Either it is another quiet day, or the fact that I still have a cold is making me unable to see when important things happen. Probably the former. Still, I greatly dislike having a cold. It disrupts my routine, and routine is essential if one is to get a lot done. It does this in three ways. First, it makes exercise impossible. This makes one feel bad, disrupts the usual structure of the day, and deprives one of the customary exercise-induced buzz. Second, it promotes slippage in time slots. One thing runs into another because it takes energy to switch tasks and colds deplete energy. Third, it causes the day to end earlier. It is hard to work beyond 6 or 7 p.m. because having a cold is tiring.

Usually I try to counteract these effects by eating more, and eating sugary things. This can provide a temporary boost, but a) the boost does not last long, b) a sugar low makes things worse and c) if the cold lasts a long time I spend days over-eating. So this time, I am sticking to my usual food intake. I am also keeping as closely as possible to my usual routine, and I find that I at least feel in control.

There was a bit of news. The G20 did not have a go at Japan, but did suggest it would be a bad idea to talk about where the JPY should be — probably in order to stop people from blathering on about “currency wars”, a phrase that is once again making me feel queasy every time I hear it. The EU’s presumed preferred candidate took the most vote in the Cypriot election, but failed to avoid a run-off. Italy’s election will be held this coming Sunday and Monday. President Obama apparently has a plan to avoid the sequester but no details have been reported, which suggests more political theatre (indeed, since the deficit is being cut this year anyway, the sequester might allow Mr. Obama the perfect opportunity to place the blame for any economic weakness on the Republicans — it doesn’t make that much difference to the amount of deficit reduction, but it could make all the difference to the narrative; I hadn’t thought of this before — perhaps Mr. Obama actually wants it to happen).

Bloomberg reports on a note from Westpac that says that Japanese investors have been pulling out of Australian assets, and especially Australian bonds, on the basis of mutual fund flows (http://bloom.bg/VqovVL). This coheres with my view on the AUD. AUD should be stronger than it is against USD on the basis of its usual relationships, and I took its weakness as a sign that the flow of liquidity from Japan was going into USD assets in preference to AUD assets. The mutual-fund flow data therefore tends to confirm both the specific thesis and the wider view that global markets are presently being driven by a reallocation of capital between assets by Japanese investors.

Just a word on data releases. In the Eurozone, the December trade surplus hit a new high, while the current account showed a highly positive balance for a second month. In the US, preliminary Michigan sentiment showed a rebound for February, and the Empire State manufacturing index also jumped, coming in above zero for the first time in seven months. So the early data for February are looking positive so far. Industrial production was down -0.1% d.e. in January, but capacity utilisation rose for a third month, b.e. This week sees the release of various sets of monetary-policy minutes and flash PMI’s.

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