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MNI GLOBAL MORNING BRIEFING: Ukraine Crisis Remains Focus

MNI (London)

Monday is a busy day on the data front. Final Manufacturing PMIs open the schedule, concentrating on Europe in the AM before the US release in the afternoon. Other highlights will be both Italian and German flash February inflation prints.

Markets remain tense, as the Ukraine crisis deepens. Monday's development saw talks between President's Putin and Macron, as well as a meeting on the Ukraine-Belarus border between Russian and Ukrainian and an official application by Ukrainian President Zelensky for EU membership.

Eurozone & UK Manufacturing PMIs (0815-0930 GMT)

Spanish and Italian manufacturing PMI prints will be the first and final readings for February, with both seen softening by 0.2 and 0.3 points respectively. Spain is expected to inch down to 56.0, whilst Italy is seen slightly higher at 58.0.

French, German and Eurozone manufacturing final prints are all anticipated to confirm flash estimates this morning. The Eurozone aggregate and Germany see some moderation from January numbers, edging down to 58.4 from 58.7 in the Eurozone, and down to 58.5 from 59.8 in Germany. Notably, German input prices slowed to a 12-month low growth rate and output prices plateaued (albeit at the fourth-strongest recorded reading). French manufacturing on the other hand saw an unexpected boost to 57.6 from 55.5 in January, led by new orders increases on the back of strengthening demand and employment.

Across the region supply chain disruptions and bottlenecks remain persistent, nonetheless, appearing to be easing in certain areas.

The UK flash reading of 57.3 is also expected to be confirmed, stabilizing around the January print. Input cost inflation was seen easing, however high Covid cases created substantial absenteeism over the survey period.

Italian & German Flash CPI Continue to Climb (1000/1300 GMT)

Italy’s February flash CPI sees a continuation of price growth to +5.5% y/y from +5.1% y/y and +0.3% m/m from 0.0% m/m in the harmonized print. Following a morning of individual German state CPI readings, German flash headline inflation is also projected to tick upwards. Harmonized headline CPI is similarly seen growing to +5.4% y/y from +5.1% y/y in January, however with a slight softening on the month of +0.8% m/m from +0.9% m/m. Energy remains the key upwards driver.

This will be uncomfortable news for the ECB, which had to shift towards more flexibility in rhetoric concerning QE in their last meeting. The current Russian invasion of Ukraine has however put an end to expectations of any rate hikes this year, with the conflict possibly decreasing Eurozone growth by 1%.

Canada GDP to See Strong Recovery (1330 GMT)

Annualized Q4 GDP growth is projected to reach +6.5%, up from +5.4% in Q3 and as such the strongest reading for 2021, following the Q3 rebound largely on the back of strong household spending.

US IHS Manufacturing Final PMI Confirming Rebound (1445 GMT)

The US will complete the February manufacturing PMI round for today, projected to confirm the flash estimate of 57.5, highlighting increased production, however persistent raw material shortages continue to be a key downwards driver in the slowed recovery of the US manufacturing sector.

Key policymaker appearances today include ECB President Christine Lagarde and executive board member Fabio Panetta, as well as the BOE's Michael Saunders and Katherine Mann. Atlanta Fed's Raphael Bostic and Cleveland Fed's Loretta Mester will also be attending events. Where available, links are in the calendar below.

01/03/20220730/0730UK DMO Gilt Operations Announcement W/C 4/11 April
01/03/20220815/0915**ES IHS Markit Manufacturing PMI (f)
01/03/20220845/0945**IT IHS Markit Manufacturing PMI (f)
01/03/20220850/0950**FR IHS Markit Manufacturing PMI (f)
01/03/20220855/0955**DE IHS Markit Manufacturing PMI (f)
01/03/20220900/1000**EU IHS Markit Manufacturing PMI (f)
01/03/20220900/1000***DE Bavaria CPI
01/03/20220930/0930**UK BOE M4
01/03/20220930/0930**UK IHS Markit/CIPS Manufacturing PMI (Final)
01/03/20220930/0930**UK BOE Lending to Individuals
01/03/20221000/1100***IT HICP (p)
01/03/20221000/1100***DE Saxony CPI
01/03/2022-EU ECB Panetta at G7 Finance Ministers/CB Governors Meeting
01/03/2022-***US domestic made vehicle sales
01/03/20221300/1400***DE HICP (p)
01/03/20221300/1400EU ECB Lagarde visits Chancellor Scholz
01/03/20221330/0830*US construction spending
01/03/20221330/0830***CA GDP - Canadian Economic Accounts
01/03/20221355/0855**US Redbook Retail Sales Index
01/03/20221445/0945***US IHS Markit Manufacturing Index (final)
01/03/20221500/1000***US ISM Manufacturing Index
01/03/20221830/1830UK BOE Saunders speech at East Anglia University
01/03/20221900/1400US Atlanta Fed's Raphael Bostic
01/03/20221900/1900UKBOE Mann panels Cleveland Fed discussion
01/03/20221900/1400USCleveland Fed's Loretta Mester

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