NEWS:
US/UKRAINE (WSJ): U.S. Doubles Down on Demand That Ukraine Sign Minerals Deal
The Trump administration is stepping up its push for Ukrainian President Volodymyr Zelensky to hand mineral rights worth hundreds of billions of dollars to the U.S., after Zelensky’s initial rejection of the demand fueled President Trump’s escalating broadsides against Ukraine’s leader. The White House called Zelensky’s refusal to sign a deal it proposed and his criticism of Trump unacceptable, a day after Zelensky said Trump is living in a “disinformation” bubble and Trump countered by calling Zelensky a dictator.
US (WSJ): Senate Democrats Use Budget Vote to Make Republicans Squirm
Senate Republicans moved to take their first step Thursday toward funding new spending on border security and the military, while Democrats tried to put GOP lawmakers on the record on uncomfortable issues at the start of President Trump’s new term. The Senate Republicans’ budget blueprint aims at unlocking $342 billion in spending—and the same amount of offsetting cuts—over four years. The blueprint, which Republican senators have cast as a backup to a far broader House GOP plan, cleared the Senate by 52-48 on Friday morning.
US (WSJ): Trump Is Planning to Take Control of the Postal Service, Officials Say
President Trump is making plans to disband the governing board that oversees the U.S. Postal Service and absorb the agency into his administration, throwing the future of the mail provider’s quasigovernmental status into doubt. Trump is preparing to issue an executive order, possibly this week, to fire the members of the Postal Service’s governing board and put the agency under the direct control of the Commerce Department, according to two government officials. The plan was earlier reported by the Washington Post late Thursday.
US (WSJ): Musk Looks at Auditing the Federal Reserve
Elon Musk on Thursday offered hints about the work to come, including auditing the Federal Reserve, as his Department of Government Efficiency bulldozes through federal agencies in its effort to identify and implement budget and staffing cuts under authority from President Trump. Asked if he plans to audit the Federal Reserve, Musk said yes without offering elaboration. He also added fuel to the possibility of giving payouts to the public from some of the budget savings that DOGE identifies. Trump said Wednesday that he was weighing the idea.
CHINA (BBG): China Pledges to Boost Services as US Calls to Rebalance Economy
Chinese officials are mapping out plans for tapping the nation’s huge customer base, as US Treasury Secretary Scott Bessent prepares to refresh calls for Beijing to decrease its dependence on exports. Premier Li Qiang led the charge Thursday, urging China’s cabinet to “vigorously” improve the supply of services in industries spanning education, health care, culture and sports, without elaborating.
SWEDEN (BBG): Sweden Reports Another Damaged Submarine Cable in Baltic Sea
Another subsea cable was ruptured offshore the Swedish island of Gotland in the Baltic Sea. The suspected breakage is located in Swedish economic zone on a cable between Finland and Germany, the Coast Guard told SVT on Friday. “We can confirm that we on Thursday received information about a cable break east of Gotland,” Mattias Lindholm, press officer at Swedish Coast Guard, said by phone. It’s unclear when the incident took place, he said. The Coast Guard is on the way to the site, he added.
JAPAN (MNI): BOJ Shrugs Off JGB Yields, Yen Strength
The BOJ sees no immediate impact of higher JGB yields and yen strength on monetary policy. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
RBNZ (MNI): RBNZ Deputy Sees OCR Dip To Neutral, No Further
RBNZ Deputy Governor Christian Hawkesby speaks to MNI in an interview.-On MNI Policy MainWire now, for more details please contact sales@marketnews.com
DATA:
MNI: UK FEB FLASH MANUF PMI 46.4 (FCST: 48.5); JAN 48.3
UK FEB FLASH SERVICES PMI 51.1 (FCST: 50.8); JAN 50.8
MNI: EUROZONE FEB FLASH MANUF PMI 47.3 (FCST: 47.0); JAN 46.6
EUROZONE FEB FLASH SERVICES PMI 50.7 (FCST: 51.5); JAN 51.3
MNI: GERMANY FEB FLASH MANUF PMI 46.1 (FCST: 45.5); JAN 45.0
GERMANY FEB FLASH SERVICES PMI 52.2 (FCST: 52.5); JAN 52.5
MNI: FRANCE FEB FLASH MANUF PMI 45.5 (FCST: 45.3); JAN 45.0
FRANCE FEB FLASH SERVICES PMI 44.5 (FCST: 48.9); JAN 48.2
MNI JAPAN JAN CORE CPI +3.2% Y/Y; DEC +3.0%
JAPAN JAN CORE-CORE CPI +2.5% Y/Y; DEC +2.4%
JAPAN JAN SERVICES PRICES +1.4% Y/Y; DEC +1.6%
- UK retail sales bounced back strongly in January, with total volumes rising 1.7% month-on-month after a 0.6% decline in December, data released by the Office for National Statistics said Friday.
