The S&P 500 futures trade just three points, or 0.1%, above fair value, although they were trading as low as 2.2% below fair value after Russia declared two territories in eastern Ukraine as independent and ordered deployment of troops into those regions.
President Biden, in response, signed an executive order prohibiting new U.S. investment in the so-called DNR or LNR regions of Ukraine. Mr. Biden also accepted a meeting 'in principle' with Russian President Putin late this week if an invasion does not occur.
Based on the resilient price action, there might be hope that diplomacy can still win out or that the market has priced in everything but a Russian invasion. Despite the Russia news, the 10-yr yield is up one basis point to 1.94%, gold futures are down 0.1% to 1898.50/ozt, and the U.S. Dollar Index is down 0.1% to 95.94. WTI crude futures, though, are up 3.1% to $93.06/bbl.
The 2-yr yield is up five basis points to 1.51% as the market continues to expect tighter monetary policy. Fed Governor Bowman (FOMC voter) said she supports a March rate hike in addition to further rate increases in the coming months if the economy evolves as expected.
In other developments, Home Depot (HD 347.00, +0.13, unch) beat top and bottom-line estimates, the UK announced the remaining domestic restrictions in England will be removed, and Houghton Mifflin Harcourt (HMHC 20.82, +2.71, +15.0%) agreed be acquired by Veritas Capital for $2.8 billion, or $21.00/share, in cash.
On the data front, investors will receive the FHFA Housing Price Index for December and the S&P Case-Shiller Home Price Index for December (Briefing.comconsensus 18.3%) at 9:00 a.m. ET, the preliminary IHS Markit Manufacturing/Services PMIs for February at 9:45 a.m. ET, and the Conference Board's Consumer Confidence Index for February (Briefing.comconsensus 109.0) at 10:00 a.m. ET.
In U.S. Corporate news:
Home Depot (HD 347.00, +0.13): UNCH despite beating top and bottom-line estimates and approving a 15% increase of its quarterly dividend to $1.90/share.
Macy's (M 27.61, +1.91): +7.4% after beating top and bottom-line estimates, guiding FY23 EPS and revenue above consensus, and authorizing a new $2.0 billion share repurchase program.
Dillard's (DDS 272.00, +28.31): +11.6% after beating revenue estimates.
Houghton Mifflin Harcourt (HMHC 20.82, +2.71): +15.0% after agreeing be acquired by Veritas Capital for $2.8 billion, or $21.00/share, in cash.
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Tuesday on a lower note. Japan's Nikkei: -1.7% Hong Kong's Hang Seng: -2.7% China's Shanghai Composite: -1.0% India's Sensex: -0.7% South Korea's Kospi: -1.4% Australia's ASX All Ordinaries: -1.1%.
In economic data:
Japan's December Corporate Services Price Index 1.2% yr/yr (last 1.1%). January BoJ Core CPI 0.8% yr/yr (last 0.9%)
South Korea's February Consumer Confidence 103.1 (last 104.4)
Hong Kong's January CPI 1.2% yr/yr (expected 1.7%; last 2.4%)
In news:
China Securities Journal continued speculating that the People's Bank of China will lower the reserve requirement ratio, though the urgency of easing has declined after a January increase in the supply of credit.
China's Finance Minister Liu said that larger tax and fee cuts will be announced this year.
The shadow board of the Reserve Bank of New Zealand called for a 25-bps rate hike at the upcoming meeting and substantial tightening during the next year.
Major European indices trade just above their flat lines. STOXX Europe 600: +0.1% Germany's DAX: +0.1% U.K.'s FTSE 100: +0.3% France's CAC 40: +0.3% Italy's FTSE MIB: +0.1% Spain's IBEX 35: +0.4%.
