Source: MNI - Market News/Bloomberg/Refinitiv.
UK
TRADE (BBC): “Speaking during the prime minister's visit to the White House, Trump envisaged "a real trade deal" which could see the UK could avoiding the kind of tariffs the president has been threatening on its trading partners.”
POLITICS (BBC): “US President Donald Trump has been invited to the UK for a second state visit by the King. Prime Minister Sir Keir Starmer used his trip to the White House to present Trump with the invitation letter from King Charles.”
UKRAINE (POLITICO): “British troops in a post-war Ukraine would be able to "take care of themselves," Donald Trump said Thursday, as U.K. Prime Minister Keir Starmer visited Washington to try to win security guarantees for Europe.”
POLITICS (BBC): “US President Donald Trump has indicated he would be prepared to back Prime Minister Sir Keir Starmer's deal to hand over sovereignty of the Chagos Islands to Mauritius. The agreement includes a plan to lease back the strategically important US-UK military base on Diego Garcia at British taxpayers' expense.”
INFRASTRUCTURE (BBC): “A second runway at Gatwick Airport has been backed by government, providing measures to reduce noise are put in place. Transport Secretary Heidi Alexander said she was "minded to approve" the expansion. Some MPs, local authorities and residents are strongly opposed.”
EU
EU (MNI INTERVIEW): EU Summit To Decide On Defence Boost Options
GERMANY (POLITICO): “Germany’s conservative Christian Democrats (CDU) and center-left Social Democrats (SPD) will begin talks on Friday to explore forming a coalition, both parties told POLITICO. The parties took the decision to start talks Friday instead of the following week to avoid prolonging political uncertainty, according to German tabloid Bild.”
UKRAINE (BBC): “US President Donald Trump has said he has a "lot of respect" for Ukrainian President Volodymyr Zelensky, on the eve of their talks at the White House.”
IRELAND (POLITICO): “Opposition leaders threaten to paralyze parliament if pro-government independents gain speaking rights and committee chairs at their expense.”
US
TARIFFS (BBG): “President Donald Trump said 25% tariffs on Canada and Mexico are on track to go into place on March 4, and said he would impose an additional 10% tax on Chinese imports, moves that would deepen his fight with the largest US trading partners.”
BITCOIN (RTRS): “Bitcoin dropped to its lowest level in 3-1/2 months on Friday, dragged by uncertainty about U.S. President Donald Trump's tariff plans and crypto policy and flagging investor confidence after a $1.5 billion hack in rival crypto currency ether.”
FED (MNI): The Federal Reserve should stick to its current interest rate policy and allow restrictive rates to keep pressure on prices despite inflation progress slowing over the past several months, Philadelphia Fed President Patrick Harker said Thursday.
FED (MNI): Federal Reserve officials can take their time before taking any additional action on interest rates because of upside inflation risks and labor market conditions are healthy, Cleveland Fed President Beth Hammack said Thursday.
OTHER
JAPAN (MNI BRIEF): The year-on-year rise in the Tokyo core inflation rate decelerated to 2.2% in February, from January’s 2.5% but remained above the Bank of Japan's 2% target for the fourth straight month, data from the Ministry of Internal Affairs and Communications showed on Friday.
JAPAN (MNI BRIEF): Japan's industrial output fell 1.1% m/m in January for the third straight drop following December's 0.2% decline due to lower manufacturing of production machinery and electronic parts and devices, although automobile output rose, data released by the Ministry of Economy, Trade and Industry showed on Friday.
JAPAN (MNI BRIEF): Bank of Japan Deputy Governor Shinichi Uchida said on Friday that the BOJ’s large JGB holdings continue to have a strong easing effect. Uchida told lawmakers that underlying inflation is moving toward the bank’s 2% price target and the Japanese economy is recovering moderately.
JAPAN (BBG): “ Japan’s financial regulator plans a sweeping crackdown on $67 billion of high-yield loans backed by government bonds and other assets that have gained popularity among regional banks even after officials warned about their risks.”
NEW ZEALAND (BBG): “New Zealand’s filled jobs rose 0.3% m/m in January versus revised -0.1% in December, according to Statistics New Zealand.”
NEW ZEALAND (BBG): “Job ads index rises 4.1% m/m following a 1.9% decline in December”
CHINA
CONSUMPTION (YICAI): “China’s old-for-new subsidy scheme only boosts economic growth and consumption in the short term, given its limited scope, according to Lu Ting, chief economist at Nomura Securities China. Looking longer term, authorities should increase support for vulnerable groups and improve the country's social welfare system, especially migrant workers and farmers' pension.”
