Global markets dropped, US futures extended their slump into a third day and the Nasdaq 100 was on course for its first weekly loss of 2023, while Treasuries extended a selloff as wagers for more hawkish monetary policy mounted. Oil rose after Russia said it will cut output. Nasdaq futures were down 1.1% by 730 a.m. ET after the tech-heavy index lost 0.9% during the previous session, bringing this week’s declines to 1.5%. Nasdaq futs have broken below the support level of the rising channel since the start of the year.

The tech benchmark is still up over 13% year-to-date, but expectations of interest rates staying higher for longer - at least for a few more days - after a blowout US payrolls report and concerns about inflation pressures are weighing on sentiment. Investors will be closely watching the US inflation report next Tuesday for clues on the Fed’s monetary policy outlook.

S&P futures were also down, off by 0.6% and trading near session lows, and at the lowest level since the Golden Cross earlier this week. Treasury yields held gains across the curve after investors inverted the TSY yield curve by the most since the early 1980s, a sign of flagging confidence in the economy’s ability to withstand additional Federal Reserve hikes. The dollar reversed earlier losses when the yen surged after a report that Japan's Prime Minister Fumio Kishida had picked the hawkish Kazuo Ueda as the next head of the BOJ.

In premarket trading, Lyft tumbled as much as 35% after the ride-hailing company said it would prioritize lower prices to attract more customers, a move it expects to shrink future profits. Expedia Group was lower in premarket trading after reporting a fourth-quarter miss driven by bad weather. Here are some other notable premarket movers"

• BuzzFeed and SoundHound AI lead fellow artificial intelligence-related stocks lower in US premarket trading. The group is poised to extend losses from Thursday. AI-related stocks falling in premarket trading: BuzzFeed -10%, SoundHound AI -6%, BigBear.ai -3.5% and C3.ai Inc. -4%
• Expedia Group dips 2.3% after the US online travel agency reported a fourth-quarter miss, driven by bad weather. That said, a surge in January bookings sparks optimism around recovery in 2023, with some analysts raising price targets.
• PayPal shares slip 0.4%, erasing earlier gains, as analysts weighed the payment company’s miss on fourth-quarter total payment volume against better-than-expected EPS guidance, with some looking for more evidence of growth to justify further gains in the stock.
• Cloudflare rises 7.3% after the infrastructure software company gave a 2023 revenue forecast that beat the average analyst estimate. Analysts raised their price targets and said that the guidance will allay some investor concerns.
• Bloom Energy shares jumped 7.4% as analysts nudged their price targets higher on the power generation equipment maker, noting the company’s fourth-quarter revenue beat estimates.
• News Corp. shares drop 2.8% in US postmarket on Thursday after the media company reported adjusted earnings per share for the second quarter that missed the average analyst estimate and said it will cut 5% of its staff this year, or about 1,250 positions.

Stocks are heading for their first weekly decline in three after a chorus of Fed speakers reinforced the need to keep raising rates for longer, following a strong payrolls report, quashing the optimism that spurred a powerful rally in January. Next week’s inflation update from the US offers a relevant potential inflection point in the Treasury yield curve, according to Benjamin Jeffery and Ian Lyngen, strategists at BMO Capital Markets  “Our expectations are that the market takes away sufficient angst regarding the prevailing inflation trend to press the inversion trade even further,” they wrote in a note.

Investors have become increasingly jittery about a hawkish policy tilt are paying close attention to official comments and economic data for clues on the rates trajectory. In Japan, reports of a surprise nomination for Kazuo Ueda to take helm at the Bank of Japan sparked a jump in the yen. It pared gains later as Ueda said the BOJ’s stimulus should stay in place.

"The momentum this week is building towards realizing that Powell’s last speech is actually not dovish and that translates on Treasuries yield and the Nasdaq,” said John Plassard, investment specialist at Mirabaud, confirming once again that price action sets the daily narrative. Investors initially brushed off the Fed chief’s warning on Tuesday that borrowing costs may need to peak higher than previously expected, and instead focused on his outlook that 2023 will be a year of significant declines in inflation.

And speaking of deflation, next week’s CPI data will mark a turning point for the equity rally at a time when investors are swapping stocks for bonds amid the specter of a recession, according to Bank of America strategists. US equity funds saw their first redemptions in three weeks, according to BofA’s note citing EPFR Global data. Bank of America strategist Michael Hartnett said that while it was “so very tempting” to believe that last week’s blowout US jobs report for January indicated the economy could avoid a contraction, the consumer-price data on Tuesday will be “vital” for clues on when the Federal Reserve would start easing up on monetary policy. Hartnett reiterated his 4,200 "sell" level.

