FOMC split on June lift-off

•     FOMC split on June lift-off

–    “Several” members want to hike rates in June, but not all; Yellen, Dudley, Powell see risk of tightening too soon, think rates can rise “gradually” after 1^st hike

–    Majority lowered their estimate of non-inflationary level of unemployment

–    Fed funds rate expectations firmed up only 1 bp; dollar generally rose

–    I expect further gains in USD as monetary policy divergence continues

•     Oil collapses on huge build in US inventories

–    Largest increase in inventories since 2001

–    CAD could suffer today as a result

•     Greece sells T-bills in an odd fashion; no money from Russia

–    Bid-to-cover was exactly the same as at the previous auction, yield was around 80 bps below that of existing 6m T-bills: a nice result for the government, certainly

–    PM Tsipras gets pledge of closer ties from Moscow but no money. The countdown to default continues

•     Today:

–    Eurozone: German industrial production and trade balance for Feb

–    UK:  Bank of England Monetary Policy Board meeting expected to be non-event

–    US: Initial jobless claims