Overseas markets with the exception of Chinese indices traded lower for a second straight day. With political uncertainty and tensions moving from Crimea to eastern Ukraine, interest in defensive plays has been reignited with gold, JPY and CHF rallying. Gains in crude oil and declines in European indices suggest political risk premiums and discounts are finding their way back into other markets. US indices, meanwhile, appear to be stabilizing suggesting that the two day selloff that followed Friday’s nonfarm payrolls report may have run its course and is subsiding for now. Economic news in North America has been light to start the week so attention now turns toward earnings season which starts with Alcoa’s results after US exchanges close this afternoon. Results over the next month may give another indication of which parts of the economy were most impacted by winter storms (and we can expect that weather will likely get the blame for any shortfalls). USD, meanwhile has been underperforming all other majors, while AUD and NZD have been among the top performers. What is most interesting is that CAD has historically performed well in the days and weeks following PQ setbacks at the ballot box on reduced political risk. Today, CAD is ahead of the US in the wake of the PQ’s big defeat last night but is underperforming all the other majors particularly its resource dollar peers. This suggests that AUD and NZD are benefitting from their sensitivity to China while CAD is being impacted by its sensitivity to the US today Economic News Economic reports released overnight and this morning include: Quebec Election results Liberals capture 70 seats and a majority government. PQ falls from minority government to opposition with 30 seats, PQ leader Pauline Marois loses her seat. Other parties win 25 seats Bank of Japan meeting no changes to interest rates or QE as expected UK industrial production 2.7% vs street 2.2% UK manufacturing production 3.8% vs street 3.1% Canada housing starts 156K vs street 192K Economic reports due later today include: 4:00 pm EDT ish Alcoa earnings