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Writer's pictureSimon Charles Hooper

18/02/22 Briefing

The S&P 500 futures trade 27 points, or 0.6%, above fair value as the latest geopolitical headlines offer some reprieve for the market. The benchmark index enters the session down 0.9% for the week after a steep decline yesterday.

Investors are cautiously optimistic on the Russia-Ukraine situation after Secretary of State Blinken agreed to meet with Russia's foreign minister next week if there's no invasion, according to The New York Times. Russia also rebuffed claims that it was planning to invade.

The reaction outside the futures market has been

muted. The 10-yr yield is unchanged at 1.97%, and the 2-yr yield is up two basis points to 1.49%. Gold futures have edged lower from the $1900 level ($1893.80, -8.20, -0.4%). The U.S. Dollar Index is little changed at 95.81.

WTI crude futures, however, are now trading below $90 per barrel ($89.49, -2.26, -2.5%) amid the potential for a nuclear agreement with Iran.

On the earnings front, investors continue to see disappointing reactions in growth stocks, specifically Roku (ROKU 107.10, -37.61, -26.0%), DraftKings (DKNG 18.25, -3.81, -17.3%), and Redfin (RDFN 20.60, -8.04, -28.1%). To be fair, Roku missed revenue estimates and issued downside Q1 revenue guidance.

Separately, today's data will include Existing Home Sales for January (Briefing.comconsensus 6.08 million) and the Conference Board's Leading Economic Index for January (Briefing.comconsensus 0.2%) at 10:00 a.m. ET.

In U.S. Corporate news:

  • Roku (ROKU 107.10, -37.61): -26.0% after missing revenue estimates, guiding Q1 revenue below consensus, and saying it expects TV unit sales to remain below pre-COVID levels this year due to supply chain issues.

  • DraftKings (DKNG 18.25, -3.81): -17.3% despite beating revenue estimates and raising its FY22 revenue guidance.

  • Redfin (RDFN 20.60, -8.04): -28.1% despite beating top and bottom-line estimates and guiding Q1 revenue above consensus.

  • DuPont (DD 82.99, +3.26): +4.1% after agreeing to sell the majority of its Mobility & Materials business to Celanese (CE 158.00, +5.07, +3.3%) for $11 billion in cash.

  • Deere (DE 382.00, +1.47): +0.4% after beating top and bottom-line estimates and raising its FY22 net income guidance.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the week on a mostly lower note. Japan's Nikkei: -0.4% (-2.1% for the week) Hong Kong's Hang Seng: -1.9% (-2.3% for the week) China's Shanghai Composite: +0.7% (+0.8% for the week) India's Sensex: -0.1% (-0.6% for the week) South Korea's Kospi: UNCH (-0.1% for the week) Australia's ASX All Ordinaries: -1.0% (-0.2% for the week).

    • In economic data:

      • Japan's January National CPI 0.5% yr/yr (last 0.8%) and National Core CPI 0.2% yr/yr (expected 0.3%; last 0.5%)

      • New Zealand's Q4 Input PPI 1.1% qtr/qtr (last 1.6%) and Output PPI 1.4% qtr/qtr (last 1.8%)


  • In news:

    • Japan's Finance Minister Suzuki said that recent inflation has been mostly driven by higher energy costs and that inflation without higher wages will negatively impact consumption.

    • South Korea's Vice Finance Minister Lee said that the risk of higher inflation is spreading and that a difficult situation will persist this month.

    • The conservative challenger for South Korea's president has increased his lead over the incumbent to seven percentage points, according to Gallup.



  • Major European indices trade in mixed fashion. STOXX Europe 600: +0.1% (-1.0% week-to-date) Germany's DAX: -0.1% (-1.1% week-to-date) U.K.'s FTSE 100: +0.4% (-1.3% week-to-date) France's CAC 40: +0.4% (-0.5% week-to-date) Italy's FTSE MIB: +0.5% (-0.7% week-to-date) Spain's IBEX 35: -0.1% (-1.5% week-to-date).

