• European equities are lower, dragged down by losses in the semi-conductors; US equity futures are mixed
• Dollar is flat, JPY continues its recent advances, helped by the regions GDP figures
• Bonds are contained within relatively tight ranges; ECB’s Kazimir sparked a modest hawkish reaction
• Crude is modestly firmer; XAU flat and base metals mixed
• Looking ahead, US Employment Trends, Japanese Corporate Goods Price, NY Fed Survey of Consumer Expectations, Supply from the US, Earnings from Oracle.

EUROPEAN TRADE

EQUITIES

• European bourses, Stoxx600 (-0.4%), are entirely in the red, with the Eurostoxx50 (-0.7%) hampered by significant losses in chip-maker ASML (-3.3%).
• European sectors hold a strong negative tilt; Real Estate is propped up by Leg Immobilien (+5.5%), post-earnings; Tech is weighed on by negative sentiment permeating within the semi-conductor industry.
• US equity futures (ES -0.1%, NQ -0.1%, RTY +0.1%) are mixed and are trading on either side of the unchanged mark; earlier, the NQ posted heftier losses, hampered by Nvidia (+1.6% pre-market), which was initially lower by as much as 2% in the pre-market, though has since reversed course. Newsflow around NVDA includes a lawsuit regarding NeMo AI and a WSJ profile article.
• Click here and here for the sessions European pre-market equity newsflow, including earnings.
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FX

• DXY is flat but the USD is showing varied performance vs. peers. 102.63 low print for the session is above Friday's NFP-induced trough at 102.35. Conviction on USD-related moves likely to be low today given CPI on Tuesday.
• Steady trade for EUR/USD in quiet newsflow within tight parameters of 1.0933-47 and respecting Friday's 1.0918-81 range.
• JPY's recent strong run vs. the USD has continued with the currency receiving a boost from GDP figures which showed Japan did not enter a technical recession at the end of last year. USD/JPY has been as low as 146.54 but is yet to crack Friday's trough at 146.48.
• Antipodeans are both softer vs. the USD but AUD more so after being hampered by Iron ore futures falling over 7% in Singapore. AUD/USD is just about maintaining 0.66 status.
• NOK is weaker in the wake of softer-than-expected Norwegian inflation metrics but well within recent ranges vs. the EUR.
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FIXED INCOME

• Overall trade for Bunds have been contained; benchmarks derived a modest bid alongside a dip in broader risk sentiment, with the 'haven' move taking Bunds to a 134.04 peak before paring. A move which stopped shy of Friday's 134.15 best. Hawkish sentiment from ECB's Kazimir sparked modest pressure in the Bunds, though ultimately proved fleeting as his remarks echoed recent sources which favour a June cut.
• UST price action is following EGBs but with the magnitude of moves even more limited; currently trading towards the mid-point of narrow 111-23 to 111-31 bounds. Fed blackout underway and no Tier 1 data due today as we await US CPI on Tuesday and 3yr supply this evening.
• Gilts once again the relative outperformers, but directionally in-fitting with peers. High of 99.99 is just a handful of ticks shy of last week's 100.03 peak, which also marks the contract high. As above, the docket ahead remains light.
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COMMODITIES

• Crude is modestly firmer, having spent the majority of the European morning flat despite ongoing geopolitical tensions and after reports that Saudi is to reduce Arab heavy crude supply next month, due to oil field maintenance; Brent holds just shy of USD 82.50/bbl.
• Precious metals are holding mild upward biases amid a steady/caged Dollar, with newsflow light this morning and the calendar sparse; XAU sits in a USD 2,175-2,189.12/oz range.
• Base metals are flat/mixed amid a steady Dollar and little in terms of fresh fundamental newsflow to drive price action. That being said, Iron ore slumped in APAC hours despite a clear driver, but with some suggesting sub-par stimulus for the Chinese Real Estate market.
• Saudi Arabia plans to reduce Arab heavy crude supply to term customers in Asia next month due to oil field maintenance, according to Reuters sources.
• Saudi Aramco CEO said FY saw lower crude oil prices and lower volumes sold but noted that 2023 saw global oil demand reach record levels despite geopolitical tensions and they expect the global oil market to remain healthy this year, while he considers supply and demand to be in reasonable balance. Saudi Aramco CEO said they are ready and able to react to market opportunities and can increase maximum capacity if needed. Furthermore, they are interested in LNG in the US and are looking at further opportunities to invest in China, as well as see significant growth in oil demand in China and Asia, according to Reuters.
• Qatar set April marine crude OSP at Oman/Dubai + USD 0.25/bbl and land crude OSP at Oman/Dubai + USD 0.05/bbl, according to a pricing document cited by Reuters.
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NOTABLE EUROPEAN HEADLINES

