Business

As observed earlier in the day, as part of the leaked preliminary Trump budget, the president was set to unveil major spending increases for US defense offset by cuts to federal agencies, and other non-defense sectors. And on Monday morning, the first details emerged, including that the boost to defense spending is expected to be about 10%, or some $54 billion, and will be revenue neutral, offset by cuts in non-defense areas, and will not "add a dime to the deficit." As Trump said, he is seeking a "historic increase" in military spending.

The Dallas Fed Manufacturing survey soared - for the 6th straight month - to 24.5 in February (smashing expectations of a modest dip to 19.4). This is the highest since April 2006.

This is a 4 standard deviation beat of analysts' expectations, well north of even the highest forecast.

While the headline data soared, we note, however, that wages declined, workweek dropped, prices paid surged, and new orders tumbled.

Another soft survey 'beat' as hard data (core durable goods) misses.

As good as it gets?

With the dollar sliding on rising fears Trump may disappoint in his address to Congress tomorrow evening, moments ago the dollar spiked, and risk assets rebounded after headlines hit from Reuters and Bloomberg in which Trump previewed what he would say, saying he would have a "big statement" on infrastructure in his Tuesday speech, adding that "we're going to start spending on infrastructure big."

Against expectations of a 0.6% rise, pending home sales in January plunged 2.8% MoM - the biggest drop since May.

The West - the most expensive region - saw the biggest decline, down 10.3% MoM with The Midwest also tumbling 5.2% MoM.

As mortgage rates have soared since the election (and mortgage applications tumbled), affordability has become a major issue according to NAR with pending home sales at the lowest in a year.

And it's going to get a lot worse...

• Epic Oscars Mistake: Faye Dunaway, Warren Beatty Announce Wrong Best Picture Winner (Variety)
• 'Moonlight' upsets 'La La Land' for top Oscar after major gaffe (Reuters)
• Oscar host Jimmy Kimmel turns Trump into recurrent punch line (Reuters)
• After Mix-Up, Hollywood Searches for an Explanation (WSJ)
• Trillions at Risk When Trump Speaks to Congress (BBG)
• Bond Market Is Flashing Warning Signal on Trump Reflation Trade (WSJ)
• Mexico Warns U.S. It'll Cut Off Nafta Talks If Tariffs Proposed (BBG)