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Stocks: Prior Day: Asia, Europe, USA up. Today: Asia, Europe down. Stocks continue higher despite no noteworthy positive news, disappointing lack of progress with Greece as time for a solution winds down, muted Fed outlook on US economy and further QE from Japan. That risk  FX and commodities fail to follow stocks higher casts doubt on stock rally, Germany to Greece: go to IMF!

.-          FX: Slight bias to safety currencies [JPY, USD, CHF in order of safety appeal] vs. risk currencies [AUD, NZD, CAD, EUR, GBP in order of risk appetite appeal], as flat/down stocks reflect market seeking direction from news over the coming days.

-           Main events: WED:  JPY BoJ Press Conference-, GBP MPC Meeting Minutes+, THURS  GBP Public Sector net Borrowing, USD Core CPI m/m, Unemployment, Philly Fed Mfg Index, FRI: EUR German PPI, Trichet Speaks, CAD Core CPI, Retail Sales

 -      Big Theme: Stocks chop up/down near  12 months highs despite numerous concerns this week, lack of noteworthy positive data, FX and commodities fail to follow stocks higher, casting doubt on the stock rally, EU still failing to produce Greek debt solution, US Fed still very cautious on US recovery, EU, UK, Japan all at some stage of considering (UK, EU) or implementing(Japan) more QE


US: Up: The stock market moved higher for the third straight session to a fresh 52-week high despite a lack of noteworthy positive news, failure of FX and commodities to confirm the rally, a muted tone from the latest Fed comments, and no clear steps in place to prevent a possible default by Greece in the coming months That risks an historic wave of sovereign defaults in the EU and surrounding area, and likely steep market pullback.

Asia Stock Outlook: Mixed: Early Thursday trade GMT: A fall in the euro accelerated profit-taking, market players said, after a report saying Greece is not hopeful of aid from the March 25 European Union summit, raising the risk of a default and ensuing market pullback amid fears of a wave of sovereign defaults among the world’s weaker economies as fear drives borrowing costs  beyond reach for these nations.

European Stock Outlook Down Early Thursday trade GMT: European shares slipped back from the previous session's 17-month closing highs in early trade on Thursday, with banks and commodity stocks taking the most points off a key index as markets turn cautious near new highs while the EU debt crisis continues to fester without resolution following the failure of the recent EU meeting to introduce a concrete plan to keep Greece solvent.


Commodities Outlook: Mixed: In Wednesday and early Thursday trade GMT  as risk assets struggle near highs amidst ongoing uncertainty about the EU debt crisis and subdued words from the Fed.

Crude Oil Daily Outlook: steady: In Wednesday and early Thursday trade GMT  .

Gold Daily Outlook: Down In Wednesday and early Thursday trade GMT

FOREX Daily Outlook: In Wednesday and early Thursday trade GMT: Bias to safety currencies as risk assets pull back at new highs amid ongoing uncertainty about Greece and growing risk of its default and possible ensuing wave of higher sovereign rates and defaults among the weaker economies.

US Dollar Daily Outlook: In Wednesday and early Thursday trade GMT : steady/rising vs. most majors down vs. commodity dollars, EUR Failure of EU to provide any concrete assurances likely to keep pressure on the Euro to the benefit of the USD

As noted in our Stocks, Commodities, Forex Market Drivers March 15th- 19th: Weekly Review/Preview, there were 2 scheduled events that might provide market moving news. One was the EU policy meeting Monday and Tuesday, The other was the FOMC statement. Neither both were disappointing in that neither produced positive news for their currency. The EU continues to avoid firm commitments of cash if needed, and the Fed remained cautious, maintaining that rates will stay low for an extended period. We see more damage to the Euro given the potentially catastrophic effects of a Greek default.

Euro Daily Outlook: In Wednesday and early Thursday trade GMT: Up vs. the USD, down vs. the AUD, CHF, JPY, GBP

Yen Daily Outlook: In Wednesday and early Thursday trade GMT: Up vs. the EUR, AUD, steady vs. the USD, down vs. the GBP

British Pound Daily Outlook: In Wednesday and early Thursday trade GMT: Up vs. the CHF, JPY, EUR steady vs. AUD, USD, as BoE leaves rates, stimulus unchanged to the relief of markets, providing an oversold bounce.

Australian Dollar Daily Outlook:  In Wednesday and early Thursday trade GMT:  steady vs. USD, JPY, GBP up vs. the EUR, down vs. the CAD, holding up well despite mild risk aversion

New Zealand Dollar Daily Outlook: In Wednesday and early Thursday trade GMT Up vs. the USD

Canadian Dollar Daily Outlook: In Wednesday and early Thursday trade GMT  steady/higher vs. all majors except down vs. AUD

Swiss Franc Daily Outlook In Wednesday and early Thursday trade GMT: down vs. the GBP, JPY, USD, up vs. EUR

CONCLUSIONS & Big Picture: Short term: The S&P 500, our key risk asset barometer, like other major stocks, stuck at / near the resistance of new 12 month highs, with considerable uncertainty from events noted in the market summary yet markets continue to drift higher despite no noteworthy positive news of note, no improvement in Greek debt crisis, cautious words from the Fed. Risk trend remains higher though we don’t trust it as long as there is no remedy in sight for Greece. Also, fx and commodities are flat, whereas they should be rising along with stocks. This negative divergence casts further doubt on the rally in global equities, and we see higher probability of near term downside, especially in July, when 2 major events hit: Spain needs to sell about 30 bln euros in bonds AND a massive wave of US mortgage rate resets not seen since 2007 begins. The last time we saw this magnitude of rising mortgage rates markets stalled out and ultimately crashed.