Military Action in Eastern Ukraine Spooks Markets

Economic Data

- (EU) ECB failed to fully sterilize its 7-day Term Deposit Tender (first time in 11 weeks)
- (US) ICSC Chain Store Sales w/e Apr 12th: w/w -0.3%; y/y: +2.3%
- (IN) India Mar CPI Y/Y: 8.3% v 8.3%e
- (BR) Brazil Feb Retail Sales M/M: 0.2% v 0.1%e; Y/Y: 8.5% v 8.1%e; Broad Retail Sales Y/Y: 8.4% v 6.0%e
- (PL) Poland Mar CPI M/M: 0.1% v 0.2%e; Y/Y: 0.7% v 0.7%e
- (IS) Iceland Mar Unemployment Rate: 4.5% v 4.5% prior
- (US) Apr Empire Manufacturing: 1.29 v 8.00e
- (US) Mar CPI M/M: 0.2% v 0.1%e; Y/Y: 1.5% v 1.4%e
- (US) Mar CPI Ex Food and Energy M/M: 0.2% v 0.1%e; Y/Y: 1.7% v 1.6%e
- (US) Mar CPI Index NSA: 236.293 v 236.017e; CPI Core Index: 236.604 v 236.452e
- (CA) Canada Feb Manufacturing Sales M/M: 1.4% v 1.0%e
- (US) Redbook Retail Sales w/e Apr 12th +2.6% y/y, Mar MTD: -1.0% m/m
- (US) Feb Net Long-term TIC Flows: $85.7B v $30.0Be; Total Net TIC Flows: $167.7B v $87.0B prior
- (PL) Poland Mar YTD Budget Balance Level (PLN): -17.5BB v -11.7B prior; Budget Balance Performance: 36.8% v 24.7% prior
- (BE) Belgium Feb Trade Balance: -€300M v -€955.9M prior
- (CA) Canada Mar Existing Home Sales M/M: 1.0% v 0.3% prior
- (US) Apr NAHB Housing Market Index: 47 v 49e

- European markets have fallen sharply from their highs of the session to their lows since the open of US cash trading, while the S&P500 peaked early and is also back around unchanged. Nervousness about Ukraine is being cited for the volatile trading. As of writing, the DJIA is down 0.09%, the S&P500 is up 0.05% and the Nasdaq is down 0.72%.

- The situation is very tense in eastern Ukraine today. Ukrainian Interior Ministry troops stormed an airfield between the cities of Slovyansk and Kramatorsk that had been occupied by local militia. Ukraine officials said the forces occupying the small airfield were elements of the Russian 45th Airborne (based by Moscow) and were not local pro-Russia protestors. Fatalities have been reported in the action. Russia's MICEX is down 2.6% today, while the ruble is selling off hard.

- Spot gold was down around 2.6% on the day earlier this morning, breaking below its 200-day moving average around $1,300, putting it on track for its biggest one-day decline since last fall. This comes after a three-week high yesterday along with a somewhat stronger dollar. Prices have bounced a bit higher as of writing, putting spot gold back above $1,300. Silver is down as well, while copper prices fell through critical levels, dropping below $3.00 to three-week lows. Note that a raft of Chinese economic data is out later today and some are saying there may be disappointments. Note that Chile Copper Commission COCHILCO cut its 2014 copper price expectation to $3.05 from $3.15 today due to declining China demand.

- The April NAHB housing market index was weaker than expected, moving up to an anemic 47 from 46 in the March report. This is the third consecutive month the index is below 50, in contraction territory. The component measuring expectations for future sales rose four points to 57. Major homebuilders are down one or two percent a piece. March CPI rose slightly more than expected.

- Coca-Cola is up 3.2% in the early going despite small declines in first quarter revenue and earnings on a y/y basis. Coke reported its global unit case volume rose 2%, but said North American volume was unchanged. The firm warned that FX rates would have an unfavorable impact on 2014 results. Shares of rival PEP are flat on the day.

- Johnson & Johnson was up slightly after topping earnings and revenue expectations slightly, and raised its FY14 guidance. The company's results were boosted by its worldwide pharmaceutical sales, which grew 10.8% to $7.5 billion, despite hitting a patent cliff for Aciphex and Concerta.

- Motorola Solutions sold its enterprise business to Zebra Tech for $3.45B in cash. Zebra said the deal would be immediately accretive and hiked its first quarter guidance well above consensus expectations. Conversely, after the news dropped Motorola offer sub-par first quarter data and cut its FY14 revenue outlook. ZBRA rose 4% or so after the deal was disclosed by has plunged to -8% as of writing, while MSI is in the red. 

Looking Ahead

- 11:30 (US) Treasury to sell $25B in 4-Week Bills
- (UK) DMO to announce size of upcoming 1.75% 2019 Gilt
- 15:00 (AR) Argentina Mar National Urban CPI M/M: 3.0%e v 3.4% prior
- 15:00 (AR) Argentina Mar Wholesale Price Index M/M: No est v 5.1% prior; Y/Y: No est v 24.0% prior
- 15:00 (US) Fed's Plosser moderates panel in Stone Mountain, Georgia
- 16:00 (US) Fed's Rosengren speaks in Bangor, Maine
- 16:30 (US) Weekly API Oil Inventories
- 18:45 (NZ) New Zealand Q1 CPI Q/Q: 0.5%e v 0.1% prior; Y/Y: 1.7%e v 1.6% prior
- 20:00 (US) Fed's Kocherlakota speaks in Fargo, ND
- 22:00 (CN) China Mar YTD Fixed Assets Urban Assets Y/Y: 18.0%e v 17.9% prior
- 22:00 (CN) China Mar Retail Sales Y/Y: 12.1%e v 12.2% prior; Retail Sales YTD Y/Y: 11.9%e v 11.8% prior
- 22:00 (CN) China Mar Industrial Production Y/Y: 9.0%e v % prior; Industrial Production YTD Y/Y: 8.8%e v 8.6% prior
- 22:00 (CN) China Q1 GDP Q/Q: 1.5%e v 1.8% prior; Y/Y: 7.3%e v 7.7% prior; GDP YTD: 7.3%e v 7.7% prior
- (BR) Brazil Apr CNI Industrial Confidence: No est v 52.5 prior
- (PE) Peru Feb Economic Activity Y/Y: 4.8%e v 4.2% prior
- (PE) Peru Mar Unemployment Rate: No est v 7.0% prior