On Monday we opened with a selloff down to the bottom of the trend channel where we rattled around for most of the day.

Chevron will begin buying back shares at the rate of $500 million to $1 billion dollars per quarter.

Tuesday brought a surprise rate cut from the Japanese pushing rates back to essentially zero and pledges to buy 5 trillion yen in continued efforts to revive the economy and protect the currency.

The Reserve Bank of Australia decided to keep rates steady in a surprise move as well. The RBA was expected to hike rates by 25 bp in an effort to put a lid on inflationary pressures.

The Indonesian Central Bank held steady as well choosing not to raise interest rates.

Tuesday’s big move looked to be a coordinated action in order to help Japan. Inflationary pressures are on the rise in Asia everywhere except for Japan and while the Indonesian Central Bank was expected to keep rates on hold Australia was widely expected to raise rates.

Euro zone 2nd Q GDP came in at 1.0%, unchanged from the previous estimate.

While Trichet held ECB rates steady he made some curious comments about the ECB making policy for the euro area as a whole and not for a few countries. The implication is that if the larger countries continue to expand the policy rate will be hiked even if there are countries still in a recession. If true, this is a thinly veiled message to the PIIGS that they will need to get their house in order quickly as waiting increases the risk that they will be left behind.

The US unemployment report showed a mixed bag in September as businesses are still hesitant to add jobs. While the headline rate was steady at 9.6% the U-6 rate, which is described as the “total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force”, jumped by 0.5% to 17.1%.

Next Week

Monday – Canadian markets closed

Tuesday – Minutes from FOMC meeting

Wednesday – Euro Industrial Production for September

Thursday – US PPI, OPEC meeting Vienna

Friday – Japan Industrial Production, Europe Core Inflation, US CPI, and Retail Sales

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