US Market Update: DJIA -47 S&P500 -4 NASDAQ -8


Economic data

- (PL) Poland Central Bank leaves Base Rate unchanged at 4.50%; as expected

- (CL) Chile Jan CPI M/M: 0.1% v 0.2%e; Y/Y: 4.2% v 4.3%e; CPI Ex Perishables & Fuel M/M: 0.1% v 0.3%e

- (US) MBA Mortgage Applications w/e Feb 3rd: +7.5% v -2.9% prior

- (CA) Canada Jan Housing Starts: 197.9K v 194.0Ke v

- (BR) Brazil Jan Commodity Price Index M/M: +0.6% v -0.5% prior; Y/Y: -4.5% v -0.4% prior

- (US) DOE Crude: +305K v +2.5Me; Gasoline: +1.63M v 0e; Distillate: +1.17M v -1Me; Utilization: 82.8% vs. 81.4%e

- After opening in positive territory, thanks to some decent corporate earnings, US indices are sinking into the red as concerns about Greece push back to the forefront. Greek political party leaders finally got around to conferencing about austerity measures this morning and investors are eagerly awaiting the outcome of the meeting. Note that yesterday afternoon, there were press reports that the ECB would be willing to exchange Greek debt for EFSF bonds (thanks to guarantees that it would not take losses in the exchange). This morning more unconfirmed reports indicated that the ECB has not committed to any such exchange, pouring cold water on yesterday's story. Crude spiked from $96 to just over $100 this morning, before trading off again.

- Entertainment giant Disney topped profit expectations in its Q1, as margins at its profitable parks business continue to offset big revenue declines in the studio arm. Executives said the Hong Kong park is doing very well, and plans are well under way to build the Shanghai park. DIS is back to unchanged after some earlier strength in the name. Hartford Financial is surging on excellent profits, despite the continuing fund outflows and a combined ratio over 100%. HIG is up an impressive 8% this morning. Fertilizer name Agrium also widely topped consensus EPS estimates. Agrium executives warned that crop inventory levels for most crops remain well below normal levels and in some cases are critically low. After rising around 3.5% in the premarket, AGU is giving up its gains. Time Warner topped expectations and generated solid revenue growth. TWX is flat on the day. CVS only just met analysts' expectations, although the firm also slightly raised its FY12 expectations. CVS is up 2%. Sprint's quarterly losses steepened after a few quarters of better performance, although executives insisted that FY12 would be the year Sprint returns to consistent profitability. After declining about 6%, shares of Sprint are around -4%.

- The euro is more or less sustaining the big run-up against its major pairs from yesterday morning. The greenback strengthened very slightly after reports circulated that Italy's GDP would likely contract in Q4 and not improve in Q1. In addition, data out of Athens indicated that Greece's January budget revenues were -7% y/y, much worse than the target of +8.9%. Nevertheless, EUR/USD is holding above the 1.3233 level, its former January high.

- The yen was off its worst levels against the major pairs despite continued verbal intervention by Japanese officials. Japan Fin Min Azumi reiterated that Japan was prepared to intervene in its currency when required and that the October round of solo FX intervention was successful in curbing JPY currency strength. USD/JPY was back below the 77 handle while EUR/JPY move back under the 102 level.


Looking Ahead

- 13:00 (US) Treasury to sell $24B in 10-Year Notes

- 20:30 (CN) China Jan Producer Price Index Y/Y: 0.7%e v 1.7% prior

- 20:30 (CN) China Jan Consumer Price Index Y/Y: 4.0%e v 4.1% prior

- Key central bank policy decisions due Thursday from the BOE and ECB.