• European equities are entirely in the green, with semi-conductor names lifted in a read-across from Applied Materials post-earnings; US equities are mixed, NQ leads
• Dollar is around flat, JPY underperforms after dovish BoJ Ueda speak
• Bonds are subdued, largely led by the higher-than-expected UK Retail Sales print, as attention turns to US PPI/Fed speak
• Crude is softer, paring the prior day’s advances; Base metals bid
• Looking ahead, US PPI, UoM Sentiment, Comments from Fed’s Daly, Bostic, Barr & BoE’s Pill.

EUROPEAN TRADE

EQUITIES

• European bourses, Stoxx600 (+0.6%) began the session entirely in the green and continued to grind higher throughout the morning.
• The AEX (+1.0%) is the European outperformer, lifted by strength in semi-conductor names after US-listed Applied Materials (+13.2%) reported strong earnings after-hours; BE Semiconductor (+3.2%), ASM (+3.2%), ASML (+1.3%).
• European sectors hold a positive tilt, with Basic Resources leading, boosted by higher underlying base metal prices. Tech benefits in a read-across from Applied Materials results. Telecoms lags, hampered by losses in Vodafone (-1.0%).
• US Equity Futures (ES +0.2%, NQ +0.5%, RTY +0.1%) are mixed, with clear outperformance in the NQ, with optimism permeating within the index after Applied Materials (+13.2%) reported strong results.
• Click here and here for the sessions European pre-market equity newsflow, including earnings from Eni, Sika, Swiss Re. and more.
• Click here for more details.

FX

• Contained trade for DXY and within a tight 104.26-44 range, respecting yesterday's 104.18-71 range. Upside sees the WTD peak at 104.97, as the index awaits impetus from US PPI.
• EUR/USD is contained within yesterday's 1.0724-84 range as ECB speak does little to sway price action. Any USD selling could prompt a test of 1.08 but Monday's move above the level was unconvincing.
• Following UK Retail Sales Cable initially spiked higher to 1.2605 before gains were trimmed as some desks questioned seasonality issues with the data and with the BoE focussed on wages/inflation. Downside targets include 200DMA at 1.2654.
• JPY is the laggard across the majors with some noting BoJ Governor Ueda remaining dovish overnight. So far USD/JPY has printed a peak of 150.36 and is yet to threaten yesterday's top of 150.58.
• Click here for more details.

FIXED INCOME

• Gilts gapped lower by just under 30 ticks to 97.67 at the open and then waned further to 97.56, following strong Jan. Retail Sales which speak to the signs of an upturn flagged by Bailey pre-GDP.
• Bunds have been driven lower by UK Retail Sales with newsflow limited; as such Bunds have not meaningfully moved from their 133.08 session trough.
• USTs are moving in tandem with EGBs/Gilts as we head towards the sessions next listed events of Fed's Barkin and Barr who are scheduled either side of PPI; currently holding around the 109-28 trough.
• Click here for more details.

COMMODITIES

• Crude prices have started ebbing lower, paring back some of the prior day's advances, but the European morning has been quiet thus far in the run-up to the US PPI data and more Fed speak; Brent testing USD 82.00/bbl to the downside.
• Muted action across precious metals but prices remain underpinned by yesterday's Dollar pullback and overall geopolitics; spot gold is flat around yesterday's highs (USD 2,008.34/oz).
• Base metals are mostly firmer with copper among the outperformers despite an obvious catalyst but with desks citing rate cut hopes following yesterday's US Retail Sales data.
• Japan's Cosmo Oil restarted No.1 CDU in 220k BPD Chiba refinery on Feb 14th following system issues.
• Japan's Eneos (5020 JT) shut its 153k BPD Negishi CDU on Feb 10th amid equipment failure.
• Japan is said to be mulling an extension of gasoline subsidies beyond April and gradually phasing it out by summer, according to Kyodo
• Azerbaijan Jan oil production 474k BPD (prev. 482k in Dec)
• Click here for more details.