In Europe, stocks were also lower with the Stoxx 600 down 1.1% and on course to snap a three day winning streak. Retailers, travel and consumer products are the worst-performing sectors. Here are some of the biggest European movers.

• Adidas shares drop as much as 12%, the most since March 2020, after the sportswear group warned that the fallout from the dispute with rapper and former partner Ye might lead to a €700 million operating loss in 2023
• Roche voting shares fall as much as 7.9% on news that an unnamed shareholder plans to sell a 2.5% stake in the Swiss pharmaceutical company
• HelloFresh falls as much as 8.9% as the meal-kit delivery firm is cut to underweight from neutral at JPMorgan
• Standard Chartered declines as much as 7% after First Abu Dhabi Bank reiterates that it’s not evaluating a possible offer for the London-based lender
• Schibsted slides as much as 5.7% after results, trimming a recent rally, after the Norwegian firm failed to offer Ebitda guidance at a group level
• Thule falls as much as 18%, the most since September, after the Swedish outdoor and bicycle equipment maker said it would replace its CEO
• Enel shares gain as much as 3.5%, the most since Jan. 4, after the Italian utility reported full-year revenue and adjusted Ebitda that beat estimates
• Saab jumps as much as 11% to a record after reporting a strong full-year performance
• Neobo Fastigheter AB rises as much as 56% on its first day of trading, bucking a trend in the real estate market that’s recently been in the limelight for its struggles
• Nobia gains as much as 5.6% after the Swedish kitchen interiors manufacturer reported in-line numbers in its 4Q report
• Iveco soars as much as 15%, the steepest gain on record, after the company reported 4Q results that Mediobanca (neutral) said are strong and “far above” consensus across the board

Earlier in the session, Asian stocks were poised for a second weekly decline as worries about a more hawkish Federal Reserve weighed on sentiment, while a pullback in China’s reopening rally also dragged the region’s equities.  The MSCI Asia Pacific Index fell as much as 1.1% on Friday, with losses driven by consumer discretionary and communication service shares. The Hang Seng Index declined the most among benchmarks, led by Chinese technology stocks, while gauges for South Korea and Australia also fell. Onshore Chinese shares continued to retreat from their highs as traders await fresh impetus, with a mild pick-up in inflation — seen as reflecting improving demand — doing little to support share prices.  Meanwhile, Japanese stocks edged higher as strong earnings from chipmakers providing a boost. However, Nikkei futures slipped after a report said Kazuo Ueda will be nominated as the Bank of Japan’s next governor. The Asian stock benchmark was poised to drop more than 1% this week, extending its slide from a late-January high. Global investors are starting to price in the prospect of higher interest rates, following a strong US jobs report last week and a string of hawkish comments by Fed officials. “Some investors are ramping up bets that we could see a whole lot more Fed tightening, but overnight index swaps are still pricing in easing by the end of the year,” said Edward Moya, senior market analyst at Oanda. “If inflation ends up being hotter-than-expected, the Fed will most likely go back to the hawkish playbook and signal more work needs to be done.”

Stocks in India declined for a second week in three amid rising wagers for further rate hikes by the global central banks, while an extension of a selloff in Adani Group shares weighed on investor sentiment.   The S&P BSE Sensex fell 0.2% to 60,682.70 in Mumbai on Friday, stretching its weekly decline to 0.3%, while the NSE Nifty 50 Index declined by by a similar measure. The Reserve Bank of India raised its key lending rate by 25 basis points as expected to 6.50% earlier this week. The rate-setting panel said it remains open to further hikes if the inflation accelerates. US Federal Reserve as well as the Reserve Bank of India seem to be using a “firmer tone” regarding inflation containment, and “both sounded quite determined to hike rates again if data points favor the same,” according to Joseph Thomas, head of research at Emkay Wealth Management.  Nine out of BSE Ltd.’s 20 sector-gauges fell on Friday, led by metal companies, which were also among worst performers for the week as worries over global growth and monetary tightening hurt stocks across Asia.  Reliance Industries contributed the most to the Sensex’s decline on Friday, decreasing 0.8%. Out of 30 shares in the Sensex index, 14 rose, while 16 fell. Adani Group stocks capped another week of losses as a review by MSCI Inc. spurred concern about passive outflows from shares already reeling from the rout triggered by US short seller Hindenburg Research’s scathing report.

