|  Eurozone inflation. The reading for March came in at 0.5%, below the 0.6% expected and down from 0.7% in February.
Market tests ECB. Despite the new reading, the Euro was up Monday and European stocks have retreated from early highs. Street consensus seems to be price gains have still not slowed enough to cause the ECB to panic. "Despite the low March inflation reading, the risk of outright deflation in the eurozone still seems small," the FT quoted ING as saying. "Our base case is still for the ECB to keep interest rates unchanged on Thursday. "However, to avoid a renewed rise in the euro, [ECB president] Draghi may be forced to either beep up it forward guidance -for example by signaling more clearly that economic slack may keep policy loose for longer- or announce new liquidity measures." Ukraine. The U.S. and Russia agreed Sunday to resolve the situation in Ukraine without escalating tensions, but there remains lots of uncertainty. "Mr. Kerry said he had outlined some ideas for Russian President Vladimir V. Putin to consider that might lead to a reduction of the Russian forces near Ukraine. But it was far from clear how Mr. Putin might respond, or what he might demand in return," the New York Times said. Erdogan boosted. Turkish Prime Minister Recep Tayyip Erdogan's AKP party won big in local elections. "The result was likely to embolden Mr. Erdogan to seek to extend his time in power, either by running for the presidency this year or by altering the rules of his party to stand for a fourth term as prime minister," the New York Times said. Regulator failure in GM probe. Federal regulators twice declined to open formal probes into complaints about faulty GM cars, Dow Jones reported. GM also rejected a proposed fix for the problem in 2005 because it would have taken too long and cost too much. "The findings by staff for the House Energy and Commerce Committee offer new details about events leading up to GM's recall of 2.6 million vehicles for ignition-switch defects now linked to 13 deaths." Markets. Stocks are up around the world. Emerging stocks are rallying to their seventh-straight day of gains, led by Taiwan, Indonesia, and Russia, the latter two up about 1%. S&P futures were higher. Data. Not too crazy. At 9 a.m. we get ISM Milwaukee, 9:45 a.m. Chicago PMI, at 10 a.m. inventory and sales revision, and at 10:30 a.m Dallas Fed, which is expected to surge to 2.5 from 0.3. Bitcoin prices stand at $449. El-Erian on jobs day. The former PIMCO boss laid out three key points about this week's report on BI Saturday, and they boil down to: It probably won't mean much to policymakers, whatever its outcome. "For a while, the information content of the jobs report had evolved from providing lagging insights to also serving as an important leading indicator," he writes. "Today’s employment conditions, however, no longer act as a powerful driver of overall economic and political developments. That role has been transferred – to business investment when it comes to the considerable economic upside, and to geo-political risk on the downside. Goldman in Argentina. The megabank is negotiating a $1 billion loan with the troubled sovereign. "It would be the first time in more than a decade the country has received a substantial loan from international creditors and comes as the government seeks cash to avoid a further devaluation of the peso," Reuters says. The most dangerous fault in L.A. There was another earthquake in L.A. Friday, this time measuring 5.1. The real news is that the fault that moved, the Puente Hills, is considered to be much more dangerous than the San Andreas. "...a 7.5 quake on the Puente Hills fault could cause the fault to slip for 20 seconds — and the shaking could last far longer. Scientists say that quake would be more destructive than the so-called Big One on the San Andreas fault." *** Below is an interview with Kevin Book, research head at ClearView Energy Partners LLC. *** BI: What is the most underreported energy story at the moment? Our perennial answer remains “efficiency.” Energy prices shocked end-use sectors twice in the space of a decade. Even without government intervention, the behavioral imprint of scarcity pricing may take years – or decades – to fade from consumption patterns. Nor have government incentives for conservation diminished. Efficiency standards are ramping up here at home. Overseas, governments are paring back subsidies. In short, past trends may not predict future demand very well. BI: What should be investors' biggest concerns coming out of Ukraine? Uniform Western sanctions against the Russian energy sector could create unpredictable results for U.S. companies invested in producing Russian resources. Asymmetrical, U.S.-only sanctions against the Russian energy sector could shift revenues from U.S. companies to their European counterparts. BI: What is your biggest concern heading into spring season? KB: We see downside risk to crude in the months ahead, notwithstanding looming conflict with Russia. Iran negotiations could prove bearish for crude if they succeed, but also if they fail, because it’s not at all clear that Asian buyers would agree to pare back purchases in the event Congress passes new sanctions. U.S. crude production slowed by winter could catch back up in the spring thaw. The scale of ongoing crude disruptions (~3 MMbbl/d) may put Brent in a precarious position, too, for example should Iraq maintain production momentum or should Libya come back onstream. BI: What will the lingering impact be of the unusually intense winter? KB: Natural gas inventories ended the winter at ten-year lows. Mild weather could give inventories room to recover, but a hot summer could draw gas down still further, setting up higher prices for next winter. Price premiums during the past winter are likely to encourage greater investment in storage infrastructure, pipelines and – in the case of propane – inventories, an eventual buffer against future volatility. BI: What kinds of investment allocations are now called for as China slows down? KB: China’s growth may be slowing, but the base is getting bigger, too, and supply stability remains imperative. We expect Chinese oil and gas companies to continue their efforts to diversify supply, not only through foreign direct investment in North America and other producing areas, but also through intensifying efforts at domestic shale production. This keeps focus at the upstream. Likewise, China may offer a countervailing force against weaker crude prices by seizing upon discounts to expand strategic crude reserves between now and 2015. | 
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