NOTABLE EUROPEAN HEADLINES

• UK opposition Labour Party won the by-elections in Wellingborough and Kingswood which were both previously held by the Tories, according to The Times.
• ECB's Villeroy said the principle of a rate cut this year seems to be a given and there is still a question of a precise calendar for a rate cut, while he added there are several reasons as to why the ECB should not wait for too long before making the first rate cut, according to an interview with L'Echo cited by Reuters.
• ECB's Schnabel says monetary policy needs to remain restrictive until can be confident that inflation will sustainably return to our medium-term target. Must be cautious not to adjust the policy stance prematurely. Productivity growth is a key determinant of medium-term inflation and real interest rates, which means it directly affects the conduct of monetary policy. Persistently low, and recently even negative, productivity growth exacerbates the effects that the current strong growth in nominal wages has on unit labour costs for firms. This increases the risk that firms may pass higher wage costs on to consumers, which could delay inflation returning to our 2% target. New estimates show that an increase in trend productivity growth by one percentage point can increase r-star by 0.6 percentage points; a higher r-star would reduce the need to embark on unconventional policy measures that often come with larger side effects.
• Russian Federation Central Bank Key Rate (Feb) 16.0% vs. Exp. 16.0% (Prev. 16.0%); sees its average key rate at 13.5-15.5% in 2024 (prev. forecast 12.5-14.5%;

DATA RECAP

• UK Retail Sales MM (Jan) 3.4% vs. Exp. 1.5% (Prev. -3.2%, Rev. -3.3%); Click here for more details.
• UK Retail Sales Ex-Fuel YY (Jan) 0.7% vs. Exp. -1.6% (Prev. -2.1%); Retail Sales YY (Jan) 0.7% vs. Exp. -1.4% (Prev. -2.4%); Retail Sales Ex-Fuel MM (Jan) 3.2% vs. Exp. 1.7% (Prev. -3.3%, Rev. -3.5%)
• German Wholesale Price Index YY (Jan) -2.7% (Prev. -2.6%); Wholesale Price Index MM (Jan) 0.1% (Prev. -0.6%)
• Swedish Unemployment Rate SA (Jan) 8.2% vs. Exp. 8.2% (Prev. 8.2%); Unemployment Rate (Jan) 8.5% (Prev. 7.7%); Total Employment (Jan) 5.136M (Prev. 5.188M)
• French CPI (EU Norm) Final YY (Jan) 3.4% vs. Exp. 3.4% (Prev. 3.4%); CPI (EU Norm) Final MM (Jan) -0.2% vs. Exp. -0.2% (Prev. -0.2%)

EARNINGS

• Applied Materials (AMAT) - Q1 2024 (USD): Adj. EPS 2.13 (exp. 1.91), Revenue 6.71bln (exp. 6.48bln). Sees Q2 Adj. EPS USD 1.79-2.15 (exp. 1.80). Sees Q2 rev. USD 6.5bln (exp. 5.92bln). CEO says there is a reacceleration in capital investment by cloud companies; memory investment levels are normalising; fab utilisation is increasing across all device types. The DRAM market is strengthening. Sees leading-edge foundry logic being stronger Y/Y in 2024 even though some important projects are delayed. Expect NAND revenues to be up Y/Y but NAND to remain less than 10% of total wafer fab equipment spending. CFO says expect the equipment market to grow as fast or faster than semiconductors over time. (Newswires) Shares +12.7% in pre-market trade
• Coinbase Global Inc (COIN) - Q4 2023 (USD): EPS 1.04 (exp. -0.01), Revenue 953.8mln (exp. 826.3mln). Q1 subscription and services revenue view USD 410-480mln (exp. 367.3mln). (Newswires) Shares +10.7% in pre-market trade
• DoorDash Inc (DASH) - Q4 2023 (USD): EPS -0.39 (exp. -0.16), Revenue 2.3bln (exp. 2.24bln). FY gross order value view 74-78bln (exp. 76.54bln). FY adj. EBITDA 1.5-1.9bln (exp. 1.62bln). Q1 EBITDA view 320-380mln (exp. 360.3mln). Q1 Marketplace gross order value 18.5-18.9bln (exp. 18.57bln). (DoorDash IR) Shares -7.5% in pre-market trade
• DraftKings Inc (DKNG) - Q4 2023 (USD): EPS -0.10 (exp. 0.08), Net income -44.6mln (exp. profit 39.7mln), Revenue 1.23bln (exp. 1.24bln). Monthly Unique Payers 3.5mln (exp. 3.44mln). Average revenue per monthly unique payer 116 (exp. 119.79). FY24 revenue view 4.65-4.9bln (prev. 4.5-4.8bln). FY24 adj. EBITDA view 410-510mln (prev. 350-450mln). DraftKings to acquire Jackpocket for USD 750mln. (DraftKings IR) Shares -3.5% in pre-market trade
• Eni (ENI IM) – Q4 (EUR): adj. PBT 3.16bln (exp. 3.39bln), adj. Net 1.6bln (exp. 1.71bln), adj. EBIT 3.76bln (prev. 4.98bln). FY24 outlook will be provided at the 14th March capital markets day. Shares -1.7% in European trade

