BOE: Dhingra interview - nothing on monetary policy

Global swap spread correlations evident this morning, with the long end leading the narrowing in the UK, driven by the proposed fiscal expansion in Germany.

• Note that spreads fail to test respective cycle bases and have edged away from session lows.

Of note:

AUDUSD 1.24bn at 0.6350 (a little far).

USDCNY 1.26bn at 7.2000 or 1.41bn at 7.2800 (thu).

USDCAD 3.19bn at 1.4350/1.4400 (fri).

AUDUSD 2.22bn at 0.6300 (fri).

NZDUSD 1.14bn at 0.5795.

AUDUSD 2.47bn at 0.6385 (tue).

• EURUSD: 1.0700 (256mln).
• USDJPY: 149.00 (770mln).
• USDCAD: 1.4325 (471mln), 1.4375 (456mln), 1.4400 (392mln), 1.4430 (649mln).
• AUDUSD: 0.6350 (1.24bn).
• AUDNZD: 1.1065 (237mln).

France industrial production in January was significantly weaker than expected at -0.6% M/M (vs 0.4% consensus, -0.5% revised prior from 0.4%). This is the weakest sequential print since May 2024. This also led to IP disappointing on an annual basis at -1.6% Y/Y (vs -0.2% consensus, -1.5% revised prior from -1.7%). Given the revision, this was the weakest annual print since May 2024 - although note that this is only because last month was revised higher.

• The M/M decline was driven by a fall in manufacturing production, though extractive industries, energy and water production also fell. This contrasts with the January Manufacturing PMI index which rose to 45 from 41.9 in December (though remains in contraction).
• Manufacturing production (which makes up 81.78% of the overall 2025 industrial production weighting) fell -0.7% M/M (from -1.0% in December), this is the second sequential negative reading and leaves the Y/Y print at -2.4% Y/Y (vs -2.6% prior).
• Within manufacturing, four of five subcomponents decreased with the "other manufacturing" category driving the deterioration with a fall in production of 0.9% M/M, the second successive negative print following -1.3% in December. The drivers within this category are different to last month, however, with last month seeing a -9.0% fall in pharmaceuticals, whereas this month that subcategory has been more stable with broad based declines in most other subcategories (except chemicals).
• Machinery and equipment goods declined 1.9% M/M (from a rise of 0.6% in Dec), this is the lowest print since August 2024. Manufacture of food products and beverages fell 0.2% M/M after a firm 3.2% increase in December while coking and refining production fell 1.7% M/M (vs 0.8% prior), the first negative print after 4 months of gains.
• In contrast, manufacture of transport equipment rose 0.8% M/M recovering some of its 5.7% decline in December. This was driven by automobile production rising 6.4% M/M (vs a decrease of 11.1% in Dec), whilst other transport equipment production fell 2.4% M/M following a similarly sized fall of 2.3% in December.
• Outside of manufacturing, the remaining 18.22% weighting is made up of "mining and quarrying, energy water supply and waste management" which fell 0.2% M/M, after rising 2.2% in December.
• Looking ahead, the February Manufacturing PMI edged up to 45.8, a nine month high, suggesting some easing in manufacturing ahead, though the release also noted there is uncertainty on the outlook of key industries such as vehicle manufacturing.
• Note this month's release contains the annual revisions - in which the weights and seasonal adjustment are updated. Insee also revises each of the branches of industry every seven years. Data back to January 2021 has been revised.