EXECUTIVE SUMMARY
- ZELENSKIY SIGNALS HE WOULD MEET WITH TRUMP IF INVITED BACK
- UK AND FRANCE AIM FOR NEW UKRAINE PEACE DEAL
- CHINA MAY HIT US CROPS IN TARIFF RESPONSE, GLOBAL TIMES SAYS
- ISRAEL HALTS GAZA AID AFTER HAMAS BALKS AT NEW US TRUCE IDEA
Figure 1: Eurostoxx Banks Index trading at highest since 2011
Source: MNI/Bloomberg
NEWS
US/UKRAINE (BBG): Zelenskiy Signals He Would Meet With Trump If Invited Back
Ukrainian President Volodymyr Zelenskiy said he’s willing to meet Donald Trump if the US president invites him again “to solve real problems,” adding his country is ready to accept a minerals deal that was put on hold last week. “We are worthy of an equal dialog,” Zelenskiy said Sunday in London after attending a security summit of European leaders meant to rally support for Ukraine.
US/CHINA (BBG): China May Hit US Crops in Tariff Response, Global Times Says
China is considering retaliatory measures on US agriculture and food products in response to tariffs from the Trump administration that are scheduled to take effect on Tuesday, according to the Global Times. The response from Beijing will likely include tariffs and non-tariff measures, the Communist Party-backed news outlet reported on Monday, citing a person it didn’t identify. The Global Times, which didn’t provide specific details, is occasionally used to signal China’s positions to the outside world.
US/CHINA (BBG): China FX Regulator Surveys Companies on Impact of Trump Tariffs
China’s foreign exchange regulator has surveyed companies about the potential impact of US-China tariffs, according to people familiar with the matter. The State Administration of Foreign Exchange’s questionnaire for exporters focus on the levies imposed by US President Donald Trump, the people said, asking not to be identified in discussing private information. Importers were asked about the impact from China’s retaliatory tariffs.
US/CHINA (WSJ): Chinese Buyers Are Ordering Nvidia’s Newest AI Chips, Defying U.S. Curbs
Chinese buyers are circumventing U.S. export controls to order Nvidia’s latest artificial-intelligence chips, illustrating the challenges the Trump administration will face in choking off cutting-edge American technology. Traders in the country are selling computing systems with Nvidia’s Blackwell chips installed by routing them through third parties in nearby regions. Some sellers promise buyers delivery within six weeks.
US (FT): Crypto Prices Jump as Donald Trump Names Tokens Included in Strategic Reserve
Cryptocurrency prices jumped on Sunday after President Donald Trump said a potential US strategic reserve of digital assets will include lesser-traded tokens Solana, XRP and Cardano. Trump made the disclosure on his Truth Social media account, adding: “I will make sure the US is the Crypto Capital of the World. We are MAKING AMERICA GREAT AGAIN!” His comments gave prices across the industry a lift after weeks of selling pressure, as cryptocurrencies were hit in a market shake-out of riskier assets.
US (BBG): US Farmers to Get First of $30 Billion Tranche for Downturn
American farmers will soon start receiving the first tranche of $30 billion in funding approved by Congress to fight a downturn in the markets, according to Agriculture Secretary Brooke Rollins. Speaking at the Commodity Classic event in Denver, Rollins said that the initial $10 billion in assistance should start moving in the next few weeks, adding that she asked her team to “think creatively” about how to make the application process for the funds to move quicker.
US (WSJ): Big Consulting Bosses Meet With Trump Officials to Save Contracts
Executives at some of the biggest U.S. consulting firms are meeting with Trump administration officials to defend their projects ahead of this coming week’s deadline for government agencies to justify major consulting contracts. In recent days, top executives at professional services firms including Ernst & Young and Guidehouse have met with officials including Josh Gruenbaum, the Federal Acquisition Service commissioner within the General Services Administration, according to people familiar with the discussions. A Booz Allen BAH -4.48%decrease; red down pointing triangle executive has also been in touch with Gruenbaum, who is a former director at the private-equity firm KKR.
