EU stocks rebounded the most in six weeks ahead of FOMC decision


– Focus on the FOMC rate decision. The Fed is expected to signal its plans for its first interest rate hike since 2018.

– European stocks rally the most in the six weeks ahead of the FOMC decision.

– Companies due to report during the New York morning include Abbott Labs, ADP, Anthem, Amphenol, Boeing, Freeport-McMoRan, General Dynamics, Corning, Hess Corp, Kimberly-Clark, Knight-Swift Transportation, Monro, Norfolk Southern, Oshkosh, Progressive, AT&T, TE Connectivity.


– BOJ Views Summary for January Meeting: Consumer inflation is expected to top 1% as pricing pressure builds on changing corporate pricing behavior. The CPI could temporarily approach 2% from April, although the key is whether the economy had momentum for these moves to be sustainable.


– French and German leaders (Macron and Scholz) said they were united in the need for de-escalation in Ukraine, with diplomatic talks expected to continue. Position reiterated that Russia would pay a high price if it attacked Ukraine.

– Sue Grey’s report into possible UK lockdown breaches is said to be largely complete and could be released on Wednesday January 26.

– EU’s Sefcovic reportedly told member states there was no prospect of an imminent breakthrough in the Northern Ireland Protocol negotiations.

– The Italian center-left party rejected the 3 center-right candidates for the presidency in the 2nd vote. Let’s still hope to reach an agreement with the center-right on a consensus presidential candidate.

– Goldman Sachs analyst: The current correction in global equity markets is unlikely to deepen further and turn into a bear market.


– President Biden said it could displace some of the 8.5,000 US troops in the “short term”; No intention of putting US forces in Ukraine.

– The United States has declared itself ready to impose export controls on critical sectors of the Russian economy if it decides to invade Ukraine.


– Weekly inventories of API crude oil: -0.9m vs. +1.4m previously.

– The US Department of Energy announced the loan of 13.4 million barrels of SPR crude to seven companies.

– Some OPEC+ delegates believed the recent oil price hike was fueled by geopolitical risks and the fuel shift, not demand, which could lead them to continue the 400,000 bpd hike as expected for March.

Fixed income/FX/Commodities/Erratum speakers


clues [Stoxx600 +1.73% at 467.52, FTSE +1.71% at 7,497.31, DAX +1.98% at 15,423.91, CAC-40 +2.04% at 6,977.57, IBEX-35 +2.02% at 8,651.16, FTSE MIB +1.80% at 26,497.00, SMI +1.14% at 12,081.64, S&P 500 Futures +1.12%].

Market Focal Points/Key Themes: European indices open higher across the board and move further into the green as the session progressed; sectors leading up include consumer discretionary and technology; while lagging sectors include telecommunications and financial services; support from the oil and gas sub-sector after the rise in the price of crude oil yesterday; EQT sells its ESG stake; Playtech Says Support for Aristocrat Deal; Aareal receives improved offer from Atlantic; UK CMA Issues Enforcement Order on National Express – Stagecoach Merger; Imerys would seek to sell its high temperature solutions unit; focus on concluding the FOMC meeting later in the session; expected earnings for the rest of the day include Anthem, Oshkosh, ADT and Abbott.


Consumer Discretionary: Wizz Air [WIZZ.UK] +3% (gains).

Energy: Vestas Wind Systems [VWS.DK] +4% (preliminary results).

Health: Lonza Group [LONN.CH] -1.5% (earnings), Essity [ESSITY.B.SE] -4% (price increase; profits).

Manufacturers: Somero Enterprises [SOM.UK] +6% (trade update).

Technology: Playtech [PTEC.UK] -2% (offer update).

Materials: Wacker Chemie [WCH.DE] +5% (preliminary results), Fresnillo [FRES.UK] -13% (production; declining outlook).