NOTABLE US HEADLINES

• Fed's Bostic (voter) said the Fed does not face an urgency to cut rates given the current economy and a strong economy argues for patience in adjusting monetary policy but added the Fed is likely soon to contemplate cutting rates. Bostic said inflation is likely to decline more slowly than markets expect and the fight is not finished on getting inflation back to 2% but also noted the Fed has made solid progress in lowering inflation and it is unlikely that January CPI signals a big change in the trend of weakening inflation. Furthermore, Bostic said if inflation retreats faster, he will change his mind on the rate outlook and currently forecasts two rate cuts this year.
• US House Republican Emmer says the chamber will not pass another temporary spending bill to avert a shutdown when the current March 1st deadline expires.
• Nordea believes the Fed will delay its first rate cut to September 2024. Given this, now look for the first Norges Bank cut in December (prev. September), with risks of no 2024 cut.

GEOPOLITICS

MIDDLE EAST

• US President Biden raised the situation in Rafah during a call with Israeli PM Netanyahu and reiterated his view that a military operation should not proceed without a credible and executable plan for ensuring the safety of and support for civilians in Rafah. Biden also reaffirmed his commitment to working tirelessly to support the release of all hostages as soon as possible, according to Reuters.
• US State Department said the US is working with Qatar, Israel and Egypt on the hostage talks to find an agreement and there are some very hard issues to be resolved, while it was also reported that US Secretary of State Blinken said he believes an Israel-Hamas hostage deal is possible.
• US VP Harris is to meet Israeli President Herzog and will meet Iraq's PM Al-Sudani at the Munich Security Conference today, while Secretary of State Blinken is also to meet with Chinese Foreign Minister Wang at the Munich Security Conference.
• "Israeli newspaper Haaretz: Officials expect to conclude a deal to exchange detainees with Hamas within Ramadan month [March]", according to Sky News Arabia.
• "Yemen said its armed forces fired missiles at a British ship passing though the Gulf of Aden on Thursday and scored a “direct hit” in their latest operation in solidarity with the Palestinians.", according to Tehran Times.

OTHER

• Japanese Chief Cabinet Secretary Hayashi said they are aware of comments made by North Korean leader Kim's sister but added that they cannot accept North Korea's claim that abduction issues were solved, while there is no change to our position to resolve various issues with North Korea comprehensively.
• Belarusian President Lukashenko says several Ukrainian citizens were detained on border with Belarus for transporting explosives for use in Russia and Belarus

CRYPTO

• Bitcoin is firmer on the session, though still holds just shy of the USD 52k mark.

APAC TRADE

• APAC stocks sustained the positive momentum from Wall St where yields softened after the US data deluge.
• ASX 200 was led higher by the mining sector but with the upside capped as large insurers faltered post-earnings.
• Nikkei 225 rallied and briefly approached within 100 points of its record high before reversing some of the gains.
• Hang Seng climbed back above the 16,000 level with notable gains in biopharmaceuticals and property with the latter underpinned after a court dismissed liquidation petitions against Chinese developer Logan Group.

NOTABLE HEADLINES

• BoJ Governor Ueda said when a sustained and stable achievement of the price target comes into sight, they will examine whether to maintain various easing measures including the negative interest rate. Ueda also noted the specific means of rolling back stimulus will depend on economic conditions at the time and based on the current economic and price outlook, monetary conditions will likely remain accommodative even after ending negative rates.
• Japanese Finance Minister Suzuki said a weak yen has merits and demerits, while he is concerned about the negative aspects of a weak yen and reiterated that rapid FX moves are undesirable and is closely watching FX moves with a sense of urgency.
• RBNZ Governor Orr refrained from talking about the rate outlook and said they have more work to do to get inflation expectations anchored to 2%. Governor Orr said a flexible approach to inflation targeting with a medium-term focus remains appropriate and bringing levels of core inflation back in line with the bank's 1-3% target is an important part of bringing inflation back to the 2% midpoint, while he also noted the removal of the maximum sustainable employment objective does not mean any big changes to RBNZ's monetary policy strategy.

DATA RECAP

• Singapore Non-Oil Exports MM (Jan) 2.3% vs. Exp. 0.5% (Prev. -2.8%); Non-Oil Exports YY (Jan) 16.8% vs. Exp. 5.4% (Prev. -1.5%)