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US EQUITY WRAP

Equities finished flat on Friday following mixed economic reports on consumer confidence. Stocks had been modestly higher at the start of trading, but soon came under pressure after lower than expected University of Michigan data and traded sideways for much of the session. Basic materials were the outperforming sector due to USD weakness, while financials lagged the S&P500, as traders took profits following the run up in the sector this week. At the close; the S&P 500 closed down 0.02% at 1149.99, the DJIA closed up 0.12% at 10624.69 and the NASDAQ 100 closed up 0.12% at 1924.43.

ECB's Trichet says do not want to breed dependency, delayed exit would distort markets and misallocate credit

Says:
- Pre-crisis liquidity framework is natural end-point of phasing out.
- Reviewing liquidity ops but relatively little reason for fundamental changes.
- Policy stance will depend on ability to deliver price stability in longer term.
- Price stability definition means ECB does not need to make promises about future rates path.
- Sees market risk premia falling further but new normal will be higher than before crisis.

US Senator Schumer says plans to move forward with revamped China currency legislation in coming days

US FIXED INCOME WRAP

Treasuries touched on a low 116.08+ after retail sales beat expectations, but losses were soon recovered after Michigan data disappointed. At the pit close t-notes finished up 1 tick at 116.26

Safeway (SWY) cut to hold from buy at Standpoint Research

Yum! Brands (YUM) to buy back shares up to USD 300mln

US crude futures settle at USD 81.24/BBL, down USD 0.87, (-1.06%)

White House's Gibbs says Yellen is a leading contender for Fed Vice chair nomination

BT (BT/A LN) Group raised to 'buy' from 'hold' at Citigroup

US may extend deadline for bids on aerial refuelling tanker to let Europe's EADS (EAD FP) compete against Boeing (BA)

- source familiar with Pentagon thinking

ECB's Trichet says Chinese currency needs to be more flexible

ECB's Trichet says certainly we have to look at ECB collateral rules

Portugal parliament approves 2010 budget in final vote

US Baker Hughes Rig Count (Mar 12) W/W 1407 vs. Prev. 1396

IMF's Lipsky says European officials have made it clear, they want to handle Greek financial arrangements on their own

IMF's Lipsky says the USD is the dominant international reserve currency, will remain so for foreseeable future

Says:
- idea of alternate global reserve currency is a topic worth of study, not a near-term issue

US Treasury's Geithner says 'very confident' will get strong financial regulatory bill passed

Moody's says US CMBS loan delinquencies now at 5.73%, retail rate drops slightly

US Treasury's Geithner says US coming out of recession faster than other countries

Says:
- can use opportunity to make investments for future
- important that countries like China move away from export-led growth
- US economy ‘healing’, gradually strengthening across the board but will take time to fully recover
- recovery gaining momentum, still need targeted measures to spur job creation and growth

ECB's Trichet says EUR is a currency that inspires confidence - Fox

Says:
- EUR is for Europe, don’t have any battle with the USD.
- Proposal by academics, German finance ministers for European Monetary Fund deserves examination

IMF's Lipsky says there is justification for significant optimism about economic outlook

Says:
- still not clear how rapid recovery will be in advanced economies
- inflation low, likely to remain low, in most countries for foreseeable future
- process of strengthening balance sheets for most financial institutions not yet over

Senior US official confirms San Francisco Fed President Yellen is leading contender for Fed Vice Chair

Says:
- Sarah Raskin and Peter Diamond are under consideration for Fed Board vacancies

ECB's Trichet says very courageous, convincing measures have been taken by Greek PM

RANsquawk 'US afternoon briefing': Video uploaded to www.youtube.com

http://www.youtube.com/watch?v=NqRFATjRO8I

LVMH (MC FP) will consider buys, but no comment on Bulgari

US House Speaker Pelosi says House vote on healthcare could come within next week

JPMorgan (JPM) CEO says doesn't believe commercial real estate problems are going to stop US from recovering

European equity close (Preliminary): FTSE +0.22%, DAX +0.26% , CAC -0.03% , Eurostoxx +0.07%

European equity close (Preliminary) (5-days): FTSE +0.53%, DAX +1.14% , CAC +0.45% , Eurostoxx +0.70%

US House Speaker Pelosi says public option will not be in final healthcare package

JPMorgan (JPM) CEO Dimon says bank lending is actually higher now than it was a couple of years ago

Fitch says expiring government programmes to translate to higher US RMBS losses

Senator Dodd bill limits Fed to supervising banks with USD 100bln plus: CNBC

Teva (TEVA) sues Mylan to stop generic copies of birth-control pills

Fitch places HSBC (HSBA LN) Private Banking Holdings' individual rating on negative watch on data theft

UK DMO says to sell GBP 1bln of 6% 2028 Gilt on March 16

Says:
- 2028 Gilt sale to take place via tender on single price basis.

US ECRI Weekly (Mar 12) W/W 130.6 vs. Prev. 129.80

US ECRI Weekly Annualised (Mar 12) Y/Y 13.1% vs. Prev. 13.7%

Ireland's NTMA looking at issuing index-linked bonds, says has been interest from pension funds

Expert witness says Microsoft (MSFT) infringed VirnetX patents

An expert witness has determined that Microsoft infringed upon two of VirnetX’s patents while knowing about the patents, the Seattle Post-Intelligencer says in a blog post

Fog lifts, pilots resume moving ships at oil ports of Houston, Texas City and Galveston - US Coast Guard

Moody's says Portuguese RMBS performance stabilised in January

US Business Inventories (Jan) M/M 0.0% vs. Exp. 0.1% (Prev. -0.2%, REv. to -0.3%)

Venezuela's energy minister says OPEC should maintain output levels

Coca Cola (KO) could eventually spin off bottling operations acquired from CCE, according to a report

University of Michigan Confidence (Mar P) M/M 72.5 vs. Exp. 73.6 (Prev. 73.6)

- Expectations (Mar P) M/M 67.2 vs. Exp. 68.0 (Prev. 68.4)

- Conditions (Mar P) M/M 80.8 vs. Exp. 82.0 (Prev. 81.8)

- 5-year Inflation (Mar P) M/M 2.7 vs. Prev. 2.7

- 1-year Inflation (Mar P) M/M 2.8 vs. Prev. 2.7

Market talk that SuperValu (SVU) is subject to takeover

Canada's finance minister Flaherty says strong CAD is an advantage to manufacturers who import machinery

Weather Derivatives forecast sees average temp. in the US for the next 6-10 days to be 4.0F (above avg. this time of year)

Prev: 2.7F (above avg. this time of year)

McDonalds (MCD) shares move above 52 week high of USD 65.74, prints new high of USD 65.84

Genzyme (GENZ) price target raised to USD 61 from USD 56 at RBC Capital; rating sector perform