In economic data:
Germany's February ifo Business Climate Index 98.9 (expected 96.5; last 96.0). February Current Assessment 98.6 (expected 96.6; last 96.2) and Business Expectations 99.2 (expected 96.1; last 95.8)
U.K.'s February CBI Industrial Trends Orders 20 (expected 25; last 24). January Public Sector Net Borrowing -GBP3.65 bln (expected GBP15.22 bln; last GBP16.08 bln)
Italy's January CPI 1.6% m/m, as expected (last 0.4%); 4.8% yr/yr, as expected (last 3.9%)
In news:
Russian President Putin announced yesterday that Russia will recognize the independence of two separatist regions in Eastern Ukraine.
German Chancellor Scholz said that the approval process for the Nord Stream 2 pipeline from Russia will be halted and re-assessed in light of recent events.
Bank of France Governor Villeroy de Galhau said that there is no current need to decide on specific dates for rate hikes and that asset purchases should end around Q3.
U.S. equity futures:
S&P 500 Futures: -2 @ 4,347
DJIA Futures: -33 @ 34,046
Nasdaq 100 Futures: -63 @ 13,947
Overseas:
Europe: DAX +0.1%, FTSE +0.3%, CAC +0.3%
Asia: Nikkei -1.7%, Hang Seng -2.7%, Shanghai Composite -1.0%
Commodities:
Crude Oil +2.87 @ 93.08
Nat Gas +0.167 @ 4.544
Gold +0.80 @ 1900.60
Silver +0.088 @ 24.080
Copper +0.0092 @ 4.5287
U.S. Summary:
Earnings/Guidance (Full Earnings Calendar):
APA Corp. (APA) misses by $0.17, misses on revs
Armstrong World Industries (AWI) beats by $0.04, beats on revs; guides FY22 EPS in-line, revs in-line
Carrier Global (CARR) updates its medium term outlook
CenterPoint (CNP) beats by $0.08; reaffirms FY22 EPS guidance
Colfax (CFX) beats by $0.01, beats on revs
Dillard's (DDS) reports Q4 (Jan) results, beats on revs
Dorman Products (DORM) misses by $0.02, beats on revs; guides FY22 EPS in-line, revs above consensus
Douglas Dynamics (PLOW) misses by $0.02, beats on revs; guides FY22 EPS below consensus, revs in-line
Enpro Industries (NPO) beats by $0.23, beats on revs; guides FY22 EPS above consensus
Esperion Therapeutics (ESPR) beats by $0.52, beats on revs
Equitrans Midstream (ETRN) misses by $0.30, misses on revs
Fluor (FLR) beats by $0.04, misses on revs; guides FY22 EPS above consensus
General Mills (GIS) reaffirms FY22 guidance, provides long-term financial expectations
Healthcare Realty (HR) reports FFO in-line, revs in-line
HealthStream (HSTM) misses by $0.04, reports revs in-line; guides FY22 revs below consensus
Hecla Mining (HL) reports EPS in-line, misses on revs
Helix Energy (HLX) beats on top and bottom lines
Home Depot (HD) beats by $0.03, beats on revs; Q4 US comps +7.6%; approves 15% increase in quarterly dividend to $1.90/share; provides FY22 guidance
ICON plc (ICLR) reports EPS in-line, revs in-line; guides FY22 EPS mostly above consensus, revs in-line; announces $100 mln buyback program
JELD-WEN (JELD) misses by $0.06, beats on revs; guides FY22 revs above consensus
KBR (KBR) beats by $0.04, misses on revs; guides FY22 EPS in-line, revs in-line
Krispy Kreme, Inc. (DNUT) misses by $0.01, beats on revs; guides FY22 EPS below consensus, revs in-line, reiterates long-term outlook
Louisiana-Pacific (LPX) beats by $0.25, beats on revs
Luxfer (LXFR) beats by $0.05, beats on revs; guides FY22 EPS in-line
Macy's (M) beats by $0.46, beats on revs, comparable sales up 28.3% on owned basis vs. 4Q20; guides FY23 EPS above consensus, revs above consensus; authorizes new $2.0 bln share repurchase program
