MNI EUROPEAN OPEN: China "National Team" To The Rescue?

EXECUTIVE SUMMARY

• CHINA STATE FUNDS SAID TO BUY STOCKS TO STEM WORSENING ROUT (BBG)
• PBOC DEPUTY GOVERNOR CHEN: THE PBOC SEES NO NEED FOR MAJOR STIMULUS (MNI)

Fig. 1: U.S. Dollar Index (DXY)

Source: MNI - Markets News/Bloomberg

UK

CORONAVIRUS: Boris Johnson has welcomed the "emotional" return to school for pupils in England as he warned it would lead to a rise in coronavirus transmission and ruled out accelerating the planned lifting of the third national lockdown. The UK prime minister told a Downing Street press conference it was "inevitable" that case numbers would increase as schools reopened in the first step on the government's road map to easing restrictions in England. Johnson said the risk of a rise in infections was worth it. "We all know that the education of our children is so important that the greater risk now is keeping them out of school for a day longer." (FT)

CORONAVIRUS: In a sign the pressure was easing on the NHS, the health service said that most of the pop-up Nightingale hospitals — established in the early weeks of the pandemic but little used — are to shut to patients from April. (FT)

ECONOMY: British consumers cut back heavily on spending as they spent a second month in a COVID-19 lockdown in February but confidence in the economy hit a 12-month high, payment card firm Barclaycard said on Tuesday. Consumer spending was 13.8% lower than a year before, similar to January's plunge of around 16%, Barclaycard said. Spending on essential items grew 5.3% and online grocery shopping surged. But spending on non-essentials plummeted 22.1% with many businesses still closed. After suffering its biggest slump in three centuries last year, Britain's economy is expected to grow strongly once the COVID restrictions are lifted between now and late June. Barclaycard said a survey which it had commissioned showed consumers' confidence in the wider economy rose by 4 percentage points to 28%, its highest point since the pandemic hit last year. (RTRS)

ECONOMY: The prospects for a consumer spending boom after lockdown have been downplayed by a senior Treasury official, amid warnings that wealthier families have saved more than low-paid workers during the pandemic. Charlie Bean, a former Bank of England deputy governor who sits on the government's budget responsibility committee, said it would take several years for households to spend £180bn in extra savings accumulated mainly by retirees and higher-paid workers during the crisis. Casting doubt over forecasts for rapid growth in spending once Covid rules have been relaxed, he told MPs on the Commons Treasury committee: "The idea that people will make up for lost consumption by spending it all over the next few quarters once the economy has reopened, I find implausible. It is much more likely it'll be spread out over several years." (Guardian)

POLITICS: Boris Johnson will use his next cabinet reshuffle to boost the number of women in his top team, a senior aide has suggested. Allegra Stratton, the prime minister's press secretary, refrained from setting a date for the next big alteration to the ministerial ranks, but admitted they should be more reflective of the country's population – where women make up more than 50%. On International Women's Day, Stratton said Johnson "does accept that he would like to improve how representative his cabinet is of the population at large". (Guardian)

EUROPE

CORONAVIRUS: A Swiss biopharmaceutical company will produce the Sputnik V Covid-19 vaccine at its Italian facilities, marking the first European production agreement for the Russian shot. Lugano, Switzerland-based Adienne Pharma & Biotech SA signed an agreement with Russian sovereign wealth fund RDIF to manufacture the vaccine at its production site in the Milan region, the company's founder and President Antonio Francesco Di Naro told Bloomberg in an interview. The start of production is subject to approval from Italian regulators. No production targets can be set as of now, Di Naro said. The deal comes as Prime Minister Mario Draghi pledged to speed up Italy's fledgling vaccination campaign amid a new rise in infections from the disease that's already claimed 100,000 victims in the country. (BBG)

FRANCE: The French economy will avoid a second recession in the Covid pandemic as a steadying of activity is enough to fuel "slight growth" in the first quarter of the year, the Bank of France said. Based on its monthly surveys of 8,500 firms, the central bank estimates economic activity rose to a plateau 5% below pre-crisis levels in December and will remain there through March. Business leaders in industry and construction expect a slight improvement this month, while their peers in services see activity stagnating. (BBG)

