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

Snapshot: European Services PMIs were downgraded slightly versus Flash readings overnight, while Eurozone retail sales followed Germany’s lead, surging by the most month-over-month since May of 2013 and rising to their highest year-over-year rate since mid-2005, 3.7%.  The figures are bullish for Q1 European growth, but markets are trading down as opening highs in continental equities were sold along with US equity index futures, which are currently down 31 bps versus yesterday’s close.  The only headline we could see that could have possibly catalyzed the selling was a report that Russia’s nuclear forces would start a training exercise.  If that was in fact the cause of the sharp selling that knocked 25 bps off of S&P 500 futures (currently -33 bps) at 3:30 AM, we would expect a pop into the open as the training exercise would be a routine event.  That said, it’s impossible to attribute the selling in the US and Europe directly to the Russia headline and other geopolitically sensitive asset classes (gold, Treasuries, Brent crude) saw no reaction, so for the time being it looks like US stocks are set for mild declines again today.  Russell 2000 futures are off 49 bps. 

Elsewhere overnight the Reserve Bank of India cut rates overnight in a surprise move, hitting Indian equities and the Indian rupee.  WTI continues to close the large gap that it’s developed with Brent, up 49 cents or 89 bps as Brent declines 33 cents or 57 bps, taking the Brent-WTI spread to -9.66 (WTI per barrel minus Brent per barrel), its third day of gains in a row.  Gold is still bumping around just above $1,200, currently $1205.54 spot, up 15 bps. Treasuries are mixed with the front end of the curve rallying, yields falling by a basis point versus unchanged yields in the long end of the curve.  The steepening bias since the end of January is intact, with 2s10s rising 26 bps since January 30th and 2s30s rising 27 bps.  The USD is higher overnight, up 12 bps on the Bloomberg USD Index, driven up by gains versus EUR, which is off 40 bps.

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