Notes/Observations
G20 communiquagreed to avoid competitive devaluation of their currencies, but left countries able to pursue aggressive monetary policy to stimulate their own economies ,as long as that policy leads to domestic price stability.
Shanghai Composite traded for the first time in a week, closed down 0.4%
Niikei225 Index +2.1% after G20 did not name Japan as a currency manipulator.
S&P affirms Japans sovereign rating at AA-
Former BoJ Dep Gov Muto still seen as the frontrunner to head the BOJ.
Japan PM Abe continues to put pressure on the BOJ to ease aggressively to boost the Yen and inflation.
Bank of Spain Dec Bad Loans at 10.4% v 11.4% prior (first monthly improvement in over a year but due to transfer of assets to the bad bank (SAREB)
Spanish 10-year gov't yield at 5.25% for 1-week high vs. pre-European open level of 5.17%
Sugar short positions reach record high levels.
US equity and fixed income markets closed for holiday.
Economic Data
(JP) Japan Jan Final Machine Tool Orders Y/Y: -26.4% v -26.1% prelim
(EU) ECB: €1.8B borrowed in overnight loan facility vs. €122.0M prior; €131.9B parked in deposit facility vs. €124.3B prior.
(EU) Euro Zone Dec Current Account nsa: €27.0B v €20.8B prior; Current Account Seasonally Adj: €13.9B v €15.9B prior.
(ES) Bank of Spain Dec Bad Loan Ratio: 10.4% v 11.4% prior (1st MoM improvement in over a year)
Fixed Income:
(SK) Slovakia Debt Agency (ARDAL) sold total €400.2M in 2015 and 2017 bonds.
(NL) Netherlands Debt Agency (DSTA) sold total €3.2B vs. €4.5B indicated in 3-month and 6-month Bills.
Sold €2.09B vs. €1.5-2.5B indicated in 3-month bills; Yield: 0.07% v 0.000% prior; Bid-to-cover: 1.96x v 1.64x prior.
Sold €1.11B vs. €2.0B indicated in 6-month Bills; Avg Yield: 0.026% v +0.021% prior; Bid-to-cover: 2.66x v 3.17x prior.
SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM
Equities
Indices: (as of 5:15 ET): FTSE 100 -0.2% at 6313, DAX +0.1% at 7,600, CAC-40 -0.4% at 3,644, IBEX-35 -1.3% at 8046, FTSE MIB -0.9% at 16,347, SMI -0.2% at 7,483
European equities were in negative territory by mid-session for the third straight of losses, after failing to extend multi-year highs. Political uncertain in Italy ahead of its elections at the end of the week was one factor for the lack of risk appetite. Peripheral yields rose in the session as a result. Financial stocks which headed the recent rally on the back of falling macro tail risks, were lower as investors banked some profits
UK movers : Phytopharm [PYM.UK] Shares decline by over 80% after Cogane had no effect in phase II Parkinson's Disease Clinical Trial. Bumi [BUMI.UK] at 6-month highs after shareholder Roselani said to have found buyer for £117M stake Costain COST.UK: JV project, awarded £110M Crossrail contract with Skanska.
Germany movers: Deutache Telekom DTE.DE: Major shareholder Paulson & Co not in favor of plans to merge with T-Mobile USA
France movers: Natixis [KN.FR]: higher by over 15% after announcing exceptional payment of €2B, or €0.65 per share, to its shareholders Eurofins [ERF.FR] higher by over 5%, after announcing special package that combines tests for horsemeat and detection of Phenylbutazone in samples of meat products in response to the ongoing meat contamination scandal in Europe.
Italy movers: Banca Monte Paschi [BMPS.IT]