NY Open – A boost from Beijing and earnings
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Risk sentiment is on a stronger footing at the mid-week mark. Better US tech earnings, and renewed China stimulus prospects have stabilized risk. Hang Seng rallied 3.5%, with reports of a potential stabilization fund and the PBoC confirming a 50bps RRR rate cut from February 5. USD gave away gains from the last 24 hours, but it’s been muted in FI. European PMIs were overall better than feared, though gains in manufacturing were more impressive. GBP benefitted while EUR recovered from Tuesday’s sell-off. US equities should post further gains after overnight earnings with more to come. It’s quiet on the US data front with just S&P preliminary PMIs at 09:45 EST. The Bank of Canada decision is widely expected to deliver a removal of the hawkish bias present in December. UST supply continues with 61bn 5s today. We watch CLP pension reform bill progress as well as MXN inflation data |
OP – COP is the region’s worst performer on the day down -1.33%. Spot wise our trader continues seeing the market range trading between 3890-3970 in the short term and on the flows side has noted large outflows from RM clients today. On the data front, data released (link) by the MoF shows total National Central Government Debt (NCG) at COP865.4tn at the close of 2023, which amounts to 53.9% of GDP according to their GDP estimates.