Euro PMI Manufacturing Data Improves, Euro Hits New Trend Highs

Major European PMI Manufacturing data continues to show improvement; Euro hits new trend highs against major pairs

Notes/Observations

(JP) Nikkei225 Index ends session up 0.5% at 11,191 (highest since Apr 2010); longest weekly winning streak in 54 years

SPX ends month with best Jan since 1989

China Shanghai Composite at fresh 7-month high and 7 best weekly performance since Oct 2011

Mixed overnight Chinese manufacturing PMI data (official and non-official) the recent positive tone to broad risk sentiment has been maintained with both reading remaining in expansion territory

China Jan PMI Manufacturing (official reading) missed; 50.4 vs 51.0e

China HSBC PMI Manufacturing beats; 52.3 vs 52.0e to 2-year high

Australia Jan manufacturing PMI at 3.5 year lows

Japan Jobless data missed expectations with first increase since April 2012 (4.2% vs 4.1%e)

Japan Dec household spending misses: -0.7% vs -0.2%e

European Manufacturing PMI data generally show improvement but still in contraction territory; German reading came in much better than expected.

USD Index falls below the 79 handle for first time since Oct

Netherlands Gov't confirmed it would nationalize SNS Reaal [SR.NL]

Senate approves bill temporarily suspending debt ceiling

Economic Data

(IE) Ireland Jan NCB Manufacturing PMI: 50.3 v 51.4 prior; 9-month low but 6th straight reading in expansion territory)

(SE) Sweden Jan Swedbank PMI Survey:49.2 46.1e

(FR) France Jan New Car Registrations -15% y/y

(NO) Norway Jan PMI Survey: 50.5 v 50.4e

(HU) Hungary Nov Final Trade Balance: €181.6B v €703.8M prelim

(HU) Hungary Jan PMI Survey: 55.9 v 48.9 prior; highest since March 2012

(TR) Turkey Jan Manufacturing PMI: 54.0 v 53.1 prior; 22-month high

(PL) Poland Jan Manufacturing PMI: 48.6 v 48.8e

(EU) ECB: €335M borrowed in overnight loan facility vs. €3.0B prior; €185.4B parked in deposit facility vs. €165.9B prior

(ES) Spain Jan Manufacturing PMI: 46.1 v 45.5e; 21st straight reading in contraction territory

(AT) Austria Jan unemployment rate: 9.3% v 8.6% prior

(CZ) Czech Republic Jan Manufacturing PMI: 48.3 v 46.0 prior; 9th straight month of contraction

(CH) Swiss Jan PMI Manufacturing: 50.5e v 49.5 prior; first growth in 10 months

(CN) China Q4 Current Account: $65.0B v $70.8B prior

(IT) Italy Jan PMI Manufacturing: 47.8 v 47.4e; highest since March 2012 but 18th straight month of contraction

(FR) France Jan Final PMI Manufacturing: 42.9 v 42.9e; 11th straight month of contraction

(DE) Germany Jan Final PMI Manufacturing: 49.8 v 48.8e; 11th straight month of contraction

(EU) Euro Zone Jan Final PMI Manufacturing: 47.9 v 47.5e; 11th month high but also 11th straight month of contraction

(GR) Greece Jan Manufacturing PMI: 41.7 v 41.4 prior; 41st straight month of contraction

(IT) Italy Dec Preliminary Unemployment Rate: 11.2% v 11.2%e; highest since 1999

(NO) Norway Jan Unemployment Rate: 2.7% v 2.7%e

(ZA) South Africa Jan Kagiso PMI: 49.1 v 47.4 prior

(UK) Jan PMI Manufacturing: 50.8 v 51.0e; second straight month of expansion

(EU) Euro Zone Jan CPI Estimate Y/Y: 2.0% v 2.2%e

(EU) Euro Zone Dec Unemployment Rate: 11.7% v 11.9%e

(DK) Denmark Jan PMI Survey: 56.1 v 57.0 prior

Fixed Income:

(ZA) South Africa sold total ZAR in I/L 2025, 2038 and 2050 bonds

(IN) India sold total INR120B vs. INR120B indicated in 2020, 2025 and 2042 bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices: FTSE 100 +0.70% at 6,319, DAX +0.70% at 7,830, CAC-40 +1% at 3,768, IBEX-35 -1.2% at 8,267, FTSE MIB +0.10% at 17,457, SMI +0.30% at 7,415, S&P 500 Futures +0.40% at 1,499

European equity markets are mostly higher ahead of the later today release of payrolls data out of the US. Spain's IBEX-35 has lagged, amid declines in financials after the country's market regulator failed to extend the ban related to the shorting selling of financial companies. Overall European banks are mixed, as French banks have outperformed. Resources related firms are broadly higher, tracking the gains in copper prices. In terms of the major European PMI data, m/m improvements were seen for Germany, Greece, Italy, Spain and Switzerland. UK PMI was below market expectations, while the French data was in line

UK movers [De La Rue +6% (trading update),BT +5% (Q3 results), Qinetiq +4% (contract award); Tate & Lyle -3% (trading update),Shell -0.90% (broker commentary)]

Germany movers [Porsche +3% (settlement agreement), Deutsche Bank +0.50% (broker commentary); Bayer -0.30% (EU proposed suspension of neonicotinoids)]

France movers [BNP +1.3% (broker commentary)LVMH +0.50% (FY12 results)]

Spain movers [BBVA +0.30% (Q4, FY results)]

Italy moves [Autogril +3% (may consider options for certain units),Banca Popolare di Milano +6% (speculation related to governance changes)]

Sweden movers [Electrolux -2.6% (Q4 results)]

Austria movers [Raiffeisen Bank -5% (profit warning, OMV -1% (Q4 trading update)]