2010 09 15

Very quiet day except two assets:

Oil pulled back on the news the broken pipeline might be repaired and would be ready to resume service soon.
Yen weakened significantly on official BoJ intervention.

Otherwise no action in stocks, commodities or currencies.

We saw some sell offs in bonds and bunds especially on long ends but it is merely reversing all of yesterday’s inexplicable strengthening. Sometimes (or often???) there is no real logic behind price moves. Prices just move around.

I would advocate taking some profits on positions that rose the most this month after the initial jobless claims number tomorrow – before the weekend




UK unemployment holds steady – upcoming spending cuts stokes concern
• The number of people unemployed in the UK fell by 8,000 to 2.47 million in the three months to July. This is less than drop of 40,000 that was expecte.
• However, the figures also showed the claimant count - those out of work and receiving unemployment benefit - rose by 2,300 in August to 1.47 million.
• UK is in similar situation as US – unemployment that is stuck at high rate that seems to be getting worse. The main fear is that as spending cuts take effect unemployment can rise sharply.

US industrial production slowed a bit in August from July
• U.S. industrial production rose 0.2% in August, a slower pace than the downwardly revised 0.6% in July. Economists had forecast of 0.1% increase in August industrial production.
• This piece of good news helped offset weaker than expected Empire state manufacturing survey
• It was not a great news, but good enough to hold up the market. This marks 14th straight months of industrial activity growth which remains the bedrock of economic recovery. It will be a scary scenario if manufacturing begins to slip as inventory build reaches normal level.

Oil falls 2nd day as U.S. pipeline seen restarting
• SINGAPORE, Sept 15 (Reuters) - Oil fell for a second day as Enbridge prepared to restart the biggest Canada-U.S. crude pipeline, raising expectations of a short-lived shutdown that would limit the drainage of record-high inventories.
• "This situation has been priced in, so now that it is going to restart earlier than expected, prices have re-adjusted, causing the prompt WTI price to weaken much more than Brent," said Serene Lim, a Singapore-based oil analyst at ANZ.


Tomorrow:
Japan Tankan business survey
UK retail sales
Switzerland SNB meeting (would be interesting to see if they comment on CHF probably not as their economy is holding up just fine)
US initial jobless claims
US Philly fed survey