (-1.9% pre-market).
• Click here and here for the sessions European pre-market equity newsflow, including earnings from Reckitt, ASM International, Holcim & more.
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FX

• USD is making gains vs. all peers with January PCE data tomorrow expected to come in hot. DXY has reclaimed 104 status and taken out its 100, 10 and 21DMAs as well as a cluster of highs from last week. Current high today at 104.24.
• EUR is hampered by the broadly firmer USD with EUR/USD oscillating around the 1.08 mark after taking out yesterday's low of 1.0812.
• GBP is dragged lower by the USD after yesterday's failure to test 1.27 to the upside. Session low currently sits at 1.2622 with the 22nd Feb low at 1.2612.
• USD/JPY remains arguably the most important pair to watch after printing a high of 150.79 with the YTD peak just above at 150.88. The further the pair climbs, the more likely is jawboning from Japanese officials and speculation over intervention.
• NZD is the standout laggard across the majors as the RBNZ stood pat on rates vs. a 30% chance of a hike accompanied by dovish tweaks to the OCR projections. NZD/USD has erased all of last week's gains and slipped below the 0.61 mark with the next downside support via its 100DMA at 0.6091. AUD lower in sympathy as well as the region's soft inflation metrics overnight.
• PBoC set USD/CNY mid-point at 7.1075 vs exp. 7.2023 (prev. 7.1057).
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FIXED INCOME

• USTs are marginally firmer with specifics light and perhaps some follow-through from the dovish RBNZ OCR projections in the absence of other drivers. Action which comes after Tuesday's bear-steepening.
• Bunds are modestly firmer with specifics light and the focus once again on supply. Bunds are eking out marginal new highs of 132.41 seemingly as US equity futures deteriorate further, but ultimately remains comfortably within yesterday's 132.02-71 range.
• Gilt price action is similar to that seen in EGBs with Gilts also able to eke out some very marginal gains but well within Tuesday's 97.22-98.15 bounds; a UK outing produced a wide 2.2bps tail, resulting in modest pressure in Gilts.
• UK sells GBP 4.0bln 4.00% 2031 Gilt: b/c 3.0x, average yield 4.085%, tail 2.2bps.
• Italy sells EUR 8.25bln vs exp. EUR 7.50-8.25bln 3.35% 2029 & 3.85% 2034 BTP and EUR 1.5bln vs exp. EUR 1.00-1.50bln 2031 CCTeu.
• Orders for Italy's new 6yr BTP Valore retail bond reaches 12bln since the start of the odder, according to bourse data cited by Reuters
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COMMODITIES

• A downbeat session for the broader crude complex in what is seemingly a function of a firmer Dollar and a subdued risk tone. Brent May futures have slipped below USD 82.00/bbl.
• The firmer Dollar exerts broader pressure on precious metals, although losses are capped ahead of key US data alongside a number of Fed speakers; XAU approaches USD 2,025/oz to the downside after falling under its 50 DMA at 2,032.15/oz.
• Base metals are softer across the board amid the aforementioned pressure from the stronger Greenback, whilst Chinese markets overnight continued to tumble despite intervention from regulators.
• US Private Energy Inventory (bbls): Crude +8.4mln (exp. +2.7mln), Cushing +1.8mln, Gasoline -3.3mln (exp. -1.5mln), Distillate -0.5mln (exp. -2.1mln)
• Trafigura Chief Economist says oil market talk has shifted to upside risk; oil spreads show a relatively tight market, via Bloomberg TV.
• Citi upgrades 0-3m Palladium price targe price forecast to USD 1200/oz (prev. 950/oz) on the prospect of imminent supply cuts; bounce would present a tactical opportunity for spec selling and producer hedging; sees structural long-term downtrend.
• Click here for more details.

NOTABLE EUROPEAN HEADLINES

• ECB's de Guindos says recent inflation outlook has been very positive and prices will continue to decline; we need to be sure that prices will move towards our 2% target

DATA RECAP

• EU Economic Sentiment(Feb) 95.4 vs. Exp. 96.7 (Prev. 96.2, Rev. 96.1); Consumer Confid. Final (Feb) -15.5 vs. Exp. -15.5 (Prev. -15.5); Services Sentiment (Feb) 6.0 vs. Exp. 9.0 (Prev. 8.8, Rev. 8.4); Industrial Sentiment (Feb) -9.5 vs. Exp. -9.2 (Prev. -9.4, Rev. -9.3); Selling Price Expectations (Feb) 3.8 (Prev. 4.6, Rev. 4.4); Cons Inflation Expectations (Feb) 15.5 (Prev. 11.9, Rev. 12.0)
• Swedish Trade Balance (Jan) 13.3B (Prev. 3.8B, Rev. 1.9B)
• Swedish PPI YY (Jan) -2.3% (Prev. -7.7%); PPI MM (Jan) 0.3% (Prev. -1.6%)
• Swedish Overall Sentiment (Feb) 90.5 (Prev. 90.5); Manufacturing Confidence (Feb) 98.4 (Prev. 99.3); Total Industry Sentiment (Feb) 92.0 (Prev. 91.7); Consumer Confidence SA (Feb) 82.7 (Prev. 82.3)
• Italian Manufacturing Business Confidence (Feb) 87.3 vs. Exp. 88.7 (Prev. 88.3, Rev. 88.1); Consumer Confidence (Feb) 97.0 vs. Exp. 96.9 (Prev. 96.4)

