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Sentiment divergence

  • Italian Prime Minister Monti (he is still PM) is asking for input from other political leaders ahead of 14 March EU meeting, underscoring first that there may not be a new government by then, and second that Italy is unlikely to play much of a role at an EU level.
  • Cyprus was on the agenda at Monday's Euro group finance ministers' meeting, but apart from promising a "swift" bail out no details were forthcoming. Markets are less worried about the swiftness and more concerned about the severity (and what precedent that may set).
  • Service sector sentiment dominate the data calendar today. The Euro area numbers are expected to deteriorate further (the manufacturing sentiment has had a slight downward bias of late). The UK data may also be of note following poor manufacturing numbers there last week.
  • US sentiment data is expected to contrast that of the Euro area, with a modest increase forecast. Credit availability, a resilient consumer, and indifference to political machinations should help sentiment. Lacker of the Fed is also due to speak.

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