Sequester Day is here, but global markets have plenty of other news to be depressed about. In addition to Congress refusing to do a thing about the Budget Cut To End All Budget Cuts, personal income in the U.S. was reported to have dropped the most in 20 years- down 3.6%.
In Europe, aggregate unemployment across the Eurozone is at an all-time high of 11.9%. Italy's jobless rate is 11.7%, the highest in 21 years. PMI in the U.K. and Italy dropped, Spain's industrial output dropped, and France saw it's 20th straight month of declines in manufacturing. This weighed down the euro, and prompted EU stocks to hit a 2 month low. Germany still proves to be the powerhouse of the EU, with exports hitting a 21-month high.
In Asia, February PMI in China fell to 50.1, the second month of declines. This is raising doubts about any economic recovery there.
The dollar index hit another 6-month high overnight and is trading over 82, as money seeks a save haven from all the bad news. Oil hit a new two-month low overnight.
Wall St. is deciding to bank some profits and move to a risk-off stature in the face of bad economic news globally and uncertainty on the effects of layoffs in the U.S. due to the sequester.
After dropping in London trading, gold has made up the overnight losses with gains on the COMEX. This, despite a very strong dollar. This firming is partially from short covering and bargain hunting, as well as a little safe haven activity. The markets are ignoring possible inflation concerns until it becomes a reality when it comes to gold, but TD Securities says that there could be a rally in the yellow metal if bad economic news continues and global economies drop back into recession.
Concerns over national gold reserves hits Greece, as the press speculates over the fate of Greek gold reserves which were evacuated to London in 1941 when the Axis Powers invaded the country. The Greek central bank reported on the state of the country's gold in a letter to a politician of the far-right Golden Dawn party, according to Bloomberg.
The letter stated that Greek national gold reserves stood at 3.76 million ounces on December 31, 2012. Total value is recorded as €4.74 billion ($6.2 billion), with half held in Athens, and the rest split between the NY Federal Reserve, the Bank of England, and Switzerland. The gold that was sent to London for safekeeping in 1941 was repatriated between 1946 and 1956, according to records at the Bank of Greece.