Nigerian Rebels Declare War On Oil Industry

Today’s PPI number showed a much
bigger than expected rise in "core prices"

However, contrary to conventional economic wisdom (admittedly an oxymoron),
Treasuries rose sharply undaunted by the prospect of higher inflation.

The 10yr T-note posted its’ biggest gain in more
than a month, responding more to the technical condition rather than economic
fundamentals. Today’s gain enabled the 10yr to record its’ first weekly advance
in 5-weeks.

The US Dollar responded by falling versus the Euro, GBP, AUD and
CAD. A strong rise versus the Yen helped offset the day’s losses in the Dollar
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All the energies rallied sharply after Nigerian
rebels declared war against the oil industry, demanding that all employees leave
the area by midnight tonight. The news sent Unleaded Gas sharply higher, along
with Crude Oil and Heating Oil.

In the softs, Coffee rose more than 3% after reports
of crop damage in Brazil. Cotton was the only other mover to the upside, rising
1.72%. Lumber was the only contract to fall more than 1%.

All the grains closed higher, with Soybean Oil and
Wheat leading the advance. The meats were mixed, Pork Bellies and Lean Hogs
rose, while Feeder Cattle and Live Cattle fell.

Gold and Silver closed higher, Copper closed lower.

Economic News

PPI Up 0.3% In Jan.; Core PPI Up 0.4% (report).

University of Michigan Consumer Sentiment 87.4 (Feb. Prelim) Vs. 91.2 (Jan.

Ashton Dorkins

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