ON DECK FOR MONDAY, FEBRUARY 14
KEY POINTS:
- Russia-Ukraine tensions and Fed bets roil markets
- Indian CPI hits RBI’s upper bound
- Lagarde, Bullard on tap
- Global Covid watch
- Global Week Ahead
Please go here for the Global Week Ahead—2014 Redux? Also see the accompanying chart deck that was shared over the weekend and this morning. Key topics include:
- Russia-Ukraine tensions loom over markets
- FOMC minutes: Stale, but still useful guidance?
- Canadian inflation: a record overshoot
- A potentially pivotal week for Canada’s border blockades
- UK jobs, CPI to inform risk of 50bps
- Aussie jobs and the RBA
- Want low inflation? Move to China
- A full jobs recovery in the Eurozone?
- Consumers rebounding in the US, UK and maybe Canada?
- Soaring mortgage rates and US housing
- Indian inflation could break the RBI’s bands
- Japan’s rebound
- CBs: Turkey, Philippines to hold
Cupid’s arrow missed stocks this morning. Blame Russia alongside continued market positioning around the Fed. European exchanges are leading the way down with declines of roughly 2–3% while N.A. futures are so far down by up to about -1%. Sovereign bonds are picking up some of the flow with ten year yields down by about 1–9bps across major markets and led by EGBs and with US and UK front ends flat to slightly cheaper. The latter signals that it’s not just Russia-Ukraine tensions driving things as markets continue to price higher policy rate risk. Oil is nudging gently higher and the USD is a toucher stronger along with other classic safe havens like the yen and Swiss franc.
There was nothing of consequence released overnight. A G7 statement released earlier this morning followed Biden’s call with Putin on Saturday with a unified threat of strong sanctions being applied if—or perhaps more like when—Russia invades. Canadian protests continue with the main Ambassador bridge cleared but little action on all other fronts amid rising scrutiny of police efficacy (here, here, here, here).
On tap for today is a very light line-up including some central bank-speak (Bullard at 8:30amET, Lagarde at 11:15amET). India’s inflation rate hit the upper end of the RBI’s 2-6% target range.
Please see the accompanying charts as a weekly depiction of progress toward reducing omicron’s grip on several major countries. Hospitalizations are turning materially lower in the US, Canada, UK, Australia and parts of Europe.
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