After kicking off the week with big rallies, major indices in Europe and North America have dropped back this morning. The Dax has given back 1% after soaring to a new all-time high yesterday but continues to hold above 12,000, while France’s CAC holds 5,000. Spain’s IBEX has slipped back under 11,000 in the last while. US indices are mixed trading flat to slightly lower. Soft ZEW survey results may get the blame for the pullback, but the Dax had moved up so quickly recently, it has been due for a trading correction anyway. There has been no reaction in the US to the surprisingly weak housing starts report. With building permits better than expected, traders appear to be considering the soft starts as a distortion due to bad weather. US markets may continue to be choppy today as the street awaits tomorrow’s big Fed decision and projections. The other big news overnight was the PBOC’s announcement of another surprise interest rate cut keeping the street wondering just how badly China’s economy has slowed. The prospects of a deeper slowdown in China on demand combined with the ongoing refusal among producers to cut production has crude oil under pressure again. WTI has hit another multi-year low below $43.00 today while Brent has dropped back toward $53.00. In currency markets today, continental currencies like EUR, CHF and SEK continue to rebound while GBP remains under pressure. CAD and NOK also continue to underperform with crude oil in retreat. Gold is still drifting around the $1,150 level. Corporate News There are no major corporate announcements this morning. Economic News Economic reports released overnight and this morning include: China interest rate surprise 0.10% cut to 7-day reverse repo rate to 3.65% Bank of Japan decision no change as expected US housing starts 897K vs street 1,040K US building permits 1092K vs street 1,065K Canada manufacturing sales (1.7%) vs street (1.2%) Germany ZEW current 55.1 vs street 52.0 Germany ZEW expectations 54.8 vs street 59.4 Eurozone ZEW expectations 62.4 vs previous 52.7 Eurozone consumer prices (0.3%) as expected Eurozone core CPI 0.7% vs street 0.6% Norway trade balance NOK 21.0B vs street NOK 27.1B Singapore electronic exports (12.5%) vs street (7.7%) Economic reports due later today include: There are no major announcements scheduled for North America later today.