ITALY: Italy has become the first European Union country to surpass 100,000 deaths officially attributed to Covid-19 after a further 318 people lost their lives on Monday. (FT)

ITALY/BTPS: Italy to sell the following M/T and L/T BTP at auction on Mar 11:

• E4.5-5.0bn of 3-Yr, 0.00% Apr-24 BTP
• E2.5-3.0bn of 7-Yr, 0.25% Mar-28 BTP
• Note: "The Ministry of Economy and Finance announces that the auction of the bonds with maturity above ten years will not be held due to the recent issuance of the new BTP Green"

NETHERLANDS: The Netherlands will extend its lockdown until the end of March, but slowly ease some restrictions, Dutch Prime Minister Mark Rutte said on Monday. A curfew from 9 p.m. until 4.30 a.m. will remain in place, but shopping on appointment will be expanded and adults are allowed to take part in outside sports with up to four people. (BBG)

NETHERLANDS: Dutch Prime Minister Mark Rutte's VVD liberals party leads in a survey ahead of general elections next week, according to opinion poll by I&O Research published on Monday. Survey gives VVD 36 seats vs 33 seats in 2017 elections. PVV (Freedom Party, led by Geert Wilders) at 19 seats vs 20 seats in 2017 elections. CDA (Christian Democrats, led by Finance Minister Wopke Hoekstra) 15 seats vs 19 seats in 2017 elections. (BBG)

U.S.

FISCAL: The House aims to pass Democrats' $1.9 trillion coronavirus relief bill Tuesday and get it to President Joe Biden's desk for his signature this week. The party aims to beat a Sunday deadline to renew key unemployment aid programs. The House approved one version of the proposal late last month. After the Senate passed a revised bill over the weekend, representatives need to sign off on it again. (CNBC)

FISCAL: MNI BRIEF: US CBO Projects February Budget Deficit Of USD312B

• The nonpartisan U.S. Congressional Budget Office on Monday projected the February federal budget deficit will be USD312 billion, up USD77 billion compared with the deficit in February 2020 - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

FISCAL: Top House Democrats on Monday urged the Internal Revenue Service to extend the tax-filing deadline beyond the traditional April 15 deadline, arguing the agency needs additional time to sort through a backlog of returns. (FOX)

CORONAVIRUS: People who have been fully vaccinated against COVID-19 can take fewer precautions in certain situations, including socializing indoors without masks when in the company of low-risk or other vaccinated individuals, according to guidance from the Centers for Disease Control and Prevention released Monday. Per the report, there's early evidence that suggests vaccinated people are less likely to have asymptomatic infection and are potentially less likely to transmit the virus to other people. At the time of its publication, the CDC said the guidance would apply to about 10% of Americans. (Axios)

CORONAVIRUS: More than a two-dozen travel industry groups and labor unions on Monday urged the Biden administration to issue guidelines for Covid-19 vaccine passports, in hopes that a uniform system will help customers feel more comfortable booking trips again. A host of platforms around the world are helping travelers upload test results and soon, proof of vaccinations, as part of a push toward some kind of Covid-19 health credential, or CHC. (CNBC)

CORONAVIRUS: Chicago Mayor Lori Lightfoot said Wrigley Field, home to the Chicago Cubs, and Guaranteed Rate Field, home to the Chicago White Sox, will allow up to 20% capacity, starting on each baseball team's opening day in April. That capacity may grow as vaccination and recovery efforts continue, but any jump in Covid-19 cases could prompt closures, the city said. (BBG)

CORONAVIRUS: Florida Governor Ron DeSantis said the state is opening up the vaccine to everyone 60 and over starting on March 15, expanding general eligibility by five years from the previous starting age of 65. (BBG)

CORONAVIRUS: Wyoming will lift its mask requirement and permit bars, restaurants, theaters and gyms to resume normal operations March 16, Governor Mark Gordon said Monday. Wyoming "has seen significant success rolling out the vaccine," according to a statement issued by the governor's office. (BBG)

