EUROPEAN OPEN: Equities are mixed amid corporate earnings updates; EZ IP, ECB's Lagarde ahead

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  OVERNIGHT: Equities were mixed on Wall Street after a 'mixed' CPI report for January and amid Fedspeak (see here). The APAC session saw stocks mostly lower after the choppy lead from the US, while local traders also were focussed on a heavy earnings slate; RBA Governor Lowe reiterated that further rate hikes would be forthcoming, while the PBoC boosted funds through its Medium-term Lending Facility at an unchanged rate (see here).


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  EUROPEAN OPEN: European stocks start the midweek session with a note of caution, with Fed officials continuing to make the case for tighter monetary policy after a sticky January inflation report. It has been a busy morning of corporate earnings in Europe: Barclays (BARC LN) annual profits fell over trading error, while IB revenues disappointed. It was more positive for Glencore (GLEN LN), which will return USD 7.1bln to shareholders after trading profits rise to a record high in 2022. In the consumer sectors, Heineken (HEIA NA) profits top expectations on Asia recovery, while Ahold Delhaize (AD NA) topped sales expectations after decent US performance. In industrials, Airbus (AIR FP) reportedly plans to boost production rates of its two biggest models as it tries to capitalise on resurgent demand for long-haul travel.


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  UK INFLATION: Data out of the UK today showed consumer prices falling 0.6% M/M in January, a deeper-than-expected fall vs the -0.4% M/M that analysts were predicting. That saw the annual measure fall from 10.5% Y/Y in December to 10.1% Y/Y in January (exp. 10.3%), while the core rate of CPI eased to 5.8% Y/Y (exp. 6.2%, prev. 6.3%). Capital Economics said the data showed that disinflationary pressures were building and broadening, pointing out that it was the easing in services inflation that will do the most to reassure the Bank of England that inflation is moderating as it had hoped. "This suggests that the end of the Bank of England’s tightening cycle just got a bit closer," it said. In wake of the data, when UK markets opened, implied probability for a BoE rate hike of 25bps at its March meeting fell from around 89% to 66%.

DAY AHEAD:

• Our live day ahead calendar can be accessed here; a PDF version can be accessed here.


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  EUROPEAN DATA/SPEAKERS: Eurozone industrial production is expected to slip in December. ECB President Lagarde will present the central bank's 2022 Annual Report to the European Parliament, where she will give an overview of the actions the central bank has taken in the last year.


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  NORTH AMERICAN DATA/SPEAKERS: There are a few key items on the US data slate: retail sales data for January are expected to post a rise in the month, rebounding from December’s downside. We will also see the release of US industrial and manufacturing production for January, which are likely to show sequential improvements vs December. The Empire Fed manufacturing survey for February will help to form initial expectations of what the ISM manufacturing data (released on March 1st) will look like. Elsewhere, business inventories data for December is due. Towards the close, TIC flows data for December will be released. From Canada, manufacturing sales and wholesale trade data is out in the pre-markets. There is no scheduled Fedspeak on Wednesday.


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  SUPPLY: On the supply front, Germany will auction EUR 2.5bln of 2048 and 2052 debt, while the US will auction USD 15bln of 20yr Bonds. Click here for our G7 daily bond auction note.


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  ENERGY: The API’s weekly inventory report was said to have shown headline crude stocks +10.5mln (exp. +1.1mln), Cushing +2mln, gasoline +0.8mln (exp. +1.5mln), distillates +1.7mln (exp. +0.4mln). Elsewhere, WTI March 2023 options will expire today.


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  CORPORATE EARNINGS: Major US Corporate earnings due today include: Cisco (CSCO), Nutrien (NTR), Kraft Heinz (KHC), Zillow (ZG), Barrick Gold (GOLD), Biogen (BIIB), Analog Devices (ADI), Marathon Oil (MRO), Shopify (SHOP). Click here for our Daily US earnings estimates note.

EQUITY SPECIFIC NEWS:

• Our full European equity specific briefings for February 15th can be accessed here and here.


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  COMMUNICATIONS: United Internet (UTDI GY) announces resolutions to reduce capital. Telecom Italia (TIT IM) sees a return to core profit growth as its home business improves.


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  CONSUMER CYCLICAL: Delivery Hero (DHER GY) will repurchase EUR 476.4mln of convertible bonds due 2024, and EUR 250mln of 2025 convertible bonds. Kering (KER FP) revenue misses expectations, Gucci sales down 14%, but said start of 2023 was encouraging in China. LVMH (MC FP) appoints Pharrell Williams as the head of Louis Vuitton menswear design. Michelin (ML FP) downgraded at HSBC.


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  CONSUMER STAPLES: Carrefour (CA FP) sales and LFL topped expectations in Q4, sees further profit growth this year, also expects customers to continue trading down amid high inflation. Ahold Delhaize (AD NA) topped sales expectations after decent US performance. Heineken (HEIA NA) profits top expectations on Asia recovery.


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  ENERGY: Vopak (VPK NA) sees higher core profits this year, has begun review of three Dutch terminals.


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  FINANCIALS: Barclays (BARC LN) annual profits fell over trading error, while IB revenues disappointed; it is also reportedly pulling back a large share of its GBP 2.5bln consumer lending operations. Deutsche Bank (DBK GY) cuts ties with property developer Rene Benko over corruption concerns. Hargreaves Lansdown (HL/ LN) half year profit jumped. SNAM will reportedly sell its stake in Italgas (IG IM). UniCredit (UCG IM) is reportedly exploring strategic options for its merchant acquiring business.


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  HEALTH CARE: QIAGEN (QIA GY) TB blood test gains CE-marking under the new EU IVDR framework.


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  INDUSTRIALS: Airbus (AIR FP) reportedly plans to boost production rates of its two biggest models as it tries to capitalise on resurgent demand for long-haul travel. Vinci (DG FP) affirmed FY23 guidance. BAE Systems (BA/ LN) was awarded a USD 466mln US contract modification. LockBit sought a GBP 65.7mln ransom from IDS' (IDS LN) Royal Mail for the return of encrypted data, which the company's board refused to pay. Kuehne & Nagel (KNIN SW) downgraded at UBS.


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  MATERIALS: Glencore (GLEN LN) to return USD 7.1bln to shareholders after trading profits rise to record high in 2022. Brenntag (BNR GY) upgraded at Citi. Thyssenkrupp (TKA GY) upgraded at JPMorgan Chase.


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  REAL ESTATE: Swiss Prime (SPSN SW) upgraded at Baader Helvea.


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  TECH: ASML (ASML NA) said new China export controls would not have a material impact this year. Sandvik (SAND SS) to supply SEK 370mln worth of battery EVs to Norway’s Rana Gruber.

15 Feb 2023 - 08:10- Fixed IncomeData- Source: Newsquawk