OVERNIGHT NEWS
# Risk off start to the week after S&P closed below 200dma on Friday (4,419), Brent crude tops $95/bbl. JGB 10y yield falls to 0.20% after BoJ offered to buy unlimited amount of bonds at fixed rate of 0.25%.
# Ukraine calls for meeting with Russia in next 48hours to explain build-up of troops. German Chancellor Scholz meets President Putin tomorrow. Beijing Winter Olympics end next Sunday. USDD/RUB off 78.1617 high, EUR/RUB slips from 88.6521.
# Day ahead: ECB’s Lagarde, Fed’s Bullard, Fed holds closed board meeting to review discount rate. India and Czech CPI.
# SG Monthly Digest: On Tenterhooks (incl Technicals).
# CFTC positioning: HFs raise long euro to 5.5% of OI, GBP shorts cut to 4.3%, AUD shorts rise to 43.7%, JPY shorts trimmed to 30.1%, CAD longs reduced to 10.2%. UST 10y net shorts cut to 5.0%.
# Nikkei -2.2%, EUR 10y IRS unch at 0.855%, Brent crude +1.1% at $95.5/b, Gold -0.3% at $1,854/oz
Brent crude approaching $100/bbl

Risk appetite did not receive any love in Monday’s Asian trading after getting tackled hard on Friday post the European close by negative geopolitical headlines. USD was flat in Asian trading after rallying into the NY close, while JPY and CHF were up a tad. Risk currencies AUD and NZD saw drops. Equities, which went down in the NY session, stayed down in Asian trading. The exception to the risk appetite storyline were oil prices, which continued their run upwards into Asian trading. Brent and WTI prices stand north of 95 and 94 at the time of print. UST fumbled, with front and tail end yields up by 3bps. The weekend saw several ECB speakers, whom all had dovish tilts as specified in True Dove Story: ECB speakers in weekend press.
Puns aside, today we will look forward to more Fedspeak from Bullard at 13:30 GMT and ECB Speak from Lagarde at 16:00 MGT. We remind for the former that we believe inter-meeting hikes are note on the table, while the latter will be watched for hawkish comments. For data, CZK and INR will see CPI prints at 08:00 GMT and 10:00 GMT respectively
Geopolitical risk
· Geopolitical risks ratcheted higher in late US trading. The headlines, still unconfirmed by officials included:
– PBS reported that the US expects Russian invasion of Ukraine to begin next week. “The US believes that Russian President Vladimir Putin has decided to invade Ukraine and already communicated those plans to the Russian military. Two Biden administration officials said they expect the invasion to begin as soon as next week.” According to the article, the North Atlantic Council was briefed on the new intel Friday.
– Bloomberg headlines suggested that the US continues to see signs of Russian escalation, which can occur at any time, even during the Olympics.
– Russia and Belarus began their joint military exercises that will continue through February 20. Dmitry Kozak, an aide to Putin, told reporters that “we deeply regret” that the so-called Normandy round of negotiations had failed to overcome differences. He called the current situation a “stalemate.”
· Equity weakness during the NY session last Friday intensified, with major indices recording drops. Subsequently, the Asian session on Monday morning saw equities a tad in the green.
· Oil prices, however, continued their grind higher across the NY session as well as Monday’s Asian trading. WTI was seen trading around 94.50 while Brent was seen around 95.60. In terms of technicals, we note a channel has formed, suggesting a resistance around 96.20 for Brent, and a support at around 91.00.