POLITICS: President Joe Biden isn't budging from his desire to keep the filibuster in place; at least not yet. And activists demanding reforms are growing increasingly befuddled by the administration's hesitance. With more Senate Democrats expressing a willingness to abolish or modify the legislative filibuster, which establishes a 60-vote threshold to move most bills through the Senate, the White House on Monday continued to deflect on the issue. (POLITICO)

OTHER

U.S./CHINA: Biden's team called the U.S. commitment to democratic Taiwan "rock solid" and on Monday White House spokeswoman Jen Psaki told a regular news briefing Washington would "continue to assist Taiwan in maintaining a sufficient self-defence capability." "Our position on Taiwan remains clear. We will stand with friends and allies to advance our shared prosperity, security and values in the Indo-Pacific region," she said when asked about Wang's remarks. (RTRS)

U.S./JAPAN: The first foreign leader to be welcomed by President Biden to the White House is likely to be Yoshihide Suga, the Japanese prime minister, in a sign of the significance the US places on relations with Tokyo while it stays locked in a cold war with China. Suga, 72, could travel next month but the date has not been finalised because of the pandemic. The Biden administration has made clear that it views China as the "biggest geopolitical test" of the century. The president is reviving the "Quad", a security dialogue between the US, Australia, India and Japan, with an online meeting of leaders as soon as this week, focused on the expansion of China's power across the Indo-Pacific. China is "the only country with the economic, diplomatic, military and technological power to seriously challenge the stable and open international system — all the rules, values and relationships that make the world work the way we want it to", Antony Blinken, the secretary of state, said. Officials in Tokyo said they hoped that the visit would take place as soon as possible. (The Times)

GLOBAL TRADE: The European Union and the U.S. have reached an agreement after two years of talks on how to adjust so-called tariff-rate quotas that had to be renegotiated after the U.K. left the bloc. The negotiations took place under World Trade Organization procedures and will determine how to split TRQ quantities between the 27-nation region and the U.K., the office of the U.S. Trade Representative said in an emailed statement Monday. The parties will sign and implement the agreement after the EU completes "formal approval procedures," the USTR said. It didn't provide more detail about the pact. Tariff-rate quotas allow countries to export specified quantities of a product to other nations at lower duty rates, but subject all imports of the product above a pre-determined threshold to a higher duty, according to the USTR's website. "Once implemented, this agreement will provide market access certainty for U.S. producers and exporters to the EU," acting USTR Maria Pagan said. (BBG)

CORONAVIRUS: New global Covid-19 infections are picking up speed again after dropping to the lowest level since October a few weeks ago, as variants of the pathogen spread rapidly in places like Brazil and Europe. New infections for the seven days ended Sunday totaled 2.8 million, according to data compiled by Johns Hopkins University and Bloomberg, increasing for a second week in a row following more than a month of declines. The pickup comes despite a significant slowing of infections in the U.S. as the nation ramps up its vaccination efforts. Brazil is seeing record cases and deaths, with its hospitals overflowing as it plays host to a more contagious variant. That country is on course to overtake India in the next week for the second-highest number of infections in the world. While variants are causing a spike in cases, global deaths continue to decline. Fatalities for the latest week totaled 62,646, the lowest number since November. (BBG)

CORONAVIRUS: Preliminary studies suggest the AstraZeneca vaccine will protect against the P1 variant of the coronavirus, Mauricio Zuma, the head of production at Brazil's Fiocruz biomedical institute said on Monday, confirming a Reuters report on Friday. The Brazil variant is worrying experts because it is highly contagious and has led several countries to ban travel from the Latin American nation. (RTRS)

CORONAVIRUS: A World Health Organization official urged world leaders to be careful when issuing guidelines on what people can and can't do after they've been vaccinated against Covid-19. Mike Ryan, executive director of the WHO's health emergencies program, said the guidelines could have implications for national policy and international travel down the road. "I think there are real practical and ethical considerations as well that countries will have to address," he told reporters during a press briefing. (CNBC)

HONG KONG: Overhaul of Hong Kong's election system will be done in a way that ensures broad representation of the public, says Song Ru'an, deputy commissioner of the Chinese Foreign Ministry Commissioner's Office in Hong Kong. The people of Hong Kong fully support the changes, Song says at a briefing Tuesday in the city. (BBG)

