Just Another Tepid Friday

Economic Data

- (IT) Italy Jan Retail Sales M/M: 0.1% v 0.1%e; Y/Y: +1.7% v -0.3%e
- (IE) Ireland Feb Retail Sales Volume M/M: -0.2 v 2.8% prior; Y/Y: 8.2 v 8.0% prior (revised from 8.8%)
- (IN) India Weekly Forex Reserves w/e Mar 20th: $340.0B v $335.7B prior
- (BR) Brazil Q4 GDP Q/Q: +0.3% v -0.1%e; Y/Y: -0.5% v -0.7%e; GDP 4 Quarters Accumulated: +0.1% v 0.0%e
- (US) Q4 Final GDP Annualized Q/Q: 2.2% v 2.4%e; Personal Consumption: 4.4% v 4.4%e
- (US) Q4 Final GDP Price Index: 0.1% v 0.1%e; Core PCE Q/Q: 1.1% v 1.1%e
- (MX) Mexico Feb Unemployment Rate (Seasonally Adj): 4.5% v 4.4%e ; Unemployment Rate NSA (Unadj): 4.3% v 4.4%e
- (MX) Mexico Feb Trade Balance: $0.6B v $0.4Be
- (US) Mar Final University of Michigan Confidence: 93.0 v 92.0e

US equities stopped the bleeding during yesterday's session and today we are seeing some tepid gains, although the 10-year UST has come in 2.5 basis points or so. As of writing, the DJIA is up 0.07%, the S&P500 is up 0.26% and the Nasdaq is up 0.29%.

Fed Chair Yellen is scheduled to speak on monetary policy in San Francisco later this afternoon. Few observers expect her to materially alter the tone of last week's FOMC press conference or the more cautious Fed forecasts issued at that time. Nobody expects her to pinpoint the date of the first rate hike, although a reiteration of the Fed's data dependency mantra is guaranteed. Recent remarks by FOMC voters have indicated the June, July, and September meetings are all "live."

The final March University of Michigan confidence reading and the final Q4 GDP report held few surprises. As expected, the March index declined slightly to 93 from 95.4 in February, marking a four-year low. Fourth quarter GDP was a respectable +2.2%, with the final reading right in line with the preliminary report. Analysts were saying that the winter weather impact on Q1 GDP would likely be less than last year, when GDP declined 2.1% in Q1.

The Saudis have begun their bombing campaign in Yemen and Arab press reports out this morning suggest that a ground campaign could begin within 48 hours, despite Saudi claims they are holding off on ground troops for now. Nevertheless, crude prices continue to come off their midweek highs, with WTI dipping to $50 and Brent around $57.80 this morning thanks in part to fresh dollar strength. During the European session, EUR/USD briefly stabbed toward 1.0800 before recovery its composure as the technical retreat from 1.1000 continues.

Shares of Olin Corp are up 22% this morning after Dow Chemical agreed to separate its chlorine business and merge it with the Olin. The deal will deliver about $5 billion to Dow, including about $2 billion in cash, and it is structured as a tax-efficient Reverse Morris Trust transaction. The enlarged Olin will have revenue of about $7 billion. Recall that Dow has faced lots of pressure from activists to divest units and "unlock value."

Looking Ahead

- Austria, Cyprus, Denmark, Estonia, Finland, Greece, Lithuania, Luxembourg, Nigeria and Portugal sovereign debt reports to be published by ratings agencies
- (BR) Brazil Mar CNI Consumer Confidence: No est v 100.0 prior
- 13:00 (US) Weekly Baker Hughes US Rig Count w/e Mar 27th:
- 15:00 (AR) Argentina Jan Economic Activity Index (Monthly GDP) M/M: No est v 0.1% prior; Y/Y: 1.0%e v 0.6% prior
- 15:45 (US) Fed Chair Yellen to speak in San Francisco