Fig. 1: U.S. Dollar Index (DXY) & Bloomberg U.S. Dollar Index (BBDXY)
Source: MNI - Market News/Bloomberg
BOE: Bank of England Chief Economist Huw Pill signaled policy makers are ready to reduce the speed of their interest rate increases, saying there’s a risk of “overtightening” if the pace over the past few months is maintained. (BBG)
BREXIT: Prime Minister Rishi Sunak is in Belfast to meet local political parties amid speculation a deal on the Northern Ireland Protocol could soon be struck. Sources suggest a deal could be reached as early as next week on the region's post-Brexit trading arrangements. (BBC)
BREXIT: Northern Ireland's Democratic Unionist Party, whose support is seen as crucial for any deal between Britain and the European Union on the Northern Ireland protocol, has not yet seen details of any possible compromise, a senior member said on Thursday. (RTRS)
SCOTLAND: Candidates are expected to formerly enter the race to replace Nicola Sturgeon as leader of the SNP and first minister today - after the timeline for the contest was unveiled last night. (Sky)
ECB: Updated economic projections due in March should determine the size of the European Central Bank’s interest-rate increase that month, according to Governing Council member Yannis Stournaras. (BBG)
FRANCE: French unions held another day of strikes and protests on Thursday in a fresh test of opposition to President Emmanuel Macron’s plan to raise the retirement age ahead of a two-week pause during the school holidays. (BBG)
ITALY: Italy’s government approved a streamlining of how it will spend billions of European Union funds, the first move by Premier Giorgia Meloni to seek more flexibility on how to use the pandemic recovery money. (BBG)
NORWAY: Norway's central bank governor on Thursday said the economy was "operating above potential" and that there should be no doubt that Norges Bank will bring down soaring consumer price inflation, which is running at its highest level in decades. (RTRS)
RATINGS: Sovereign credit rating reviews of note scheduled for after hours on Friday include:
FED: The Federal Reserve should keep raising interest rates to ensure the recent disinflationary trend continues and inflation expectations remain well anchored, St. Louis Fed President James Bullard said Thursday. (MNI)
FED: U.S. shelter inflation could jump by nearly as much as 6% in 2023, Boston Fed economists wrote in a paper published Thursday, adding that even under optimistic assumptions of low market-rent growth CPI shelter will raise inflation considerably in the year. (MNI)
POLITICS: Joe Biden’s doctor says he is “healthy” and “vigorous” following a routine physical Thursday that comes as the oldest ever US president eyes a widely expected 2024 reelection bid, where he will face scrutiny over his fitness. (BBG)
EQUITIES: Retail traders are pushing a record amount of cash into stocks, ignoring Wall Street’s alarms and helping to buoy a market that’s on edge. (BBG)
EQUITIES: Apple – which thus far avoided the mass layoffs that have claimed tens of thousands of workers at Amazon, Google, Meta and Microsoft – has quietly begun axing contractors, On The Money has learned. (New York Post)
U.S./CHINA: The panel reviewing TikTok’s national security risks is facing heightened pressure to wrap up its investigation of the popular video-sharing app and impose strict restrictions on whether and how the company can continue to operate in the U.S. (CNBC)
U.S./CHINA: President Joe Biden sought to ease public concerns about a spate of aerial objects over the US in recent weeks, saying he intends to speak with President Xi Jinping of China to defuse tensions over the military downing of an alleged Chinese spy balloon. (BBG)
U.S./CHINA: China’s “unreliable entity list” targets very few illegal foreign entities and the scope of use won’t be expanded at will, China’s Commerce Ministry says in a statement after sanctions on two US companies. (BBG)
U.S./CHINA/TAIWAN:The Pentagon’s top China official is to visit Taiwan in the coming days, a rare trip to the island by a senior US defence policymaker that comes as relations between Washington and Beijing are mired in crisis over a suspected Chinese spy balloon shot down two weeks ago. (FT)
BOJ: Japan's government picked academic Kazuo Ueda as new central bank governor on expectations he can help keep inflation on target and sustain economic and wage growth, finance minister Shunichi Suzuki said on Friday. (RTRS)
BOJ: Bank of Japan watchers are quickly reassessing the path of monetary policy following Prime Minister Fumio Kishida’s surprise choice for the top job at the central bank, a Bloomberg survey shows. (BBG)
BOJ: The Bank of Japan said on Friday it will launch a pilot program of a central bank digital currency in April. (MNI)
RBA: Reserve Bank of Australia Governor Philip Lowe said it was "plausible" that rates could be cut in 2024 but that would require signs that inflation was on track to return to target, he told a House of Representatives economics committee on Friday. (MNI)
RBA: Reserve Bank of Australia Governor Philip Lowe responded to criticism of his closed-door meeting at investment bank Barrenjoey by pledging to avoid events at the firm “for quite some time.” (BBG)
NEW ZEALAND: The country should not expect many “lollies” in the 2023 Government Budget, Finance Minister Grant Robertson says. “This isn’t a Budget where people should expect to see huge sums of money thrown around,” he told the Auckland Business Chamber annual economic update lunch on Friday. (Stuff NZ)
