US Market Up-Date

***Economic Data***

– (GE) Germany Feb Preliminary Consumer Price Index M/M: 0.5% v 0.5%e; Y/Y: 2.0% v 2.1%e
– (GE) Germany Feb Preliminary CPI EU Harmonized M/M:0.6 % v 0.5%; Y/Y: 2.2% v 2.1%e
– (GE) Germany Feb CPI Baden Wuerttemberg M/M: +0.5 v -0.4% prior; Y/Y: 2.4 v 2.1% prior
– (BR) Brazil Primary Budget Balance (BRL): 17.7B v 15.1Be; Nominal (Overall) Budget Balance: -1.5B v -8.7B prior ; Net Debt -to-GDP Ratio: 40.1% v 40.4% prior
– (US) Q4 Preliminary GDP Q/Q Annualized: 2.8% v 3.3%e; Personal Consumption: 4.1% v 4.2%e
– (US) Q4 Preliminary Core PCE Q/Q: 0.5% v 0.4%e; GDP Price Index: 0.4% v 0.3%e
– (MX) Mexico Q4 GDP Y/Y: 9.5% v 9.0%e
– (MX) Mexico Jan Unemployment Rate: 5.4% v 5.6%e v 4.9% prior
– (US) Feb Final University of Michigan Confidence: 77.5 v 75.4e
– (MX) Mexico Q4 Current Account: -$3.6B v -$1.8Be

– There has been a bid in equities this morning as Saudi promises to pump up to an additional 9M bpd of crude calms markets and the very strong University of Michigan consumer confidence data trumps the soft prelim Q4 GDP. Libya remains tense, although there is a sense that the noose is tightening around Gaddafi’s neck, with protesters holding more and more of the country. The final reading of the University of Michigan confidence survey hit its highest level in three years. The second reading of Q4 GDP was revised downward, against expectations for a slight gain. Front-month WTI crude is well below the $100 handle this morning, trading around $97.40. Fed Governor Lacker told CNBC that oil prices will not derail the recovery, and also said that growing inflation expectations are part of the process of the consolidation of the economic recovery.

– Shares of Boeing gained 4% in premarket trade and are around +3% mid morning after the company won the long-awaited $30B Air Force refueling aircraft contract, defeating EADS. Volkswagen reported record FY10 profits and revenues. The three government-owned financial sector basket cases – Freddie, Fannie and AIG – reported better-than-expected results for their fourth quarters, although making sense of the results remains challenging. AIG is down 4% in the early going as analysts look at the weakness at the firm’s huge property insurance business, Chartis, and its aircraft leasing unit, ILFC. Shares of retailers The Gap and JC Penny both met expectations and boosted share buybacks. GPS has given up earlier gains and is near unchanged, while JCP is down 4%. First Solar is down 3% and off its worst levels after reporting soft revenue and narrowing its FY11 sales outlook. INTC and AMD are both up 3% or so on analyst upgrades. Among this morning’s biggest movers is Nutrisystem; shares of NTRI are down 30% after the firm missed revenue expectations by a very wide margin.

– The dollar mustered some strength during the New York morning despite the softer Q4 GDP reading. Dealers noted that the price action was more a result of position squaring and cross-related trading ahead of the weekend as continued uncertainty lingered in the Middle East with Libya as the current flash point. Tens of thousands protest in Yemen capital city of Sanaa. The higher revision in University of Michigan also provided strength for the greenback.

***Looking Ahead***

– (CO) Colombia Central Bank Interest Rate Decision: Expected to maintain the Overnight Lending Rate unchanged at 3.00%
– 11:00 (US) Fed to purchase $6-8B in Notes/Bonds
– 13:30 (US) Fed’s Yellen, BOE’s Bean, ECB’s Constancio Speak in NY
– 14:00 (AR) Argentina Jan Supermarket sales Y/Y: No est v 19.8% prior