In FX, the dollar edged higher against its Group-of-10 peers as traders awaited Tuesday’s key inflation data to assess the outlook for Federal Reserve rate hikes. The gauge is set for a 0.3% gain this week as traders lifted bets on peak Federal Reserve policy rate after a slew of officials reiterated the need to hike rates further to quash inflation. In Japan, the yen initially jumped on media reports of a surprise nomination for Kazuo Ueda to take helm at the Bank of Japan — suggesting investors saw the move as hawkish. The currency later pared gains after Ueda said it’s important to keep BOJ easing for now

In rates, US treasuries extended losses over the London session, following wider selloff in bunds and gilts as money markets ramped up expectations that the ECB will raise the deposit rate to 3.75% by September. Front-end-led selloff in core rates pushed German 2-year yield 8bps higher to 2.77%, the highest since 2008. US yields cheaper by 3bp to 4.5bp across the curve with losses led by intermediates, cheapening the 2s5s10s spread by 1.5bp on the day; 10-year yields up to around 3.70% are near cheapest levels of the day with bunds and gilts lagging by 3bp and 4.5bp in the sector. Bear-flattening move in German curves have knocked 2s10s, 5s30s spreads tighter by 1bp and 2.5bp vs Thursday’s close.

In commodities, oil prices surged after Russian Deputy Prime Minister Alexander Novak said the country will cut output in March by 500,000 barrels per day. Russia did not consult with OPEC+ on its March oil production reduction, it was an independent decision, according to a source cited by Reuters. Subsequently, Russia's Kremlin says Russia held talks with some OPEC+ members on its decision to cut its oil output. OPEC+ will not boost supply in reaction to the Russian cut, according to delegates cited by Reuters. Brent crude futures have added 2.6% to trade around $86.70.  Spot gold is little changed around $1,864.

To the day ahead now, and data releases include UK GDP for Q4, Italian industrial production for December, and in the US there’s the University of Michigan’s preliminary consumer sentiment index for February. From central banks, we’ll hear from the Fed’s Waller and Harker, the ECB’s Schnabel and de Cos, and BoE chief economist Pill.

Market Snapshot

• S&P 500 futures down 0.7% to 4,062.25
• MXAP down 0.8% to 166.52
• MXAPJ down 1.1% to 542.42
• Nikkei up 0.3% to 27,670.98
• Topix little changed at 1,986.96
• Hang Seng Index down 2.0% to 21,190.42
• Shanghai Composite down 0.3% to 3,260.67
• Sensex down 0.2% to 60,701.20
• Australia S&P/ASX 200 down 0.8% to 7,433.66
• Kospi down 0.5% to 2,469.73
• STOXX Europe 600 down 0.6% to 459.65
• German 10Y yield little changed at 2.36%
• Euro down 0.2% to $1.0718
• Brent Futures up 2.8% to $86.83/bbl
• Gold spot up 0.1% to $1,863.42
• U.S. Dollar Index little changed at 103.29

Top Overnight News from Bloomberg

• Japanese Prime Minister Fumio Kishida will nominate Kazuo Ueda, a professor and former Bank of Japan board member, to take the helm of the BOJ from April, according to local media reports, in a surprise move that sparked a jump in the yen
• Russia’s partners in the OPEC+ oil coalition signaled they won’t boost output to fill in for cutbacks announced by Moscow
• The UK avoided a recession last year by the narrowest of margins after the cost- of-living crisis and industrial action hit the economy during December
• The UK’s trade deficit with the European Union widened to a record in the final quarter of 2022 as imports from the bloc jumped
• Banks in the euro zone will return another €36.6 billion ($39.2 billion) in long-term funding to the European Central Bank after the terms of the programs were toughened to help the fight against inflation

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly negative after the losses on Wall St where the major indices wiped out initial gains and virtually spent the entire session on the back foot with sentiment hampered and recession fears stoked amid the deepest 2s/10s yield inversion since the 1980s. ASX 200 was dragged lower as underperformance in tech led the declines seen in almost all sectors and after the latest RBA Statement on Monetary Policy reaffirmed that further rate hikes will be needed. Nikkei 225 bucked the trend amid an overload of earnings releases and softer PPI data, although advances were capped as participants second-guess who will succeed BoJ Governor Kuroda. Hang Seng and Shanghai Comp. were lower with Hong Kong pressured by weakness in the property and tech industries, while frictions lingered as the US seeks to take action against Chinese entities linked to the surveillance balloon and reportedly aims to curtail technology investment in China.

