This was the third consecutive week of softer economic releases in the U.S. The European and Asian releases were also soft. In reaction, equity markets fell across the globe, government bond markets rose and credit spreads widened, particularly at the riskier end of the spectrum. Oil and metals prices fell and the U.S. dollar rose on the week.

Perspective:

This was not the week to be away, but I was. The week started with the horrific bombing at the Boston Marathon; it ended with the arrest of the second suspect followed by the chanting in the streets around Boston "USA...USA" reminiscent of the chanting in 1979 when the USA hockey team defeated the USSR to win the gold medal in the Olympics. The events captured so much media attention that the ricin laced letters to the Mississippi senator and U.S. president and the fertilizer plant explosion in Texas barely got mentioned when no connection was found to the bombing. Nonetheless, within the week, authorities identified, located and apprehended the suspected bombers. This result is an example of what this nation can do if it comes together to solve our country's problems. Instead of being territorial, local, state and federal authorities worked together, leveraging each unit's relative strengths and resources and praising each others' contributions.

On a personal note, this was not the week to be away, but we were. My wife and I joined my cousin and her husband to enjoy the warmth and hospitality of the people of Puerto Rico. We hiked in the rain forest, kayaked in the luminescent waters and swam at a near-by sandy beach. For us, this was not the week to be away because 1) our daughter, her boyfriend and the 'grand-puppy' were in Cambridge near the eye of the storm, and 2) our oldest daughter was hospitalized and had her appendix removed. These are the times we would have wanted to be near. We were comforted by the strong support shown by each of our five children to each other and our eldest's husband to our daughter.

Economic Releases:

U.S. Housing Starts (red in the chart) were surprisingly strong in March, rising to 1.036 million on the back of a surge in the multifamily component. Permits (green in the chart) slipped to 902,000. The Federal Reserve's quantitative easing has kept mortgage rates low as can be seen in the blue line showing 30-year fixed rate mortgages in the same chart. The NAHB Housing Market Index slipped a couple of points to 42 in April after a similar decline in March. Even with all of this fiscal and monetary stimulus, housing activity is still half of what it was in its peak years surrounding 2006.

Other Economic Releases

U.S. Industrial Production rose +0.4 percent in March. March's Capacity Utilization was 78.5 percent, little changed from the 1 point downward revision for February. The Empire State Manufacturing and Philadelphia Fed surveys fell in April. Initial Jobless Claims rose 6,000 to 352,000 and the four-week average of claims rose to 361,250 in the week of April 13; Continuing Claims, reported on a one-week delay, fell to 3.068 million.

As expected, the Bank of Canada kept its target overnight interest rate unchanged at 1.0 percent.

Germany's Zew Surveys of Current Conditions and Business Expectations both fell in April. In the UK, the Unemployment Rate rose a tick to 7.9 percent and Retail Sales fell -0.7 percent in March.

Equities Markets:

Equities dropped across the globe in reaction to the softer economic data. The investment grade corporate bond market managed a positive return as falling government rates were enough to overcome the widening credit spreads.

Bond Markets:

Government bond yields fell, but credit spreads widening, particularly on the riskier end of the credit spectrum.

Currencies & Commodities:

The U.S. dollar rose across the other four currencies in the table. Oil and metals commodity prices fell, but natural gas prices rose on the week.