Manitowoc (MTW) beats by $0.24, misses on revs; guides FY22 EPS below consensus, revs in-line
Masonite International (DOOR) beats by $0.07, misses on revs; guides FY22 EPS in-line, revs in-line
Medtronic (MDT) reports EPS in-line, misses on revs; guides Q4 EPS in-line
Middleby (MIDD) beats by $0.08, beats on revs
National Storage Affiliates (NSA) beats by $0.03, beats on revs; guides FY22 FFO above consensus
Nexstar (NXST) beats by $1.28, reports revs in-line
NexTier Oilfield (NEX) beats by $0.10, beats on revs; guides Q1 revs above consensus
ProAssurance (PRA) beats by $0.43, beats on revs
Sasol (SSL) beats on top and bottom lines
Smith & Nephew (SNN) reports FY21 results and provides outlook
Sun Communities (SUI) beats by $0.01; beats on revs; guides FY22 FFO in-line
Tempur Sealy Int'l (TPX) misses by $0.08, misses on revs; guides FY22 EPS in-line, revs above consensus; increases dividend
TopBuild (BLD) beats by $0.20, beats on revs; guides FY22 revs in-line
TransUnion (TRU) misses by $0.11, misses on revs; guides Q1 EPS below consensus, revs below consensus; guides FY22 EPS below consensus, revs in-line
Turning Point Brands (TPB) beats by $0.15, beats on revs
Unisys (UIS) beats by $0.14, reports revs in-line; guides FY22 revs in-line
Valaris (VAL) beats on bottom line, misses on revs
Vontier (VNT) has entered into a $250 mln accelerated share repurchase agreement with Citibank
Westlake Corporation (WLK) beats by $0.38, beats on revs
Williams Cos (WMB) beats by $0.05, beats on revs
General News:
Russian President Putin declared two territories in eastern Ukraine as independent and ordered deployment of troops into those regions, according to the New York Times
National Security Advisor Jake Sullivan says Russia is planning an "extremely violent" invasion of Ukraine, according to The Hill
President Biden signed an Executive Order to respond to President Putin's action to purportedly recognize the so-called Donetsk and Luhansk People's Republics (DNR and LNR) as "independent" states
White House says it will take further measures today to hold Russia accountable for this clear violation of international law and Ukraine's sovereignty; White House has seen Russia order troops to deploy into the DPR and LPR for so-called peacekeeping functions
President Biden accepts meeting 'in principle' with Russian President Putin late this week if invasion does not occur
German Chancellor Olaf Scholz says Nord Stream 2 pipeline project has been halted, according to DW
Ukraine President Zelenskyy does not believe there will be an invasion, according to CNBC
White House announce major investments to expand domestic critical minerals supply chain, breaking dependence on china and boosting sustainable practices
Fed Governor Michelle Bowman (voting FOMC member) says she will be 'watching the data closely to judge the appropriate size of an increase at the March meeting'
US considering another oil release from SPR to lower energy prices, according to the Washington Post
UK Prime Minister sets out plan for living with COVID; remaining domestic restrictions in England will be removed
Iran nuclear deal could be completed in next few days, according to the Wall Street Journal
China might introduce more restrictions on tech sector, according to Bloomberg
Former President Trump's Truth Social application is now available, according to Guardian
Canadian police arrest trucker protesters at gunpoint, according to the New York Times