EUROPE (FT): UK and France Aim for New Ukraine Peace Deal as Macron Pushes for Initial 1-Month Truce
Britain and France are to lead a desperate European attempt to salvage peace hopes in Ukraine, with a plan to end the war that would include an initial one-month truce with Russia, covering air, sea and infrastructure. UK Prime Minister Sir Keir Starmer said after a summit in London on Sunday that Europe would step in as intermediaries for Volodymyr Zelenskyy to try to “stop the fighting”, after the Ukrainian leader’s explosive row with US President Donald Trump in the Oval Office.
ISRAEL/MIDDLE EAST (BBG): Israel Halts Gaza Aid After Hamas Balks at New US Truce Idea
Israel halted all humanitarian aid and other imports to the war-shattered Gaza Strip as a six-week truce with Hamas expired on Sunday and the Iranian-backed Palestinian faction balked at a US bridging proposal to extend the suspension of hostilities. The Israeli move drew sharp responses from Egypt and Qatar, mediators looking to extend the ceasefire. Aid shouldn’t be withheld “as a weapon” for starvation of civilians, they said in separate statements. Saudi Arabia’s foreign ministry echoed similar sentiments, saying the move wields aid as a “blackmailing and collective punishment tool.”
CHINA (FT): China Adviser Pushes for Lower Marriage Age to Boost Births
China’s top political advisory body will consider a proposal to lower the country’s marriage age to help reverse falling birth rates this week, as more than 5,000 delegates gather in Beijing for the country’s annual parliamentary meeting.
DATA
EUROZONE DATA (MNI): Services Deceleration Apparent in February EZ HICP
- EUROZONE FEB FLASH HICP +2.4% Y/Y
- EUROZONE FEB FLASH CORE HICP +2.6% Y/Y
Eurozone February flash HICP Y/Y inflation came in at 2.37%, 0.07pp above the rounded consensus of 2.3% (vs 2.52% January). On a monthly basis, Eurozone inflation came in at 0.47% (0.4% cons, -0.28% prior). The data on services in the release should be seen as a good sign regarding tapering stickiness in the category. Core HICP printed below consensus, at 2.60% Y/Y and 0.58% M/M (2.5% cons; Jan 2.70% Y/Y, -0.95% M/M). Looking at the individual categories: Services inflation notably decelerated to 3.73% Y/Y; rounded to 1dp, there has not been a print lower than 3.7% since June 2022. The median sellside analyst estimate ahead of the national data stood at 3.8% - so that looks like a downside surprise. However, some of the national prints did point to a downside surprise in this category already.
SPAIN DATA (MNI): Contractionary Feb Manuf PMI Could Signal Soft IP Momentum Ahead
- SPAIN FEB MANUF PMI 49.7 (FCST: 51.4); JAN 50.9
The Spanish manufacturing PMI moved into contractionary territory for the first time in 13 months in February, with the 49.7 print well below the 51.4 consensus (vs 50.9 prior). This was the second consecutive decrease, and could suggest the recent momentum in Spanish industrial production is set to wane in the first few months of this year. Spanish January IP is due on Friday.
ITALY DATA (MNI): Feb Manuf PMI Better Than Expected, But Details Still Weak
- ITALY FEB MANUF PMI 47.4 (FCST: 46.7); JAN 46.3
The Italian manufacturing PMI registered a third consecutive increase from November's low of 44.5, exceeding consensus expectations at 47.4 (vs 46.7 cons, 46.3 prior). The index has nonetheless been contractionary since March 2024, and does not suggest weak industrial production momentum is set to reverse in the near future.
EUROZONE FINAL FEB MANUF PMI 47.6 (FLASH: 47.3); JAN 46.6 (MNI)
GERMANY FINAL FEB MANUF PMI 46.5 (FLASH: 46.1); JAN 45.0 (MNI)
FRANCE FINAL FEB MANUF PMI 45.8 (FLASH: 45.5); JAN 45.0 (MNI)
UK FINAL FEB MANUF PMI 46.9 (FLASH: 46.4); JAN 48.3 (MNI)
SWEDEN DATA (MNI): Manufacturing PMI Another Solid Data Release
The Swedish manufacturing PMI rose to 53.5 in February, from a 0.2p point upwardly revised 53.1 prior. Although there was no consensus for the print, it's another solid piece of economic data which underscores expectations for a Riksbank pause in March. As noted above, SEK continues to outperform the G10 this morning. The manufacturing PMI has been in expansionary territory since July 2024, and has better reflected the recent rise in industrial production momentum than the Economic Tendency Indicator's manufacturing sentiment series.