US/CHINA (MOFCOM): “China has called on the U.S. to withdraw its investigation into imported copper given Beijing net imports the metal and exports only a small amount, according to He Yadong, spokesperson of the Ministry of Commerce.”
CHINA MARKETS
MNI: PBOC Net injects CNY102 Bln via OMO Friday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY284.5 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY102 billion after offsetting the maturity of CNY182.5 billion today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 2.4274% at 10:01 am local time from the close of 2.3282% on Thursday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 45 on Thursday, the same as the close Wednesday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Lower At 7.1738 Fri; -0.99% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.1738 on Friday, compared with 7.1740 set on Thursday. The fixing was estimated at 7.2849 by Bloomberg survey today.
MARKET DATA
NEW ZEALAND FEB. ANZ CONSUMER CONFIDENCE +0.6% M/M; JAN. -4.2%
NEW ZEALAND FEB. ANZ CONSUMER CONFIDENCE 96.6; JAN. 96.0
NEW ZEALAND JAN. BNZ JOB ADS +4.1% M/M; DEC. -1.9%
NEW ZEALAND JAN. FILLED JOBS +0.3% M/M; DEC. -0.1%
AUSTRALIA JAN. CREDIT TO BUSINESS, CONSUMERS +0.5% M/M; DEC. +0.6%
AUSTRALIA JAN. CREDIT TO BUSINESS, CONSUMERS +6.5% Y/Y; DEC. +6.5%
JAPAN TOKYO FEB. OVERALL CONSUMER PRICES +2.9% Y/Y; EST. +3.2%; JAN. +3.4%
JAPAN TOKYO FEB. CORE CPI +2.2% Y/Y; EST. +2.3%; JAN. +2.5%
JAPAN TOKYO FEB. CPI EX-FRESH FOOD, ENERGY +1.9% Y/Y; EST. +2.0%; JAN +1.9%
JAPAN JAN. INDUSTRIAL OUTPUT -1.1% M/M; EST. -1.1%; DEC. -0.2%
JAPAN JAN. INDUSTRIAL OUTPUT +2.6% Y/Y; EST. 2.8%; DEC. -1.6%
JAPAN JAN. RETAIL SALES +0.5% M/M; EST. +0.6%; DEC. -0.8%
JAPAN JAN. RETAIL SALES +3.9% Y/Y; EST. +3.9%; DEC. +3.5%
MARKETS
US TSYS: Tsys Futures Edges Higher As Investors Look For Safe Haven
- Treasury futures have rallied as investors sought safe-haven assets amid growing expectations of earlier Federal Reserve rate cuts. Despite Fed officials maintaining their stance on an extended pause in rate changes, global markets are reacting to an looming trade war sparked by U.S. policies, particularly tariffs.
- TU is trading +03+ at 103-13⅝, while TY is trading +13+ at 111-02. TY has now broken through 110-31 (1.00 proj of the Jan 13 - Feb 7 - Feb 12 price swing) and 111-00 (Round number resistance)
- Cash tsys are trading 2-4bps richer, with the belly outperforming. The 2s7s30s fly is -1.5bps at -26.623 and has dropped about 16bps over the past week or so. The 2yr is -2.7bps at 4.024%, 7yr outperforming -3.8bps at 4.131%, while the 10yr is -3.3bps at 4.227%
- Fed-dated OIS was broadly unchanged on the day, around 57bp of rate cuts remains priced by the December FOMC with approximately 7bps of easing priced into the May policy meeting
- Later today we have Personal Spending/Income, PCE, Wholesale Inventories & MNI Chicago PMI
JGBS: Lower Than Expected Tokyo CPI & Risk-Off Drive Rally
JGB futures are stronger but slightly off session bests, +26 compared to settlement levels.
- Japan's Feb Tokyo CPI print came in below expectations. The headline printed at 2.9% y/y, against a 3.2% forecast and prior outcome of 3.4%. Ex fresh food was 2.2%y/y (forecast of 2.3% and 2.5% prior). The ex-fresh food, energy measure was 1.9%y/y, unchanged from Jan, but under the 2.0% forecast.
