US Market Update

***Economic Data***

(CA) Canada Feb Consumer Price Index M/M: 0.4% v 0.3%e; Y/Y: 1.6% v 1.4%e

(CA) Canada Feb Core CPI M/M: 0.7% v 0.3%e; Y/Y: 2.1% v 1.7%e

(CA) Canada Jan Retail Sales M/M: 0.7% v 0.6%e; Less Autos M/M: 1.8% v 0.5%e

(RU) Russia Feb Unemployment Rate: 8.6% v 9.3%e

(RU) Russia Feb Retail Sales M/M: -3.5% v -0.4%e; Y/Y: 1.3% v 4.2%e

(BE) Belgium Mar Consumer Confidence: -13 v -15.0 prior

US equity markets traded higher in the premarket this morning, continuing the slow but steady rally seen this week and throughout the month of March. But India's surprise rate hike just after the US open sparked sudden moves in FX markets and a wave of risk aversion (keep in mind that today is quadruple witching as well), with investors heading into the safe harbor of the greenback. Front-month crude has rapidly shed $1.50, giving up gains seen over the last two sessions while gold prices plunged $20. Initially US Treasury prices traded lower as focus shifted to next week's $108B in coupon supply, but risk aversion has been present there too, pulling bids into the long end of the curve especially. The 10-year yield briefly ticked above 3.7% but has settled back towards 3.67%.

Investors are punishing US tech firms SunPower and Palm in the wake of terrible earnings reports. SunPower's earnings were a hair below expectations, while revenue was above the consensus view. The firm's guidance for next quarter was way below target, with earnings seen at $0.05 versus expectations for $0.32. Full-year guidance was also notably weak. Several firms downgraded ratings and prices targets on SunPower overnight. Executives said they are preparing for up to a 20% decline in prices in 2010. Shares of SPWRA are down nearly 14%. Palm's quarterly losses were a third higher than expected as the smartphone maker's business continues to be hammered by the competition. Palm's CFO said he see next quarter's revenue at half the expected amount due to a "significant decline" in orders for its Pre and Pixi smart phones. Shares of PALM are down more than 18%. In other news, Boeing has boosted production of its 777 and 747 models to meet fresh demand. Carl Icahn is now tendering for all of Lions Gate's outstanding shares after the board rejected his earlier partial tender offer.

The euro continues to be weighed down in the early New York morning on lingering concerns about whether Greece would secure financial assistance from the EU. The USD also benefited from risk aversion flows following the inter-meeting rate hike by India's central bank (RBI). India was expected to possibly raise several key rates in April at its schedule policy meeting but pulled the trigger a bit early. The CAD firmed in the aftermath of higher Canada February inflation data and stronger retail sale data for January. However, the continued monetary tightening by emerging market economies provided some weakness in commodities.

***Looking Ahead***

11:50 Greenspan speaks at Brookings on financial crisis

15:00 (AR) Argentina Q4 GDP: 2.65e v -0.3% prior; Current Account: $1.5Be v $3.8B prior

15:00 (AR) Argentina Feb Industrial Production M/M: No est v -8.0% prior; Y/Y: 6.8%e v 5.2% prior

Trade The News Staff
Trade The News, Inc.

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