Overnight we have seen a reversal in recent trends with China indices and copper rebounding, CNH stabilizing and gold retreating suggesting that some of the recent financial fears have started to ease. This appears to be the case across many emerging markets where the street appears to have stopped painting them all with the same brush and that crises may be contained to specific countries realized that some may do better than others. Treasury yields for Brazil and Mexico for example, are at 3-month lows ahead of a Brazilian interest rate decision. China has dropped back into the lower half of its 3-month range while yields for India and Turkey are closer to their 3-month highs. Perhaps the clearest example of easing financial tensions is that Greece’s treasury yield is nearly back down to the 7% bailout barrier for the first time since early 2010, having fallen from a high above 30% in early 2012. Despite this, we haven’t really seen traders get really excited about risk on trades. Indices across Europe are trading lower this morning. While US indices have been up slightly, the S&P remains stuck below 1,850 resistance. This suggests that the bull market in stocks that has been on for over a year appears to be nearing exhaustion and that traders remain more concerned about the impact of tapering on money flows. Energy markets have been mixed today, WTI crude oil is up a bit ahead of today’s storage report while Natural Gas has been slammed back under $5.00 once again as traders look past the current cold spell toward the end of heating season. Currencies have been relatively steady today. GBP is off slightly after UK GDP was not revised upward as some had speculated, taking some of the pressure off the Bank of England to raise interest rates. AUD and NZD have been a bit soft, while CAD appears to be regaining its footing after recent weakness. Today wraps up the quiet period for news that has dominated the week to date. Starting tomorrow news flow increases once again heading into Thursday night’s Japanese basket of monthly indicators and Friday’s North American GDP reports. Corporate News First Solar $0.89 vs street $0.98, sales $768M vs street $973M, guides EPS next Q to $0.50-$0.60 short of street $0.66 Target $0.81 vs street $0.80, guides Q $0.60-$0.75 vs street $0.88, guides full year $3.85-$4.15 short of street $4.21 Canada operations ($0.40) in Q4 Royal Bank adjusted EPS $1.47 vs street $1.44, 6% dividend increase Economic News Economic reports released overnight and this morning include: UK GDP 2.7% vs street 2.8% Singapore industrial production 3.9% vs street 6.5% Economic reports due later today include: 10:00 am EST US new home sales street 400K 10:30 am EST US crude oil inventories street 1.2 mmbbls 10:30 am EST US gasoline inventories street (1.0 mmbbls)

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