NETHERLANDS DATA (MNI): Dutch HICP Reaccelerates, Broad-Based Higher Than Expected
Dutch flash HCIP rose to 3.51% Y/Y in February, notably above January's 3.01% as well as consensus expectations for 3.2%. Remember that last month, Dutch HICP was also expected at 3.2% but then surprised two tenths to the downside. Looking at Y/Y trends on the core measure (3.21% Feb), January now appears like a bit of a one-off (2.60%), and despite the acceleration since then, the February pace remains below December's 3.57%.
UK BOE JAN MORTGAGE APPROVALS 66,189 (MNI)
UK JAN M4 MONEY SUPPLY +1.3% M/M, +4.1% Y/Y (MNI)
UK BOE JAN CONSUMER CREDIT GBP1.74 BLN (MNI)
UK BOE JAN SECURED LENDING GBP4.21 BLN (MNI)
CHINA DATA (MNI): Caixin Feb Manufacturing PMI Hits Three-Month High
MNI (Beijing) China's Caixin manufacturing PMI came in at 50.8 in February, up from January's 50.1, staying in the expansionary zone above the 50 mark for the fifth straight month and hitting a three-month high, the financial publisher said on Monday. The production and new orders sub-indices both rose to their highest level in three months in the expansion range as factories restarted after the Spring Festival holiday. The new export order sub-index stopped falling and rebounded to the highest level since May 2024, driven by improved global market demand.
TURKEY DATA (MNI): Annual Inflation Drops Below 40%, Clearing Path for Another 250bp Rate Cut
- TURKEY FEB CPI +2.27% M/M
Turkey’s annual inflation rate slowed to 39.1% in February from 42.1% the prior month, according to TurkStat, below the analyst survey forecast of 39.9%. Monthly inflation stood at 2.27%, slowing from 5% in January and showing below expectations of 2.9%. Core prices rose 39.05% on an annual basis, up 1.8% M/M. On a month-on-month basis, the “Health” component of the CPI basket dropped 4.38%, with the partial reversal of regulated health price hikes likely accounting for much of the improvement. Indeed, Bloomberg Economics estimate that about 1ppt of the fall in month-on-month inflation is due to the adjustment to some government administered healthcare prices.
RATINGS: France Moved to Outlook Negative At S&P, While S&P Upgraded Portugal
Sovereign rating reviews of note from after hours on Friday include:
- Fitch affirmed Germany at AAA; Outlook Stable
- Fitch affirmed the United Kingdom at AA-; Outlook Stable
- Moody's affirmed the Netherlands at Aaa, outlook stable
- S&P affirmed France at AA-; Outlook Revised to Negative from Stable
- S&P upgraded Portugal to A; Outlook Positive
- Morningstar DBRS confirmed the Netherlands at AAA, Stable Trend
- Scope Ratings affirmed Japan at A; Outlook Stable
FOREX: Dollar Drifting Ahead of Revived Tariff Deadline
- EUR/USD edges to a new intraday high on the back of that EZ HICP print, but the pair was bid into the release already, with the USD further softer against all others in G10. EUR/JPY also trades well through the release, briefly showing above the Friday high.
- The impact has spilled over into new intraday highs for GBP/USD, which accelerates on the break of last Friday's high at 1.2622, but the mid-week highs and major resistance are still out of reach for now at 1.2716.
- No specific headlines or newsflow behind the USD drift, but markets likely well aware of the looming deadline for Canada/Mexico/China tariffs - due Tuesday at 0501GMT/0001ET - meaning markets will be on watch today for any signals of a last-minute extension, as was the case in February.
