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Bears bring out their claws as March arrives
00:00, 03 March 2014
The Russian bear moving in Crimea over the weekend has sent market bears running roughshod over global markets to start the new month (March comes in like a lion indeed). Increased political risk has sparked big rallies in gold and silver and also in crude oil with the closer to the situation and more politically sensitive Brent Crude outpacing WTI to the upside. Needless to say, in currency markets RUB has been pounded, forcing Russia’s central bank to take action in an attempt to defend the currency. Interestingly, however, currency trading also suggests traders expect this situation to remain relatively contained as neighboring currencies like PLN (Polish Zloty) and TRY (Turkish Lira) are pretty much unchanged on the day. Indices worldwide have been smacked down hard as traders retrench and move to more defensive stances, causing another S&P 500 breakout attempt to fail. In addition to the politically driven action off the situation in Ukraine, this is a huge week for data that could move the markets. So far manufacturing PMI reports have been stable with some of the recently softer economies showing signs of improvement. Results have generally been in line or slightly better than expected. This morning’s US reports have the potential to spark some trading action. Comparing the national numbers with some of the recent regional reports may give an indication of how much of an effect bad weather has had on the economy., (Which continues into March with US government in DC closed again today due to another storm. Here its clear and cold -20C this morning). Effects of the recent selloff in the loonie (CAD) are starting to appear with Canadian producer price inflation jumping significantly. There is the potential for activity right through the week with US payroll numbers Wednesday and Friday, plus service PMI on Wednesday. It’s also a big week for central banks with RBA tomorrow, Bank of Canada Wednesday, and the Bank of England plus the ECB on Thursday. Corporate News Magna International $2.03 vs street $1.53, sales $9.1B vs street 8.8B, raises dividend 19% Pengrowth Energy ($0.17) vs street ($0.04) Economic News Economic reports released overnight and this morning include: Manufacturing PMI reports 9:00 am EST US Markit vs previous 56.5 10:00 am EST US ISM vs street 52.0 UK 56.9 vs street 56.5 Germany 54.8 vs vs previous 54.7 France 49.7 vs vs previous 48.5 Italy 52.3 vs vs previous 53.1 Spain 52.5 vs street 52.0 Sweden 54.6 vs street 54.5 Norway 51.0 vs street 43.2 Switzerland 57.6 vs street 56.0 China official 50.2 vs street 50.0 China HSBC 48.5 as expected China non-manuf 55.0 vs vs previous 53.4 South Korea 49.8 vs previous 50.9 India 52.5 vs previous 51.4 Australia 48.6 vs previous 46.7 TBA Singapore vs previous 50.5 TBA Singapore electronics vs previous 52.0 Other reports include: India Q4 GDP 4.7% vs street 4.9% UK mortgage approvals 76.9K vs street 73.5K Canada industrial prices 1.4% vs previous 0.7% Canada retail prices 2.6% vs previous 1.9% US personal income 0.3% vs street 0.2% US PCE core 1.2% vs street 1.1% Economic reports due later today include: 9:30 am EST Canada manufacturing PMI 10:00 am EST Mexico manufacturing PMI 10:00 am EST US construction spending