• European equities are mixed, with trade fairly rangebound ahead of the US NFP report
• Dollar is flat, JPY is bid post-BoJ sources and EUR is hampered by dovish ECB rhetoric
• Bonds are bid, with EGBs lifted by dovish ECB speak and ahead of the US NFP
• Crude gives back earlier gains; XAU sits at highs
• Looking ahead US NFP, Canadian Employment, and comments from Fed’s Williams.

EUROPEAN TRADE

EQUITIES

• European bourses, Stoxx600 (+0.2%) are mixed and trade has been contained within recent ranges, as the US NFP at 13:30 GMT / 08:30 ET remains in focus.
• European sectors are mixed; Financial Services takes the top spot, led higher by UBS (+4.1%), which benefits from a broker upgrade at Morgan Stanley. Energy is also higher, benefitting from broader strength in the crude complex. Telecoms is found near the bottom of the pile.
• US Equity Futures (ES +0.1%, NQ U/C, RTY +0.2%) are modestly firmer, and with trade fairly rangebound as traders await the US NFP report at 13:30 GMT / 08:30 ET. In terms of stock specifics, TSMC (+3.5%) benefits after reporting that its revenue rose 11.3% Y/Y.
• Click here and here for the sessions European pre-market equity newsflow, including earnings.
• Click here for more details.

FX

• DXY is flat as losses in EUR offset gains in JPY. The range for the session is 102.69-90 with NFP set to be the main driver for the USD. A soft release could see the DXY move closer to 102; a level not breached since 5th Jan.
• EUR is the only currency across the majors on the backfoot vs. the USD with ECB speakers out in full force and guiding markets towards a June cut. The pair is potentially showing some fatigue after venturing as high as 1.0955 with traders mindful of NFP later which will likely act as the main catalyst for the pair today.
• JPY has continued to extend on its weekly gains vs. the USD as markets increasingly position for a more hawkish BoJ amid reporting that the BoJ is to review its YCC programme and "leaning toward" ending negative rates in March. USD/JPY now down as low as 146.89; a soft NFP print could see the 200DMA come into view at 146.17.
• Antipodeans are both firmer vs. the USD with AUD marginally more so. AUD's climb this week has seen it rise from 0.6477 base to a current peak of 0.6644 after taking out its 10, 21, 50, 100 and 200DMAs.
• PBoC set USD/CNY mid-point at 7.0978 vs exp. 7.1863 (prev. 7.1002).
• Click here for more details.

FIXED INCOME

• Bunds are bid, after stronger than expected German Industrial Orders and a slew of ECB speakers which are on the dovish-side/echo-Lagarde overall and increasing the focus on June while a handful have not entirely dismissed April. Bunds printed a session high at 133.84 and is yet to surpass its WTD high at 133.96.
• USTs have been moving in tandem with EGBs with fleeting pressure on the latest BoJ sources piece via JiJi/Reuters but action overall is relatively contained into the US NFP report.
• Gilts are the incremental outperformer despite a lack of specific newsflow. Action which has taken Gilts to within a handful of ticks of the WTD peak and around 50 ticks above post-Budget levels. Currently around 99.80 and higher by 39 ticks thus far.
• Click here for more details.

COMMODITIES

• Crude is now lower after spending much of the session in the green despite a lack of fresh headlines this morning and a rather tentative risk profile ahead of the US jobs report. Brent Apr sits around USD 83.00/bbl after making peaks at USD 83.84/bbl earlier.
• Precious metals are in the green despite a steady Dollar this morning, with some possible tailwinds from heightened geopolitics as the Israeli incursion into Rafah looms if no ceasefire deal is reached. XAU topped yesterday's USD 2,164.80/oz high and rose to a fresh ATH of USD 2,168.79/oz this morning.
• Base metals are higher the board amid the recent tailwinds seen on Wall Street and then APAC, with dovish rhetoric from Western G10 central banks keeping the complex propped up.
• Shanghai Warehouse Stocks: Copper +24.7k/T, +11.5%; Zinc +11k/T, +11.3%; Lead +9.9k/T, +18.8%
• Click here for more details.

ECB

• ECB's Villeroy says an ECB rate cut is "very likely" in Spring, describes Spring as April-June 21st. More and more confident on inflation. Need to avoid haste on rates and avoid acting too late. Timing for cuts remains a minor issue, there is a large consensus that risks are in balance and a rate cut will come. French economic growth will surpass the European average.
• ECB's Kazaks says they could take pauses on the rate-cutting journey, via Bloomberg; wage growth appears to be easing somewhat. Rate cut bets are more consistent with the baseline. How much easing occurs this year is data dependent. ECB will not be on autopilot once reductions commence.
• ECB's Muller says they need more confidence on prices prior to conducting rate cuts, via Bloomberg. Optimism is returning to the EZ.
• ECB's Rehn says a faster than expected slowdown in inflation is good news. Risks of a premature rate cut have substantially decreased; matter of cuts will be reviewed in April and June.
• ECB's Simkus says there are all conditions to move to a less restrictive monetary policy; a cut in June is "very likely"; a cut in April cannot be ruled out but probability is low.
• ECB's Holzmann says rate change may be in preparation.
• ECB's Vasle reiterates current level of interest, if held long enough will get inflation to target.
• ECB's Nagel sees a rising chance of a rate cut before policymakers' break for summer, although this will be data-dependent, but the prospects have brightened, according to Bloomberg.