    • In economic data:

      • Ukraine's defense minister told the Kyiv Independent that the risk of an "all-out" invasion by Russia is "not high," adding that Ukrainians are safe everywhere in the country except for the war zone in Donbas.

      • European Central Bank policymaker Kazimir voiced support for ending quantitative easing in August with a flexible timetable for rate hikes.

      • The French government will inject EUR2.1 bln into utility provider EDF.



U.S. equity futures:

  • S&P 500 Futures: +22 @ 4,403

  • DJIA Futures: +134 @ 34,446

  • Nasdaq 100 Futures: +100 @ 14,272

Overseas:

  • Europe: DAX -0.1%, FTSE +0.4%, CAC +0.4%

  • Asia: Nikkei -0.4%, Hang Seng -1.9%, Shanghai Composite +0.7%

Commodities:

  • Crude Oil -2.09 @ 89.67

  • Nat Gas +0.026 @ 4.512

  • Gold -7.60 @ 1894.40

  • Silver -0.012 @ 23.863

  • Copper +0.0195 @ 4.5425

U.S. Summary:

  • Earnings/Guidance (Full Earnings Calendar):

    • Aerojet Rocketdyne (AJRD) misses by $0.07, beats on revs

    • Air Lease (AL) beats by $0.52, beats on revs

    • Alliant Energy (LNT) misses by $0.01, beats on revs; guides FY22EPS in-line

    • Ameren (AEE) misses by $0.01, beats on revs; guides FY22EPS in-line

    • AMN Healthcare (AMN) beats by $0.33, beats on revs; guides Q1 revs above consensus

    • Appian (APPN) beats by $0.07, beats on revs; guides Q1 EPS above consensus, revs above consensus; guides FY22EPS above consensus, revs above consensus

    • AptarGroup (ATR) beats by $0.02, beats on revs; guides Q1 EPS in-line

    • Arconic (ARNC) reports Q4 (Dec) results, beats on revs; guides FY22revs above consensus

    • Aspen Aerogels (ASPN) reports Q4 results, misses on revs; guides FY22revs in-line

    • Barnes Group (B) beats by $0.09, reports revs in-line; guides FY22EPS in-line

    • BJ Restaurants (BJRI) misses by $0.17, misses on revs, comps +45.6%

    • Bloomin' Brands (BLMN) beats by $0.08, beats on revs; guides Q1 EPS in-line, revs in-line

    • Cambium Networks (CMBM) beats by $0.01, beats on revs; guides Q1 EPS below consensus, revs in-line; guides FY22EPS above consensus, revs above consensus

    • Casella Waste (CWST) beats by $0.03, beats on revs; guides FY22revs above consensus

    • Chuy's (CHUY) beats by $0.09, reports revs in-line; comps +20.8% yr/yr, -0.7% compared to 2019

    • Cognex (CGNX) beats by $0.08, beats on revs; guides Q1 revs above consensus

    • Con Edison (ED) beats by $0.14, beats on revs; guides FY22midpoint of EPS above consensus

    • Cronos Group (CRON) beats by CAD 0.34, misses on revs

    • Deere (DE) beats by $0.66, beats on revs; raises FY22net income guidance

    • Diamondrock Hospitality (DRH) reports FFO in-line, beats on revs

    • Digital Realty Trust (DLR) beats by $0.01, reports revs in-line; guides FY22FFO in-line

    • Doma (DOMA) reports Q4 (Dec) results, beats on revs

    • DraftKings (DKNG) beats on revs; raises FY22revenue guidance

    • Dropbox (DBX) beats by $0.05, beats on revs; co to repurchase an additional $1.2 bln of its Class A common stock; guides 1Q22 and FY22revs below consensus

    • Exelixis (EXEL) beats by $0.19, beats on revs; guides FY22revs in-line

    • Globant (GLOB) beats by $0.05, beats on revs; guides Q1 EPS above consensus, revs above consensus; guides FY22EPS above consensus, revs above consensus

    • Globus Medical (GMED) beats by $0.02, beats on revs; guides FY22EPS below consensus, revs below consensus

