Good morning!  Here’s a rundown of what’s going on heading into today’s open:

Snapshot: The stat that’s grabbing the market’s attention this morning: German retail sales.  In real 2010 dollars, sales from German shops grew an astounding 2.9% versus 0.4% expected in January; in annual terms that’s 5.3% versus a year ago, compared with 3.0% expectations.  Along with CPI, PMI, and monetary aggregate beats (mentioned over the past week in this commentary) the economic setup in Europe is looking phenomenal, both relative to expectations and compared to the past few years of awful growth.  Despite the strong data from Germany and a healthy Spanish unemployment beat, a January Eurozone PPI miss has the EUR down a third straight day and closing in on 12 year lows set earlier this year.  European equity is also down (Stoxx 600 -5 bps) as bunds sell off modestly contrasted with tightening spreads for peripherals and a tighter spread bias for cash bonds and CDS in European credit.  S&P 500 futures are -12 bps, while Russell 2000 contracts are down 10 bps.  Brent is reversing its move of yesterday, gaining 3.38% as its spread versus WTI gives back some of the massive 22% narrowing it made yesterday.  In terms of dollar spreads, the $2.82 narrowing of the Brent-WTI gap yesterday was the largest since December 2013, and is now being unwound with force.  WTI is up 1.75%.  Gold is mixed, down 20 bps, while USTs continue to see higher yields, with bonds five years and out up about 2 bps as the yield curve (2s30s) steepens by a basis point and a half.

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