This week finds traders in a positive mood to start things off. Chinese markets and CNY bounced back a bit despite soft Chinese flash PMI, while AUD is the top performing currency today with NZD not far behind. Overall this suggests that significant Chinese economic weakness has already been priced in and selling pressure appears to be getting washed out. Although western leaders are meeting in the Netherlands today on the Ukraine situation with the potential for more sanctions, Russia continues to ignore them and focus on consolidating its position in Crimea. Trading action to start the week indicates the street appears to be taking the annexation of Crimea as a done deal. Defensive plays like gold, silver and CHF have been falling while RUB has been rebounding indicating that street concerns over political tensions continue to decline although fears of disruptions could return at any time without warning. Energy and grains are trading slightly higher today but with WTI and wheat stalled near $100.00 and $7.00 respectively, these commodity groups appear to be in consolidation mode unless we see a significant move away from those levels to signal the start of a new trend. European indices have been falling today following mixed flash PMI numbers from France and Germany and their closer proximity to Russia and Ukraine. US indices appear to be heading for a moderately positive open. USD is also broadly trading higher against most other majors. This indicates that currently traders are more focused on the improving US economy boosting the prospects for corporate earnings and also anticipation that because of this, tapering is likely to continue through the year followed by a normalization of interest rates. Scheduled economic news for much of this week is mainly second tier and regional data, so we may see markets continue to digest recent events in the near term. Economic News Economic reports released overnight and this morning include: China flash manufacturing PMI 48.1 vs street 48.7 France flash manufacturing PMI 51.9 vs street 49.8 France flash services PMI 51.4 vs street 47.5 Germany flash manufacturing PMI 53.8 vs street 54.6 Germany flash services PMI 54.0 vs street 55.5 Economic reports due later today include: 9:00 am EDT US flash manufacturing PMI street 56.5

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