HIGHLIGHTS OF THE WEEK

• U.S. retail sales grew by a better than expected 0.3% in February, showing no signs of letting up in the midst of winter storms that ravaged the Eastern seaboard during the month. The February gain, a 4th in 5 months, bucked expectations of a 0.2% drop, and was broadly based across retail sectors.

• The University of Michigan index shows slightly less confidence in March, but does not break the gradual trend improvement in mood seen since Q2-2009.

• U.S. household net worth grew (by 1.3% Q/Q) for a third consecutive quarter in Q4-2009, much slower than the 5% pace set in the previous two quarters. The slowdown is related to that of equity markets and a slight drop in the value of tangible assets, notably real estate. Roughly a third of household net wealth lost during the Great Recession has been recovered so far.

• At its policy meeting next week, the Federal Reserve is widely expected to leave benchmark rates unchanged near zero. In its own words, it will acknowledge signs of recovery, but caution that it is still young and fragile, and that unemployment remains elevated. We expect the Fed to reiterate that this warrants keeping rates exceptionally low for an extended period of time.

• Canadian economy adds 21,000 jobs in February, unemployment rate drops to 8.2%

• Canadian dollar inches closer to parity as commodity prices rise

          • A string of positive economic data suggest Canadian economy continues to chug happily along

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