ECB Simkus (Lithuania) said there was no evidence of a significant change in the ECB forecast; the inflation outlook was no reason to change course. The ECB stood ready to act if the economic situation changed, but stressed that it would have to end bond purchases before any rate hikes.

Japanese Prime Minister Kishida reiterated that the specifics of monetary policy are up to the BOJ to decide; expects the central bank to continue its efforts to achieve the 2% inflation target.

Min Lavrov of Russian Foreign Affairs reiterated his position that West did not provide a constructive response to his security proposal and then would take appropriate action. To respond to Ukraine’s aggressive moves by the West.

Peskov, Russian government spokesman said sanctions directed against President Putin would be politically destructive (**Reminder: On January 26, President Biden noted that he would consider directly sanctioning President Putin if Russia invaded Ukraine).

China to begin a 3-year anti-money laundering crackdown to be carried out by the PBOC and Chinese police.

OPEC+ delegates it was expected to stick to the modest production ramp-up plan.

Currency/Fixed Income

– USD mostly flat ahead of FOMC rate decision. Market participants expect to see a strong signal from the Fed of a 25bp hike coming in March with additional hikes thereafter.

– EUR/USD remains below the 1.13 mark while USD/JPY is above the 114 mark.

Economic data

– (SE) Sweden Dec PPI M/M: 2.8% vs. 1.3% before; Y/Y: 20.1% vs. 18.1% before.

– (SE) Sweden’s trade balance in December (SEK): -5.5 billion against +0.6 billion previously.

– (DK) Denmark December retail sales M/M: -4.5% vs. -0.4% prior; Y/Y: 3.4% vs. 1.5% before.

(FR) France Jan Consumer confidence: 99 vs. 99th.

– (ES) Spain Nov Total mortgage loans Y/Y: 29.0% vs. 30.3% before; Y/Y home loan approvals: 24.1% vs. 27.9% prior.

– (CH) Swiss survey on January expectations: 9.5 against 0.0 before.

– (PL) Poland Unemployment rate in December: 5.4% vs. 5.4%e.

Issuance of fixed income securities

– (SE) Sweden sold a total of 2.5 billion SEK against 2.5 billion SEK indicated in the bonds 2023 and 2032.

– (NO) Norway total sold NOK 2.0 billion vs. NOK 2.0 billion shown in March 2024 3% bonds; Average return: 1.53% vs. 1.17% before; Bid to cover: 5.33xv 4.72x before.

– (UK) BMD sold £600 million in inflation-indexed gilts at 0.125% in March 2051 (UKTi); Actual return: -2.191% vs. -2.261% before; bid-to-cover: 2.04xv 2.37x front.

– (THIS) The Italian Debt Agency (Tesoro) sold €3.75bn vs. €3.25-3.75bn in the indicated range in November 2023 0.00% BTP bonds; Average return: -0.13%; bid to cover: 1.41x.

– (THIS) Italian Debt Agency (Tesoro) sold a total of 1.0 billion euros against 0.75-1.25 billion euros in the range indicated in the I/L bonds 2026 and 2041 (BTPei).

Look forward

– (RO) Romania Dec M3 Money supply Y/Y: No est v 14.7% before.

– 05:25 (EU) Daily ECB liquidity statistics.

– 05:30 (DE) Germany to sell 4.0 billion euros of February 2032 0.0% Bunds; Average return: %v -0.09% before; bid-to-cover: xv 1.46x before (Jan 5, 2022).

– 05:30 (EU) Monthly allocation from the ECB in the context of a 3-month LTRO tender.

– 06:00 (FR) France Q4 Total job seekers: No is v 3,307M before.

– 06:00 (BR) Brazil Jan FGV Construction costs M/M: 0.6%ev 0.3% before.

– 06:00 (RU) Russia has canceled the scheduled OFZ Bond auction.

– 06:00 (CZ) The Czech Republic will sell bonds 2029, 2032 and 2037.

– 06:45 (US) Libor daily fixing.