Olympics had lowest ratings ever, according to the Wall Street Journal
FDA considering authorization of fourth coronavirus vaccine this fall, according to the Wall Street Journal
Abbott Labs (ABT) receives FDA approval for CardioMEMS HF System
Adagio Therapeutics (ADGI) announced a Chief Executive Officer succession plan; outlines strategic initiatives for ADG20 program
Air Lease (AL) announces long-term lease placements for nine new Boeing (BA) 737 aircraft with Corendon Airlines Group
Albireo Pharma (ALBO) receives NICE recommendation for Bylvay for all PFIC types
AngloGold Ashanti (AU) announced that Chief Financial Officer Christine Ramon has elected to take early retirement from her current role at the end of June of this year, after more than seven years with the company
Aon (AON) authorizes an additional $7.5 bln for share repurchases, bringing the total to approx. $9.2 bln; increases quarterly dividend 10% to $0.56/share
Ares Management (ARES), Apex Clean Energy, EPIC Midstream Holdings, and the Port of Corpus Christi Authority sign memorandum of understanding for Gigawatt-Scale Green Fuels Hub on Texas Gulf Coast
AstraZeneca (AZN) reports ENHERTU (fam-trastuzumab deruxtecan-nxki) significantly improved both progression-free and overall survival in DESTINY-Breast04 Trial in Patients with HER2-Low Metastatic Breast Cancer
AVANGRID (AGR) announces leadership changes, including Patricia Cosgel as interim Chief Financial Officer
Bayer AG (BAYRY): new treatment Kerendia approved in EU for adult patients with chronic kidney disease associated with type 2 diabetes
BeiGene (BGNE) announces FDA acceptance of sNDA for BRUKINSA in chronic lymphocytic leukemia and EMA acceptance of sNDA for CLL and marginal zone lymphoma
BioNTech (BNTX) and Medigene collaborate on advance T cell receptor immunotherapies against cancer
Bio-Techne (TECH) announces development and license agreement with Thermo Fisher (TMO) for ExoTRU kidney transplant rejection test
Braskem SA (BAK) provides update for production
Breeze Holdings Acquisition Corp. (BREZ) announces intention to extend deadline to consummate business combination
Brookfield Asset Management (BAM) aiming to raise $25 bln for another infrastructure fund, according to Bloomberg
Camping World (CWH) increases quarterly dividend to $0.625/share from $0.50/share
Carnival (CCL) says effective with cruises departing Mar. 1, masks on board will be recommended but not required
DoorDash (DASH): A new bill in NYC would ban grocery applications from advertising 15 minute delivery windows, according to the New York Post
Eli Lilly (LLY) announces the launch of the Lilly Institute for Genetic Medicine and an investment of ~$700 mln to establish a state-of-the-art facility at a new site in the Boston Seaport
Embraer SA (ERJ) reports its delivered 55 jets in Q4; Board of Directors approved a three-year pause in its E175-E2 jet development program
Flora Growth (FLGC) announces that the Company has filed twenty-three cannabinoid-infused food and beverage products with the Instituto Nacional de Vigilancia de Medicamentos y Alimentos, similar to the U.S. FDA
Gracell Biotechnologies (GRCL) Announces Multiple Advancements of TruUCAR Allogeneic CAR-T Platform
Hercules Capital (HTGC) announces $0.60/share supplemental dividend
Homology Medicines (FIXX) provides update on pheNIX gene therapy trial of HMI-102 in adults with PKU; trial placed on clinical hold
