• Global stocks are mixed with the European DJ Stoxx 50 Index down -0.16% and March S&Ps down -0.60 points. The dollar and Treasuries are weaker after Greek bonds rallied for a fourth day when Greek Prime Minister Papandreou announced an additional 4.8 billion euros ($6.6 billion) of deficit cuts, including higher taxes and reduced salaries for civil servants, after European leaders called for greater austerity measures before considering aid. Jan Euro-Zone retail sales came in near expectations at -0.3% m/m and -1.3% y/y, although the 20th consecutive year-over-year decline shows that European consumer spending has yet to pick up to pre-financial crisis levels. Adidas slumped nearly 6% after the world's second-largest sporting-goods maker reported Q4 profit of 19 million euros, weaker than analysts' estimates of 27.6 million euros. Irish Life climbed 3% after the county's biggest life insurance company said its full-year loss narrowed to 279 million euros from 433 million euros last year and its CEO said he expects to see a "significant improvement in the life businesses' profitability" in 2010.

• The Asian markets today closed mostly higher with Japan up +0.31%, Hong Kong -0.14%, China +0.72%, Taiwan +0.42%, Australia +0.72%, Singapore +0.38%, South Korea +0.44%, India +1.36%. Japan's Jan labor cash earnings unexpectedly rose +0.1% y/y, the first increase in the last 20 months, and a sign the economic recovery is strengthening as employers add working hours. Japanese manufacturers boosted workers' overtime hours by 6.5% in Jan from Dec with overtime hours across industries rising for the first time in the last 18 months. Australia's Q4 GDP expanded 0.9% q/q, the strongest pace in almost two years, which underscores the RBA's decision yesterday to raise interest rates for the fourth time in the last five monetary policy meetings. PBOC deputy governor Su Ning said today that "China's economy will perform better than last year" and that GDP growth this year will top last year's 8.7% pace. Standard & Poor's warns, however, that Asian policy makers risk creating asset bubbles and fueling inflation by keeping interest rates "too low for too long" in their attempt to boost domestic demand. According to a report from S&P, it said it expects monetary tightening this year in South Korea, Hong Kong and Singapore, where asset-price volatility is a concern. It added that India and China would also further tighten policy while in Japan, where the recovery is lagging behind the rest of the region; further policy support will be needed to mitigate recessionary conditions.

• March S&Ps this morning are trading off by -0.60 of a point. The US stock market yesterday traded in positive territory the entire day but finished well off of its high (Dow Jones +0.02%, S&P 500 +0.23%, Nasdaq Composite +0.32%). The S&P 500 Index, the Dow Jones and the Nasdaq Composite all rallied to 1-1/4 month highs. Bullish factors for stocks included (1) carry-over strength from a rally in European bourses after the Greek government said it will announce as much as 4.8 billion euros ($6.5 billion) of additional deficit cuts, which increases speculation that a solution to its debt crisis may be nearing, (2) strength in bank stocks after bank analyst Richard Bove said "bank earnings in the next few years will soar" as the industry's balance sheet now "has more earnings capacity built in to it than any time in decades," (3) gains in energy producers as crude oil prices surged, and (4) the prediction from Barclays Capital that the Fed won't start to increase interest rates for another eight months if policy makers follow their past practice of waiting for the unemployment rate to fall for 12 months before hiking the funds rate.

• Bearish factors for stocks included (1) weakness in telecommunication companies led by a drop in AT&T after HSBC Holdings cut AT&T to "neutral" from "overweight," (2) comments from Kansas City Fed President Hoenig that the Fed should be prepared to raise the funds rate to 1.00% even when unemployment is above 9%, and (3) comments from Minneapolis Fed President Kocherlakota who said that he would be "highly surprised" if US unemployment falls below 9% this year and that he sees a chance that smaller regional banks will become the source of the next financial crisis, given their links to commercial real estate.

• Pfizer (PFE) climbed 1.9% in pre-market trading after the world's biggest drugmaker was said to bid as much as 3 billion euros ($4.08 billion) for generic-drug maker Ratiopharm GmbH.

• NetFlix (NFLX) slipped 3.7% in pre-market tradng after Bank of America Merrill Lynch downgraded the largest US mail-order movie rental service to "underperform" from "buy."

