First Quarter Will Not Go Quietly

Economic Data

- (RO) Romania Central Bank (NBR) cut Interest Rates by 25bps to 2.00%, as expected
- (IT) Italy Feb PPI M/M: +0.5 v -1.7% prior; Y/Y: -3.3 v -3.8% prior
- (US) Goldman Economist: Chain Store Sales w/e Mar 27th w/w: +3.4%; y/y: +2.9%
- (PL) Poland Central Bank (NBP) Mar Inflation Expectations Survey: 0.2% v 0.2%e
- (PL) Poland Q4 Current Account Balance: -€2.0B v -€1.3Be
- (BR) Brazil Feb PPI Manufacturing M/M: 0.3% v 0.% prior; Y/Y: 2.7 v 3.0% prior
- (CA) Canada Jan GDP M/M: -0.1% v -0.2%e; Y/Y: 2.4% v 2.4%e
- (US) Redbook Retail Sales w/e Mar 27th: +3.0% y/y, Mar MTD: +1.2% m/m; Mar MTD: +2.8% y/y
- (US) Mar ISM Milwaukee: 53.3 v 51.5e
- (US) Jan S&P/ CaseShiller 20 City M/M: 0.87% v 0.60%e; Y/Y: 4.56% v 4.60%e; 20-City HPI: 172.94 v 172.90e
- (EU) Weekly ECB Forex Reserves: €247.2B v €247.0B prior
- (BR) Brazil Feb Nominal Budget Balance (BRL): -58.6B v -28.0Be; Primary Budget Balance (BRL): -2.3B v +2.0Be; Net Debt to GDP Ratio: 36.3% v 35.6%e
- (US) March Chicago Purchasing Manager: 46.3 v 51.7e
- (US) March Consumer Confidence Index: 101.3 v 96.4e

The Tokyo and Shanghai exchanges dropped one percent each in trading earlier today, while European stocks came off their worst levels into the close. At the open the DJIA was down triple digits, starting off the final day of March and the first quarter on a downbeat, but US stocks have drifted higher in light volume. As of writing, the DJIA is down 0.48%, the S&P500 is off 0.28% and the Nasdaq has given up 0.42%.

The January S&P/CaseShiller survey showed home prices continued to rise in January, despite slowing growth and some seasonal weakness. The 20-city home price index was basically flat with the December reading. The March Chicago PMI report was considerably weaker than expected, echoing yesterday's March Dallas Fed manufacturing index miss.

As noted earlier, the dollar is poised to end Q1 with its strongest quarterly performance since late 2008, while the euro is about to finish up its worst quarter ever. The dollar index gained 9% in the quarter, while the euro lost 11%. EUR/USD has slid even lower in today's session, testing to within pips of 1.070. Note that traders used this morning's inline Canada January GDP release - with slightly less oil impact than expected - to buy the CAD, following a massive four big figure slide in the loonie. USD/CAD dropped from 1.2780 to 1.2660.

Richmond Fed President Lacker reiterated his hawkish stance earlier today. Lacker warned the Fed could tighten policy more rapidly than expected, depending on economic data. The recent economic weakness would be transitory, and the strong dollar and oil price impact would be a well. Asked if he would dissent to a June FOMC decision that did not raise rates, Lacker said he had not made any final decisions about how he would respond in that case.

In Iraq, government forces began consolidating their hold on the center of Tikrit after more than a month of fighting ISIS for control over the provincial capital. There were more reports of clashes in Yemen, but as of yet Saudi and Egypt ground forces have not entered the country in force. Nearly a week of Iran nuclear negotiations wrapped up today, with a statement due later and expectations for a drawn-out final phase due to be completed by the end of June. WTI and Brent remain in a narrow trading range, around $48.30 and $55.30, respectively.

Looking Ahead

- 12:00 (CO) Colombia Feb Urban Unemployment Rate: 10.9%e v 11.8% prior; National Unemployment Rate: No est v 10.8% prior
- 15:00 (AR) Argentina Feb Construction Activity Index M/M: No est v 2.0% prior; Y/Y: No est v 0.1% prior
- (CO) Colombia Q4 Current Account Balance: No est v -$5.0B prior
- 16:30 (US) Weekly API Oil Inventories
- 19:00 (KR) South Korea Mar CPI M/M: 0.1%e v 0.0% prior; Y/Y: 0.4%e v 0.5% prior; CPI Core Y/Y: 2.0%e v 2.3% prior
- 19:50 (JP) Japan Q1 Tankan Large Manufacturers Index: 14e v 12 prior; Large Non-Manufacturers Index: 17e v 16 prior; Large All Industry Capex: 0.4%e v 8.9% prior
- 19:50 (JP) Japan Q1 Tankan Small Manufacturers Index: 4e v 1 prior; Small Non-Manufacturers Index: 4 v -5 prior
- 20:00 (KR) South Korea Mar Trade Balance: $8.0Be v $7.7B prior; Exports Y/Y: -1.9%e v -3.4% prior; Imports Y/Y: -12.1%e v -19.6% prior
- 20:00 (KR) South Korea Manufacturing PMI: No est v 51.1 prior
- 21:00 (CN) China Mar Manufacturing PMI (Official govt): 49.7e v 49.9 prior
- 21:00 (CN) China Mar Non-manufacturing PMI: No est v 53.9 prior
- 21:35 (JP) Japan Mar Final Manufacturing PMI: No est v 50.4 prelim
- 21:45 (CN) China Mar Final HSBC Manufacturing PMI: 49.3e v 49.2 prelim