- "The BoJ will keep tapering its government bond purchases despite recent rises in yields, deputy governor Shinichi Uchida said on Friday, stressing its huge bond holdings continue to exert a strong stimulus effect on the economy." (per RTRS)
- Risk appetite has deteriorated in today’s Asia Pac session. Regional equity losses are being led by the tech sensitive plays in terms of Japan's Nikkei and the South Korean Kospi. The HSI in HK is also down. Tariff concerns and the Thursday tech plunge in US markets are weighing.
- Cash US tsys are 3-4bps richer in today’s Asia-Pac session.
- Cash JGBs are 2-4bps richer across benchmarks out the 20-year, and flat to 3bps cheaper beyond. The benchmark 10-year yield is 2.7bps lower at 1.374% versus the cycle high of 1.466%.
- Swap rates are 2-3bps lower. Swap spreads are mixed.
- On Monday, the local calendar will see Jibun Bank PMI Mfg.
AUSSIE BONDS: Richer With Risk-Off Sentiment, Q4 GDP Partials On Monday
ACGBs (YM +4.0 & XM +4.0) are stronger and near session highs.
- While the RBA noted in its December meeting minutes that “financial conditions remained restrictive”, it observed that there “were indications that financial conditions were not restraining credit growth as much as had been expected”. The January RBA private credit data were consistent with this view as total credit increased a further 0.5% m/m to be up 6.5% y/y, in line with December and the fastest in almost two years. The February RBA minutes are published on March 4.
- Cash US tsys are 3-4bps richer in today’s Asia-Pac session after yesterday’s modest twist-steepener.
- Cash ACGBs are 4-5bps richer with the AU-US 10-year yield differential at +7bps.
- The bills strip has bull-flattened with pricing flat to +6.
- RBA-dated OIS pricing shows a 25bp rate cut in April as a 9% probability, with a cumulative 59bps of easing priced by year-end (based on an effective cash rate of 4.09%).
- On Monday, the local calendar will see CoreLogic Home Values, S&P Global PMI Mfg and Melbourne Institute Inflation data alongside Q4 GDP partials, namely Company Operating Profit and Inventories.
- Next week, the AOFM plans to sell A$800mn of the 4.25% 21 March 2036 bond on Wednesday and A$700mn of the 1.00% 21 December 2030 bond on Friday.
BONDS: NZGBS: Closed Richer, Risk-Off, Cons Conf Off Lows But HH Exp Subdued
NZGBs closed at session bests, with benchmark yields 9bps lower.
- Risk appetite has deteriorated in today’s Asia Pac session. Regional equity losses are being led by the tech sensitive plays in terms of Japan's Nikkei and the South Korean Kospi. The HSI in HK is also down. Tariff concerns and the Thursday tech plunge in US markets are weighing.
- Cash US tsys are 3-4bps richer after yesterday’s modest twist-steepener.
- ANZ consumer confidence rose 0.6% m/m to 96.6 in February and is materially above April 2024’s 82.1 but consumers remain cautious, especially about the outlook.
- While confidence is off its recent lows, it is signalling subdued household expenditure for now as the labour market remains soft. The RBNZ is expected to cut rates by 25bp in April and May.
- Housing Minister Chris Bishop announces proposed changes to infrastructure funding, as part of plans to accelerate construction, in a speech Friday in Wellington (per BBG).
- Swap rates closed 6-7bps lower.
- RBNZ dated OIS pricing closed showing 26 bps of easing priced for April, with a cumulative 69 bps by November 2025.
- On Monday, the local calendar will see Q4 Terms of Trade Index data.
FOREX: Tariff Threat Drives FX Risk Off, NZD/JPY Back Close To Aug 2024 Lows
Risk off has been the focus in the first part of Friday trade, with JPY and CHF the only G10 currencies higher against the USD at this stage. NZD and AUD have been underperformers. The USD BBDXY index is tracking modestly firmer, up +0.10%, to be near 1295.5. For the week, the index is up a little over 0.70%, which would be the first weekly gain since end Jan. Tariff concerns and the associated spill over to equity losses is the main driver of sentiment today, particularly in terms of yen crosses.
- NZD/USD was last close to 0.5600, off around 0.50%. This is close to key support and a break here would then open up a move to retest the Feb 3 lows of 0.5516. Earlier data showed stabilizing labor market trends, while still cautious consumer sentiment. These prints didn't impact FX sentiment.
