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CHF *meetings this week for BoE, RBA and BoJ *Big earnings week - (especially since FASB guidelines appear to be applicable to Q1 earnings) Quiet day is likely - perhaps its time to reflect on whether the rally in equities is really justified - sure enough we have seen a few positives dotted around, but there has been enough written at the weekend to suggest that these should be taken in context (the context of being relatively better than recent woeful, or even perhaps one data print doesn't make an uptrend). If you don't want to start the week in pessimistic fashion - then start to look at the market from the perspective of how fast you expect QE, rate cuts etc to be removed - if you think this is the bottom and we aren't going to drag along for the foreseeable, then jump onboard the over optimistic wagon....
USD:
Thought this was worth nicking from Simon Penn - discussing Bernanke speaking on Friday - 'However, Bernanke also added a couple of hawkish comments - that it has the tools to raise rates when that become necessary, and that the Fed recognised the inflationary implications of some of its measures.  Note that the US 5yr5yr BEI has risen all the way to 1.93% most recently from 0.2% at the start of the year (with much of that gain coming over the last four weeks or so).  From 2003 through to the beginning of 2008 that measure held around 2.50%.  So while there's still some upward leeway available, the pace of the acceleration of the market view will not have escaped the Fed's notice. Remember that the Fed operates a soft inflation target, and hence it's possible will allow inflation to run ahead to allow the recovery to take hold (as opposed to certain other central banks which could well react mechanically to a lift up to 2%). Note the 6bn of TIPS coming on the 7th April, we also have 3s and 10y....
EUR:
More discussions on Eastern Europe - with the FT headline suggesting that we have quasi-members, with 'euroisation' the catchy phrase - Im not sure exactly how excited we are sposed to be over this, it's a
suggestion by the IMF afterall.  Bit of data -   industrial numbers,
productions, inventories and some CPI from France and Germany on top ...
but its supply that shld most interest - starting tomorrow we have Austria (19s and 37s), Sweden brings the 19s, with some talk of QE expected, Portugal brings the 12s, Slovakia the 13s, and Italy brings 4 taps on Thursday.
GBP:
Its MPC week - Thursday unlikley to yield much of a move in interest rates, but may have some discussion on QE - again with the uptick in data, lets see if we get a wave of over optimism and discussions on how liquidity will be removed from the market. Talking of over optimism, decent read in the telegraph regarding house prices - after the Nationwide reading last week, its interesting to note that in the 74 month long downtrend in the late 80s and 90s, there were 22 months in which house prices rose, with a run of 4 consecutive rises at one stage (well before then end of the trend). Discussions about Darling, acknowledging the fact that the Treasury's previous economic forecasts were wrong, but not discussing their revisions in the upcoming budget on the 22nd.
PPF headlines in the FT - with suggestions that levys should increase in the good times...if you care.
Supply - 19s tomorrow, Linker 32s on Wed.
US ECO / US Daily / US end Of Day / ANZAC

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