- Outside of Monday trade, the week is fraught with event risk - Tuesday marks the final deadline for additional trade levies on Canada, Mexico and China. The additional tariffs kick in at 0501GMT/0001ET on Tuesday - meaning markets will be on watch today for any signals of a last-minute extension, as was the case in February.
- ISM Manufacturing data for February is the data highlight, with sentiment in the spotlight this month thanks to growing signals in regional Fed releases that businesses are increasingly uncertain over tariffs and price pressures. Friday's MNI Chicago Business Barometer showed prices paid lurching higher, marking the largest one-month increase since July 1957.
EGBS: German Curve Bear Steepens on Increased Fiscal Spending Prospects
The German curve has bear steepened this morning, with 5s30s reaching a fresh multi-month high of 58.5bps (+3.6bps steeper today) on the prospect of increased German defence and infrastructure spending following an earlier Reuters source report.
- The short-end sell-off has been limited a touch by the softer-than-expected Eurozone flash February services inflation print (3.7% Y/Y vs 3.8% MNI consensus), even as headline and core metrics printed a touch above the rounded consensus.
- Bund futures are -78 ticks today at 132.41, having fallen ~50 ticks from session highs over the last 90 minutes. For now, a short-term bullish theme remains intact. Initial support is the Feb 24 low at 131.83, while the short-term bear trigger has been defined at 131.26, the Feb 19 low.
- Long-end German ASWs have tightened ~1.5bps on the prospect of increased domestic fiscal spending.
- The 10-year BTP/Bund spread is 2.5bps tighter at 111bps: A combination of Bund weakness, stronger European equities (led by defence stocks) and a smaller than expected domestic 2024 fiscal deficit.
- Focus turns to this afternoon’s US manufacturing survey data, alongside any last-minute developments ahead of the looming deadline for Canada/Mexico/China tariffs - due Tuesday at 0501GMT/0001ET.
GILTS: Recovery Rally Fades Alongside Wider Risk-On
Gilt futures -67 at 92.76, which is a fresh session low.
- The bullish short-term technical set up in the contract remains intact.
- Initial support at 92.72, followed by 92.22.
- Yields 5-6bp higher across the curve.
- Cross-market cues continue to dominate.
- Second-round pressure stemming from wider risk-on flow results in fresh session lows for gilts in recent trade.
- A reminder that reports pointing to more forceful short-term German fiscal spending drove an early sell off.
- That was before a recovery as markets assessed increased U.S.-Ukraine tensions, which presents greater inflationary risk but widens the left tail of the economic growth outlook.
- Final UK manufacturing PMI was slightly higher than flash but still comfortably sub-50.
- GBP STIRs follow the long end.
- 52bp of BoE cuts priced through year-end vs. ~56.5bp late Friday.
- ~18bp priced through May, ~23.5bp through June and ~36.5bp through August, we still look for a cut in May at this stage.
- SONIA futures flat to -7.5.
- Final services PMI data (Wednesday) and the BoE DMP survey (Thursday) headline this week’s UK data calendar.
- This week’s BoE-speak will come from Bailey, Pill, Mann, Greene & Taylor.
- Expect more detail on those events in our Gilt Week Ahead publication.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.458 | +0.3 |
May-25 | 4.275 | -18.0 |
Jun-25 | 4.223 | -23.2 |
Aug-25 | 4.092 | -36.2 |
Sep-25 | 4.049 | -40.6 |
Nov-25 | 3.960 | -49.5 |
Dec-25 | 3.934 | -52.0 |
EQUITIES: Trend Condition in Eurostoxx 50 Futures Remains Bullish, For Now
The trend condition in the Eurostoxx 50 futures contract remains bullish and - for now - the latest shallow retracement appears corrective. The contract has pierced support at the 20-day EMA, at 5417.56. A clear break of this average would signal scope for a deeper retracement - note that the 50-day EMA lies at 5266.18. The EMA represents a key area of support. For bulls, a resumption of gains would open 5574.57 next, a Fibonacci projection. Recent weakness in the S&P E-Minis contract has resulted in a breach of a number of important supports; 6014.00, the Feb 10 low, and 5935.50, the Feb 3 low. The sharp move down signals scope for a deeper retracement and has exposed the next key support at 5809.00, the Jan 13 low. Clearance of this level would highlight a stronger reversal. On the upside, initial firm resistance to watch is 6038.96, the 50-day EMA.