    • Golden Entertainment (GDEN) misses by $0.07, beats on revs

    • GTY Technology (GTYH) misses by $0.31, reports revs in-line; sees Q1 in-line consensus

    • Hannon Armstrong Sust. Infr. (HASI) reports Q4 (Dec) results, beats on revs; expects FY24EPS of $2.40 at the midpoint; increases quarterly dividend 7% to $0.375/share

    • Instructure (INST) reports Q4 results, beats on revs, guides Q1 and FY22revs in-line

    • Intel (INTC) provides upside FY22guidance at investor meeting; outlines longer term growth model

    • Keysight (KEYS) beats by $0.10, beats on revs; guides Q2 EPS in-line, revs in-line

    • Ligand Pharma (LGND) beats by $0.43, beats on revs; guides FY22revs below consensus

    • Livent (LTHM) beats by $0.01, beats on revs; guides FY22revs above consensus

    • LTC Properties (LTC) reports Q4 (Dec) results, beats on revs

    • Matson (MATX) beats by $2.58, beats on revs

    • Mercer Intl (MERC) beats by $0.25, reports revs in-line

    • MSA Safety (MSA) beats by $0.43, beats on revs

    • NatWest Group plc (NWG) reports FY21results

    • nLIGHT (LASR) misses by $0.04, misses on revs; guides Q1 revs below consensus

    • Orion Engineered Carbons (OEC) misses by $0.18, reports revs in-line; guides FY22EPS below consensus

    • Park Hotels & Resorts (PK) beats by $0.03, beats on revs; not providing guidance

    • Prothena (PRTA) misses by $0.27, misses on revs

    • Quidel (QDEL) beats by $1.97, beats on revs

    • Realogy (RLGY) beats by $0.04, beats on revs

    • Redfin (RDFN) beats by $0.04, beats on revs; guides Q1 revs above consensus

    • Ritchie Bros. (RBA) misses by $0.08, misses on revs

    • Roku (ROKU) beats by $0.13, misses on revs, added 3.7 mln active accounts from last quarter; guides Q1 revs below consensus, expects TV unit sales to remain below pre-COVID levels due to supply chain issues

    • RR Donnelley & Sons (RRD) misses by $0.01, reports revs in-line

    • Shake Shack (SHAK) beats by $0.06, reports revs in-line, comps of +20.8%; guides Q1 revs below consensus, comps of high-single digits to low-double digits percentage

    • ShockWave Medical (SWAV) beats by $0.23, beats on revs; guides FY22revs above consensus

    • Sunrun (RUN) misses by $0.04, beats on revs

    • Takeda Pharma (TAK): Alofisel shows clinical remission rate at six-months in the real-world INSPIRE study interim analysis consistent with the pivotal clinical ADMIRE-CD Study1,2

    • Tanger Factory (SKT) beats by $0.04, beats on revs; guides FY21FFO above consensus

    • US Cellular (USM) beats by $0.14, reports revs in-line

    • Ventas (VTR) beats by $0.02, beats on revs; guides Q1 FFO above consensus

    • Virgin Galactic (SPCE) announced effective immediately, Chamath Palihapitiya will step down as chairman and as a member of its Board of Directors to focus on other public company board commitments

    • Washington REIT (WRE) misses by $0.01, misses on revs; guides FY22FFO in-line

    • Yamana Gold (AUY) beats by $0.02, misses on revs; provides 2022-2024 production guidance


  • General News:

    • Gunfire between Russian-backed separatists and Ukraine residents might be used as a justification for invasion by Russia. Secretary of State Anthony Blinken agreed to meet with Russian foreign minister Sergey Lavrov next week as long as there is no invasion, according to the New York Times

    • Senator Joe Manchin (D-WV) is "undecided" regarding Fed vice chair for supervision nominee Sarah Bloom Raskin, according to Bloomberg

    • Senate passes bill to fund government through March 11; President Biden will sign it today

    • Antitrust bills get support from trade group, according to Reuters

    • Abbott Labs (ABT) initiates voluntary recall of powder formulas manufactured at Sturgis facility

