CREDIT OPEN: 'Coalition of the willing' boosting European markets
Macro headline drivers were largely absent in Asia-Pac hours, leaving the focus centred on developments / headlines from over the weekend in addition to key upcoming events - US tariffs on Mexico & Canada due to kick in on 4th March and additional levies on Chinese goods.
Participants are returning from the weekend to news of an emergency security summit in relation to Ukraine being held in London - with various European countries (plus Canada and Turkey) seen in attendance. The willingness / ability of European countries to fill a potential gap in the shape of the US (after last Friday's Oval office showing) is clearly a development worth watching closely. European stock futures are being buoyed by the news with Euro Stoxx 50 futures up around 0.8% at the time of writing.
US e-mini equity index futures are roughly 0.1 - 0.2% higher, having traded on either side of neutral overnight. That sees them retaining most of last Friday's 1.4% - 1.5% gains which came on the back of US PCE for Feb, although we shouldn't overlook the fact that they had recently hit 1.5- to 3-month lows (such has been the scale of weakness in US equities).
Overnight, on the data front, the Caixin Manufacturing PMI reading for Feb showed the sector rising further into expansion, marking its fastest pace of growth seen since Nov 2024, expanding for a fifth straight month. Perhaps most of note, manufacturers acknowledged growing optimism regarding the outlook. Final manufacturing PMIs for Feb are due out of the euro-area, France, Germany and the UK, with various PMIs due across Sweden, Switzerland, Italy, and Norway as well.
Italy will be releasing GDP data for 2024, while the German BuBa will be releasing its proposal on its debt brake reform. Across the Channel, the UK will receive money supply, consumer credit data and mortgage approvals for January.
In the US, the ISM manufacturing PMI for Feb will likely be the headline, with expectations regarding the Prices Paid sub-gauge seen riding high at present (BBG median 56.3; Jan 54.9), with forecasters seen calling for the index to rise to its highest seen since Feb 2022.
St Louis Fed President Musalem is the sole Fed speaker scheduled to appear today.
For more on latest developments see the European Breakfast Briefing.
Monday's supply prospects
Despite this week’s issuance window being impacted by Thursday’s ECB verdict, survey respondents anticipate the single currency issuance pace to remain brisk with a EUR35bn average combined estimate put forward for the week. SSAs are expected to drive the bulk of activity as they have done it all but one week so far in 2025. That after last week we managed to beat the average weekly issuance estimate (EUR32.5bn), with the total finishing up at EUR34.1bn across the IG asset classes.
Despite a valiant effort, US high-grade corporate borrowers failed to raise enough (USD10.1bn) at the back-end of last week to reach the average monthly ex-SSA estimate of USD170bn. With nine issuers raising USD7.05bn, issuance for the month finished at USD166.831bn. For more colour, see the IG WEEKLY WRAP UP.
What to watch Monday (and the week)
** Key Data: SP Feb HCOB Manufacturing PMI (08:15), IT Feb HCOB Manufacturing PMI (08:45), FR Feb F HCOB Manufacturing PMI (08:45), GE Feb F HCOB Manufacturing PMI (08:55), EC Feb F HCOB Manufacturing PMI (09:00), UK Jan Mortgage Approvals (09:30), UK Jan M4 Money Supply (09:30), UK Feb F S&P Global Manufacturing PMI (09:30), EC Feb P CPI (10:00), US Feb F S&P Global Manufacturing PMI (14:45) and US Feb ISM Manufacturing / Prices Paid (15:00)
** Key events/speakers: Fed’s Musalem speaks (17:35)
** Auctions: No major term auctions scheduled for Monday 3rd March
** Viewpoint - The week ahead:
- US President Trump delivers speech to joint session of Congress. Powell speaks (Friday)
- US February manuf (Monday), services (Wednesday) ISM. February Employment Report (Friday)
- EMU prelim February CPI (Monday). ECB should cut 25bp (Thursday). New staff forecasts
- China’s NPC starts/government’s main quantitative targets delivered (Wednesday)
All times GMT