Original insights into market moving news

[PODCAST] European Open Rundown 15th February 2021

  • Asia-Pac equity markets began the week positively with sentiment underpinned as US equity futures extended to fresh record levels
  • The UK reached its 15mln vaccination milestone while the 7-day average new infection cases in the US recently declined below 100k for the first time in more than 3 months
  • In FX, the DXY languished beneath 90.50, to the benefit of major peers, GBP/USD eyes 1.39
  • Former ECB President Draghi was sworn in as Italy’s Prime Minister at the head of a unity government
  • Looking ahead, today's calendar sees a lack of tier 1 releases. US markets are closed for Presidents' Day
  • The desk will shut at 18:00GMT/13:00ET and re-open the same day for the beginning of Asia-Pac coverage at 22:00GMT/17:00ET


US CDC reported total COVID-19 cases rose by 88,913 to a total 27.42mln and deaths rose by 3,317 to a total 482.5k, while it was reported that the 7-day average of new COVID-19 cases in US decline to below 100K for 1st time since November late last week. (Newswires)

White House said it does not intend to go ahead with any plan that required COVID-19 testing before US domestic flights and it was also reported that the FDA agreed that Moderna (MRNA) can boost the vaccine supply in each vial by up to 40%. (Newswires/NYT)

EMA was said to expect Johnson & Johnson (JNJ) to file for approval of its COVID-19 vaccine within a few days and EMA also plans an accelerated assessment of vaccines modified for virus variants, according to reports on Friday citing the COVID-19 Task Force President. (Newswires)

UK COVID-19 cases +10,972 (prev. +13,308) and deaths +258 (prev. +621), France cases +16,546 (prev. +21,231) and deaths +167 (prev. +199), Italy cases +11,068 (prev. +13,532) and deaths +221 (prev. +311). (Newswires)

UK has reached its target of inoculating around 15mln of its most vulnerable citizens against COVID-19. In relevant news, PM Johnson said 15mln jabs is a significant milestone and that everyone in the first four priority groups have been offered a vaccine, while he will set out full vaccine progress on Monday and it was separately reported that government internal projections forecast the number of COVID-19 patients in hospitals in England to more than halve over the next month. (Newswires/Times)

UK PM Johnson said he is "optimistic" ahead of the launch of his "roadmap" for easing the lockdown which will be unveiled on February 22nd and will prioritise the reopening of schools on March 8th, while reopening of non-essential retail will be next followed by hospitality businesses. Furthermore, separate reports also noted the UK government will begin permitting activities such as meeting a friend for a coffee on a park bench and outdoor picnics on March 8th with golf and tennis to also be permitted shortly after, while UK is expected to revert to the "Rule of Six" outdoors for Spring and is considering allowing self-catered breaks from April. (Sky News/Sun/Telegraph/Times) UK PM Johnson was told by a group of lockdown-sceptic MPs that COVID-19 restrictions must be fully removed by the end of April and that there will be "no justification" for current restrictions once all that are aged 50+ have been offered a vaccine dose. (Sky News)

Switzerland’s government will delay its decision on easing COVID-19 restrictions to February 24th. In relevant news, Swiss business lobby group Economiesuisse are pushing for the government to relax some COVID-19 restrictions in March, while there were separate comments from the head of Switzerland’s cantonal doctors association that the government’s goal to distribute vaccines to everyone who wants one by summer is unlikely to be met. (Newswires/Tages Anzeiger)

Czech government approved a new state of emergency for the next 2 weeks due to COVID-19. (Newswires)

Japan approved the Pfizer (PFE) COVID-19 vaccine for domestic use which paves the way for Japan to begin vaccinating health workers within days, while Japanese PM Suga stated he wants to begin vaccinations of medical personnel from Wednesday. (Newswires/Nikkei)

South Korea is to permit the reopening of nightclubs and karaoke bars following a 3-month closure with social distancing rules in Seoul and surrounding Gyeonggi province to be relaxed from level 2.5 to level 2.0, while the rest of the country will be lowered from level 2.0 to level 1.5. (Newswires)

New Zealand PM Arden announced a 3-day snap lockdown in the country’s largest city of Auckland as authorities investigate three new cases of COVID-19 in the community, while the alert level for the rest of the country will increase to Level 2, which requires social distancing and suggests risk of community transmission. (Newswires)

WHO said it has staff already on the ground and supporting the Guinea government as a new Ebola outbreak is declared, while it is also working with health authorities in neighbouring countries to strengthen their preparedness. (Newswires)