RBNZ: New Zealand's central bank will scale down its tightening campaign only slightly with a half-point interest rate hike to 4.75% on Wednesday as inflation is still running at a near three-decade high, a Reuters poll of economists found. (RTRS)
SOUTH KOREA: South Korea’s financial regulator vowed to revamp schemes for bonuses and interest rates on loans at banks as well as to spur more competition in the industry. (BBG)
NORTH KOREA: North Korea threatened on Friday to take "unprecedentedly constant, strong responses" if South Korea and the United States press ahead with planned military drills, accusing the allies of raising tensions in the region. (RTRS)
BOC: Bank of Canada Governor Tiff Macklem, speaking for the first time since the report on January’s job blowout came out last week, said on Thursday that the economy remains overheated and continued to leave the door open to higher interest rates. (RTRS)
BOC: Bank of Canada Deputy Governor Paul Beaudry on Thursday said it will take time to pull inflation all the way back to the 2% target after the strongest interest-rate hikes in decades and warned about complacency around finishing the job. (MNI)
MEXICO: The Bank of Mexico's monetary tightening cycle is nearing its end and could see nominal interest rates top out between 11.25% and 11.75%, at which point rates would be kept steady to allow them to take effect, deputy bank governor Jonathan Heath said. (RTRS)
BRAZIL: Brazil's National Monetary Council (CMN), the country's top economic policy body, announced no new resolutions regarding its inflation targets at a monthly meeting on Thursday. (RTRS)
BRAZIL: President Luiz Inacio Lula da Silva toned down his criticism of Brazil’s central bank chief in an interview Thursday, in another sign that their frosty relationship is starting to thaw. (BBG)
RUSSIA: The European Commission has abandoned plans to sanction Russia's nuclear sector or its representatives in its next sanctions package, three diplomats told POLITICO on Thursday. (POLITICO)
RUSSIA: Germany plans to change its Energy Security Act to allow a quick sale of Russian energy group Rosneft's stake in the Schwedt refinery without the need for prior nationalisation, a draft law showed, as Berlin strives to stabilise a key energy supplier. (RTRS)
WORLD BANK: The World Bank, under pressure to do more to help poor countries grapple with climate change, is considering taking on more risk to free up $4 billion in additional lending capacity each year, World Bank President David Malpass told Reuters on Thursday. (RTRS)
MARKETS: Commodity Futures Trading Commission said it will postpone the weekly Commitments of Traders report that normally would have been published on Feb. 17. Intends to resume publishing the report as early as Feb. 24. (BBG)
METALS: Vale SA, the world’s No. 2 iron ore supplier, missed earnings estimates in the fourth quarter as higher costs added to a dip in revenue. Vale produced less of the steel-making ingredient than expected last quarter on rain disruptions and licensing delays in northern Brazil, but the impact was cushioned by an quarter-on-quarter up-tick in prices. On a net basis, profit fell less than expected. (BBG)
OIL: Russian oil companies expect to maintain the current volume of crude exports, despite the government’s plan to reduce production by 500,000 bpd in March, Vedomosti reports, citing three unidentified people familiar with plans. (BBG)
OIL: Saudi Energy Minister Prince Abdulaziz bin Salman said the current OPEC+ deal on oil output will continue until the end of the year, Ashrq TV reported on Thursday citing comments by the prince published on Energy Aspects' website. The minister also said the oil group can't increase output based on initial signals about demand only, the report added. (RTRS)
OIL: A US Treasury official pushed back against speculation that Russia — confronted by a set of price caps and sanctions that seek to limit its oil revenue — could be quietly earning more than reported data suggest. (BBG)
PBOC: China’s loan prime rate is expected to remain unchanged this month as credit continues to expand amid a robust economic rebound, though the key reference rates could be lowered if the recovery falters, economists and advisers said. (MNI)
POLICY: China is poised to name regulatory veterans known for their strict campaigns against financial wrongdoing as new chiefs of the country’s banking and securities watchdogs, according to a person familiar with the matter. (BBG)
BANKS/PROPERTY: Banks are encouraged to adjust down payment ratios, interest rates, and their tolerance of non-performing loans to support the logistics industry during the economic recovery, according to a circular posted on the PBOC website. (MNI)
BANKS/PROPERTY: China’s regulators are checking on how the nation’s major lenders are coping with the pressure from a wave of mortgage prepayments as homeowners take advantage of falling interest rates to reduce debt. (BBG)
PBOC NET INJECTS CNY632 BILLION VIA OMOS FRIDAY
The People's Bank of China (PBOC) conducted CNY835 billion via 7-day reverse repos on Friday, with the rates unchanged at 2.00%. The operation has led to a net injection of CNY632 billion after offsetting the maturity of CNY203 billion reverse repos today, according to Wind Information.