- However, the ONS noted sales still remained 1.4% below their pre-pandemic level, having been unable to hold a recover back above those levels in 2022 and 2023, although thwere have been signs in some recent indicators that there is some life in the consumer.
FOREX: EUR Slips on French PMI, JPY Volatility Remains in Focus
- The Euro is softer on Friday following the weaker-than-expected French services PMI. EURUSD slipped from around the 1.05 mark to 1.0468 and subsequently stabilised near session lows on the better-than-expected German manufacturing print. Overall growth prospects in the region continue to appear stagnant, while a renewed uptick in output charges will be of concern to ECB policymakers. 1.0533 the Jan 27 high and a reversal trigger remains key on the topside for EURUSD.
- EURGBP also sits moderately weaker and has been consolidating its position below 0.8300 over the past three sessions. A resumption of weakness would once again refocus attention on 0.8248, the Feb 3 low and the bear trigger, before 0.8203, the lowest point of a multi-year range.
- Elsewhere, the volatile Japanese yen remains of key interest in G10 FX markets. After slipping to a fresh two-month low of 149.29, comments from BOJ Governor Ueda have sparked an impressive relief rally for USDJPY. Ueda told the Diet Friday the Bank would buy bonds nimbly should yields rise sharply, prompting USDJPY to rise around 1% from session lows to a 150.74.
- Losses for the week remain around 1.2% having cleanly traded through the bear trigger on Thursday. 148.65 is the next downside mark and key support.
- AUDUSD has declined 0.25% on Friday, with the overnight high closely coinciding with key resistance at 0.6414 - marking both the 100-dma as well as the 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg. Clearance here opens the next leg higher for the pair, making 0.6471 the next target.
- Canadian retail sales and US flash PMIs headline Friday’s calendar from here, with existing home sales and UMich (2nd reading) also crossing.
EGBS: Mixed Germany / EZ PMIs Temper France-induced Dovish Reaction
The dovish reaction to the weaker-than-expected French services PMI was tempered by a better-than-expected German manufacturing print. That leaves Bund futures at 131.98, +38 ticks on the session but off the 132.20 high. Initial resistance in Bunds at 132.26 remains intact, shielding the 20-day EMA at 132.59. Wednesday’s low at 131.26 provides support.
- The Eurozone-wide PMI suggested the growth prospects in the region continue to appear stagnant, while a renewed uptick in output charges will keep inflation concerns at the forefront of hawkish ECB policymaker's minds.
- German yields are 3.0 to 3.5bps lower, with the curve flattening slightly.
- 10-year EGB spreads to Bunds are generally biased wider, with the exception of BTPs and GGBs. The OAT/Bund spread is 1.5bps wider at 74bps following the weak French PMI.
- Ongoing political and fiscal uncertainty in Austria heightens the risk of a negative outlook move from Moody’s after the close.
- ECB-dated OIS price 77bps of easing through year-end, up from 74bps this morning. ECBspeak is scheduled from the dovish Centeno (1030GMT) and Chief Economist Lane (1430GMT).
GILTS: Little Changed, PMIs Add To Stagflationary Fears
Gilts stick within the ranges established earlier in the week.
- Yields ~1bp higher across the curve, 2.5-4.0bp off the session lows that came in the wake of the soft French services PMI, with the German PMIs countering that rally.
- Domestic PMIs had little market impact, even as they underscored stagflationary worry.
- The UK PMIs noted demand weakness, while highlighting employment and input cost increases being passed through to output prices.
