It’s like traders decided to completely forget what happened on Monday as political risk concerns evaporated completely on Tuesday after Russian President Putin ordered some troops on exercise back to base and indicated he does not plan to annex Crimea. This sparked a big relief rally in stocks that sent the S&P 500 to a new all-time high while ripping out the rug from under defensive plays like gold, CHF, JPY and even USD. It seems a bit premature to call an end to this crisis though. President Putin left the door open to military intervention if necessary, stated he still sees the ousted Yanukovitch as the legitimate President of Ukraine and his removal as a coup, is still holding off on releasing more aid money to Ukraine and still squeezing them on natural gas prices. The Ukraine situation appears far from over but may pause in the short term with the Sochi Paralympics running from Friday through to Sunday March 16th. With the US and Europe squawking about sanctions the threat of a boycott of their party could keep a lid on things for now. It also means that political risks have not gone away and could flare up again later in the month. There was some action in the market after Russia went ahead with an apparently scheduled but interestingly timed ballistic missile test. Today’s ISM New York report went unnoticed for the most part but was very interesting. The NY region dropped off sharply last month indicating that big winter storms did have a negative impact on the east coast and southeast. This means that for the recent Chicago PMI and national ISM PMI numbers to beat expectations, some regions had to have done extremely well. For the longer term, this bodes well for resource demand and corporate earnings but also means that tapering is likely to continue and may need to be accelerated. This sets the stage for US employment numbers which start tomorrow with ADP payrolls. Last month’s numbers suggested that the weather has had less of a lasting impact on employment as it has on other indicators. Service PMI may also spark some trading action overnight. USDCAD has been weakening ahead of tomorrow’s meeting. No change is expected to interest rates but traders may look to the central banks for comments on the impact of the loonie’s drop over the last few months has had as big an impact on stimulating growth as it has on boosting producer price inflation. First up though is Australia GDP which could influence trading in AUD, NZD and the S&P/ASX. AUD has started to bounce back from yesterday’s post RBA weakness but may still see its upside limited by fears of a central bank intervention. The RBA did indicate the positive effect a weaker Dollar may have on growth and a big rebound could whittle away at that. Economic News Significant announcements released overnight include: Spain unemployment (1K) vs street 22K and previous 113.1 Greece manufacturing PMI 51.3 vs previous 51.2 UK construction PMI 62 6 vs street 63.5 US ISM New York 57.0 vs previous 64.4 Upcoming significant announcements include: 11:30 am AEDT Australia GDP street 2.5% vs previous 2.3% 10:00 am GMT Eurozone retail sales street (0.2%) 10:00 am GMT Eurozone GDP street 0.5% 8:15 am EST US ADP payrolls street 155K vs previous 175K 10:00 am EST Canada interest rate decision 1.00% no change expected 10:30 am EST US crude oil inventories street 1.3 mmbbls 10:30 am EST US gasoline inventories street (1.0 mmbbls) Upcoming Service PMI reports include: 12:45 pm AEDT China HSBC previous 50.7 4:00 pm AEDT India previous 48.3 8:15 am GMT Spain previous 49.4 8:45 am GMT Italy previous 49.4 8:50 am GMT France previous 46.9 8:55 am GMT Germany previous 55.4 9:30 am GMT UK previous 58.3 10:00 am EST United States street 53.5

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