Top Asian News

• RBA Statement on Monetary Policy noted that the board's priority is to return inflation to the target and that the board expects further increases in rates will be needed, while it is mindful that a considerable adjustment to interest rates has already been made and that monetary policy affects activity and inflation with a lag and through different channels. RBA also stated there are considerable uncertainties surrounding the outlook, and so around the level of interest rates needed to achieve the Board’s objectives.
• Singapore Backtracks on Grab’s Lawmaker Hire After Outcry
• Adani Stocks Decline as MSCI Action Raises Concern Over Outflows

European bourses are under pressure, Euro Stoxx 50 -1.2%, in a continuation of APAC/US trade that was exacerbated by the latest geopolitical developments re. Romanian airspace. Sectors are predominantly in the red with the exception of Energy given benchmark pricing while Retail names post marked underperformance amid heavy losses in Adidas. Stateside, futures are directionally in-fitting with Europe given broader geopolitics-induced action though with marked NQ -1.0% underperformance as yields pick up globally.

Top European News

• UK Treasury officials are in discussions to speed up Solvency II reforms and are considering whether to pursue a two-stage implementation, according to FT.
• ECB's Vujcic says core inflation is too high and ECB needs to see a sustained decline in the core rate. Not the time to discuss terminal, once the peak is reached will need to hold there for some time. Even if headline inflation fell below core, policy would need to remain restrictive.
• ECB TLTRO.III February 10th window repayment figure (EUR): 36.6bln vs exp. 60-320bln (prev. 62.75bln).
• Russian Federation Central Bank Key Rate (Feb) 7.50% vs. Exp. 7.5% (Prev. 7.5%); if pro-inflationary risks intensify will consider the necessity of hikes.
• Roche Foundation Buys Shares as Family Voting Stake Falls to 65%
• Jupiter’s Mid-Cap Fund Sinks Below £1 Billion AUM After 62% Fall
• UK Trade Deficit With EU Hits Record as Brexit Curtails Exports
• Russia to Cut Oil Output in Retaliation for West’s Sanctions
• Brent Oil Jumps Above $86 After Russia Says It Plans Output Cut

BOJ

• Japanese gov't is reportedly likely to nominate Kazuo Ueda as the new BoJ Governor, via Nikkei; to nominate Himino as the new Deputy. Japanese gov't initially approached BoJ deputy Amamiya as a possible successor but was met with a firm refusal. Click here for more detail.
• Touted BoJ Governor nominee Ueda said the BoJ's monetary policy is appropriate and they need to continue easy policy, speaking on NTV; when asked if he will be nominated as the next BoJ Governor, says nothing has been decided. Adds, it is important to make decisions logically and explain them clearly.
• Japan's government is to present the nominees for the BoJ leadership on February 14th at 02:00GMT/21:00EST, while the ruling and opposition parties are considering holding a hearing on the nominees in the lower house on February 24th, according to officials cited by Reuters. Subsequently confirmed by PM Kishida

Geopolitics

• "Ukrainian commander in chief Zaluzhny says 2 Russian kalibr missiles entered Moldovan and NATO-member Romanian airspace on their way to targets in Ukraine", via The Economists' Carroll; subsequently, Romania says it cannot confirm at this point that a Russian missile crossed its airspace though Moldova confirms it entered Moldovan airspace.
• Most recently, Romania's Defence Ministry says Russian missile did not reach Romanian airspace, but crossed Moldovan airspace.
• Ukrainian Energy Minister says Russian attacks hit power facilities in six regions, emergency shutdowns reported in many regions.
• French President Macron said he doesn't rule out sending fighter jets to Ukraine but added that it is not a priority for now, according to Reuters.
• Brazil reportedly bowed to US pressure and agreed to delay Iranian warships from docking in Rio de Janeiro until after President Lula meets with US President Biden, according to sources cited by Reuters.