Asia-Pac equity markets began the week positively with sentiment underpinned as US equity futures extended to fresh record levels and amid improvements to the global COVID-19 situation on both sides of the Atlantic after the UK reached the 15mln vaccination milestone and with the 7-day average new infection cases in US recently declining to below 100k for the first time in more than 3 months. ASX 200 (+0.9%) traded higher with upside led by commodity names after WTI crude futures extended to above USD 60/bbl and with LME copper prices at their highest level since 2012. Furthermore, earnings results were a driving force among today’s biggest gainers and M&A news added to the constructive mood after Coca-Cola European Partners upped its offer for Coca-Cola Amatil and with Entain said to have offered AUD 3bln for Tabcorp’s wagering business. Nikkei 225 (+1.9%) climbed above the 30k milestone for the first time since August 1990 with the index buoyed by several bullish factors including a weaker currency and better than expected Q4 GDP data, while Japan also approved the Pfizer COVID-19 vaccine which is the first to be approved domestically and paves the way for vaccinations of medical workers this week. KOSPI (+1.4%) was lifted after South Korea eased COVID-19 restrictions which allows the reopening of nightclubs and karaoke bars from a 3-month closure, and with early February trade figures showing a surge in Exports and Imports which rose 69.1% and 71.9%, respectively, during the first 10 days of the month. As a reminder, US, Canada, China, Hong Kong, Taiwan and Vietnam are all closed for holiday on Monday. Finally, 10yr JGBs declined amid the rally in stocks and continued retreat in T-note futures which extended on Friday’s downturn, although the losses for Japan’s 10yr benchmark were cushioned by support near 151.50, better than expected GDP data and with the BoJ present in the market today for over JPY 1.2tln of JGBs mostly concentrated in 1yr-10yr maturities.

US National Security Adviser Sullivan said the US has deep concerns regarding the WHO’s early COVID-19 investigation and said it is imperative that the report is independent and findings are not subject to intervention and alteration from the Chinese government, while the Chinese Embassy in Washington later responded that US has severely undermined the WHO in recent years and should not point the finger at other countries. There were prior reports on Friday that alleged Chinese authorities refused to provide WHO investigators with raw, personalized data on early COVID-19 cases that could help them determine how and when the coronavirus first began to spread in China, according to WHO investigators. (Newswires/WSJ)

Japanese Economic Minister Nishimura said the economic recovery is at half-way point and still below pre-COVID levels, while he also suggested they need to pay close attention to downside economic risks. However, he later added that Q4 GDP demonstrates the recovery potential of Japan's economy and stated that they will swiftly implement measures to support businesses, jobs and people's livelihoods. (Newswires)

South Korea February 1st-10th Trade Balance at provisional deficit of USD 2.46bln, Exports rose 69.1% Y/Y and Imports rose 71.9% Y/Y. (Newswires)

  • Japanese GDP (Q4) Q/Q 3.0% vs. Exp. 2.3% (Prev. 5.3%)
  • Japanese GDP Annualised (Q4) 12.7% vs. Exp. 9.5% (Prev. 22.9%)
  • Singapore GDP (Q4 F) Q/Q 3.8% vs. Exp. 2.4% (Prel. 2.1%)
  • Singapore GDP (Q4 F) Y/Y -2.4% vs. Exp. -3.6% (Prel. -3.8%)
  • Singapore GDP (2020) Y/Y -5.4% (Prel. -5.8%)


UK Chancellor Sunak is mulling extending the stamp duty holiday by six weeks to avoid tens of thousands of home buyers being caught in a “completion trap”. (Telegraph)

UK Government is confident that it avoided its post-Brexit worst-case scenario of disruption from queues of thousands of lorries in Kent, while reports added that overall freight flows returned to the same levels as last year. (BBC)

European Commission’s Sefcovic said London and Brussels plan to set up a top-level emergency hotline to address escalating problems over Northern Ireland post-Brexit. (FT)

Former ECB President Draghi was sworn in as Italy’s Prime Minister at the head of a unity government, while it was previously reported that 5SM leader Di Maio is to remain as Italian Foreign Minister and prev. Bank of Italy Deputy Governor Daniele Franco was appointed as Economy Minister to replace Gualtieri. (Newswires)

S&P affirmed Sweden at AAA; Outlook stable and Fitch affirmed Norway at 'AAA'; Outlook stable. (Newswires)

  • UK Rightmove House Prices (Feb) M/M 0.5% (Prev. -0.9%). (Newswires)


In FX markets, the DXY languished beneath the 90.50 level with haven demand sapped amid the strength across stock markets and with North American participants on an extended weekend as US celebrates Presidents’ Day and Canada observes Family Day. The newsflow for USD over the weekend was mixed with positive developments on the COVID-19 front whereby new infection cases recently slowed, although on the other hand, the US Senate acquitted former President Trump in his impeachment trial after failing to reach the two-thirds super-majority needed for a conviction which underscores the bipartisan divide at the upper chamber of Congress. EUR/USD marginally benefitted from the weakness in the greenback and after former ECB President Draghi was sworn in as the Italian Prime Minister to lead a unity government, while GBP/USD outperformed and eyes the 1.3900 handle amid vaccination progress and with UK PM Johnson optimistic ahead of the launch of his blueprint to relax lockdown restrictions which will be unveiled on February 22nd. USD/JPY reclaimed 105.00 and JPY-crosses coat-tailed on the positive risk tone, while antipodeans also gained due to the risk environment which helped NZD/USD shrug-off early jitters from the announcement of a snap 3-day lockdown in Auckland where 3 new local cases of the virus were discovered.