- Japan's NIKKEI closed higher by 629.97 pts or +1.7% at 37785.47 and the TOPIX ended 47.47 pts higher or +1.77% at 2729.56.
- Elsewhere, in China the SHANGHAI closed lower by 3.972 pts or -0.12% at 3316.925 and the HANG SENG ended 64.95 pts higher or +0.28% at 23006.27.
- Across Europe, Germany's DAX trades higher by 187.69 pts or +0.83% at 22736.32, FTSE 100 higher by 25.03 pts or +0.28% at 8834.53, CAC 40 up 28.59 pts or +0.35% at 8138.46 and Euro Stoxx 50 up 16.61 pts or +0.3% at 5479.27.
- Dow Jones mini up 43 pts or +0.1% at 43929, S&P 500 mini up 12.75 pts or +0.21% at 5975.75, NASDAQ mini up 69.5 pts or +0.33% at 20987.
Time: 09:55 GMT
COMMODITIES: Recent Weakness Bolsters Bearish Outlook for WTI Futures
The current bearish trend condition WTI futures remains intact and last week’s sell-off reinforces a bear theme. The move lower has resulted in a clear breach of support at $70.20, the Feb 6 low. This confirms a resumption of the downtrend that started on Jan 15 and paves the way for an extension towards $67.75, the Dec 20 ‘24 low. Key short-term resistance has been defined at $73.33, the Feb 11 high. A corrective phase in Gold remains in play and the yellow metal traded lower last week. Price has breached the 20-day EMA, at $2879.8. This signals scope for a deeper short-term retracement, possibly towards the next important support around the 50-day EMA, at $2804.6. For bulls, a resumption of gains would refocus attention on the next objective at $2962.2, a Fibonacci projection. This would also open the $3000.0 handle.
- WTI Crude down $0.31 or -0.44% at $69.42
- Natural Gas down $0.02 or -0.63% at $3.811
- Gold spot up $11.21 or +0.39% at $2869.33
- Copper up $0.75 or +0.16% at $455.3
- Silver up $0.26 or +0.84% at $31.4227
- Platinum up $5.15 or +0.54% at $954.31
Time: 09:55 GMT
| Date | GMT/Local | Impact | Country | Event |
| 03/03/2025 | - | *** |  US | Domestic-Made Vehicle Sales |
| 03/03/2025 | 1445/0945 | *** | US | S&P Global Manufacturing Index (final) |
| 03/03/2025 | 1500/1000 | *** | US | ISM Manufacturing Index |
| 03/03/2025 | 1500/1000 | * | US | Construction Spending |
| 03/03/2025 | 1630/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 03/03/2025 | 1630/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 03/03/2025 | 1735/1235 | US | St. Louis Fed's Alberto Musalem | |
| 04/03/2025 | 2330/0830 | * |  JP | Labor Force Survey |
| 04/03/2025 | 0001/0001 | * |  GB | BRC Monthly Shop Price Index |
| 04/03/2025 | 0030/1130 |  AU | RBA Meeting Minutes | |
| 04/03/2025 | 0030/1130 | AU | Balance of Payments: Current Account | |
| 04/03/2025 | 0030/1130 | ** | AU | Retail Trade |
| 04/03/2025 | 0700/1500 |  CN | Chinese People's Political Consultative Conference | |
| 04/03/2025 | 1000/1000 | ** | GB | Gilt Outright Auction Result |
| 04/03/2025 | 1000/1100 | ** |  EU | Unemployment |
| 04/03/2025 | 1355/0855 | ** | US | Redbook Retail Sales Index |
| 04/03/2025 | 1630/1130 | * | US | US Treasury Auction Result for Cash Management Bill |
| 04/03/2025 | 1920/1420 | US | New York Fed's John Williams | |
| 05/03/2025 | 2200/0900 | * | AU | S&P Global Final Australia Services PMI |
| 05/03/2025 | 2200/0900 | ** | AU | S&P Global Final Australia Composite PMI |