The price action was mixed in NY trading as the flows around tomorrow's month end continue to be volatile. US stocks shed another -1.5% in broad terms as details of Obama's massive budget and $1 trillion in proposed tax hikes led shares lower. The 7-year Treasury bond auction, the first since the early 1990s, was described as sloppy though the bid/cover of 2.1 suggests demand for US paper remains robust. Bonds were lower as demand for higher yields drove prices down. The 10-year rate added 7bps to near 3.00% while the 2-year was pretty flat at 1.08%. Gold lost another -$7 towards 946 as profit taking continued. The precious metal briefly tested 935/930 support and this is expected to be an interesting level as we head into the weekend.

EUR/USD edged about -50 pips in NY trading as failure to take out the 1.28 barrier put downside pressure on the pair. The 200hr SMA by 1.2710 and hourly trendline by 1.2670 now look like the next barriers to further weakness. USD/JPY was bid more than 30 pips despite the weakness in stocks as the yen safe haven myth continues to evaporate. The pair was sitting near the 98.50 pivot at the NY close and 99 looks like the next hurdle in the rally. USD/CAD surprisingly jumped about 95 pips to 1.2530/40 despite the pop in oil prices to near the $45/bbl level. Look for this correlation to resume once the murkiness around month-end subsides next week.

Upcoming Economic Data Releases (Asia Session) prev est

2/2623:15GMTJNNomura/JMMA Manufacturing PMIFEB29.6- -
2/2623:30GMTJNJobless RateJAN4.4%4.6%
2/2623:30GMTJNJob-To-Applicant RatioJAN0.720.69
2/2623:30GMTJNHousehold Spending (YoY)JAN-4.6%-5.5%
2/2623:30GMTJNNatl CPI YoYJAN0.4%0.0%
2/2623:30GMTJNNatl CPI Ex-Fresh Food YoYJAN0.2%-0.1%
2/2623:30GMTJNNatl CPI Ex Food, Energy YoYJAN0.0%-0.2%
2/2623:50GMTJNIndustrial Production (MoM)JAN P-9.8%-10.0%
2/2623:50GMTJNIndustrial Production (YoY)JAN P-20.8%-30.7%
2/2623:50GMTJNLarge Retailers' SalesJAN-6.3%-5.7%
2/2623:50GMTJNRetail Trade YoYJAN-2.7%-3.0%
2/2623:50GMTJNRetail Trade MoM SAJAN-2.0%-0.5%
2/270:01GMTUKGfK Consumer Confidence SurveyFEB-37-39
2/270:30GMTAUPrivate Sector Credit MoM%JAN-0.3%0.3%
2/270:30GMTAUPrivate Sector Credit YoY%JAN- -6.0%
2/270:30GMTAURBA Foreign Exchange TransactnJAN- -- -
2/274:00GMTJNVehicle Production (YoY)JAN-25.2%- -
2/275:00GMTJNHousing Starts (YoY)JAN-5.8%-14.9%
2/275:00GMTJNAnnualized Housing StartsJAN1.001M0.997M
2/275:00GMTJNConstruction Orders (YoY)JAN-27.3%- -

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