BOJ: Japan nominates Nomura Asset Management Chief Executive Officer Junko Nakagawa to join the Bank of Japan's nine-member board, according to a document released from parliament on Tuesday. If confirmed, Nakagawa would replace the only woman on the board now, former banker Takako Masai, whose term ends June 29. (BBG)

BOJ: MNI BRIEF: BOJ Mulls Further Cutting Number of JGB Buying Ops

• The Bank of Japan could also consider reducing the frequency of purchase of Japanese government bonds with a remaining life of 5 to 10 years, to increase volatility in JGBs, MNI understands, although the scale of purchases per operation would be increased to stifle criticism from reflationists, including Deputy Governor Masazumi Wakatabe - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

AUSTRALIA: Australia could soon start treating the coronavirus pandemic as nothing more than a bad flu, thanks to encouraging signs from abroad about the efficacy of vaccines, Prime Minister Scott Morrison said. Addressing The Australian Financial Review Business Summit, Mr Morrison also said that the premiers would have to better justify future border closures as the health threat eased. To "assist" them in making future decisions, the Prime Minister said his chief of staff, Phil Gaetjens, was leading work on a risk management framework for the states, territories and the Commonwealth. "It's not just about health because the health risk has diminished. It's important that all premiers and prime ministers make decisions that are commensurate with the new risk framework," he said. "Wherever possible we seek to have some consistency. What we're now doing this year I think is very different to 2020. The risk has changed. (Australian Financial Review)

SOUTH KOREA: South Korea will closely monitor market trends and take swift measures as the markets may continue to be volatile amid expectations for an economic recovery and concerns about inflation and rising interest rates, Vice Finance Minister Kim Yongbeom says in a meeting. The rebound in local and overseas financial markets in a short period of time was mainly due to forecasts that major countries including the U.S. may maintain eased monetary policy. Government will try to thoroughly manage economic and financial risks. (BBG)

CANADA: Finance Minister Chrystia Freeland's first budget will not come this month, but later "this spring", her spokeswoman said Monday. It will be the first full budget since before the COVID-19 pandemic hit. (RTRS)

TURKEY: Arda Ermut has been appointed as the new General Manager of the Turkey Wealth Fund (TWF) after previous head Zafer Sonmez was dismissed. Turkey's Official Gazette confirmed the appointment early on Tuesday. (TRT World)

BRAZIL: Three instruments within the proposed emergency amendment bill, which allows for emergency aid payments and is under evaluation at the lower house, may be withdrawn, giving room to a parallel amendment bill, O Estado de S. Paulo newspaper reported citing President Jair Bolsonaro. Bill's rapporteur, Congressman Daniel Freitas, aims to change 5 instruments from the proposed text, Estado said citing Bolsonaro. According to the newspaper, Congressmen involved with public security matters want to remove civilian and military police from the wage freeze proposed in the bill. So-called Kandir Law also faces resistance, the newspaper adds. Brazil Senate had approved the so-called Emergency amendment last week. (BBG)

BRAZIL: A justice from Brazil's top court on Monday annulled all sentences against former President Luiz Inácio Lula da Silva, which for now restores his political rights and would potentially allow him to run again for the presidency next year. The decision also laid bare the country's political divisions, with leftists celebrating their 75-year-old leader's return to the political arena as conservatives said the rulings were tantamount to impunity. Others saw the ruling as an attempt to preserve a vast but embattled corruption investigation that has led to numerous convictions of powerful businessmen and politicians but that has been accused of impropriety. The decision by Justice Luiz Edson Fachin drew no conclusions about the mammoth "Car Wash" investigation centered on state-run giant Petrobras, from which the da Silva probes emerged. It said, instead, that the federal court in the Southern city of Curitiba, which sentenced da Silva twice for corruption and money laundering, didn't have jurisdiction to put the leftist leader on trial. (AP)