    • ACM Research (ACMR) announces purchase orders for 13 Ultra ECP map and 8 Ultra ECP ap copper plating systems, of which 10 tools are repeat orders from a top-tier Chinese foundry

    • Activision (ATVI): Regulators expanding investigation into Activision workplace issues, according to the Wall Street Journal

    • American Homes 4 Rent (AMH) increases quarterly dividend to $0.18/share from $0.10/share

    • Aspen Aerogels (ASPN) announces $150 mln investment from Koch Strategic Platforms

    • Aspen Aerogels (ASPN) plans to construct an advanced manufacturing facility at Bulloch County's Southern Gateway Commerce Park

    • Avita Medical (RCEL) announces that the United States Food and Drug Administration has reviewed and approved the premarket approval application supplement for RECELL Autologous Cell Harvesting Device

    • Bayer AG (BAYRY) announces results from Phase III ARASENS trial of NUBEQA

    • Bayer (BAYRY) reports Darolutamide plus androgen deprivation therapy and docetaxel significantly increases overall survival in patients with metastatic hormone-sensitive prostate cancer

    • BioMarin Pharm (BMRN) provides update on gene therapy programs; received additional request from the FDA for information needed to resolve hold on PHEARLESS Phase 1/2 study

    • BlackRock (BLK) will support fossil fuels after Texas threatened to to drop pension plans at the company, according to Reuters

    • Builders Firstsource (BLDR) has authorized the Company to repurchase $1 bln of its common shares

    • Cue Health (HLTH) and Cardinal Health (CAH) partner to expand distribution of Cue's COVID-19 tests

    • Encore Wire (WIRE) authorizes repurchase of up to 2.0 mln common shares

    • Ericsson (ERIC): US ITC launches investigation based on ERIC's patent complaint against Apple (AAPL)

    • Fortive (FTV) has authorized a share repurchase program under which Fortive may purchase up to 20 mln shares of Fortive's common stock

    • Full House Resorts (FLL) promotes John Ferrucci to COO

    • GlaxoSmithKline (GSK) voluntarily pauses enrolment on phase III RSV maternal vaccine candidate program

    • GT Biopharma (GTBP) appoints Manu Ohri as CFO effective immediately

    • Louisiana-Pacific (LPX) announced that its Board of Directors has declared an increased quarterly cash dividend to common shareholders of $0.22/share, up 22% from its previous $0.18/share quarterly dividend

    • Matador Resources Company (MTDR) Reports 20% Annual Increase in Total Proved Reserves, Including 56% Annual Increase in Proved Developed Reserves

    • M/I Homes (MHO) approves $100 mln increase to existing share repurchase authorization

    • NextEra Energy (NEE) raises quarterly dividend to $0.425 from $0.385/share

    • Northrop Grumman (NOC) awarded $250 mln Navy contract

    • Novartis' (NVS) Sandoz launches generic lenalidomide in 19 countries across Europe

    • Nuvei Corporation (NVEI) promotes Yuval Ziv to President

    • O-I Glass (OI) subsidiary Paddock Enterprises receives approval of disclosure statement and solicitation process from US bankruptcy court

    • Old National Bancorp (ONB) announces $200 mln stock repurchase authorization

    • Parsons (PSN) has entered into a collaborative agreement with Battelle Memorial Institute to combine Parsons' unique per- and polyfluoroalkyl substances investigation approach and tools with Battelle's patented PFAS analytical and site investigation tools and technologies

    • Regeneron (REGN) and Sanofi (SNY) provide update on ongoing Dupixent (dupilumab) chronic spontaneous urticaria Phase 3 Program

    • Sherwin-Williams (SHW) appoints Heidi G. Petz as COO, effective March 1

    • Xos (XOS) has entered into dealership agreements with MHC Xos

    • Zynex (ZYXI) anticipates no change in revenue related to switch in United Health Care prescription coverage


  • M&A:

    • Celanese (CE) acquires majority of DuPont's Mobility & Materials Business for $11 bln

    • Pilgrim's Pride (PPC): JBS SA withdraws proposal to acquire shares of Pilgrim's Pride, according to Reuters

    • Sandstorm Gold (SAND) signs letter of intent with Royalty North for sale of certain non-royalty and non-stream assets

    • Volkswagan (VWAGY) in discussions with Huawei to purchase key unit, according to Manager Magazine


  • Syndicate:

    • AtriCure (ATRC) files mixed securities shelf offering

    • AutoNation (AN) files mixed securities shelf offering

    • CNA Financial (CNA) files mixed securities shelf offering

    • ObsEva (OBSV) files for 7,344,017 share common stock offering by selling shareholders


  • IPOs:

    • Expected to Price:

      • No IPOs expected to price.