DATA RECAP

• German Producer Prices YY (Jan) -4.4% vs. Exp. -6.6% (Prev. -8.6%); Producer Prices MM (Jan) 0.2% vs. Exp. 0.2% (Prev. -1.2%); Industrial Output MM (Jan) 1.0% vs. Exp. 0.6% (Prev. -1.6%)
• French Trade Balance, EUR, SA (Jan) -7.388B (Prev. -6.829B, Rev. -6.421B); Imports, EUR (Jan) 56.199B (Prev. 57.021B, Rev. 56.817B); Exports, EUR (Jan) 48.811B (Prev. 50.192B, Rev. 50.396B); Current Account (Jan) -1.0B (Prev. -0.7B, Rev. -0.2B)
• Spanish Ind Output Cal Adj YY (Jan) -0.6% (Prev. -0.2%, Rev. -1.4%)
• EU Employment Final QQ (Q4) 0.3% vs. Exp. 0.3% (Prev. 0.3%); Employment Final YY (Q4) 1.2% vs. Exp. 1.3% (Prev. 1.3%); GDP Revised YY (Q4) 0.1% vs. Exp. 0.1% (Prev. 0.1%)
• Swedish New Orders Manuf. YY (Jan) -6.1% (Prev. -6.9%, Rev. -8.5%); GDP MM (Jan) 0.9% (Prev. -0.3%)
• Hungarian CPI YY (Feb) 3.7% vs. Exp. 4.0% (Prev. 3.8%); Core CPI YY (Feb) 5.1% vs. Exp. 5.5% (Prev. 6.1%)

NOTABLE US HEADLINES

• US President Biden delivered the State of the Union Address in which he stated they will work to rebuild the economy and that unemployment is at a 50-year low, Biden said he is seeking to make healthcare tax credit permanent, while he added that Americans pay more than anywhere else in the world on prescription drugs and he is ending this.

GEOPOLITICS

MIDDLE EAST

• US President Biden announced that the US military will construct a port in Gaza to allow more humanitarian aid to arrive and confirmed there will be no troops on the ground while a senior official earlier stated that the port is to allow Gaza humanitarian aid deliveries and will take weeks to complete, while troops to remain on vessels offshore.
• Two civilians reportedly killed in a Turkish airstrike in the Duhok province of northern Iraq, via Reuters citing sources.
• "Iranian presidential aide: If Kuwait decides to extract oil and gas from the Durra field, we will do the same", according to Al Arabiya

OTHER

• US President Biden stated during the State of the Union Address that they are facing an unprecedented moment and he assures that Russian President Putin will not stop at Ukraine, while he added they can stop Putin by helping Ukraine with weapons and his message to Putin is that they will not walk away and will not bow down.
• North Korean leader Kim Jong-Un guided an artillery firing drill on Thursday, according to KCNA.

CRYPTO

• Bitcoin takes a breather and holds just above USD 67k whilst Ethereum continues to advance as it closes in on USD 4k.

APAC TRADE

• APAC stocks took impetus from the fresh record levels on Wall Street amid dovish tailwinds.
• ASX 200 printed a fresh record high as the top-weighted financial industry led the gains seen in most sectors.
• Nikkei 225 initially approached just shy of 40,000 but with gains capped after disappointing Household Spending.
• Hang Seng and Shanghai Comp. were somewhat varied as the Hong Kong benchmark conformed to the upbeat mood, while the mainland was less decisive amid lingering tech-related frictions between the US and China.

BoJ

• BoJ considers new quantitative monetary policy framework, via JiJi; would show the outlook of JGB buying amount.
• BoJ is to reportedly review Yield Curve Control as it considers new quantitative policy framework, according to JiJi.
• BoJ leaning towards ending negative rates in March and key determinant will be outcome of March 13 wage talks, via Reuters citing sources.
• BoJ is reportedly mulling buying nearly 6tln of JGBs under new quantitative policy framework, according to JiJi.

NOTABLE ASIA-PAC HEADLINES

• China NPC Standing Committee said it will formulate a financial stability law, a law on rural collective economic organizations, a value-added tax law and a private sector promotion law, while it will revise the mineral resources law, enterprise bankruptcy law, unfair competition law, accounting law, public bidding law, the statistics law, and civil aviation law. Elsewhere, Hong Kong's government issued a draft of a new national security law which includes state secrets, espionage, and foreign interference, according to Reuters.
• US lawmakers advanced a bill on Thursday that would ban TikTok in the US unless it cuts ties with its Chinese parent ByteDance within six months, while House Majority Leader Scalise said the House will vote next week on the TikTok crackdown.
• Three US Senators urge President Biden to hike tariffs on Chinese imported autos saying they could endanger American automotive manufacturing, according to a letter.
• China is raising a USD 27bln chip fund in order to counter mounting US restrictions, according to Bloomberg

DATA RECAP

• Japanese All Household Spending MM (Jan) -2.1% vs. Exp. 0.4% (Prev. -0.9%); All Household Spending YY (Jan) -6.3% vs. Exp. -4.3% (Prev. -2.5%)