InfuSystem (INFU) announces a national distribution agreement with Solo-Dex, Inc. for its proprietary continuous nerve block catheters
Kellogg (K) announces changes to supply chain leadership
Kilroy Realty's (KRC) CFO resigns to pursue another opportunity; Chief Investment Officer will act as interim CFO
Kraft Heinz (KHC) to appoint CEO Miguel Patricio to Chair of the Board
Lockheed Martin (LMT): China issues sanctions against Lockheed Martin and Raytheon (RTX), according to Reuters
Lottery.com(LTRY) has signed an agreement with T-Mobile to become the exclusive digital lottery brand for in-vehicle advertising
Manitowoc (MTW) releases statement regarding EPA matter
Manitowoc (MTW) CFO to retire; promotes Brian P. Regan
Marathon (MRO) refinery near New Orleans caught fire, according to Bloomberg
McDonald's (MCD) board of directors issues statement in response to Carl Icahn
Meridian Bioscience (VIVO) appoints Andy Kitzmiller as CFO
Mesoblast (MESO) announced positive results from an interim analysis of the first patient cohort in the randomized, controlled study of remestemcel-L by direct endoscopic delivery to areas of inflammation in patients with medically refractory ulcerative colitis or Crohn's colitis
Nikola Corporation (NKLA) appoints Michael Lohscheller as President of Nikola Motor
Ocugen (OCGN): FDA lifts clinical hold on submission of IND application for COVAXIN
Primoris Services (PRIM) receives $75 million in Energy/Renewables Segment contracts
Provention Bio (PRVB) resubmits BLA for Teplizumab to Address Complete Response Letter
RingCentral (RNG) and Zoom (ZM) settle litigation
Siemens AG (SIEGY) Healthcare Diagnostics awarded $370 mln Army contract
Tactile Systems (TCMD) announces dismissal of qui tam lawsuit filed by competitor
Tempur Sealy Int'l (TPX) increases quarterly cash dividend to $0.10/share from $0.09/share
Tesla (TSLA): German regulators will look at Tesla's Autopilot feature, according to Bloomberg
Tesla (TSLA) still waiting to open to European Gigafactory, according to the Wall Street Journal
Warrior Met Coal (HCC) raises quarterly dividend by 20% to $0.06 per share
M&A:
Centerra Gold (CGAU) announces acquisition of the Goldfield District Development Project in Nevada
Chevron (CVX) aiming to sell Equatorial Guinea oil and gas assets, according to Reuters
Churchill Downs (CHDN) to acquire assets of Peninsula Pacific Entertainment for total consideration of $2.485 bln
Cummins (CMI) to acquire Meritor (MTOR) for $36.50/share in cash, for a total transaction value of approx. $3.7 bln; deal expected to be immediately accretive to CMI's adj. EPS, generate $130 mln in synergies
Gold Royalty (GROY) acquires royalty on portion of IAMGOLD's (IAG) Ct Gold Project in Ontario for $15.875 mln
GXO Logistics (GXO): Boards of Clipper Logistics and GXO announced that they have reached agreement on the key terms of a possible cash and share offer for Clipper by GXO
Houghton Mifflin Harcourt (HMHC) to be acquired by Veritas Capital for $21.00 per share in cash
KKR (KKR) agrees to acquire majority stake in Refresco
M&T Bank (MTB) and People's United Financial (PBCT) extend merger agreement to June 1, 2022
Northwest Natural (NWN) signs two agreements to acquire utilities in Southeast Texas
SoFi Technologies (SOFI) to acquire Technisys for 84 mln shares of common stock; acquisition expected to deliver a mid-teens internal rate of return on a standalone basis through 2025
TEGNA (TGNA) confirms it will be acquired by Standard General for $24/share in cash
