• Markets:
    • US rallying on commodity sell-off and rising risk-aversion. EUR uptrend broken by Greek restructuring concerns. GBP continues to trend weaker; first rate hike now expected Jan 2012 (had been this month, earlier in 2011). AUD seems to have reached an uneven plateau. JPY rally continues and CHF remains in a volatile uptrend.
    • US equities remain at the base of a small pullback; Treasuries still rallying. Commodities generally remain at the base of the recent pullback, although coffee is still falling. Oil prices, though they have pulled back, remain high, with Brent at $111. Sugar continues to make what appears to be a long, round top.
    • S&P 500 bottom-up earnings expectations are still rising, but Eurostoxx 600 expectations have been downgraded. Forecasters have cut their expectation for US growth in 2011 from 3.2% to 2.7% in the past three months.
  • Newsflow:
    • Worries about the need for a Greek debt restructuring have become the markets focus even as European growth surprises on the upside. Inconsistent statements from German ministers are the trigger.
    • IMF director Dominique Strauss-Kahn arrested following an alleged sexual assault. 
    • US debt ceiling talks take on a more sensible tone, with Boehner accepting a US default would be disastrous. August now seems to be the deadline.
    • Lee Kuan Yew resigns from Singapore’s cabinet after the ruling party wins “only” 60.1% of the vote.
    • People’s Bank of China lifts bank reserve requirements for the fifth time this year.
  • Commodities:
    • Global oil demand flat in March, IEA reports. High oil prices have started to dent demand in North America. Separately, US petrol stocks climb.
    • Sugar: International Sugar Organisation joins Kingsman and Czarnikow in forecasting a surplus for 2011-12. Kingsman predicts a surplus 4x greater than current estimates. Further price falls likely — a good commodity to short?
    • Corn: Optimal point for plantings is passing, with plantings likely to be delayed again this week by wet weather. Expected mean-reversion in prices this year may be tempered by falling yields, but we are still early in the growing season.
    • Wheat: More wet weather in the Upper Plains and Dakotas is forecast this week, delaying spring plantings further, even as the same weather system extends the drought in southern winter-wheat areas, damaging crops there. Again, this may temper mean-reversion in prices, but we are still early in the growing season.
    • WASDE report:
      • Corn and soybean ending inventories revised up; wheat unchanged.
      • Cotton production predicted up 8.8% on good Indian crop.
      • Corn acreage predicted up 5%, but market to remain tight.
      • Wheat exports to resume from Russia, Ukraine and Kazakhstan. Foreign corn supplies also expected to rise. Good season in North Africa likely to limit import demand.
  • Data:
    • US:
      • CPI 3.2% yoy; core CPI 1.3%. MOM core CPI slowed to 0.4%. Michigan inflation expectations fall back a little. PPI beats expectations.
      • Retail sales show continued growth, as expected. 
      • Upward trend in initial jobless claims remains intact.
      • Trade deficit a little wider than expected; has been widening for five months.
    • Europe:
      • CPI 2.8%, still on a rising trend. Core CPI 1.6% — the second big jump in a row on a relatively high MOM number.
      • Trade deficit narrows again but surplus was expected.
      • Preliminary GDP QOQ: France 1%, Germany 1.5%, Greece 0.8%, Spain 0.3%, Eurozone 0.8%. All beat expectations. Italy disappoints with 0.1%.
    • UK:
      • NIESR GDP estimate 0.3%; was miles off in Q4 so treat with a bucket of salt.
      • Trade deficit widened a little more than expected and remains wide.
      • Manufacturing production and IP growth remain very weak.
      • BRC retail sales shows a big MOM jump.
    • Japan:
      • Core machinery orders 2.9% vs. -9.7% expected.
    • China:
      • New loans up MOM, and relatively high.
      • M2 growth at lowest since at least 2007.
      • CPI 5.3% — slowing in the rising trend.
      • Investment growth still in a rising trend; 25.4% YOY.
      • IP growth 13.4%, disappointing expectations and maintaining a flat trend.
      • Retail sales 17.1% — still below 2010 levels, but certainly not weak.
      • Trade surplus bounces back, beating expectations, but remains on the low side.
    • Australia:
      • Home loans drop again MOM vs. expectations for an increase; motor vehicle sales drop.
      • Employment fell — a bad number in absolute terms, and disappointed expectations for a rise.
      • Trade surplus bounces back — coking coal exports recover after Queensland floods.
This Week:
  • Mon: TIC report, Bernanke speaks, Sugar and Sweeteners Outlook and Crop Progress.
  • Tue: UK CPI, German ZEW sentiment, US building permits.
  • Wed: UK employment data, FOMC and MPC meeting minutes.
  • Thu: Japan prelim GDP, UK retail sales, US initial claims, existing home sales and Philly Fed manufacturing index.
  • Fri: BoJ rate and press conference.
Next Week:
  • UK revised GDP, US durable goods orders and prelim GDP.
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