Euro Soft As Cypriot Banks Reopen With Capital Controls

Euro stays soft broadly even though markets are starting to get quiet in pre-holiday trading. Cypriot banks reopen today as the island country unveiled radical capital control measures. Under the rules, individuals are only allowed to transfer a maximum of EUR 3000 out of the country. And overseas use of credit and debit cards are limited to EUR 5000 per month. Local cash withdrawals are limited to be EUR 300 per day. Meanwhile, cashing of cheques was also banned. People leaving Cyprus could only take EUR 3000 with them. While the government said it's merely a temporary measures, some analysts expect that the control measures would last months or even years, until the economy recovers.

The Spanish Government revised up its estimate of last year's fiscal deficit to 6.98% of GDP from previous estimate of 6.74%. The central government deficit for the first two months of 2013 was EUR 3b higher than in the first two months of 2012. Meanwhile, the country's retail sales were about -8% below the same period last year in February while housing permits were down 26.8% yoy in January.

In the U.S., Boston's Rosengren said the Fed should continue our large-scale asset purchases of Treasury and mortgage-backed securities through this year -- although the amount may need to be adjusted up or down, depending on how the economic situation evolves. Chicago Fed Evans said the Fed has to be patient and let our policies work, with stimulus firing on all cylinders, Meanwhile, Minneapolis' Fed Kocherlakota said, monetary policy is currently not accommodative enough.

On the data front, New Zealand building permits rose 1.9% mom in February. Japan retail sales dropped -2.3% yoy in February. UK GFK consumer sentiment was unchanged at -25 in March. German employment data will be the main focus in European session. Canadian GDP will be the main focus in US session. Canada will also release IPPI and RMPI while US will release jobless claims and Q4 GDP final.