• ECB's Kazimir saw the ECB should wait until June with the first rate cut; rushing a move is not smart or beneficial. Upside risks to inflation are "alive and kicking". Need more hard evidence and only in June will confidence threshold be reached. Discussions on easing should already start, ECB will use weeks ahead of that. Prefers "smooth and steady" cycle of policy easing.
• UK PM Sunak is reportedly mulling curbs to welfare spending to fund the government’s ambition of further tax reductions, according to The Sunday Times.
• Exit polls suggest Portugal’s centre-right coalition is on course to narrowly defeat the incumbent socialists but fall well short of a majority in Sunday’s closely fought snap general election, according to The Guardian. It was later reported that Portugal's socialist leader Pedro Nuno Santos conceded defeat and the leader of the centre-right democratic alliance Luis Montenegro claimed victory.
• Polish Central Bank projections: Scenario of extended anti-inflation measures, sees 2024 CPI at 3.0%, 2025 at 3.4% and 2026 at 2.9%; If not extended then sees 2024 CPI at 5.7%, 2025 at 3.5% and 2026 at 2.7%.
• UBS expects the BoE to start cutting rates in August vs May expected earlier.

DATA RECAP

• Norwegian Consumer Price Index MM (Feb) 0.2% vs. Exp. 0.5% (Prev. 0.1%); Core Inflation YY (Feb) 4.9% vs. Exp. 5.3% (Prev. 5.3%); Core Inflation MM (Feb) 0.4% vs. Exp. 0.7%; Consumer Price Index YY (Feb) 4.5% vs. Exp. 4.9% (Prev. 4.7%). Sparked slight upside in EUR/NOK, before eventually paring to pre-release levels.
• Norwegian Producer Price Index YY (Feb) -12.6% (Prev. -12.9%)
• Turkish Unemployment Rate (%) (Jan) 9.10% (Prev. 8.80%); Labor Underutilization rate (Jan) 26.50% (Prev. 24.70%); Labor Force Participation (%) (Jan) 53.90% (Prev. 53.50%)
• Spanish Retail Sales YY (Jan) 0.3% (Prev. 3.1%)
• Czech CPI YY (Feb) 2.0% vs. Exp. 2.2% (Prev. 2.3%); CPI MM (Feb) 0.3% vs. Exp. 0.4% (Prev. 1.5%)

NOTABLE US HEADLINES

• US Senate passed a USD 460bln government funding bill late on Friday which President Biden signed to avert a partial government shutdown and fund some federal agencies through the end of September, according to WSJ.
• EQT (EQT) and Equitrans Midstream (ETRN) midstream to combine in a big natural-gas deal, where EQT will buyback its old unit for approx. USD 5.5bln or USD 12.50/shr, via WSJ

GEOPOLITICS

MIDDLE EAST

• US President Biden said it is always possible that there could be a Gaza ceasefire before Ramadan and he was not giving up, while he said he believes Israeli PM Netanyahu is “hurting Israel more than helping Israel” with his approach to the war against Hamas in Gaza and must pay more attention to the innocent lives being lost. Furthermore, Biden warned that an assault on Rafah is a “red line” but added that he is not going to cut off weapons to Israel and didn’t specify what the "red line" meant, in an MSNBC interview.
• Israeli PM Netanyahu said he intends to push ahead with an invasion of Rafah and insisted his priority is to prevent another terror attack like the October 7th Hamas raid, according to POLITICO.
• Israel conducted a raid targeting agricultural land near the Egyptian-Palestinian border in the Al Salam neighbourhood in Rafah, according to a correspondent cited by Al Jazeera.
• Five civilians were killed and nine were injured in an Israeli strike on a border village in southern Lebanon, according to Reuters.
• US Central Command said US Army vessel General Frank S. Besson departed for the eastern Mediterranean to provide humanitarian aid to Gaza by sea and is carrying the first equipment to establish a temporary pier vital for humanitarian supplies, according to Reuters.
• US Central Command said US Navy vessels and aircraft along with multiple coalition navy ships and aircraft shot down 15 one-way attack UAVs, while it was later reported that the US military downed a total of at least 28 uncrewed aerial vehicles in the Red Sea on Saturday, according to Reuters.
• UK Defence Minister said HMS Richmond shot down two drones on Friday night to repel a Houthi attack, while it was also reported that the French military destroyed four combat drones heading towards the European naval mission in the Gulf of Aden.
• "Israeli reports: Hamas deputy head Marwan Issa killed in shelling of Nuseirat camp", according to Sky News Arabia.

