After Friday’s big pre-weekend selloff, it’s common to get a moderate trading bounce like the one we are seeing today as previous panic sellers try to get back in and others go bargain hunting. There hasn’t been anything new in North America or Europe to change attitudes. In fact, the only US news so far (Empire Manufacturing) was a big disappointment and indices have been giving back some of their early gains since it came out. Similarly, crude oil is stabilizing today with WTI holding at a lower level still well short of $60 while Brent has been able to bounce back slightly. Supply disruptions from renewed fighting in Libya has taken some of the pressure off but we’ve seen over the last several years that the impact of Libya on prices comes and goes. Gold has dropped back nearly 1% indicating that political risk assessments haven’t gotten any worse from this or the news that the US senate passed a bill enabling the country to help Ukraine more actively. In Japan, the coalition led by PM Abe’s Liberal Democratic Party won over two-thirds of the seats in Japan’s lower house, a resounding mandate to continue monetary stimulus and implement reforms. The Nikkei continued to drop back on position squaring against the news and in a catch-up response to Friday’s big selloff elsewhere. JPY, meanwhile, has been relatively well supported, trading down only marginally against a strong USD and outperforming all other majors. This week has started with traders digesting last week’s big moves. This is the last full week of trading before two weeks of holidays, so we could see quite a bit of action with traders still focused on the oil market, whether the Fed will change its interest rate guidance at Wednesday’s meeting and on growing political risk in Europe. Corporate News There is no major corporate news out today so far. Economic News Economic reports released overnight and this morning include: US Empire manufacturing UK Rightmove house prices 7.0% vs previous 8.5% New Zealand service PMI 54.8 vs previous 57.8 Japan Tankan large manuf index 12 vs street 13 Japan Tankan large manuf outlook 9 vs street 13 Economic reports due later today include: 9:15 am EST US industrial production street 0.7% 9:15 am EST US manufacturing production street 0.6%