The equity markets consolidated again today, as the dollar reverse its recent course causing commodities to have a broad based selloff. Crude Oil fell more than a dollar per barrel to close $80 at $79.91. The Euro sold off more than a big figure as did the pound. The dollar index reclaimed the 80 level, but technically it looks very heavy. The S&P 500 closed up .5 points to 1150.49.
In US economic news, Industrial Production increased by 0.1% in February to an index value of 101.0 (2002=100), better than the expected decrease of 0.1% following a 0.9% increase in January. Over the year, the industrial production index is up by 1.7%. Capacity Utilization was reported at 72.7%, an increase from the revised level of 72.5% for January, but 7.9 percentage points below its average for the period from 1972 through 2009. In February 2009, Capacity Utilization was measured at 70.6%. The biggest gain in the report showed output in the mining industry rose 2.0% after climbing 1.1% in January. Mining capacity use rose to 88.2% from 86.4%.
Net Foreign Purchases for January decreased to $19.1 billion, following a December decrease of $63.3 billion from $126.4 billion in November. Net foreign purchases of long-term U.S. securities were $36.1 billion, $40.3 billion of which were from private foreign investors and net purchases by foreign official institutions were negative $4.2 billion. U.S. residents purchased a net $17.0 billion of long-term foreign securities.
In Greece this week as the government is due to present a progress report on the deficit cutting plan at the EU finance ministers meeting, starting in Brussels today. There is fresh speculation that a Eur25bn package to help Greece may be introduced.
In Japan, the government upgraded its assessment of the economy for the first time since last July, noting that ‘The economy has been picking up steadily’, but also acknowledging that the rebound has been weak. However, MoF officials have been stressing the importance of fighting deflationary forces over the past few weeks, raising speculation that the BoJ could decide to introduce fresh QE measures (via more JGBs purchases) at this week’s meeting.