Gapping Up/Down

  • Gapping up:

    • CGNX +11.9%, SWAV +11.3%, APPN +11.1%, LTHM+10.5%, DLR +8.6%, ASPN +8%, QDEL +6.7%, HASI+6.1%, CNA +5.7%, AL +5.3%, AJRD +4.6%, RCEL+4%, AMN +4%, CE +3.8%, EFC +3.5%, FTV +3.2%, OBSV +3%, DD +2.8%, XOS +2.6%, MATX +2.4%, EXEL +2.3%, ATR +2.1%, CWST +2%, GLOB +1.9%, TSLX +1.7%, ONB +1.6%, HLTH +1.5%, NVS +1%, MHO +0.9%, SAND +0.9%, RLGY +0.8%, AAPL +0.7%, MPW +0.6%, DE +0.6%


  • Gapping down:

    • RDFN -26%, ROKU -24.9%, PPC -18.5%, DOMA-15.1%, SHAK -13.2%, DBX -6%, BJRI -5.3%, LASR-4.9%, MERC -3.7%, GMED -2.9%, SKT -2.8%, PK-2.7%, KEYS -2.7%, TDS -2.4%, BMRN -2.3%, NLOK-1.7%, OEC -1.6%, CHUY -1.6%, WIRE -1.4%, RUN-1.4%, NWG -1.4%, INTC -0.9%


Analyst Research (see Upgrades/Downgradescalendarfor full list):

  • Upgrades

    • Altice USA (ATUS) upgraded to Neutral from Underperform at Exane BNP Paribas; tgt $11

    • Cognex (CGNX) upgraded to Neutral from Underweight at JP Morgan; tgt lowered to $68

    • Fastly (FSLY) upgraded to Strong Buy from Outperform at Raymond James; tgt lowered to $35

    • Iridium Communications (IRDM) upgraded to Strong Buy from Outperform at Raymond James; tgt raised to $51

    • J.B. Hunt Transport (JBHT) upgraded to Neutral from Underweight at JP Morgan; tgt raised to $203

    • KE Holdings (BEKE) upgraded to Buy from Neutral at Goldman; tgt raised to $26.30

    • Marathon Oil (MRO) upgraded to Sector Outperform from Sector Perform at Scotiabank; tgt $28

    • Masimo (MASI) upgraded to Buy from Hold at Needham; tgt $205

    • Nutrien (NTR) upgraded to Neutral from Underweight at Atlantic Equities; tgt raised to $79

    • Pilgrim's Pride (PPC) upgraded to Overweight from Equal-Weight at Stephens; tgt raised to $35

    • Sandstorm Gold (SAND) upgraded to Sector Perform from Underperform at RBC Capital Mkts; tgt raised to $7

    • Werner Enterprises (WERN) upgraded to Neutral from Underweight at JP Morgan; tgt raised to $47


  • Downgrades:

    • Agora (API) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $11

    • Altice USA (ATUS) downgraded to Neutral from Buy at MoffettNathanson; tgt $15

    • Bilibili (BILI) downgraded to Neutral from Buy at Goldman; tgt lowered to $43

    • Brady (BRC) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $52

    • Cooper-Standard (CPS) downgraded to Hold from Buy at The Benchmark Company

    • Heartland Express (HTLD) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $16

    • Redfin (RDFN) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $23

    • Roku (ROKU) downgraded to Sell from Hold at Pivotal Research Group; tgt lowered to $95

    • Tencent Music (TME) downgraded to Sell from Neutral at Goldman; tgt lowered to $5.70