OTHER

• German Foreign Minister Baerbock is open to a missile swap with the UK to arm Ukraine, according to dpa.
• US and Japan are considering defence cooperation which could help Ukraine with the two sides looking at an arms arrangement ahead of a summit next month, according to Yomiuri.
• Iran, Russia and China are to hold joint naval drills on March 12th, via MEHR.

CRYPTO

• Bitcoin continues to climb with the coin firmly above USD 71k, with Ethereum soaring past 4k.
• LSE says will confirms it will accept applications for the admission of Bitcoin (BTC) and Ethereum (ETH) crypto ETNs in Q2 2024.
• Indian cryptocurrency investment platform Mudrex is now offering US spot-Bitcoin (BTC) exchange-traded funds (ETFs) to Indian investors, according to CoinDesk.

APAC TRADE

• APAC stocks traded with a downbeat mood with most major indices pressured after Friday's tech-led declines in the US, while participants also digested last week's hawkish BoJ source reports and Japanese GDP.
• ASX 200 slumped in which the mining and resources industries led the declines across all sectors.
• Nikkei 225 fell beneath the 39,000 level following recent source reports that suggested a potential exit from NIRP this month and after Japan's revised Q4 GDP data missed expectations but showed the economy averted a technical recession.
• Hang Seng and Shanghai Comp. bucked the trend with the former boosted by tech strength and with Hong Kong's top market regulator seeking an expansion of the Stock Connect and lower the asset threshold for mainland China investors to CNY 100k. Conversely, the mainland was much less decisive after mixed Chinese inflation data which showed a return to acceleration in consumer prices.

NOTABLE ASIA-PAC HEADLINES

• China’s Housing Minister said they should let some property developers go bankrupt or restructure according to legal and market-based rules, while the official stated that commercial banks have approved over CNY 200bln of loans for housing projects as of February under the coordinated mechanism. The minister said home sales will improve in an orderly and forceful way and China is to improve the supply of government-supported affordable housing, while they will work with the top financial regulator to guide cities to set up the property funding coordination mechanism. Furthermore, it was also stated that the priorities this year are work on construction kick-offs, housing quality and construction security.
• China’s Human Resources Minister said overall employment pressure has not eased and structural problems remain in the jobs market, while the minister added that they are confident they can keep stable employment and that demand for jobs is high in AI and big data sectors, according to Reuters.
• Chinese regulators held meetings with financial firms to discuss China Vanke (2202 HK) debt, while regulators asked large Vanke lenders to enhance financing support and asked private debt holders to discuss maturity extension, according to Reuters sources.
• US President Biden’s administration is weighing sanctions on several tech companies including memory chipmaker ChangXin Memory Technologies, according to Bloomberg.
• Hong Kong's top market regulator called for an expansion of the Stock Connect and is seeking to lower the asset threshold for mainland China investors to CNY 100k, according to Bloomberg.
• Japan's Keidanren Chair says they are feeling greater momentum for wage hikes at this year's spring labour talks vs the prior year. High possibility the BoJ will normalise monetary policy in the near future, do not know if this will occur in March. Likelihood of achieving inflation around 2% is increasing. Prolonged monetary easing as a "shot in the arm" for the economy is not healthy.
• Japanese PM Kishida is to hold a three-way meeting between the government, labour and corporate management on March 13th to strengthen momentum for higher wages.
• BoJ makes no ETF purchases on Monday, "despite morning decline in TOPIX", Bloomberg says.
• China is said to be studying lower down payment ratio for cars, according to Chinese Premier Li cited by Bloomberg

DATA RECAP

• Chinese CPI MM (Feb) 1.0% vs. Exp. 0.7% (Prev. 0.3%); CPI YY (Feb) 0.7% vs. Exp. 0.3% (Prev. -0.8%); PPI YY (Feb) -2.7% vs. Exp. -2.5% (Prev. -2.5%)
• Japanese GDP Revised QQ (Q4) 0.1% vs. Exp. 0.3% (Prev. -0.1%); GDP Revised Annualised (Q4) 0.4% vs. Exp. 1.1% (Prev. -0.4%)