PBOC SETS YUAN CENTRAL PARITY AT 6.8659 FRI VS 6.8519 THURS
The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 6.8659 on Friday, compared with 6.8519 set on Thursday.
TYH3 deals at 111-17+, -0-11, a touch off the base of its 0-08 range on volume of 128K.
Weakness in core global FI markets biased JGB futures a touch cheaper ahead of the weekend, although the contract stuck to a contained range and recovered from session lows, sitting -9 ahead of the closing bell.
The Japanese Ministry of Finance (MOF) sells Y5.12514tn 3-Month Bills:
Weakness developed in the afternoon after a contained two-way start, with YM -4.0 and XM -6.0 at the close. Weaker Asian trading for U.S. Tsys was the dominant driver, with RBA Governor Lowe’s testimony generally viewed as having covered familiar ground. Lowe did however conclude the Q&A session by suggesting it was plausible that rate cuts could be in play in ’24, although noted that a lot “has to go right” for that to be realised.
The Australian Office of Financial Management (AOFM) sells A$500mn of the 4.25% 21 April 2026 Bond, issue #TB142:
The AOFM has released its weekly issuance slate:
Regional equities are on the back foot to end the week. Cross asset headwinds are evident, with a firmer UST cash Tsy yield backdrop (1.9-2.7bps higher across the curve), boosting the USD and weighing on broader risk appetite in the equity space. US futures are also tracking lower (-0.48% for Eminis, -0.65% for the Nasdaq).
Gold continues to trend lower. The precious metal is back to early Jan lows, last around $1826.25. This is off a further 0.55% so far today, while for the week we are tracking 2.1% lower. To date in February we have lost around 5.25%. Gold hasn't enjoyed the USD/yield resurgence.
Brent crude has remained on the back foot through the session, in line with a firmer USD backdrop and risk aversion in the equity space. We last tracked around the $84.25/30bbl level, down close to 1% for the session so far. At this stage we are tracking 2.37% lower for the week. Overall, though Brent remains within well established ranges. WTI is last under $78/bbl, off by a similar amount to Brent today.
Softer US equity futures and regional equities have pressured risk appetite in Asia. BBDXY is firmer and has erased its 2023 year to date losses.
Source: MNI - Market News/Bloomberg
Date | GMT/Local | Impact | Flag | Country | Event |
17/02/2023 | 0700/0700 | *** | ![]() | UK | Retail Sales |
17/02/2023 | 0700/0800 | ** | ![]() | SE | Unemployment |
17/02/2023 | 0700/0800 | ** | ![]() | DE | PPI |
17/02/2023 | 0745/0845 | *** | ![]() | FR | HICP (f) |
17/02/2023 | 0900/1000 | ** | ![]() | EU | EZ Current Account |
17/02/2023 | 1330/0830 | * | ![]() | CA | Industrial Product and Raw Material Price Index |
17/02/2023 | 1330/0830 | ** | ![]() | US | Import/Export Price Index |
17/02/2023 | 1330/0830 | ![]() | US | Richmond Fed's Tom Barkin | |
17/02/2023 | 1445/0945 | ![]() | US | Fed Governor Michelle Bowman | |
17/02/2023 | 1500/1000 | * | ![]() | US | Services Revenues |