Verisk Analytics (VRSK) has entered into a definitive agreement to sell Verisk Financial Services, its financial services business unit, to TransUnion (TRU) for $515 mln in cash consideration paid at closing
Syndicate:
No news of note.
IPOs:
Expected to Price:
No IPOs expected to price.
Gapping Up/Down
Gapping up:
DWAC +28.1%, OCGN +15.9%, HMHC +15%, TRU+5.9%, MRO +5.1%, OIH +4.2%, AZN +3.7%, PSX+3.4%, SNN +3.4%, USO +3.2%, SLB +3%, APA +3%, HL +2.7%, HAL +2.6%, XLE +2.5%, XOM +2.2%, WMB+2%, HD +1%, TCMD +0.8%, BP +0.7%, SSL +0.6%, HSBC +0.5%
Gapping down:
FIXX -36.8%, RSX -13.4%, ADGI -9%, UIS -4.5%, VWE -3.9%, CFX -3.2%, ZM -2%, RNG -1.4%, VIVO-1%, MCD -0.8%, TTE -0.8%
Analyst Research (see Upgrades/Downgradescalendarfor full list):
Upgrades
Advanced Micro (AMD) upgraded to Outperform from Mkt Perform at Bernstein; tgt $150
ChampionX (CHX) upgraded to Neutral from Sell at Goldman; tgt $24
Datadog (DDOG) upgraded to Conviction Buy from Buy at Goldman; tgt $250
PPL Corp (PPL) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt lowered to $31
Privia Health (PRVA) upgraded to Outperform from Market Perform at Cowen; tgt $35
Quidel (QDEL) upgraded to Strong Buy from Outperform at Raymond James; tgt lowered to $130
Ritchie Bros. (RBA) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt lowered to $60
Rocket Companies (RKT) upgraded to Neutral from Underperform at BofA Securities
Visteon (VC) upgraded to Buy from Neutral at Goldman; tgt raised to $156
Downgrades:
Celanese (CE) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $140
Cerence (CRNC) downgraded to Neutral from Buy at Goldman; tgt lowered to $44
DraftKings (DKNG) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $19
Goodyear Tire (GT) downgraded to Hold from Buy at Williams Trading; tgt lowered to $17
Homology Medicines (FIXX) downgraded to Perform from Outperform at Oppenheimer
Others:
Life Storage (LSI) initiated with a Neutral at JP Morgan; tgt $142
Upcoming Events:
Econ Data:
09:00 ET: FHFA Housing Price Index for Dec. (Briefing.comConsensus NA; Prior 1.1%)
09:00 ET: S&P Case-Shiller Home Price Index for Dec. (Briefing.comConsensus 18.3%; Prior 18.3%)
09:45 ET: IHS Markit Manufacturing PMI - Prelim for Feb. (Briefing.comConsensus NA; Prior 55.5)
09:45 ET: IHS Markit Services PMI - Prelim for Feb. (Briefing.comConsensus NA; Prior 51.2)
10:00 ET: Consumer Confidence for Feb. (Briefing.comConsensus 109.0; Prior 113.8)
Earnings:
Tuesday (Feb 22)
Morning: AWI CNP CFX CBRL DORM NPO ETRN ESPR EXPD FLR HR HL HD JELD KBR DNUT LPX M MDT MIDD NSA NXST SMP TPX BLD TRU TPB WLK
Afternoon: A ACC AGR BTG BLKB BCC BWXT CDNS CZR CSGP CUTR FANG ESI EPR EXAS GKOS HALO HTGC HIMS INDI JBT KTOS LPI MTDR MAXR MELI MOS NHI NDSN OSPN PANW PGRE PEB PEN PCOR PUMP PTCT PSA RXT RDN RRC O RNG SPT SHO TBLA TNDM TDOC TXRH TOL RIG TRUE VRSK VNOM SPCE HCC WK
Wednesday (Feb 23)
Morning: AVNS AVA BHC BCO CLH CSTM DAN ETR EVOP FDP ROCK GIL HFC IART JACK KOP LIVN LL LOW MFA TAP MNDY NEO NI ODP OPCH OSTK OMI PSN PLAB DOC PRG RSKD SPNS SBGI SSYS TJX TNL TUP VRT VIPS WWW
Afternoon: ONEM AEM AGI ALKT BIRD Y AMED ANSS ACA ARNA BAND BBWI BMRN BKNG CHDN CLOV FIX CTRA CCRN CW MSP DK DRQ EBAY ECPG EXR FNF FIVN FLS FRG FUBO FLGT GBT GSHD GH HTA HEI HTZ HBM IAG IMAX NARI IR NGVT IIPR PODD IRTC KALU KW LHCG LYV MGNI MANT MRVI VAC MGRC MED MYRG NTAP NVRO NDLS NUVA OLO OGS OSUR ORA ORCC PAAS RMAX RCII RVLV RLJ ROOT SKLZ SNBR SPXC STAA STOR RGR SUM FTI AAN REAL UCTT OLED VICI WES