- NZD/JPY has fallen under 84.00, tracking lower for the 4th straight session. The pair is back to levels last seen in the early August risk off episode from last year. Lows at that juncture were at 83.07 (current levels sit near 83.80).
- AUD/USD is near 0.6210/15, off around 0.35%, so slightly outperforming NZD. Downside focus for this pair is 0.6171 the Feb 4 low and 0.6088 the Feb 3 low. AUD/JPY is just under 93.00. note August 2024 lows for the pair were 90.15.
- USD/JPY got to highs of 150.15, after we saw weaker than expected Tokyo CPI figures for February, but broader risk off trends soon took over. We hit lows of 149.10, but now sit back around 149.60/65, up in yen terms by close to 0.10%.
- Regional equity markets are all down sharply, the Asia Pac MSCI off 2%. US equity futures are close to flat, but have struggled for upside traction.
- US yields are lower by around 2-4bps as Tsys see safe haven demand.
- Looking ahead, German retail sales/unemployment, German/French/Italian February CPIs and Canadian December/Q4 GDP print. BoE’s Ramsden speaks. In the US, January income/spending, PCE prices, merchandise trade and February MNI Chicago PMI are released.
ASIA STOCKS: Equities Plunge, Tracking Wall Street's Losses As Tariffs Near
- Japanese stocks plummeted, with the Topix Index down 2.1% and the Nikkei falling 3.3%, heading for their largest monthly decline since December 2022. A sharp sell-off in chip-related firms like Disco (-12%) and Advantest (-10%) followed Nvidia’s 8.5% plunge, while Trump’s tariff plans—25% on Canada and Mexico, plus 10% more on China—amplified fears of global economic fallout, hitting export-driven sectors hard.
- Chinese equities slid as Trump announced an additional 10% tariff on imports, compounding an existing 10% duty. Hong Kong-listed Chinese shares fell 2.5%, and the CSI 300 Index is trading 0.80% lower, threatening a recent AI-driven rally sparked by DeepSeek’s innovations. Despite a stable yuan bolstered by the central bank, investor focus is shifting to next week’s parliamentary session for potential stimulus measures. Hong Kong listed equities are performing worse than their mainland peers, with the HSI down 2.30%, HSTech Index 3.80% lower, HS Property Index 2.50% lower.
- South Korea's KOSPI is 2.90% lower, with Samsung down -2.30%, while SK Hynix has dropped 4.50%. While Taiwan's TAIEX has dropped 1.50%
- The ASX200 index is trading 1.20% lower, and has hit its lowest level in eight weeks. The decline mirrored a Wall Street sell-off, with the every ASX sector was in the red, notably technology, consumer staples, and mining, with major firms like BHP and Fortescue losing over 3%. Star Entertainment Group plummeted 19.2% amid insolvency fears.
- Indonesia's JCI fell as much as 2.9%, entering a technical bear market with a 20% drop from its September high. Currency weakness in the rupiah, Asia’s worst performer this year, alongside Trump’s tariff threats, drove $934m in foreign outflows this month, raising inflation fears and pressuring corporate earnings, particularly in banking.
- Thailand's SET Index dropped as much as 2.4%, pushing it into a technical bear market with a decline exceeding 20% from its October peak. Heavy selling in stocks like Delta Electronics Thailand Pcl and Airports of Thailand Pcl reflected mounting concerns over Thailand’s sluggish economic growth and vulnerability to U.S. tariffs, with foreign investors offloading $381m in shares this year amid a broader $10b exodus over two years.
- India's Nifty 50 Index declined 1.35% extending losses from its September peak by over 15% and nearing a fifth consecutive monthly drop, the longest since 1996. Small and mid-cap gauges fell over 2%, with Infosys leading the Nifty’s decline at 3%, as Trump’s tariff announcements compounded regional market pressures.
OIL: Crude Impacted By Softer Risk Sentiment After Rallying Yesterday
Oil prices have held onto most of Thursday’s tariff-related gains and are only down moderately during the APAC session today driven by softer risk appetite. The benchmarks have traded in a narrow range with WTI 0.5% lower at $69.97/bbl, and Brent down 0.5% to $73.22/bbl. Technical trends remain bearish for both. The USD index is 0.1% higher.
- Both benchmarks look like they will be down 2-3% in February as concerns regarding global demand and higher supply pressured prices. In some sessions tariff news drove a crude rally due to their inflationary impact and in others it sold off on global growth and sentiment worries.