WTI crude futures were rampant at the open on a break above the USD 60/bbl level in a continuation of the recent gains as the positive risk momentum and improving COVID-19 situation provided a tailwind for prices which printed intraday highs just shy of the USD 61.00/bbl. In terms of pertinent headlines, there were comments over the weekend from Russian Deputy PM Novak that the oil market is on a recovery path and forecasts oil prices at USD 45-60/bbl on average for this year, while Iraq was said to be mulling building oil storage facilities in both China and Pakistan to drive its Asia sales. Elsewhere, gold languished as the effects of a weaker greenback were offset by the lack of haven demand and copper rallied on the risk appetite with LME prices reaching their highest since 2012.

Baker Hughes US Rig Count (w/e Feb 12th): Oil +6 at 306, Nat Gas -2 at 90, Total +5 at 397. (Newswires)

Artic temperatures are continuing to bring cold air from the North Pole to Central US, with snow and ice all the way to the Gulf of Mexico. Texas issued a state of disaster declaration whilst Oklahoma declared a weather disaster emergency. The National Weather Service warned that “extreme impacts are likely”. (Washington Post) Note, a large number of energy infrastructures reside around the most impacted areas. (EIA/Washington Post)

Russian Deputy PM Novak said the oil market is on a recovery path and forecasts oil prices at USD 45-60/bbl on average for this year, while he added that the Nord Stream 2 pipeline will be completed despite US efforts to block it. In related news, US Senators sent a letter to President Biden on Nord Stream 2 pipeline in which they stated the pipeline would be a risk to NATO, while they called for a report from President Biden by February 16th and are urging sanctions against Nord Stream 2. (Newswires)

Iraq Oil Minister said that Iraq is mulling building oil storage facilities in China and Pakistan to drive sales in Asia, while he added that they are in advanced discussions with Chinese state-run companies on building the crude oil storage facilities. (Newswires)

Iran set March Iranian light crude price to Asia at Oman/Dubai + USD 0.85/bbl which is higher by USD 0.05/bbl from the the prior month. (Newswires)


US State Department spokesperson said North Korea is an urgent priority for the US and that the US remains committed to denuclearization of the country. (Newswires)

US Embassy in Myanmar urged its citizens to shelter-in-place following reports of military movements in Yangon where armoured vehicles were seen for the first time since the military coup. (Newswires)

Israeli missiles reportedly hit targets in southern Damascus, Syria, while Syrian state TV noted that air defenses had intercepted Israeli aggression over Damascus. (Newswires/Twitter)


USTs sold hard on Friday, taking yields to cycle highs, as supply concerns took centre stage on the back of Thursday's sloppy bond auction. By settlement, 2s unch. at 0.111%, 10s +4.5bps at 1.203%, 30s +6.1bps at 2.007%; TYH1 volumes were average; 5yr TIPS flat at -1.92% and 30yr TIPS +3.5bps at -0.16%. Bonds were modestly bid out of Europe in otherwise quiet newsflow. However, that soon reversed as Bunds appeared to lead the whole sovereign complex lower as some chunky orders hit a thin stack of bids. The selling appeared very flow-driven given the dearth of newsflow and movement in other risk assets. Many attributed the moves to players looking to off-shed duration exposure heading into the long weekend/China LNY, especially after the sloppy 30-year auction on Thursday, ahead of a busy supply slate next week on both sides of the pond. Yields soon broke above technical support levels, which IFR reported to have triggered algo sell programmes that kept the momentum going to bring US cash yields back to new cycle highs after the pullback from Monday. Traders noted that any attempts to bring yields back lower didn't go well, with bids getting hit hard. Furthermore, with WTI and Brent back on their upward momentum, there were additional inflationary headwinds for duration bulls. T-notes (H1) settled 10 ticks lower at 136-17+.

Fed's Kaplan (non-voter) said the US is still far away from maximum employment and that he expects sluggish improvement in the labour market. (Newswires)

White House said President Biden will work with both parties on stimulus in the week ahead and is to convene in the White House later in the week. (Newswires)

US Senate acquitted former President Trump in his second impeachment trial with the final vote to convict him at 57 vs 43, which was below the two-thirds super-majority needed for a conviction. (Newswires)

US President Biden approved emergency declaration for Texas citing the winter storm. (Newswires)