While the rest of the world shrugged off the growing possibility of a rate hike in China following higher than expected inflation, the Shanghai index fell 1.2% to a 2 1/2 week low, the Yuan rose to the highest level since Dec 30th and their 10 yr bond yield rose to a two week high. A European newspaper is reporting that the EU has agreed to a 55b euro bailout of Greece with Germany contributing up to 20b of it. The German finance ministry said they weren’t aware of the report. Combining this possibility with a better than expected IP # for the euro region has the euro at a 4 1/2 week high vs the US$ and the DXY is back below 80. The Canadian $ is moving closer to parity with the US$ after Feb job growth was better than expected at +20.9k (about 190k if adjusted for US population growth). Also hurting the US$ is talk that Janet Yellen will be named Vice ChairWoman of the Fed. She is as dovish as can be and Ben will welcome her as his B52 co-pilot. Retail Sales are key today.
