AUD, GBP and EUR are on the road to new highs vs. USD. Numbers have been good in the US, but not enough the overrule the negative spin from the faltering housing market.

Overnight News Bullets

• German Retail Sales MoM (Feb) out at 0.9% as expected.
• French GDP figures a tad higher than expected.
• Swedish Riksbank Interest Rate out at 3.25% (unchanged) as expected.
• Euro-Zone CPI Estimate YoY (Mar) out at 1.9% as expected.
• Euro-Zone Unemployment Rate (Feb) out at 7.3% as expected.
• UK GfK Consumer Confidence (Mar) out at -8 as expected.
• US Personal Income MoM (Feb) out at 0.6% vs. 0.3% expected.
• US Personal Spending MoM (Feb) out at 0.6% vs. 0.3% expected.
• Canadian Industrial Product Price MoM (Feb) out at 0.9% vs. 0.7% expected.
• Canadian Raw Material Price Index MoM (Feb) out at 2.6% vs. 1.8% expected.
• US PCE Deflator YoY (Feb) out at 2.3% vs. 2.2% expected.
• US PCE Core YoY (Feb) out at 2.4% as expected.
• Canadian GDP MoM (Jan) out at 0.1% vs. 0.2% expected.
• US Chicago PMI (Mar) out at 61.7 vs. 49.3 expected.
• US Construction Spending MoM (Feb) out at 0.3% vs. -0.4% expected.
• Australian AiG Performance of Mfg. (Mar) out at 56 vs. 57.7 previously.
• Japanese TANKAN Survey almost as expected. Capital Spending at 2.9% vs. 1.7% exp.
• Australian Retail Sales (Feb) out at 0.9% vs. 0.4% expected.
• Australian Building Approvals MoM (Feb) out at 10.6% vs. 0.2% expected.

Markets

• FX: USD edging lower again, despite strong figures. AUD and EUR strengthening.
• Fixed Income: Very volatile day on Friday, but ended the day about unchanged.
• Stocks: European and US sessions about unchanged. Nikkei posting very ugly close.
• Commodities: Precious metals and oil consolidating. Corn opening limit down.

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week??™s Highlights:

What's going on?

• Nikkei: New 3-day high, then falling to close on a 10 ??“day low. This price action is likely to spill-over to the European and US sessions.
• US numbers have been strong on Friday, but there is still talk about sub-prime loans and the housing market. This is being priced into the USD.
• Fixed Income about to go higher as stocks take another beating. Treasuries have been very rangebound and we think the uncertainty about the US fundamtals should be supported at the lower end of the range.
• According to our Index of Weekly Economic Indicators, the US ISM Manufacturing is likely to surprise to the upside today.

FX

The USD is trending lower