SOUTH AFRICA: The top six leaders of South Africa's ruling party held an online meeting with former President Jacob Zuma on Monday to discuss his refusal to testify before a panel that's probing graft during his rule, but their seven hours of talks failed to produce a decisive outcome. Zuma told the African National Congress's leaders that he'd been subjected to unfair persecution and prosecution over the course of two decades, and it was agreed he be "given space" to decide on his next course of action, Ace Magashule, the party's secretary-general, told reporters after the meeting. "We all agreed there hasn't been any intention to undermine the constitution of South Africa," said Magashule, a close Zuma ally. "We couldn't stop President Zuma from saying: 'I'm consulting with lawyers, I'm still going to take my own decisions." (BBG)

SOUTH AFRICA: South African state-owned power utility says it will investigate allegations of racism leveled at Eskom's CEO Andre de Ruyter. (BBG)

IRAN: Iran has started enriching uranium with a third set of advanced IR-2m centrifuges at its underground plant at Natanz, the U.N. nuclear watchdog told its member states on Monday, a further breach of Tehran's 2015 deal with major powers. The move is part of a recent acceleration by Iran of its violations of restrictions under that deal, which granted Iran relief from financial sanctions in return for curbs to its nuclear activities. It began breaching limits after then-U.S. President Donald Trump quit the deal and re-imposed sanctions in 2018. (RTRS)

MIDDLE EAST: The Houthis have been battling a Saudi-led coalition in Yemen for six years in a conflict largely regarded as a proxy war between Saudi Arabia and Iran. In new incidents on Monday, the coalition said it had intercepted and destroyed a ballistic missile and an explosive drone fired towards parts of the kingdom's southern region. The Houthi military claimed to have hit a military target at Saudi Arabia's Abha airport, near the Yemen border, with a new type of ballistic missile. (RTRS)

MIDDLE EAST: The United States on Monday reaffirmed its commitment to Saudi Arabia's defense in the face of increased drone and missile attacks by Iran-backed Houthi separatists in Yemen, underscoring American commitment to its Gulf ally despite human rights concerns. The U.S. embassy in Saudi Arabia tweeted in Arabic that its commitment to defending the Kingdom's security is "unwavering," following a rising number of back and forth attacks between Riyadh and the Houthis, the latest targeting Saudi oil facilities. (The Hill)

MIDDLE EAST: The Pentagon said Monday that it has not decided on whether to withdraw U.S. troops in Afghanistan, as Washington considers a potential end to America's longest war. "Everybody here is mindful of looming deadlines," Pentagon press secretary John Kirby told reporters during a press briefing. "And I cannot today sketch out for you what specific planning is going on when there hasn't been a decision made yet about future force posture in Afghanistan," he said. (CNBC)

OIL: The largest U.S. refinery, Motiva Enterprises' 607,000 barrel-per-day Port Arthur, Texas, plant, returned to normal operations on Sunday, sources familiar with plant operations said on Monday. The refinery was shut on Feb. 15 when freezing temperatures, rarely seen on the U.S. Gulf Coast, knocked out steam supply. Motiva began restarting the refinery on Feb. 24. Motiva did not reply to a request for comment. (RTRS)

CHINA

ECONOMY: China's yearly GDP growth may average 5.5% for the next five years with inflation at 2%, the 21st Century Business Herald reported citing Liu Shijin, a deputy director of the economy committee of the Chinese People's Political Consultative Conference. The government should focus on boosting "total factor productivity" including technology growth and efficiency to support the appreciation of the yuan, the value of which will be a key factor in achieving a government goal of average income of USD20,000 by 2035, Liu said. (MNI)

PBOC: The PBOC sees no need for major stimulus to support China's economic growth for the next five years, and will keep money supply and the growth of total social financing on par with nominal GDP expansion, PBOC Deputy Governor Chen Yulu in an interview with Yicai. The central bank will not use the yuan's exchange foreign rate as a tool to gain competitive advantage, Chen said according to Yicai. (MNI)

PBOC: China's central bank will take measures to prevent systemic financial risks from building in the economy as the recovery takes hold, Deputy Governor Chen Yulu said. Laying out priorities for the next five years, Chen said the People's Bank of China will improve its macro-prudential assessment framework and strengthen supervision of "systemically important" institutions, businesses and infrastructure." (BBG)