    • Vontier (VNT) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $29

    • Zhihu (ZH) downgraded to Neutral from Buy at Goldman; tgt lowered to $5.40


  • Others:

    • AdTheorent (ADTH) initiated with a Buy at BofA Securities; tgt $10

    • Bank of Montreal (BMO) initiated with a Buy at Stifel

    • Bank of Nova Scotia (BNS) initiated with a Buy at Stifel

    • Bridgetown 2 Holdings Limited (BTNB) initiated with a Buy at The Benchmark Company; tgt $17

    • Caribou Biosciences (CRBU) initiated with an Outperform at RBC Capital Mkts; tgt $22

    • CIBC (CM) initiated with a Hold at Stifel; tgt $172

    • Graphite Bio (GRPH) initiated with a Sector Perform at RBC Capital Mkts; tgt $11

    • Intellia Therapeutics (NTLA) initiated with an Outperform at William Blair; tgt $144

    • Iris Energy (IREN) initiated with an Overweight at Cantor Fitzgerald; tgt $25

    • Oramed Pharmaceuticals (ORMP) initiated with an Overweight at Cantor Fitzgerald; tgt $20

    • PagSeguro Digital (PAGS) assumed with an In-line at Evercore ISI; tgt lowered to $19

    • Royal Bank of Canada (RY) initiated with a Hold at Stifel

    • Sabra Health Care REIT (SBRA) initiated with a Sector Weight at KeyBanc Capital Markets

    • SentinelOne (S) initiated with a Buy at DA Davidson; tgt $57

    • StoneCo (STNE) assumed with an In-line at Evercore ISI; tgt lowered to $14

    • Toronto-Dominion Bank (TD) initiated with a Hold at Stifel

    • Verve Therapeutics (VERV) initiated with an Outperform at RBC Capital Mkts; tgt $42


Upcoming Events:

  • Econ Data:

    • 10:00 ET: Existing Home Sales for Jan. (Briefing.comConsensus 6.08M; Prior 6.18M)

    • 10:00 ET: Leading Economic Index for Jan. (Briefing.comConsensus 0.2%; Prior 0.8%)


  • Earnings:

    • Monday (Feb 14)

      • Morning: KELYA STNG THS

      • Afternoon: AAP AMKR ANET CAR NTB CLR MEDP OMCL OTTR PRI SCI SRC TNET VNO ZD


  • Tuesday (Feb 15)

    • Morning: ALLE ARCH ABG BKI BWA CEVA ECL FIS FELE HSIC HUN IPGP IQV KRNT LDOS LGIH MAR QSR SABR TRP TRTN WCC ZTS

    • Afternoon: ACCO ADPT ABNB AKAM AYX ANGI AMK ATRC CF CINF CRK DENN DVN WIRE ESMT GXO IOSP IAC INVH LZB LSCC MASI MRC NMIH PACB QTWO REZI RBLX SEDG TX TOST UPST VIAC WELL WH WYNN ZI


  • Wednesday (Feb 16)

    • Morning: ALKS ALE AIMC AMCX ADI GOLD BCOR BPMC FUN CRL CHH CROX DRVN DNB DAVA GRMN GNRC HLT IS KHC NUS OC R SHOP SITE SAH SUN TTD VMC WAB WING WIX

    • Afternoon: TXG ALB ALSN ATUS AIG AWK AMPL AM AR AMAT APP ATCO SAM BFAM BCOV CAKE CSCO CDE CYH COMP CNDT CPRT CONE DASH EIG ET EQIX EVER ES FARO FSLY FSR FCPT GLBE LOPE HST HPP H INFN KGC KNBE MGY MRO MTTR NTR NVDA OIS OCDX PLMR PEGA PXD QS ROIC RGLD RPT STAG SNPS TRIP TROX TRUP TYL UFPI VMI VECO WCN


  • Thursday (Feb 17)

