US clocks sprang ahead over the weekend and the reaction in markets reflects a forced yawn. Spring is in the making but its not official and the risk of a sell-off on inflated expectations for a bigger recovery in data remains. Like a lost hour, many want the interest on the lost sleep in addition to the benefits of better sunshine. Selling off in Asian equities was predictable overnight with weaker China data and a revised lower Japan GDP. China rates are lower as is the CNY. The mystery of the Malaysian airliner lost from the skies continues to play on nerves as does the continued Russian action in the Ukraine. The pain trade in commodities – a knee-jerk reaction to China’s lower exports – maybe missing the point about the money market reform there as the hot money flows move back to the banking system. CNY loans fell but M2 in China was stable overnight. The industrial production reports in Europe for Italy, France and Spain were mixed with Italy better and Spain and France worse. Weather related drops in energy demand were notable noise factors. The drop in UK Gilts and the lower GBP stand out today in a market with little news. The US will be stuck waiting for something better – as expected by the calendar and the clocks – with the risk linked to geopolitics still. The risk of Spring is that its already sprung and we just don’t know it yet.

There was plenty on the radar screens last week but even more in the week ahead – with the saddest being the tragedy of the Malaysian Airlines flight. The China data over the weekend will be sharply in focus raising fears about growth globally – particularly for those jumping back into commodities and commodity currencies. For the week ahead - Rate hikes from New Zealand, China credit growth after weaker CPI and trade data, Russia and the Ukrainian crisis – more talk, more sanctions. The BOJ rate decision and the onslaught of data – casting more doubt on Abenomics and the EU industrial production – all showing the feeble recovery. The US is the one place that has little to worry about – but then again the extension of the equity rally from 2009 has been extraordinary and its worrying many technicians along with economists as the soft patch of weather hasn’t hurt jobs and leaves the US FOMC on track for more QE tapering and eventually higher rates. Debating the US outlook after the weather effects of January and February will likely be in vogue as well with the Service PMI competing with the Jobs report for fear over greed. The confusion over forward guidance will be a hot topic for the week ahead along with the role of fiscal policy globally in making up for the limits of monetary policy everywhere.

Track was pleased to host its February Idea Dinner last night, following a several month hiatus from Idea events. The dinner brought together and assortment of fund managers, traders, and other market professionals. The mood in the room was one of wariness of global markets – there was a general sense that there has been something consistently “off” about markets, though there was a broader variety of opinions about how this situation would resolve itself. Broadly grouping these opinions into two schools, the room was divided into individuals that felt that some significant adjustment should be coming soon, while others believed that the current paradigm would stretch out for as long as markets and central bankers could keep deferring a crisis. One participant noted that March has traditionally been a difficult month for markets (noting, for instance, that the Nasdaq bubble burst in March), and suggested that we may see a readjustment within the next several weeks. Like Caesar shrugging off the soothsayer, most other participants did not seem overly concerned with a near-term crisis (one of the primary strands of thought in the room was that “markets can remain irrational longer than you can remain solvent”—to quote Keynes’ old plum). The soothsayer turned out to be right on the money about Caesar, but it still remains to be seen what March will bring for markets.

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