EARNINGS

• Baidu Inc (BIDU) Q4 2023 (USD): EPS 3.08 (exp. 2.48), Revenue 4.92bln (exp. 4.86bln) Shares -1.2% in pre-market trade
• eBay Inc (EBAY) - Q4 2023 (USD): Adj. EPS 1.07 (exp. 1.03), Revenue 2.56bln (exp. 2.51bln); authorised additional 2bln share repurchase programme and raises quarterly cash dividend 8% to 0.27/shr. Shares +3.2% in pre-market trade
• Beyond Meat (BYND) Q4 2023 (USD): Revenue 73.7mln (exp. 66.8mln), Adj. EBITDA loss 125mln (exp. loss 47mln); FY revenue view 315-345mln (exp. 344mln) Shares +55% in pre-market trade
• ASM International (ASM NA) – Q4 (EUR): Normalised Net 100mln (exp. 137mln, prev. 142mln Y/Y), Normalised Op. 141mln (prev. 190mln Y/Y), Revenue 633mln (exp. 647mln, prev. 725mln Y/Y), Launches 150mln share buyback. Raises dividend to 2.75/shr (prev. 2.50/shr). Guides Q1 Revenue 600-640mln. (Newswires) Shares -3.7% in European trade / peer Nvidia (-1.2% pre-market) lags
• Reckitt (RKT LN) - Q4 (GBP): LFL Sales -1.2% (exp. 1.75%), FY LFL Sales +3.5% (exp. 4.15%), Revenue 3.56bln (exp. 3.6bln). Sees 2024 capital expenditure to be 3-3.5% of Net Revenue. Sees 2024 adj. operating profit to grow ahead of net revenue growth. Shares -10.1% in European trade

NOTABLE US HEADLINES

• US President Biden has issued an executive order "cracking down" on US data transfers to Russia, China and Iran, according to senior US officials cited by Reuters.
• Apple (AAPL) Apple is cancelling efforts to build electric cars; will shift many car project workers to generative AI efforts, and some car employees will be cut, Bloomberg reports. It was unclear how many layoffs there would be. Separately, Apple representatives engaged in a final meeting with the DoJ to dissuade an impending antitrust lawsuit, Bloomberg reports. Allegations suggest Apple imposed restrictions on iPhones and iPads to hinder competition. The suit is anticipated by the end of March, following investigations since 2019, the report added.
• Microsoft (MSFT) - EU regulators are probing whether Microsoft is preventing customers from buying security software that competes with its own, according to The Information. It is the latest sign of growing scrutiny from policymakers, especially in the EU, of Microsoft’s fast-growing cloud business and its practice of bundling products.

GEOPOLITICS

MIDDLE EAST

• US Central Command said a US aircraft and a coalition warship shot down five Houthi one-way attack unmanned aerial vehicles in the Red Sea on Tuesday, according to Reuters.
• "Israeli sources: The Israeli delegation returned from Doha after two days of negotiations on the detainee deal without progress", according to Sky News Arabia

OTHER

• China's Vice Foreign Minister Sun Weidong conducted consultations in Moscow where he met with his counterpart and the Russian Foreign Minister, while he stated that China supports Russia's BRICS presidency and stands ready to continuously strengthen strategic coordination between both sides in international multilateral platforms. Furthermore, Sun said both sides should strengthen communication and coordination in Asia-Pacific affairs, as well as jointly safeguard regional security and stability.
• South Korea and the US are to conduct annual military drills from March 4th-14th.

CRYPTO

• Bitcoin continues to soar higher and currently holds just shy of the USD 60k mark.

APAC TRADE

• APAC stocks traded cautiously and followed suit to the rangebound performance seen on Wall St where stocks largely ignored weak US data ahead of key events, while the region also digested a couple of data releases and the RBNZ policy announcement.
• ASX 200 was indecisive with tech strength offset by weakness in telecoms, consumer stocks and financials, while data showed softer-than-expected monthly CPI in January and a miss on Construction Work Done for Q4.
• Nikkei 225 lacked conviction but remained above the 39,000 level in the absence of any pertinent catalysts.
• Hang Seng and Shanghai Comp. were pressured amid initial developer-related concerns after a wind-up petition was filed against Country Garden, although the property sector in Hong Kong then recovered after the government announced the cancellation of all demand-side property tightening measures for residential.

NOTABLE HEADLINES

• Hong Kong Financial Secretary Chan said in the budget address that momentum for economic recovery needs to be improved amid global challenges. Chan announced the government is to cancel all demand-side property tightening measures for residential and noted there is room to further adjust measures for the property market, while it will waive stamp duties payable on transfer of REIT units.
• HKMA said the maximum loan-to-value ratios will be adjusted to 70% for self-occupation residential properties valued at HKD 30mln or less, while the maximum LTV ratio will be adjusted from 50% to 60% for non-self-use residential properties.
• RBNZ kept the OCR unchanged at 5.50% as expected, while it slightly lowered its OCR projections and said the OCR needs to remain at a restrictive level for a sustained period. The committee remains confident that the current level of the OCR is restricting demand but also noted that headline inflation remains above the 1%-3% target band, limiting the committee's ability to tolerate upside inflation surprises. Furthermore, the RBNZ reduced its OCR forecast with the June 2024 view lowered to 5.59% from 5.67% and the March 2025 view lowered to 5.47% from 5.56%.
• RBNZ Governor Orr said during the press conference Q&A that they did discuss a hike in rates and there was strong consensus that the current level of rates was sufficient, while he added that many variables have given them confidence that policy is working and noted that underlying inflation is still a concern, but headline inflation is easing.
• China reportedly tells quants to phase out Direct Market Access (DMA) products blamed for turmoil, according to Bloomberg sources; Chinese markets extended losses following this news.
• PBoC governor and Shanghai party chief held a seminar on Tuesday; PBoC supports Shanghai's high-level opening up financially

DATA RECAP

• Australian Weighted CPI YY (Jan) 3.40% vs. Exp. 3.60% (Prev. 3.40%); Construction Work Done (Q4) 0.7% vs. Exp. 0.8% (Prev. 1.3%)