By Anne D. Picker, International Economist,Econoday
Monday, April 15, 2002

Investors continued to be jittery about upcoming earnings reports and the Middle East. Some market players are speculating that earnings will be lower, in part because firms will be more cautious in the post Enron-Andersen world. There were few economic numbers to occupy investors. On the week, all the equities indexes followed here fell with the exception of the Mexican Bolsa. The Bolsa continues to outperform most indexes, up 16 percent on the year. The South Korean Kospi is up 26 percent.

Oil prices eased at week's end after reassurances from Saudi Arabia and Norway that they will make up lost crude oil production from Iraq, which last week cut off output to allies of Israel. Of more concern to U.S. oil suppliers are Venezuela's political problems and the recent interruption in supplies from that country. America's Gulf Coast refineries are heavily dependent on Venezuela's 2.2 million barrels a day of heavy crude and gasoline. Late last week the military forced President Hugo Chávez to resign and oil prices fell. But with the political situation topsy-turvy, a potentially reliable source of crude has become less so. Mexico does not have sufficient excess capacity to fill a gap of that size, and even if the Saudis were to step up production immediately, the oil would take six weeks to reach American refineries.

The Bank of Japan left policy unchanged again and continued to put the onus on Prime Minister Junichiro Koizumi's government to clean up trillions of yen in bad loans, overhaul the tax system, and end price declines. Signs that an 18- month recession is bottoming out thanks to an up-tick in exports also lessened the urgency of easing policy.

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