– 07:00 (US) MBA mortgage applications with Jan. 21: no est v 2.3% before.

– 07:00 (MX) Mexico November Retail Sales M/M: 0.2%ev 0.3% before; Y/Y: 3.1%ev 5.3% before.

– 07:00 (BR) Brazil mid-January IBGE Inflation M/M: 0.4%ev 0.8% before; Y/Y: 10.1%ev 10.4% before.

– 07:00 (UK) Weekly Question Time in the House.

– 07:30 (BR) Brazil’s current account balance in December: -$6.3 billion vs. -$6.5 billion previously; Foreign direct investment (FDI): 3.1 billion dollars against 4.6 billion dollars previously.

– 08:00 (PL) Poland Dec M3 Money supply M/M: 1.5%ev 1.9% before; Y/Y: 9.9%ev 10.1% before.

– 08:00 (UK) Daily Baltic Dry Bulk Index.

8:30 a.m. (US) Merchandise trade balance in December: -$96.0 billion vs. -$97.8 billion previously.

08:30 (US) December Preliminary wholesale inventories M/M: 1.2%ev 1.4% before; Retail stocks M/M: 1.5%ev 2.0% before.

10:00 (CA) Bank of Canada (BOC) decision on interest rates: should leave interest rates unchanged at 0.25%.

10:00 a.m. (United States) Sales of new homes in December: 760 K against 744 K previously.

– 10:30 a.m. (US) Weekly DOE oil inventories.

– 11:00 (RU) Russia Dec PPI M/M: 1.1%ev 2.7% before; Y/Y: 28.8%ev 29.2% before.

– 12:30 PM (BR) Brazil Dec Total Federal Debt (BRL): No est v 5.499T ahead.

– 13:00 (United States) The Treasury sells 2-year FRNs.

– 2:00 pm (US) FOMC Interest Rate Decision: Expected to leave interest rates unchanged at 0.00-0.25%; The interest rate on reserve balances (IOER) is expected to remain unchanged at 0.15%.

– 2:00 p.m. (AR) Argentina Nov Shop Center Sales Y/Y: No est v 160.8% before; Supermarket sales Y/Y: No est v 5.2% before.

– 2:30 p.m. (US) Fed Chairman Powell issues a press conference on the rate decision.

4:00 p.m. (CL) Central Bank of Chile (BCCh) interest rate decision: The target overnight rate is expected to rise 125 basis points to 5.25%.

– 4:00 PM (KR) South Korea February Manufacturing Survey: No Est v 92 Ahead; Non-Manufacturing Survey: No is v 78 prior.

– 4:00 p.m. (NZ) New Zealand government 5-month financial statements.

16:45 (NZ) New Zealand Q4 CPI Q/Q: 1.3%ev 2.2% before; Y/Y: 5.8%ev 4.9% before.

– 6:30 p.m. (AU) Australia Dec Leading Index M/M: No east against 0.1% before.

– 19:30 (AU) Australia Q4 Import Price Index Q/Q: 1.4%ev 5.4% before; Export price index T/T: -2.9%ev +6.2% before.

– 8:00 PM (PH) Philippines Trade Balance in December: -$4.5 billion vs. -$4.7 billion previously; Exports Y/Y: 7.5%ev 6.6% before; Y/Y imports: 29.5% vs. 36.8% before.

– 8:30 pm (CN) December industrial profits in China Y/Y: no east against -9.6% before.

– 9:00 p.m. (PH) Philippines Q4 GDP Q/Q: 3.0%ev 3.8% before; Y/Y: 6.4%ev 7.1% before; Annual GDP 2021 Y/Y: 5.1%ev -9.6% before (revised from -9.5%).

– 9:00 p.m. (KR) Department Store Sales in South Korea Y/Y: No east vs. 9.6% prior; Y/Y discount store sales: No is v -10.3% before.

– 22:35 (JP) Japan will sell 2-year JGB bonds.

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