Today’s volatile session was characterized by end-of-quarter portfolio adjustments. The market was also buffeted by economic data and the fact that the US imposed trade sanctions on China, which sparked a decline of the US dollar against major currencies.

Finally, the gyrations in the crude oil market also kept investors on their toes. Volatile and high crude oil prices continue to reflect the unresolved – and heightening – tensions between Iran and the UK. Today’s slightly lower crude oil prices (after an intraday spike to almost $66.70) were attributed to some profit taking after a strong Monday to Thursday run in this market.

According to the Commerce Department, unexpected gains were seen for February for consumer spending (up 0.6%) and income (which also rose 0.6%). Notable was also an increase in construction - it showed its first increase in almost a year – perhaps an indication that the current economic slowdown will stabilize. Also encouraging was a reading of 61.7 on the Chicago Purchasing Manager's Index (as opposed to a much lower consensus estimate of 49.5).

The market however did not like inflation data released today: In the above personal income and spending data, the core-PCE (an inflation gauge the Fed watches closely) came in with a rise of 0.3% (above consensus estimates), thus boosting the annual inflation rate up to 2.4%. The Fed’s “comfort range” for this indicator is much lower – between one and two percent.

Key economic data for the week starting April 2, 2007. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Monday:
	10:00 ISM Manufacturing Index for March: 51.0 / 52.3

Wednesday:
	10:00 Factory Orders for February: 2.0% / -5.6% ISM Non-Manufacturing Index for March: 55.0 / 54.3

Friday:
	8:30 Non-Farm Payrolls for March: 130K / 97K Unemployment Rate: 4.6% / 4.5% Average Hourly Earnings for March: 0.3% / 0.4%

© HGH Associated Press

News Archive (from 1/1/2007 until 3/31/2007)