SCOREBOARD: More free money

Dataflow was light overnight, but then again when you've just had two of the world's dominant central banks guarantee the free flow of money, you don't need a lot of data.

Bid from the open, US equities followed a solid European session (main indices up 0.4 to 0.9 per cent) and commodity gains were a key driver on both sides of the Atlantic. It doesn't appear to be currency-related this time either, as the dollar index was little changed. Indeed FX moves generally were small (comparatively) and mixed. EUR was down 45 pips to 1.3739, yen was at 90.27 (little changed) while sterling was up a big figure (1.5322 on better labour data) and AUD 50pips (0.9230).

So crude bounced another 1.2 per cent ($82.65) which is the highest close since mid-January. Part of the story here was falling inventories of gasoline and distillates, despite an increase in actual crude stockpiles. Similarly base metals pushed higher – copper up 1.7 per cent, nickel up 0.3 per cent and zinc up 1.7 per cent. Gold was the stand-out underperformer (down $8 to $1119) with a drop in producer prices feeding the line that inflation is not a concern.

Energy stocks were joined by financial and consumer goods as the main outperforming sectors, although the love was spread wide. At the close, the S&P500 was 0.6 per cent higher (1166) just off its high of 1169 ( 0.9 per cent). The Dow was up 47pts to 10733 with the Nasdaq up 0.5 per cent (2389) and the SPI up 0.4 per cent (4872).

US treasuries did nothing again on light volumes and trading in a 2 to 4bps range. From 1630 the major yields are down only 1 or 2bps with the 2yr at 0.92 per cent, the 5yr at 2.36 per cent and the 10yr at 3.64 per cent. Aussie futures were a little more volatile, 3s traded on an 8 tick range to end 3 ticks lower (94.68) while 10s were flat (94.32) on a 6 tick range.

In terms of the dataflow we really only had US producer prices which fell 0.6 per cent ( 4.4 per cent y/y) in February ( 0.1 per cent core to be 1 per cent y/y). Most of the fall was due to weaker energy prices in the month, which if the last couple of sessions on oil are any guide isn't going to last long. Mortgage applications in the week to March 13 fell 1.9 per cent with both refis and purchase down. Across the sea, UK claimant-count unemployment fell 32k with the unemployment rate steady at 7.8 per cent.

Not a lot in Australia today, we've got Westpac-ACCI's survey of industrial trends at 11am and then in NZ another consumer confidence measure at 1pm. The Europeans see the January trade balance figures while in the US we get the CPI and initial jobless claims.

Adam Carr is senior economist at ICAP Australia. See Business Spectator's glossary for definitions of technical terms used in SCOREBOARD articles.