Notes/Observations
Hawkish FOMC minutes spark a massive profit-taking across asset classes as some members suggested there's a need to taper or vary pace of purchases.
China PBoC drained a net of CNY910B (record) from the money market by selling 28-day and 91-day repos; Shanghai Composite falls 3.0% in session.
Major European advance PMI readings for France, Germany and Euro Zone miss expectations across the board.
Spain auction results healthy as it sells more than indicated in 3-tranche bond issuance.
French borrowing costs rise for its 2015 and 2018 issues.
BOE transfers of QE profits helps UK public finances in January.
USD Index at highest level since Sept 52012.
Economic Data
(RU) Russia Gold & Forex Reserve w/e Feb 15th: $529.5B v $532.5B prior.
(CH) Swiss Jan Trade Balance (CHF): 2.1B v 1.7Be; Real Exports M/M: 3.7% v 0.3%e; Real Imports M/M: -0.5 v +5.1% prior.
(FR) France Feb Preliminary PMI Manufacturing: 43.6 v 43.8e; PMI Services: 42.7 v 44.4e
(HU) Hungary Dec Avg Gross Wages Y/Y: 4.9% v 3.9%e
(DK) Denmark Jan Retail Sales M/M: -0.8% v -0.2%e; Y/Y: -1.6 v -3.5% prior.
(CH) Swiss Jan M3 Money Supply Y/Y: 9.2 v 9.8% prior.
(CH) Swiss Q4 Real Estate Index Family Homes: 419.3 v 412.9 prior.
(EU) ECB: €3.0M borrowed in overnight loan facility vs. €5.8B prior; €165.3B parked in deposit facility vs. €164.5B prior.
(DE) Germany Feb Advanced PMI Manufacturing: 50.1 v 50.5e; PMI Services: 54.1 v 55.5e
(NL) Netherlands Feb Consumer Confidence: -44 v -35 prior
(NL) Netherlands Jan Unemployment Rate: 7.5% v 7.2% prior
(NL) Netherlands Jan House Price Index M/M: -2.9% v -0.4% prior; Y/Y: -9.6% v -6.3% prior
(HK) Hong Kong Jan Unemployment Rate: 3.4% v 3.3%e
(EU) Euro Zone Feb Advanced PMI Manufacturing: 47.8 v 48.5e; PMI Services: 47.3 v 49.0e; PMI Composite: 47.3 v 49.0e
(UK) Jan Public Finances (PSNCR): -£35.6B v -£35.0Be; PSNB ex Interventions: -£11.4B v -£8.7Be; Public Sector Net Borrowing: -£9.9B v -£9.5Be
(UK) Jan Car Production at 129.1K, +1.2% y/y - SMMT
(PL) Central/Eastern European Feb ZEW Indicator: +36.3 v +27.0 prior.
Fixed Income:
(ES) Spain Debt Agency (Tesoro) sold total €4.23B vs.€3.0-4.0B indicated range in 2015, 2019 and 2023 bond.
Sold €1.112B in March 2.75% 2015 Bono bond; Avg Yield 2.540% v 2.823% prior; Bid-to-cover: 3.69x v 2.21x prior; Maximum Yield 2.570% v 2.889% prior; Tail 3.0bps v 6.6bps prior.
Sold €548M in 4.3% 2019 Bono bond; Avg Yield 4.275% v 6.701% prior; Bid-to-cover: 2.54x v 2.94x prior; Max Yield 4.294% v 6.798% prior; Tail 1.9bps v 9.7bps prior.
Sold €2.568B in 2023 bonds; Avg Yield 5.202% v 5.290% prior; Bid-to-cover:1.6x v 2.29x prior; Max Yield 5.222% v 5.322% prior; Tails 2.0bps v 3.2bps prior.
(FR) France Debt Agency (AFT) sold total €7.98B vs. €7.0-8.0B indicated range in 2015, 2017 and 2018 BTANs/OATs
Solds €1.89B in 2.0% 2015 BTAN; Avg Yield 0.41% v 0.34% prior; Bid-to-cover: 3.31x v 3.45x prior.
Sold €1.75B in 4.25% in Oct 2017 OAT; avg yield 0.95% v 1.05% prior; Bid-to-cover: 2.57x v 2.73x prior.
Sold €4.34B in 1.0% 2018 Oat; Avg Yield 1.12% v 1.06% prior; Bid-to-cover: 1.995x v 1.90x prior.
(IE) Ireland Debt Agency (NTMA) sold €500M vs. €500M indiacted in 3-month bills; Avg Yield 0.240% v 0.200% prior; Bid-to-cover: 3.28x v 3.79x prior
.
(UK) DMO sold £2.25B in 1.75% 2022 Gilts ; Avg Yield 2.147% v 1.803% prior; Bid-to-cover: 2.25x v 1.69x prior; Tail 0.1bps v 0.3bps prior.
(HU) Hungary Debt Agency (AKK) sold total HUF48B vs. HUF43B indicated in 2016, 2018 and 2028 Bonds.
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
Indices: FTSE 100 -1.4% at 6,303, DAX -1.5% at 7,616, CAC-40 -1.4% at 3,658, IBEX-35 -1.2% at 8,058, FTSE MIB -2.4% at 16,132, SMI -1% at 7,542, S&P 500 Futures -0.30% at 1,503
European equity markets are broadly lower, tracking Wednesday's declines in the US markets which came following the release of the Fed FOMC minutes. Today's weakness has been led by Italian equities (FTSE MIB down over 2%). Additionally, weaker than expected PMI data has weighed on the German DAX and French CAC-40. European banks are mostly lower, as traders assess recent commentary out of the US Fed. The weakness in commodity prices has led to declines in most resource-related companies. In terms of earnings, today's corporate reporting was dominated by French and UK companies. US firms due to report later today include large retailer Wal-Mart.
UK movers [CSR +12.5% (guided Q1 results above ests), RM Plc +12% (CEO change), Sports Direct +4.5% (Q3 sales rose y/y), BAE Systems +4% (raised dividend, announced buyback), Premier Foods +3.5% (FY sales above ests); New World Resources -5.5% (swung to FY12 net loss),Tullow Oil -1% (unfavorable drilling results in Kenya), Kingfisher -0.80% (Q4 sales declined y/y)]
Germany movers [Grenkeleasing -5% (capital raise), Bertrandt -3% (ex-dividend),ThyssenKrupp -2% (cost concerns)]
France movers [Technip +1% (Q4 results above ests), Axa -2.5% (FY12 results below ests)]
Italy movers [Italian banks have underperformed the EU banking sector ahead of elections (Feb 24-25th)]
Switzerland movers [SwissRe +1.4% (Q4 results above ests, special dividend); Straumann -2.5% (FY12 results below ests)]