Against the Grain

Mr Bernanke said nothing we did not know already and interestingly the metals for once were left in two minds, US$ up and DJI up which to follow. Focus now turns India with its budget tomorrow that should set the economic scene going forward then Mch 5 the Chinese premier addresses the National Peoples’ Congress which should give us the lead for that economy in ‘10. (Apologies y/day we credited Newton with a theory that was Einstein’s).

Hence Asia saw metals end little changed with good volume in cu and zn while al seems to have become a Western metal with another low Select turnover. The opening jousts in London saw low volumes in tight range with equities tugging metals higher and the firmer US$ dragging them back. The LME stocks made little difference to the mood cu (from Korea and cancelled warrants up in NO) and al down while rises in pb and ni (into Rott). Away from the LME coalface in Australia the mineral sands producer Iluka reported an annual loss to Dec ’09 as a decline in demand cut sales. Their main product is zircon used in ceramics, a metal that has no speculative instruments attached to it and relies more on OECD markets than China. While Ivernia has restarted the Magellan pb mine processing plant (’10 output 10 kt contained pb in concentrate) after shipping the 23 kt stockpile built up after the Freemantle pollution issue many moons ago. Is it just us or have the last couple of months seen a ramping up of metals mines with recent troubles, above, Century, Canadian nickel and various cu operations. The metals fluctuated throughout the morning between equities and US$. After the US opened the DJI

Some positive data out of Europe Feb French consumer confidence rose to 33 (Jan 32) and Italian business confidence 84.0 (83.2). The Feb German unemployment rate rose to 8.2% (8.1%). In the UK total Q4 business investment fell 5.8% (Q3 -1.8%) and yoy -24.1% (-20.8%), while the CBI reported Feb sales volumes index jumped to +23 (-8) . The Feb Euroland economic confidence 95.9 (revised higher to 96.0 from 95.7) business climate indicator -0.98 (-1.12), industrial confidence -13 (-14), consumer confidence -17 (-16) and service confidence +1 (-1), in all of this it is the consumer dragging their feet. In shipping the Shanghai futures exchange has announced plans to introduce a container shipping derivatives based on a newly developed Shanghai Containerised Freight Index. The markets in Europe came under renewed pressure after Moody’s Investors Service said it may cut Greece’s credit rating if the country does not fully implement the plan to reduce its budget deficit. The German two year bond yield fell to a record low.

The day started over the Pond with a snowstorm hitting NY during the am rush hour. The weekly US jobless claims again unexpectedly rose 22k to 496 k (473 k) with Jan durable goods rose 3% (+0.3%) as the less volatile ex transport fell 0.6% (+1.4%). Then at 15:00 the Dec home price index fell 1.6% again against analyst anticipation (+0.4%).