Against the Grain

Comments from the bosom of democracy, Greece lifted the US$ and pressured the € as a spokesman down played EU support and said they might have to go off to the IMF - suspect its posturing ahead EU meeting next week. The Greek PM has said he wants the financial aid mechanism crafted before EU summit meeting Mch 25. The Newsweek magazine Mch 22 edition has a good article “Its China’s World We’re just Living in It”, (http://www.newsweek.com/id/234928). Bloomberg had an article headed “Wall Street’s contribution to the debate on how to curb global warming – buy coal, sell solar”. Pointing out the Stove global coal index is up 6.5% in 2010 and Bloomberg global leaders solar index -17%. We suspect better summarised as “BUY what China needs, SELL what they produce”. Sorry to overload from the NYT Mch 17 edition “China Drawing High Tech Research from US”, (www.nytimes.com/2010/03/18/business/global/18research.html?hp), as the graduate engineer says “Of course, China will lead everything”.

The metals are extremely quiet continuing to follow the double D in low volume and tight range. LME stocks saw al cascade into all the locations where it is least likely to be used from around the globe (Europe 40 kt; Asia 20 kt and US 14 kt) taking stocks back to over where they were a month ago but we expect withdrawals to begin again as early as tomorrow. This had no effect on the price as the metal is “dead” stocks and available stock is tight (call it a financial anomaly). The market barely ticked over in the pre markets as traders dollar watched. Barclays Capital said investors put a further US$ 3.98 billion into commodities in Feb taking the total investment US$ 255 billion (Jan US$ 12 billion withdrawn), favouring investments associated to indexes rather than exchange traded products. A port strike in Finland has caused Boliden to shut its Harjavalta cu smelter / refinery after feed stocks ran out, their Kokkola zn / ni feed will last till next week. In Alaska the US EPA has cleared aspects of a permit for Teck Resources to continue operations at their Red Dog zn mine. Another day of little movement.

The Jan Japanese leading index was 96.7 (Dec 97.1) and coincident index 100.1 (99.9). In Europe the Mch UK CBI industrial trend slipped to -37 (-36). Was Feb 05 market turn was the 2010 equivalent of Mch 13, 2009? In the 29 trading days since that sell off hit rock bottom the FTSE is up 9.8% and only fallen on 7 days, DJI has risen 7.3% falling on 9 days and cu jumped 17.5% falling on 13 occasions.

Busy day of US data again starting early at 12:30 with weekly initial jobless claims 457 k (462 k) and the Feb CPI was flat (+0.2%) yoy 2.1% (2.6%), ex food and energy rose 0.1% (-0.1%) yoy 1.3% (1.6%). Later at 14:00 the Mch Philadelphia Fed manufacturing was 18.9 (17.6), as new orders fell and inventories rose. The Feb Conference Board leading indicators rose 0.1% at 107.6, coincident +0.1% at 100.1 and lagging +0.3% at 108. No US data tomorrow.