YUAN: MNI EXCLUSIVE: Yuan To Consolidate 2020 Gains: Advisor

• BEIJING (MNI) - The yuan may be entering a period of stability against the dollar following its appreciation last year, as economic growth balances the impact of a probable rebound by the greenback, Yan Feng, a member of the Chinese People's Political Consultative Conference and the Hong Kong-based chairman of Guotai Junan Securities, told MNI - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

EQUITIES: Chinese state-backed funds were said to intervene on Tuesday to alleviate declines in the stock market, a sign that the rout had gone too far for policy makers. The funds, known as China's "national team," stepped in to ensure stability during the government's key policy meeting in Beijing, according to people familiar with the matter. A Hong Kong-based trader, who declined to be identified discussing client business, said entities linked to mainland funds were actively buying shares through stock links with Hong Kong on Tuesday. (BBG)

OVERNIGHT DATA

JAPAN Q4 GDP ANNUALISED +11.7% Q/Q; MEDIAN +12.6%; PRELIM +12.7%
JAPAN Q4 GDP +2.8% Q/Q; MEDIAN +3.0%; PRELIM +3.0%
JAPAN Q4 NOMINAL GDP +2.3% Q/Q; MEDIAN +2.5%; PRELIM 2.5%
JAPAN Q4 PRIVATE CONSUMPTION +2.2% Q/Q; MEDIAN +2.2%; PRELIM +2.2%
JAPAN Q4 BUSINESS SPENDING +4.3% Q/Q; MEDIAN +4.0%; PRELIM +4.5%

MNI DATA IMPACT: Japan Q4 GDP Revised Lower On Weaker Capex

• Japan's economy grew at a slower rate than the previously estimated in Q4 as capital investment was revised lower, according to second preliminary data released by the Cabinet Office on Tuesday - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

JAPAN JAN LABOR CASH EARNINGS -0.8% Y/Y; MEDIAN -1.7%; DEC -3.2%
JAPAN JAN REAL CASH EARNINGS -0.1% Y/Y; MEDIAN -0.7%; DEC -1.7%
JAPAN JAN HOUSEHOLD SPENDING -6.1% Y/Y; MEDIAN -2.1%; DEC -0.6%

MNI DATA IMPACT: Japan Jan Wages Down; Real Pay Negative

• Average wages fell 0.8% y/y in January, recording a 10th straight drop following a 3.0% fall in December. Real wages also remained in negative territory, according to preliminary data released Tuesday by the Ministry of Health, Labour and Welfare - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

JAPAN'S FEB M2 MONEY STOCK ROSE +9.6 % Y/Y; MEDIAN +9.5%; JAN +9.4%
JAPAN'S FEB M3 MONEY STOCK ROSE +8.0 % Y/Y; MEDIAN +7.9%; JAN +7.8%

AUSTRALIA FEB NAB BUSINESS CONFIDENCE +16; JAN +12
AUSTRALIA FEB NAB BUSINESS CONDITIONS +15; JAN +9

• The survey results were strong in February. Business confidence rose further in February to reach 16 index points, its highest level since early 2010, with all states and industries reporting gains, except for retail. Business conditions bounced to return to around multi-year highs at 15 index points, after slipping in the month prior, with trading, profitability and employment conditions all marking solid improvements. Conditions remain very strong in retail, wholesale, mining and professional services, while construction, personal services and transport conditions continue to lag. Elsewhere, capacity utilisation and capex continue to rise and have now exceeded pre-virus levels and their long-run averages – an encouraging sign that the turnaround in business conditions and steady improvement in confidence is translating to higher capacity utilisation and increased investment. The survey continues to point to a robust recovery in the business sector, despite some tapering of government support beginning in late 2020. This is a positive sign for the economy, where ongoing strength in the business and household sector is needed to sustain the recovery. (NAB)

AUSTRALIA ANZ-ROY MORGAN WEEKLY CONSUMER CONFIDENCE INDEX 111.9; PREV 110.3

• The ANZ-Roy Morgan Consumer Confidence index rose1.5% along with generous gains in four out of five of the sub-indices. The rise likely reflects the strong gains registered by ANZ Job Ads and the GDP numbers released last week. Job Ads grew 13.4% y/yin February and Australia saw two consecutive quarters of economic growth of more than 3% for the first time in history. The long weekend of Victoria may also have contributed, as confidence rose 2.1% in the state. (ANZ)