- If US tariffs on Canada are implemented on March 4, they will include 10% on energy imports. Around 4mbd come from Canada to US refiners.
- Hopes that peace in Ukraine will ease sanctions on Russian energy exports also weighed on oil prices this month. President Trump meets President Zelensky today and while the former has said that negotiations are “very well advanced” a deal still seems a long way off with Russia refusing to accept foreign peacekeepers on Ukrainian soil. The US has said it will work with Ukraine to develop its oil & gas sector.
- Later US January income/spending, PCE prices, merchandise trade and February MNI Chicago PMI are released. Elsewhere January German retail sales/unemployment, German/French/Italian February CPIs and Canadian December/Q4 GDP print. BoE’s Ramsden speaks.
GOLD: Set For First Weekly Decline Of 2025
Gold has continued to to lose ground in the first part of Friday trade. We were last near $2862, off around 0.50% versus end NY closing levels from Thursday. At this stage gold is tracking down close to 2.5% for the week, which is the first weekly of the year for bullion.
- Current levels put us under the 20-day EMA support zone (near $2882). The next downside level would be support at $2,834.3, the Feb 6 low.
- Risk aversion has clearly stepped up, particularly in the equity space. The MSCI Asia Pac index is down 2% so far today, following sharp US losses in Thursday trade. Tariff threats from the Trump administration that Mexico and Canada tariffs will be enacted on March 4, while China tariffs will also be raised by 10% on this date, are a clear headwind.
- Gold isn't benefiting from such trends though, as liquidation flows appear to be weighing on popular longs/outperformers across various asset classes, including bullion. Bitcoin has slumped a further 4.5% today, last near $80k (fresh lows since Nov last year).
- The USD index is also a touch higher and is up 0.72% so far this week.
- Bloomberg note increased interest in gold backed ETFs in China, which is a source of underlying support (see this link).
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 28/02/2025 | 0700/0800 | *** |  SE | GDP |
| 28/02/2025 | 0700/0800 | ** | SE | Retail Sales |
| 28/02/2025 | 0700/0800 | ** |  DE | Import/Export Prices |
| 28/02/2025 | 0700/0800 | ** | DE | Retail Sales |
| 28/02/2025 | 0700/0700 |  GB | BOE's Ramsden speech on MonPol in geopolitical fragmentation | |
| 28/02/2025 | 0700/0700 | * | GB | Nationwide House Price Index |
| 28/02/2025 | 0730/0830 | ** |  CH | Retail Sales |
| 28/02/2025 | 0745/0845 | *** |  FR | HICP (p) |
| 28/02/2025 | 0745/0845 | ** | FR | Consumer Spending |
| 28/02/2025 | 0745/0845 | *** | FR | GDP (f) |
| 28/02/2025 | 0800/0900 | ** | CH | KOF Economic Barometer |
| 28/02/2025 | 0855/0955 | ** | DE | Unemployment |
| 28/02/2025 | 0900/1000 | *** | DE | North Rhine Westphalia CPI |
| 28/02/2025 | 0900/1000 | *** | DE | Bavaria CPI |
| 28/02/2025 | 0900/1000 | ** |  EU | ECB Consumer Expectations Survey |
| 28/02/2025 | 0900/1000 | *** | DE | Baden Wuerttemberg CPI |
| 28/02/2025 | 1000/1100 | *** |  IT | HICP (p) |
| 28/02/2025 | 1300/1400 | *** | DE | HICP (p) |
| 28/02/2025 | 1330/0830 | *** |  CA | GDP - Canadian Economic Accounts |
| 28/02/2025 | 1330/0830 | *** | CA | Gross Domestic Product by Industry |
| 28/02/2025 | 1330/0830 | *** | CA | CA GDP by Industry and GDP Canadian Economic Accounts Combined |
| 28/02/2025 | 1330/0830 | *** |  US | Personal Income and Consumption |
| 28/02/2025 | 1330/0830 | ** | US | Advance Trade, Advance Business Inventories |
| 28/02/2025 | 1445/0945 | *** | US | MNI Chicago PMI |
| 28/02/2025 | 1600/1100 | CA | Finance Dept monthly Fiscal Monitor (expected) | |
| 28/02/2025 | 1800/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
| 01/03/2025 | 0130/0930 | *** |  CN | CFLP Manufacturing PMI |
| 01/03/2025 | 0130/0930 | ** | CN | CFLP Non-Manufacturing PMI |