Thursday (Feb 24)
Morning: ACIW ACRS AHCO AGIO BABA AEP AMT AMWD BUD ATHM AZUL BALY BLI BBIO CARS CBRE GTLS LNG CQP IMOS CCOI CGEN DOCN DISCA EDIT ELAN EME EXLS EXPI FCN HEES HSC HMHC IBP NTLA IONS IRM KDP LNTH LXP MRNA NTES NEM NKLA NOMD NCLH NVMI NVCR NRG OGE PCRX PZZA PRFT PLNT PEG PWR RY SAGE SEAS SHLX SIX SJI SPTN SRCL SHOO TECK TNK TFX TNC TEN SHYF USPH VCEL W WOW
Afternoon: ABCL ACMR ADUS AES ATSG ALRM MDRX ALTR AMH COLD AMWL ADSK AXON AXNX BYND SQ CABO CDNA CARG CVNA CHE CLNE CDXS COIN COLL CVET CYRX LAW CUBE CWK DELL BOOM EIX EBS ENV EOG ETSY EVBG EVTC FTCH FND FTAI FOXF FTDR GLPI GDOT HURN ICFI ICUI INGN INTU NVTA IOVA LMAT LSI LPSN MGNX MTZ MAX MMSI MNST MP NTRA OXY OII LPRO OPEN OPK OPRT PBA PRDO PING PLYA KWR RKT RHP SGMO SDGR SEM SILK SM SWN SFM SWCH TRHC TMST TVTY TPIC TVTX TPC UNVR UHS UPLD VAPO VICR VRAY VIR VMW VTEX WSC YMAB ZS
Friday (Feb 25)
Morning: BHVN CRI CM CNK ECVT EVRG FL GTN IEP IMGN LAMR TREE LI MODV NWN PNW QRTEA PACK SSP SRE STWD STRA SLCA UNIT
Asia & Europe detail:
Asia: Nikkei -1.7%, Hang Seng -2.7%, Shanghai Composite -1.0%
Equity indices in the Asia-Pacific region ended Tuesday on a lower note. China Securities Journal continued speculating that the People's Bank of China will lower the reserve requirement ratio, though the urgency of easing has declined after a January increase in the supply of credit. China's Finance Minister Liu said that larger tax and fee cuts will be announced this year. The shadow board of the Reserve Bank of New Zealand called for a 25-bps rate hike at the upcoming meeting and substantial tightening during the next year.
In economic data:
Japan's December Corporate Services Price Index 1.2% yr/yr (last 1.1%). January BoJ Core CPI 0.8% yr/yr (last 0.9%)
South Korea's February Consumer Confidence 103.1 (last 104.4)
Hong Kong's January CPI 1.2% yr/yr (expected 1.7%; last 2.4%)
---Equity Markets---
Japan's Nikkei: -1.7%
Hong Kong's Hang Seng: -2.7%
China's Shanghai Composite: -1.0%
India's Sensex: -0.7%
South Korea's Kospi: -1.4%
Australia's ASX All Ordinaries: -1.1%
---FX---
USD/JPY: +0.3% to 115.09
USD/CNH: UNCH at 6.3247
USD/INR: +0.3% to 74.73
Europe: DAX +0.1%, FTSE +0.3%, CAC +0.3%
Major European indices trade just above their flat lines. Russian President Putin announced yesterday that Russia will recognize the independence of two separatist regions in Eastern Ukraine. German Chancellor Scholz said that the approval process for the Nord Stream 2 pipeline from Russia will be halted and re-assessed in light of recent events. Bank of France Governor Villeroy de Galhau said that there is no current need to decide on specific dates for rate hikes and that asset purchases should end around Q3.
In economic data:
Germany's February ifo Business Climate Index 98.9 (expected 96.5; last 96.0). February Current Assessment 98.6 (expected 96.6; last 96.2) and Business Expectations 99.2 (expected 96.1; last 95.8)
U.K.'s February CBI Industrial Trends Orders 20 (expected 25; last 24). January Public Sector Net Borrowing -GBP3.65 bln (expected GBP15.22 bln; last GBP16.08 bln)
Italy's January CPI 1.6% m/m, as expected (last 0.4%); 4.8% yr/yr, as expected (last 3.9%)
---Equity Markets---
STOXX Europe 600: +0.1%
Germany's DAX: +0.1%
U.K.'s FTSE 100: +0.3%
France's CAC 40: +0.3%
Italy's FTSE MIB: +0.1%
Spain's IBEX 35: +0.4%
---FX---
EUR/USD: +0.4% to 1.1354
GBP/USD: -0.3% to 1.3559
USD/CHF: +0.3% to 0.9185