U.S. Market Update

- Dow +64 S&P +5.3 NASDAQ +5.7

US indices were higher on the open, driven by gains in commodity stocks. Over the weekend Brazil's Vale confirmed agreements to raise ore prices 65% for shipments to Japanese and Korean steelmakers. The news has spurred a rally for a wide range of mining and metals stocks. Futures prices continue to surge across all the metals led by another new all-time high in platinum and multi-month highs for front month copper and a 3% move for gold. RIO +7% RTP +4% BHP +6% PCU +7% NEM +6% AA +2% NUE +3% X +3.2% The momentum that built in the energy complex throughout last week has continued. April crude is consolidating near the $98 mark up another 2.7% while natural gas has added more than 3% on the session. OIH is up more than 2% and XOM is the best performer in the Dow gaining 2.5%. Wal-Mart alos provided some relief ahead of the open when ther Q4 earnings report and outlook were not a bad as many had feared. Equity markets are well off their best levels as Financial stocks have come in noticeably from the open. BSC -3.7% GS -1% LEH -2% MS -1.3% MER -2% Shares of AIG and WFC are fighting to hold onto gains after a positive Barron's article over the weekend. Credit Suisse is off more than 6% after taking more write downs. Treasury futures have seen some selling but as equities have given back some gains yields have come off their highest levels. The 10-year future is off 10 ticks yielding 3.81%. The greenback is modestly lower as the EUR/USD holds near overnight highs at 1.4740. USD/JPY 107.40 is drifting back towards this morning's low as equity markets make new session lows. The Aussie Dollar made some gains after the RBA Feb minutes indicated they discussed at 50 basis point hike and they continue to review whether their rate rise is sufficiently restrictive. AUD/USD is higher by some 65 pips at 0.92. Interestingly the Loonie is making new session lows despite the strength in commodities. The USD/CAD has broken above resistance that had been seen just below the 1.01 level (post Jan Cad CPI resistance and 30-week moving average).

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