FX

• JPY soared on reports that Ueda will be the gov'ts nomination for BoJ Governor, with USD/JPY dropping to 129.82 from 131.55; however, Ueda announcing he is happy with easy policy saw this unwind back towards 131.00.
• Amidst this, the DXY was pushed down to 102.89 though has since been revitalised by the above Ueda commentary and geopolitics, taking the index to a session peak of 103.50.
• More broadly, GBP and EUR initially benefitted from the above gyrations, but have since succumbed to the USD's strength and thus have been below 1.21 and 1.07 respectively.
• SEK continues to extend post-Riksbank while NOK benefited from very hot CPI which adds to conviction to the calls for more policy tightening than flagged by Governor Bache at the last gathering.
• PBoC set USD/CNY mid-point at 6.7884 vs exp. 6.7885 (prev. 6.7905)
• Banxico hiked rates by 50bps in a unanimous decision (exp. 25bps hike) and said for the next policy meeting, the upward adjustment to the reference rate could be of a lower magnitude.

Fixed Income

• Core benchmarks came under JGB-led pressure on the initial Ueda reports, sending Bunds, Gilts and USTs to 135.88, 104.07 and 112.29+ lows.
• However, this pressure has since eased a touch for EGBs given risk gyrations though USTs remain at session lows as the initial JGB-induced move was less pronounced stateside.

Commodities

• WTI and Brent are bolstered following Novak announcing that Russia is to cut oil production by 500k BPD in March.
• Currently, the benchmarks are firmer by circa. USD 2/bbl, though they have eased slightly from best levels as the USD lifts alongside the risk tone slipping somewhat.
• MMG (1208 HK) said the Las Bambas copper mine in Peru secured critical supplies that have enabled production to continue at a reduced rate and the property remains secure but transport disruptions continue and critical supplies remain low. Furthermore, it warned that if the situation of critical supplies persists, it would be forced to commence a period of care and maintenance.
• Damage assessment and repairs are taking place in Turkey's Ceyhan oil terminal and exports from BTC could begin on Sunday, according to a Turkish official and industry source cited by Reuters.
• Spot gold is modestly firmer and seemingly torn between geopolitical-induced haven appeal, though perhaps impacted by JPY action, and the associated pick up in the USD, as such the yellow metal is at the mid-point of USD 1852-1877/oz parameters.

US Event Calendar

• 10:00: Feb. U. of Mich. 5-10 Yr Inflation, est. 2.9%, prior 2.9%
• 10:00: Feb. U. of Mich. 1 Yr Inflation, est. 4.0%, prior 3.9%
• 10:00: Feb. U. of Mich. Expectations, est. 63.1, prior 62.7
• 10:00: Feb. U. of Mich. Current Conditions, est. 68.5, prior 68.4
• 10:00: Feb. U. of Mich. Sentiment, est. 65.0, prior 64.9
• 14:00: Jan. Monthly Budget Statement, est. -$55b, prior $118.7b

DB's Jim Reid concludes the overnight wrap

Although the S&P 500 is still above where it was before the FOMC last Wednesday, it does feel like more challenging markets for both risk and rates have been developing since the payrolls number two days later.

After the strong 10yr auction on Wednesday, a weak 30-yr auction last night pushed yields higher across the curve in the last few hours of the session. US 30yr UST yields were up +5.5bps on the day and around 10bps off their pre-auction lows. This pulled up 10yr Treasury yields, which prior to the auction were down slightly, to close +4.8bps higher on the day at 3.658% and slightly up (+0.76 bps) this morning in Asia. There were bigger moves at the front end, with the 2yr yield up +6.1bps to 4.482%, and came as investors modestly raised their estimates of the Fed’s terminal rate. For instance, Fed funds futures are now expecting a 5.153% rate in July, up +1.5bps from the previous day, although still -0.05bps beneath its recent closing high on Monday.

The only silver lining from the poor 30 year auction was that it prevented the 2s10s curve from closing at its most inverted for 42 years. It moved as low as -87.2bps at one point before closing at -82.8bps as the back end got dragged up by the weak auction. Regardless of the brief respite, these curve levels are very extreme and at levels where a recession has always followed within months. Long-time readers will know that the 2s10s is my favourite US recession lead indicator. Critics might argue that some cycles have taken a lot longer to roll over than others after the initial inversion which means you can't rely on the curve for timings.

However, the lead time tightens up considerably when we only count it as a signal when the yield curve inverts for 3 months. In this cycle it first (briefly) inverted at the end of March last year but then only inverted on a sustained basis since the start of last July. After the 3 months rule has been triggered in the last 70 years, 8 out of 9 recessions have occurred between 8-19 months later. In this cycle that would take us to a range between March 2023 and February 2024.

