London Session

The big mover in London trading was the pound as a poor gilt auction led to speculation of potential funding concerns at a time in which the UK is expected to actively pursue quantitative easing. The bid to cover ratio was a dismal 0.93, meaning that there were not enough bids for the amount being offered. This was apparently only the second time ever that a gilt auction has failed. In economic news, the Confederation of British Industry's monthly retail survey for April showed sales are expected to improve little to -42 from a dismal -44 the prior month. GBP/USD shed more than -100 pips in the session and was sitting near 1.4560/70 ahead of the NY open. EUR/GBP, meanwhile, screamed about 100 pips higher towards the 0.9270/75 area.

Eurozone data continued its weak streak as well. The German IFO business climate index for March was worse than expected at 82.1 and down from 82.6 the prior month a new low since data began back in 1991. EUR/USD managed to add a modest 35 points towards the 1.3500 area nonetheless, as EUR buying against the pound outpaced commensurate USD demand. The yen crosses were up small as US stock futures barely hang on to overnight gains here. USD/JPY added a tiny 15 pips into 97.60/70 while EUR/JPY jumped about 50 pips to the 131.70/80 zone. USD/CAD was also little changed near 1.2320/30 as crude oil continues to trade near $53/bbl ahead of today's crucial inventory numbers.

Key economic data out of the US now is likely to swing the pendulum of risk. February durable goods are due up at 830am ET and are expected to dip -2.0% on the ex transport number, from a -3.0% decline the prior month. This number is notoriously volatile and we would look for stocks to trade in tandem with a weaker/better than expected result. We would look for some initial USD weakness on an upside surprise and vice versa. New home sales are up at 1000am ET but the impact is likely to be less impressive. Look for oil inventories at 1030am ET to elicit some price action in CAD, with higher supply numbers leading to weakness in the currency.

Upcoming Economic Data Releases (NY Session) prior expected

• 3/25 12:30 GMT US Durable Goods Orders FEB -4.50% -2.50%

• 3/25 12:30 GMT US Durables Ex Transportation FEB -3.00% -2.00%

• 3/25 14:00 GMT US New Home Sales FEB 309K 300K

• 3/25 14:00 GMT US New Home Sales MoM FEB -10.20% -2.90%

• 3/25 14:30 GMT US DOE Crude Oil Inventories 20-Mar 1942K 1100K

• 3/25 14:30 GMT US DOE Gasoline Inventories 20-Mar 3195K -650K

• 3/25 16:20 GMT US Fed's Pianalto Speaks on Economic Recovery

• 3/25 17:00 GMT US Fed's Yellen Speaks in New York on U.S. Economy