No Firm Signals From Yellen Testimony

Economic Data

- (TR) Turkey Central Bank (CBRT) cut its Benchmark Repurchase Rate by 25bps to 7.50%, as expected
- (BR) Brazil Feb IBGE Inflation IPCA-15 M/M: 1.3% v 1.3%e; Y/Y: 7.4% v 7.3%e
- (US) Goldman Economist: Chain Store Sales w/e Feb 20th w/w: -0.2%; y/y: +2.1%-
- (HU) Hungary Central Bank (NBH) left its Base rate unchanged at 2.10%, as expected
- (BR) Brazil Jan Current Account Balance: -$10.7B -$10.9Be; Foreign Direct Investment (FDI): $4.0B v $3.2Be
- (US) Redbook Retail Sales w/e Feb 20th: 2.8% y/y, Feb MTD: 0.8% m/m; FEB MTD 2.7% y/y
- (BE) Belgium Feb Business Confidence: -8.3 v -7.8e
- (US) Dec S&P/ CaseShiller20 City M/M: 0.87% v 0.60%e; Y/Y: 4.46% v 4.30%e; CaseShiller 20-City Index: 173.02 v 172.70e
- (EU) Weekly ECB Forex Reserves: €245.7B v €244.5B prior
- (US) Feb Preliminary Markit Services PMI: 57.0 v 54.5e
- (US) Feb Consumer Confidence Index: 96.4 v 99.5e
- (US) Feb Richmond Fed Manufacturing Index: 0 v 6e

Comments by Fed Chair Yellen have lifted markets this morning, although there is as yet little new material in her prepared remarks or the Q&A session. As of writing, the DJIA is up 0.40%, the S&P500 is up 0.22% and the Nasdaq is up 0.08%.

In her prepared remarks, Yellen largely reiterated prior points, including that changes to the forward guidance/patience language would precede hikes but would not necessarily indicate imminent tightening. The Big Questions including employment and inflation. On the former, Yellen accentuated sluggish wage growth and participation, saying the labor market is not yet fully healed. On the latter, Yellen blunted stated that there is no evidence that inflation will move above 2% right now. After holding steady through the session, the 10-year yield has dipped to 2.04% since the testimony began.

In Europe, the Eurogroup has approved Greece's four-month bailout extension after Athens submitted its list of concessions. The latter has been described as pretty vague, including commitments to modernize pension system, not to roll back completed privatizations and run the banking sector on "sound commercial principles." The euro isn't moving much on the news, with EUR/USD in the lower half of the 1.1300 handle.

The preliminary Markit services PMI data for February widely topped consensus views, rising to 57 from the final 54.2 reading in January. Recall that the January uptick broke a string of six straight monthly declines in service sector activity after the index surged to a record high at 61.0 in June. The Richmond Fed data is the latest regional Fed manufacturing data to widely miss expectations.

At its annual investor day, JP Morgan went to lengths to explain why bigger is not necessarily more complex and why it might actually be better. Assets held by JP Morgan have risen nearly 20% over the last four years and capital requirements have gotten stricter, but executives said the loss of "synergies" would outweigh the benefits of a potential breakup. Shares of JPM are up 2.6% on the session

Toll Brothers widely beat expectations in its first quarter. The homebuilder disclosed very strong y/y growth in signed contracts, backlog and deliveries. Shares of TOL are up nearly 5%, while other major homebuilders are up 3-5% on the news. Shares of Home Depot are off their pre-market highs but are still up 3% after a very strong fourth-quarter report. Earnings and revenue topped expectations, comps were good and guidance was inline. Macys met expectations in its fourth quarter on very modest comp gains. The firm's guidance was largely inline and investors have been selling the name, with shares down 3%.

Looking Ahead

- 14:00 (US) Fed Discount Rate Minutes
- 14:00 (AR) Argentina Jan Trade Balance: $30Me v $74M prior
- 16:00 (KR) South Korea Feb Consumer Confidence: No est v 102 prior
- 16:30 (US) Weekly API Oil Inventories
- 20:45 (CH) China Feb Preliminary HSBC Manufacturing PMI: 49.5e v 49.7 prior