Forex Flash: March 1 deadline in US looms – Deutsche Bank

In the United States, congress returns on Monday after a weeklong recess ahead of spending sequesters which take effect on Friday March 1st, unless Democrats and Republicans agree to a deal beforehand. Ben Bernanke delivers his semiannual testimony on monetary policy to the Senate Banking Committee on Tuesday followed by an appearance before the House Financial Services Committee on Wednesday.

It will be heavy week of data with Tuesday's consumer confidence, new home sales and consumer confidence, Wednesday's durable goods and pending homes sales, Thursday's US Q4 GDP 2nd estimate and jobless claims; and Friday's consumer spending and the ISM. The US Treasury will auction $35bn in 2yr notes on Monday; $35bn in 5yr notes on Tuesday and $29bn 7yr notes on Wednesday.

Looking at today's calendar however, the obvious focus will be on the outcome of the Italian elections. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Ahead of the polls closing though, the Italian Treasury will be testing investor appetite with the issuance of 2021 and 2026 inflation linked bonds as well as zero coupon 2014 bonds.” Jens Weidmann speaks at an in event Paris on the topic of "Fiscal and Monetary Policy: Dancing Too Close". So we have quite a bit going on but thankfully it will be a relatively quiet day in terms of data with no major releases in Europe and US today.