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Premarket: Indexes head for modest gains, Lululemon shares dive Add to ...

European markets have come off their lows this morning and U.S. stock futures suggest some modest gains at the open here in North America. But major moves in markets aren't expected until there's further clarity on developments in Cyprus.

The country's surprise decision over the weekend to introduce a one-off tax on bank deposits, which threatens to undermine investor confidence in the euro zone and throw the region back into a financial crisis, is still facing considerable uncertainty.

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The Cyprus parliament reportedly was to vote on the proposal - aimed at meeting requirements for bail out funds - at 12 noon E.T. today. It's not clear, however, whether that will actually take place.

Reuters this morning is reporting that the country has created a draft bill for a levy on bank deposits that scraps the measure for savings under €20,000 ($25,860 U.S.) while keeping the 6.75 per cent to 9.9 per cent levy on larger deposits unchanged. The report did not say if the new structure for the levy raises the required €5.8 billion European officials have demanded in return for €10-billion in aid.

But Reuters also reported that parliament would likely reject the tax, and that prospect may result in the vote being delayed. Meanwhile, the Cypriot government is also reportedly working on different scenarios to raise funds.

While the situation in Cyprus is fluid, there is much more calm this morning than on Monday. Spanish bond yields, for instance, reached no higher than 5 per cent today after climbing as high as 5.08 per cent on Monday. U.S. Treasuries are little changed. Asian markets were relatively calm overnight, with Japan's Nikkei managing a 2 per cent gain thanks to further weakness in the yen.

The U.S. Federal Reserve will begin a two-day meeting today, culminating in the central bank releasing its policy statement at 2 p.m.(ET) on Wednesday followed by a news conference from chairman Ben Bernanke. He's expected to comment that the Fed won't back down from its ultra-loose monetary policy for a long time to come - but the event could turn into the next big market mover.

Now, here's a closer look at what else is going on this morning and what's to come.

MARKETS:

Equities:

U.S. futures: S&P 500 0.0 +0.2 per cent; Dow +0.2 per cent; Nasdaq +0.3 per cent

Hong Kong's Hang Seng index -0.19 per cent

Shanghai composite index +0.76 per cent

Japan's Nikkei +2.02 per cent

London’s FTSE 100 +0.02 per cent

Germany’s DAX -0.18 per cent

France's CAC 40 -0.51 per cent

Italy's FTSE MIB -0.13 per cent

Commodities:

WTI (Nymex May) +0.06 per cent at $94.16 (U.S.) a barrel

Gold (Comex Apr) -0.19 per cent at $1,601.50 (U.S.) an ounce

Copper (Comex May) -0.23 per cent at $3.42 (U.S.) a pound

Currencies:

Canadian dollar down 0.0018, or 0.18 per cent, at $0.9763 (U.S.)

ECONOMIC INDICATORS TO WATCH:

The U.S. Commerce Department said housing starts in February totaled 917,000 on an annualized basis, a bit higher than the 915,000 that was forecast. Building permits totaled 946,000, higher than the 925,000 that was expected.

Statistics Canada said wholesale trade in January climbed 0.3 per cent, close to economists expectations for a 0.4 per cent rise.

Statistics Canada said manufacturing shipments fell 0.2 per cent in January from December. Economists had expected a rise of 0.6 per cent.

STOCKS TO WATCH:

Lululemon Athletica Inc. said late Monday it will take a “significant” financial hit as a result of production problems and an expected shortage of its signature black “luon” women’s yoga pants. Shares are down 7 per cent in the premarket.

Rona Inc. has appointed senior Metro Inc. executive Robert Sawyer as its new president and chief executive officer.

Alimentation Couche-Tard Inc. said third-quarter earnings jumped to 75 cents a share from 48 cents. Adjusted for items, it earned 81 cents, below the Thomson Reuters mean estimate of 87 cents.

Video game publisher Electronic Arts Inc. announced late Monday that CEO JOhn Riccitiello is stepping down. Shares are up 0.6 per cent in the premarket.

Other earnings today include: Adobe Systems Inc.; Cintas Corp.; Franco-Nevada Corp.; and Williams-Sonoma Inc.

THIS MORNING'S TOP INVESTING READS ON THE WEB:

How Europe let Cyprus get into this mess.

Ben Bernanke is tightening his control of Federal Reserve communications to ensure investors hear his pro-stimulus message over the cacophony of more hawkish views from regional bank presidents.

Why index investing isn't a good idea when it comes to emerging markets these days.

An ominous sign that stupid money is in play: celebrities are talking stocks.

An upbeat outlook for gold prices from the blog Sober Look.

________

The premarket report is constantly updated to reflect the latest news developments and market moves. For instant headlines on breaking economic and corporate news in the premarket, follow Darcy Keith on Twitter at @eyeonequities

Follow on Twitter: @eyeonequities

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