NEW ZEALAND MAR, P BUSINESS CONFIDENCE INDEX 0.0; FEB 7.0
NEW ZEALAND MAR, P BUSINESS ACTIVITY OUTLOOK INDEX 17.4; FEB 21.3

• The preliminary ANZ Business Outlook data for March was a mixed bag. Business confidence fell 7 points to be flat while the activity outlook fell 4points to +17%. Some of the details were stronger, with employment intentions up 5 points and capacity utilisation up 2 points. Investment intentions were little changed. Cost and inflation pressures continue to rise. Expected costs rose 2 points to a net 74% expecting higher costs ahead. Firms are intending to pass the costs on where possible, with a net 49% of firms intending to raise their prices, up 3% pts. Inflation expectations lifted too, from 1.76% to 1.95%, pretty much at the 2% RBNZ CPI target midpoint. The economy is entering a phase in which gains will be harder won. The tourism sector pain is becoming more palpable, and booming sectors such as construction are running up against constraints in terms of the availability of labour and, increasingly, imported materials. We don't report the sectoral breakdown in the preliminary results as the sample size is a bit on the small side to do that robustly. But it's worth noting that while it's still standing strong in a relative sense, construction took a hit in these early results, suggesting the mixed data are not all about the recent lockdown. Construction has been a blindingly bright spot in the New Zealand economy in the past six months, and a cooling there would change the economic picture considerably. Is it noise, supply disruption and eye-watering cost increases, or something else? The full-month survey should cast more light. (ANZ)

NEW ZEALAND Q4 MANUFACTURING ACTIVITY VOLUME +0.5% Q/Q; Q3 +17.3%
NEW ZEALAND Q4 MANUFACTURING ACTIVITY SA -0.6% Q/Q; Q3 +10.0%

NEW ZEALAND FEB ANZ TRUCKOMETER HEAVY +2.0% M/M; JAN -3.9%

SOUTH KOREA JAN BOP CURRENT ACCOUNT BALANCE +$7.0600BN; DEC +$11.5071BN
SOUTH KOREA JAN BOP GOODS BALANCE +$7.0600BN; DEC +$10.4958BN

UK FEB BRC LIFE-FOR-LIKE SALES +9.5% Y/Y; JAN +7.1%

MNI BRIEF: UK Retail Sales Pick Up in Feb: BRC

• UK retail sales returned to growth in February following a bleak start to the year, although many retailers are concerned about the months ahead, Helen Dickinson, Chief Executive at the BRC said Tuesday, as "previous re-openings have shown that demand can be slow to come back." "Although the Budget threw retailers a short-term lifeline with the extension of Covid support packages until after the summer, conditions will continue to be incredibly challenging as they face subdued demand, thinner margins and rising logistics costs, alongside the accelerated structural changes to the sector," said Paul Martin, UK Head of Retail at KPMG, the BRC's survey partners. Total sales rebounded to 1.0% in February, up from -1.3% seen in January, while Like-for-like sales rose 9.5%, data published Tuesday by the BRC and KPMG showed. Online non-food sales surged to 82.2% in February as the lockdown drags on - on MNI MainWire and email now, for more details please contact sales@marketnews.com.

CHINA MARKETS

PBOC INJECTS CNY10 BLN VIA OMOS; LIQUIDITY UNCHANGED TUES.

• The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos with the rate unchanged on Tuesday. The liquidity in the banking system is unchanged given the maturity of CNY10 billion of reverse repos today, according to Wind Information. The operation aims to maintain reasonable and ample liquidity, the PBOC said on its website.

CHINA SETS YUAN CENTRAL PARITY AT 6.5338 TUES. VS 6.4795 MON.

• The People's Bank of China (PBOC) set the dollar-yuan central parity rate higher at 6.5338 on Tuesday, compared with the 6.4795 set on Monday, marking the biggest daily fall since Jul 20, 2018.

MARKETS

UP TODAY (Times GMT/Local)