The deeper curve inversion hurt US equities after a bright start in the first half of the session but the market didn't recover any poise in the last few hours of trading even as we steepened back. In the end, over 77% of the S&P 500 finished lower as the index posted a -0.88% loss. The large move higher in long-term yields weighed on tech stocks, which was one of the sectors that was keeping the index afloat in the morning. It was the first back-to-back -1.0% days for the S&P 500 since mid-December. Tesla remained an outperformer (+3.0%). Its share price now stands at nearly double its intraday low back on January 6, albeit down -49.98% from its all-time peak on November 4th. On the other hand, Alphabet fell a further -4.39% yesterday, following on from its -7.68% decline on Wednesday. Outside of Tesla and BorgWarner keeping the Autos sector above water (+2.44%), defensives like Food & Beverage (+0.01%) were the only industry group higher on the day.

Whilst US markets were fairly soft, European assets had a much stronger day thanks to some good news on the inflation side. First, we had the delayed German CPI figures for January, which showed inflation unexpectedly falling to 9.2% (vs. 10.0% expected) on the EU-harmonised definition. That’s a 5-month low, and is also the third consecutive decline since its peak of 11.6% back in October. The data might need to settle down a bit after the benchmark revisions though for economists to get the best view on trends. Second, European natural gas futures fell to a fresh 17-month low yesterday of €52.77 per megawatt-hour, which is another positive story for European consumers and should help sustain the recent downturn in inflation.

Against that backdrop, Euro sovereigns outperformed their counterparts elsewhere, with yields on 10yr bunds (-5.9bps), OATs (-6.1bps) and BTPs (-11.2bps) all seeing a decent decline on the day. It was a similar story for equities too, with the STOXX 600 (+0.62%) hitting a 10-month high and Germany’s DAX (+0.72%) reaching a one-year high.

The main exception to this European outperformance came from Sweden, which followed the Riksbank’s latest policy decision. This was the first meeting with the new Governor at the helm, and although the 50bps hike was expected, they also announced that QT would be starting from April and indicated that the policy rate would “probably be raised further during the spring.” That triggered a massive reaction among Swedish assets, with the Krona strengthening +2.36% against the US Dollar, whilst yields on 10yr Swedish government bonds were up by +23.0bps on the day.

Asian equity markets are mostly trading in the red following the second consecutive overnight losses on Wall Street. Across the region, the Hang Seng (-1.79%) is the biggest underperformer with the CSI (-0.72%), the Shanghai Composite (-0.60%) and the KOSPI (-0.59%) slipping in morning trading. Meanwhile, the S&P/ASX 200 (-0.67%) is also losing ground after the Reserve Bank of Australia (RBA) released its quarterly Statement on Monetary Policy (SoMP) in which it indicated that inflation remains high and flagged further interest rate hikes ahead. Elsewhere, the Nikkei (+0.22%) is bucking the regional downward trend. Outside of Asia, US stock futures are printing fresh losses with contracts tied to the S&P 500 (-0.17%) and NASDAQ 100 (-0.26%) both slightly down.

In early morning data, consumer prices in China (+2.1% y/y) rose at the fastest pace in three months in January, in line with market expectations and up from a +1.8% increase seen in December on the back of a spending surge over the Lunar New year festival. At the same time, factory gate prices (-0.8% y/y) dropped more than the anticipated -0.5% decline while extending the -0.7% drop in the preceding month. The mixed data highlights a staggered economic recovery in the world’s second largest economy even as it relaxed its stringent Covid-19 policy earlier this year. Meanwhile, Japan’s producer prices advanced (+9.5% y/y) in January (vs +9.7% expected), lower than the upwardly revised gain of +10.5% in December 2022.

There wasn’t much other data of note yesterday, but we did get the latest weekly initial jobless claims for the US, covering the week ending February 4th. Interestingly, they marked the first time this year that the number had surprised to the upside of consensus with a 196k reading (vs. 190k expected). Even so, the 4-week moving average still fell to its lowest level since April, at just 189.25k.

To the day ahead now, and data releases include UK GDP for Q4, Italian industrial production for December, and in the US there’s the University of Michigan’s preliminary consumer sentiment index for February. From central banks, we’ll hear from the Fed’s Waller and Harker, the ECB’s Schnabel and de Cos, and BoE chief economist Pill.