Financial Markets…Foreign purchase of U.S. financial assets plummeted in September, with net buying of long-term equities, notes, and bonds falling to just $3.3 billion in the month from $90.3 billion in August, due partly to the improved market sentiment toward the European debt situation and profit taking on earlier purchases.

The MSCI Emerging Market Index fell for a seventh day on Friday,

sliding 0.4% and heading for its biggest weekly loss since July, as risk-aversion among investors grew amid prospects of the so-called U.S. fiscal cliff. Chinese shares led the decline with the country’s CSI 300 Index dropping to the lowest level since 2009.

Credit-default swaps on Argentinian government debt rose above 30 percent for the first time in London trading today, as speculation grew the country may opt to default rather than settle with its creditors. A U.S. court ruled in October that Argentina must pay holdout creditors from its $95 billion debt default in 2011.

High-income Economies…US industrial production dropped 0.4% (m/m) in October following a 0.2% increase in September, as superstorm Sandy knocked out power in large swathes of the Northeast in late October. US firms also face a persistent challenge from Europe’s recession and slower growth in Asia. On a year-on-year basis, industrial production growth slowed to 1.7% (y/y) in September from 2.8% (y/y) the previous month.

Euro Area exports fell 1.1% (m/m) in September, but imports dropped at a faster pace of 2.7% (m/m), reflecting weakening domestic demand as the euro area went into a recession in the third quarter. As a result, the trade surplus widened to 11.3bn. euros in September from 8.9bn. euros in the previous month.