• June 10-year T-notes this morning are trading down -1.5 ticks. T-note prices yesterday opened lower but recovered their losses and settled up +0.5 ticks at 117-130. Bullish factors included (1) comments from Kansas City Fed President Hoenig who said on CNBC that selling assets this year by the Fed would be "difficult" and he doesn't expect it to happen this year, which is bullish in that it reduces concern that the Fed will flood the market with debt securities as it shrinks its balance sheet, (2) the prediction from Goldman Sachs that a possible relapse in US home prices this year will prompt the Fed to keep interest rates near zero until at least next year, and (3) comments from Minneapolis Fed President Kocherlakota who said that he would be "highly surprised" if US unemployment falls below 9% this year and that he sees a chance that smaller regional banks will become the source of the next financial crisis given their links to commercial real estate. Bearish factors yesterday included (1) reduced safe-haven demand for Treasuries after the stock market rallied and as Greek stocks and bonds gained on speculation the Greek government will announce as much as 4.8 billion euros ($6.5 billion) of additional budget cuts to appease the European Union, (2) hawkish comments from Kansas City Fed President Hoenig who said that the Fed should be prepared to raise the funds rate to 1.00% even when unemployment is above 9%, and (3) comments from Philadelphia Fed President Plosser who said that the Fed should back away from its pledge to keep interest rates low for an "extended period."

• The dollar index this morning is weaker with the dollar/yen -0.09 yen and the euro/dollar +0.29 cents. The dollar index yesterday rallied to a 1-week high early but shed its gains and finished lower on the day. Bearish factors yesterday included (1) strength in the euro which closed higher after falling to a 9-1/4 month low against the dollar after the Greek government said it will announce as much as 4.8 billion euros ($6.5 billion) of additional deficit cuts on Wednesday, fueling hopes that a Greek debt solution is near, and (2) the prediction from Goldman Sachs that a possible relapse in US home prices this year will prompt the Fed to keep interest rates near zero until at least next year, which is negative for the dollar's interest rate differentials. Bullish factors included (1) the report from Market News that an unidentified Euro-Zone central bank official said Greek banks have "effectively been cut off" from the interbank market and are still reliant on the ECB for their financing needs, which signals the ECB is not yet ready to withdraw its emergency liquidity measures or to raise interest rates, and (2) comments from Philadelphia Fed President Plosser who said the Fed should back away from its pledge to keep interest rates low for an "extended period."

• April crude oil prices this morning are up +40 cents and Apr gasoline is up +0.70 of a cent. Apr crude oil yesterday rallied throughout the day and settled up +$0.98 per barrel. Apr gasoline closed up +4.10 cents per gallon. Apr gasoline posted a 1-1/3 year nearest-futures high. Bullish factors included (1) strength in world equity markets which boosts optimism that a growing global economy will bolster fuel demand, and (2) the dollar which weakened from an early rally up to a 1-week high and settled lower. Bearish factors included (1) the prediction from the UAE oil minister that demand for OPEC crude may drop by 100,000 barrels a day this year as stockpiles are higher than the 5-year average and the global economy is weak, and (2) speculation that US stockpiles of crude oil and gasoline increased in Wednesday's inventory report. Expectations for Wednesday's weekly DOE inventory report are for crude oil supplies to climb +1.28 million bbl, gasoline inventories to gain +300,000 bbl, distillate stockpiles to drop -1.05 million bbl and the refinery capacity rate to remain unchanged at 81.2%.

Earnings reports (confirmed releases, sorted by mkt cap) JOYG-Joy Global (BEST earnings consensus ($0.64), URS-URS Corp. (0.56), PETM-Petsmart (0.56), BIG-Big Lots (1.29), SINA-Sina Corp. (0.37), FL-Foot Locker (0.25), BJ-BJ's Wholsale Club (0.96), HMIN-Home Inns & Hotel Management (0.19), HSNI-HSN Inc. (0.46), DPM-DCP Midstream Partners (0.46), VOLC-Volcano Corp. (-0.03), CMTL-Comtech Telecommunications (0.48), LGCY-Legacy Reserves LP (0.34), NNI-Nelnet (0.91), FNSR-Finisar (0.17).

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