    • Morning: AAWW AN BAX BRC CBZ CIM COMM EPAM FVRR FOCS GEL THRM GPC GEO GPK HIMX IDA INSM ITGR IDCC IRDM IRWD LKQ MTRN MD NICE DNOW OGN PLTR PGTI POOL POR RCM RS RGEN SAFM SEE SWI SO SYNH TSEM TPH TRN USFD VC VNT WMT WST YETI

    • Afternoon: AL LNT AEE AEL AMN APPN ATR BJRI CMBM CWST CHUY CGNX ED DRH DLR DOMA DBX EXEL GLOB GMED KEYS KNSL LGND LTHM LTC MATX MERC LASR OEC PK QDEL RLGY RDFN RBA ROKU SHAK SWAV TSLX RUN SKT USM VTR WRE AUY


  • Friday (Feb 18)

    • Morning: ABR B BLMN DE PPL RRD




Asia & Europe detail:

Asia: Nikkei -0.4%, Hang Seng -1.9%, Shanghai Composite +0.7%

Equity indices in the Asia-Pacific region ended the week on a mostly lower note. Japan's Finance Minister Suzuki said that recent inflation has been mostly driven by higher energy costs and that inflation without higher wages will negatively impact consumption. South Korea's Vice Finance Minister Lee said that the risk of higher inflation is spreading and that a difficult situation will persist this month. The conservative challenger for South Korea's president has increased his lead over the incumbent to seven percentage points, according to Gallup.

  • In economic data:

    • Japan's January National CPI 0.5% yr/yr (last 0.8%) and National Core CPI 0.2% yr/yr (expected 0.3%; last 0.5%)

    • New Zealand's Q4 Input PPI 1.1% qtr/qtr (last 1.6%) and Output PPI 1.4% qtr/qtr (last 1.8%)


---Equity Markets---

  • Japan's Nikkei: -0.4% (-2.1% for the week)

  • Hong Kong's Hang Seng: -1.9% (-2.3% for the week)

  • China's Shanghai Composite: +0.7% (+0.8% for the week)

  • India's Sensex: -0.1% (-0.6% for the week)

  • South Korea's Kospi: UNCH (-0.1% for the week)

  • Australia's ASX All Ordinaries: -1.0% (-0.2% for the week)

---FX---

  • USD/JPY: +0.2% to 115.17

  • USD/CNH: -0.2% to 6.3232

  • USD/INR: -0.5% to 74.66

Europe: DAX -0.1%, FTSE +0.4%, CAC +0.4%

Major European indices trade in mixed fashion. Ukraine's defense minister told the Kyiv Independent that the risk of an "all-out" invasion by Russia is "not high," adding that Ukrainians are safe everywhere in the country except for the war zone in Donbas. European Central Bank policymaker Kazimir voiced support for ending quantitative easing in August with a flexible timetable for rate hikes. The French government will inject EUR2.1 bln into utility provider EDF.

  • In economic data:

    • Eurozone's December Current Account surplus EUR22.60 bln (last surplus of EUR23.60 bln) and December Construction Output -4.0% m/m (last -0.2%)

    • U.K.'s January Retail Sales 1.9% m/m (expected 1.0%; last -4.0%); 9.1% yr/yr (expected 8.7%; last -1.7%). January Core Retail Sales 1.7% m/m (expected 1.2%; last -3.9%); 7.2% yr/yr (expected 7.9%; last -3.8%)

    • France's January CPI 0.3% m/m, as expected (last 0.2%); 2.9% yr/yr, as expected (last 2.8%). Q4 Unemployment Rate 7.4% (expected 7.8%; last 8.0%)


---Equity Markets---

  • STOXX Europe 600: +0.1% (-1.0% week-to-date)

  • Germany's DAX: -0.1% (-1.1% week-to-date)

  • U.K.'s FTSE 100: +0.4% (-1.3% week-to-date)

  • France's CAC 40: +0.4% (-0.5% week-to-date)

  • Italy's FTSE MIB: +0.5% (-0.7% week-to-date)

  • Spain's IBEX 35: -0.1% (-1.5% week-to-date)

---FX---

  • EUR/USD: UNCH at 1.1362

  • GBP/USD: UNCH at 1.3615

  • USD/CHF: +0.1% to 0.9205



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