NEWS / Foreign Exchange

Indices push higher following a mixed bag of economic releases

- Ahead of the open, equity futures dipped following Feb PPI data that was ahead of expectations and a very soft March Empire Manufacturing reading.  The weakness was short lived as Indices opened on their lows and pushed higher.  Equity strength is being attributed in part to strong overseas markets, another round of deal announcements, and talk that tomorrow??™s quadruple witching is synthetically placed a floor in equity futures markets.  Financials are up across the board after GE and Blackstone announced at take out of PHH Corporation.  Traders also seem to be relieved that Bear Stearns reported no spreading of the recent sub-prime worries in their quarterly earnings report.  BSC +2.4% LEH +2.2% WM +1.7% NDE +4.5% LEND +50%  The Intercontinental Exchange entered the M&A fray by making a bid for CBOT.  ICE ??“3.5% CME ??“3.2% BOT +13% NMX +4%  Cyclical groups like metals and airlines are also experiencing strong gains.  NEW +1.7% PAAS +2.3% FCX +6% PCU +4% CAL +3% AMR +2.3%  It is worth noting May Copper has broken out of its 2007 range and is now trading up 5% at $2.975. Gold +1% Silver +2.5%  Dow Chemical is up 6% on speculation of a joint venture with Reliance.

- Treasury reaction to the inflationary PPI data has been somewhat muted.  Initially yields moved higher but have since retreated.  The 10-year has been trading around the unchanged mark yielding 4.532% while odds of a rate cut by June are holding around 40%.  April crude is in the middle of today??™s range up fractionally while natural gas is down marginally post in line inventory data.  OPEC did officially leave output unchanged as expected.  In what has been a fairly tight range, the Dollar is at or near the worst levels of the day against most European currencies despite Jan TICS data that exceeded expectations.  The Swiss Central Bank did raise rates 25bp as expected. EUR/USD  1.3242; USD/CHF 1.2139