US STOCKS: Midday Equities Roundup: Media, Bank & Insurance Names Aid Bounce

French final January HICP inflation was unrevised from the flash print on a rounded basis at 1.8% Y/Y (vs 1.75% in December) and -0.2% M/M (vs 0.21% prior). On an unrounded basis, HICP inflation was 1.83% Y/Y, 1 hundredth above the flash reading and -0.16% M/M two hundreds above the flash reading (vs 0.21% in Dec). The national CPI (non-HICP) was firmly above flash at 1.65% Y/Y (vs 1.35% flash, 1.32% prior) and 0.16% M/M (vs -0.13% flash, 0.19% in Dec). Looking at the national CPI special aggregates:

• Core CPI rose to 1.4% Y/Y (from 1.3% in December).
• Services was the key driver of the upward revision with the final reading at 2.45% Y/Y, whilst in the flash reading it had softened. The final reading is 57ppts above the flash reading and 21ppts above the December reading. Sequential services CPI prices rose 0.33% M/M (vs -0.23% flash, 0.49% in Dec).
• Energy prices were firm at 2.75% Y/Y in the national CPI (revised down 4ppts from flash; vs 1.24% in Dec).
• The broad "manufactured products" in the national CPI component was little changed from the flash estimate at 0.15% Y/Y (vs 0.16% flash, -0.43% in Dec).
• Food prices in the national CPI were unrevised from the flash print to 1dp at 0.10% Y/Y (vs 0.09% flash 0.02% prior), tobacco was stable at 6.01% Y/Y (vs 8.74% in Dec).
• INSEE's seasonally adjusted CPI series highlights momentum continuing its rebound after softening a few months ago. The 3m/3m SA annualised rate rose 1.64% in January from 0.60% in December, and the 3m annualised rate increased a solid 3.13% (from 2.02% in Dec) - the firmest since October 2023.
• There was a decrease in the proportion of subcomponents with annual HICP inflation rates above 2% in January (31% vs 34% prior), with the proportion of components with annual inflation rates above 6% also falling marginally to 9% from 10% in December.

Belgium has announced it will be looking to sell the following at its auction next Monday, February 24:

• the 2.70% Oct-29 OLO (ISIN: BE0000362716)
• the 3.00% Jun-34 OLO (ISIN: BE0000333428)
• the 1.90% Jun-38 OLO (ISIN: BE0000336454)

Stronger than expected core CPI inflation hasn’t changed domestic analyst views for the Mar 12 BoC decision, with a split between pausing after 200bp of cuts since June or another 25bp cut. BoC-dated OIS has shifted from 12-13bp to ~9bp of cuts for the decision. 

March pause:

• BMO: “We continue to lean to the view that the BoC will take a pause at their next decision (March 12), although developments on the tariff front may yet have a big say in that call—the possible 25% U.S. tariff on Canada and Mexico still looms for March 4.”
• Desjardins: “We continue to believe the Bank of Canada hits the pause button in March, given that the activity data is also holding up well. But that call is still contingent on tariff news and upcoming data releases cooperating.”
• RBC: “We think the BoC will want to wait for more data for hints on how underlying price pressures are evolving excluding impact from the tax holiday, and take a pause from cutting interest rates in their next meeting in March.”

March cut:

• National: “Perhaps the recent pickup in inflation would have convinced the Bank that a pause in monetary easing was appropriate. However, the situation is far from normal. The threat of tariffs should weigh on the Canadian economy, keeping investment projects on hold. In this context, we continue to forecast a 25-basis-point cut in March, although many economic data and political developments could change our outlook between now and then”
• TD Securities: “Core inflation strength will make the BoC's job more challenging as it continues to balance stronger domestic data against excess capacity and trade uncertainty. We do not believe this will be enough to force the Bank back to the sidelines in March, even if subsequent cuts would require further deterioration into Q2.”

Undecided on March:

• CIBC: “We continue to forecast a trough of 2.25% for the BoC’s overnight rate [cumulative 75bp of cuts from current], but the path there will depend on how/if tariff uncertainty is resolved as well as upcoming GDP and employment data.”