- The surveys also warned that firms indicated a further steep decline in staffing numbers, largely in response to the higher payroll costs and weak demand.
- This will make for difficult reading for the BoE MPC, especially with an increasing number of Committee members already appearing to be more attuned to growth concerns as the primary downside economic risk.
- The next 25bp BoE cut is still fully discounted though the June MPC, with ~48.5bp of easing showing through year-end.
- Macro and cross-market cues eyed ahead of the weekend.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.451 | -0.4 |
May-25 | 4.264 | -19.0 |
Jun-25 | 4.202 | -25.2 |
Aug-25 | 4.073 | -38.1 |
Sep-25 | 4.044 | -41.0 |
Nov-25 | 3.983 | -47.1 |
Dec-25 | 3.970 | -48.5 |
COMMODITIES: Bull Cycle in Gold Remains Key Driver
A bull cycle in Gold remains in play and the yellow metal continues to hold on to the bulk of its recent gains. Fresh highs once again confirm a resumption of the uptrend and maintain the bullish price sequence of higher highs and higher lows. WTI futures traded firmer Wednesday, before fading into the close and confirming the still-present bear threat. Earlier this week, price pulled back from the recent high and has again traded below the 50-day EMA - at $71.62.
- WTI Crude down $0.46 or -0.63% at $72.06
- Natural Gas up $0.19 or +4.48% at $4.337
- Gold spot down $11.71 or -0.4% at $2927.63
- Copper down $5.05 or -1.08% at $461.3
- Silver down $0.05 or -0.14% at $32.9275
- Platinum down $10.49 or -1.07% at $970.22
EQUITIES: EuroStoxx50 Remains Bullish, Despite Fade Off Highs
S&P E-Minis have faded sharply off intraday highs Thursday, but remain firm and hold the bulk of the recent phase of strength. Attention remains on resistance at 6162.25, the Jan 24 high. The trend condition in Eurostoxx 50 futures remains bullish, with prices edging to a new alltime high on the continuation contract this week. The move higher last week confirmed once again, a resumption of the uptrend.
- Japan's NIKKEI closed higher by 98.9 pts or +0.26% at 38776.94 and the TOPIX ended 1.93 pts higher or +0.07% at 2736.53.
- Elsewhere, in China the SHANGHAI closed higher by 28.33 pts or +0.85% at 3379.113 and the HANG SENG ended 900.94 pts higher or +3.99% at 23477.92.
- Across Europe, Germany's DAX trades higher by 11.89 pts or +0.05% at 22326.57, FTSE 100 lower by 4.77 pts or -0.06% at 8658.12, CAC 40 up 23.8 pts or +0.29% at 8146.95 and Euro Stoxx 50 up 6.88 pts or +0.13% at 5467.57.
- Dow Jones mini up 20 pts or +0.05% at 44288, S&P 500 mini up 0.75 pts or +0.01% at 6137, NASDAQ mini up 25 pts or +0.11% at 22166.25.
| Date | GMT/Local | Impact | Country | Event |
| 21/02/2025 | 1330/0830 | ** |  CA | Retail Trade |
| 21/02/2025 | 1330/0830 | ** |  US | WASDE Weekly Import/Export |
| 21/02/2025 | 1330/0830 | ** | CA | Retail Trade |
| 21/02/2025 | 1430/1530 |  EU | ECB's Lane Speech at FIW-Research Conference | |
| 21/02/2025 | 1445/0945 | *** | US | S&P Global Manufacturing Index (Flash) |
| 21/02/2025 | 1445/0945 | *** | US | S&P Global Services Index (flash) |
| 21/02/2025 | 1500/1000 | *** | US | NAR existing home sales |
| 21/02/2025 | 1500/1000 | * | US | Services Revenues |
| 21/02/2025 | 1500/1000 | ** | US | U. Mich. Survey of Consumers |
| 21/02/2025 | 1630/1130 | US | Fed Vice Chair Philip Jefferson | |
| 21/02/2025 | 1630/1130 | US | San Francisco Fed's Mary Daly | |
| 21/02/2025 | 1730/1230 | CA | BOC Governor speech/press conference. |