CurrencyThoughts

Dollar Weakness After Presidential Elections

November 11, 2009 · Leave a Comment

An element of the dollar’s depreciation in 2009 to bear in mind is that we are in a post-presidential election year.  The dollar has taken some pretty big tumbles in such years before.

It fell 31.5% from 3.22 marks at the time of the 1972 reelection of Richard Nixon to 2.20 by early July 1973.

It ended 1977 at 2.11 marks, 12.2% weaker than when Jimmy Carter was elected in 1976 and went on to depreciate by a total of 29% by end-October 1978.

The dollar performed very well in the early 1980s, climbing 52% against the mark between the initial election of Ronald Reagan in November 1980 and his reelection four years later.  Reagan switched Treasury secretaries at the start of his second term, resulting in a U-turn on dollar policy.  From late February 1985 to the end of that year, the dollar lost 29.5% against the mark.

During 1989,  year one of the first Bush presidency, the buck began robustly as it had done in 1985 but fell by 17% against the mark between mid-June and yearend.

The dollar fell some 20% from 126 yen on the first full day of the Clinton presidency to a low in the summer of 1993 of JPY 100.4.

The dollar has suffered in years following a presidential election under both Republicans and Democrats.  It does not do this always.  Notably, it rose strongly in the first halves of 1981 and 1989 and in the first two months of 1985.  The one consistency is that the U.S. currency has stumbled pretty significantly early on whenever a Democrat was elected.  It did so generally under Carter, specifically against the yen under Clinton, and now generally again under Obama.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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New Overnight Developments Abroad: Chinese Industrial Output, Retail Sales, and Import Growth Accelerate

November 11, 2009 · Leave a Comment

The dollar has lost 0.4% against the Canadian dollar, 0.3% versus the euro and Swiss franc, and 0.1% relative to the Aussie dollar.  On the other hand, the greenback shows gains of 0.4% against sterling, 0.3% against the kiwi, and 0.2% versus the yen.

Stocks have performed well, rising 2.5% in India, 1.7% in the Philippines, 1.4% in Thailand and Germany, 1.6% in Hong Kong, 1.2% in Singapore and France, 1.1% in Britain, 0.8% in South Korea, and 0.5% in Australia.  Japan’s Nikkei shows no change, however.

Ten-year yields climbed significantly in Germany and modestly in the U.K., but the 10-year JGB slid back four basis points.

Commodities are firmer.  Gold advanced another 1.2% to $1115.80 per ounce, while oil is 0.5% higher at $79.48 per barrel.

China released several indicators, the gist of which confirmed a return to rapid growth.  Other countries want China to let the yuan rise, now that its economic slowdown is in the rearview mirror.

  • The October trade surplus was 85.5% wider than September’s.  Imports dropped just 6.4% from a year earlier versus a 15.2% decline in the year to September.  Exports fell 13.8% on year, much more than assumed.
  • Industrial production rose 16.1% in the year to October, accelerating from on-year growth of 15.5% in September and 8.2%  in October 2008.
  • Retail sales rose 16.2% on year, up from a 12-month rise of 15.5% in September.
  • Fixed asset investment continues to expand robustly, recording a 33.1% increase from a year before in the first ten months of 2009.
  • Producer price deflation narrowed to minus 5.8% in the year to October from minus 7.0% in September.
  • Consumer price deflation was minus 0.5% after minus 0.8% in September.

The on-year drop in Indian exports of 11.4% in October was the smallest in ten months and just a third as much as the 33.3% drop in the year to March.

Japanese core private domestic machinery orders leaped 10.5% in September, much more than a forecast rise of 1.0%.  Third-quarter orders slid just 0.9%, a much smaller drop than that of 4.9% in 2Q.  Officials project a 1.0% rise in the present quarter.  Foreign machinery orders shot up 25.9% in September and by 41.7% last quarter, reinforcing hope that Japan’s economy may sustain a better tone.

Australia’s leading employment index recorded an eight consecutive improvement, printing at minus 0.841 in November after minus 0.988 in October.  But Aussie consumer confidence started to show the effects of rising interest rates, swinging to minus 2.5% from plus 1.7% last month.  Australia has the only central bank to have raised interest rates more than once thus far.  Consumer confidence was still 38.2% above year-ago readings.  Moreover, commercial and personal finance posted solid gains of 5.6% and 4.1%, respectively, in August.

Britain reported the smallest increase in the claimant unemployment count in 18 months, a gain of 12.9K versus a forecast increase of 20K and a rise of 20.8K in the prior month.  The claimant jobless rate of 5.1% in October was up a tenth from September and up 2.0 percentage points from a year earlier.  The ILO jobless rate, which conforms to standards in other countries, was 7.8%.  Average earnings, a gauge of wage inflation, posted a record low 1.2% from a year ago in the third quarter and went up just 1.0% in the year to September alone.  In the private sector, average earnings grew just 0.5% in the last year.

The Bank of England released a somewhat more dovish quarterly Inflation Report than had been anticipated.  At the path of market-projected future interest rates, CPI inflation would be still below the 2% target at 1.6% in two years from now.  The implication is that the Bank of England will move more slowly on rate raising than the market thinks.  Governor King said sub-target inflation is more likely than above-target inflation during the forecast period and added than no decision has been made on when to end quantitative easing.

Dutch industrial production rose 1.1% in September and fell by a diminished 7.6% from a year earlier.  Such had dropped 9.0% in the year to August.  Czech industrial output slid 11.9% in the year to September, similar to a forecast decline of 11.5%.  The Czech current account deficit narrowed in September.

Portuguese consumer prices were steady last month and fell 1.5% from October 2008.  Core inflation was minus 0.4%.  Hungarian consumer prices were also flat in October and up 4.7% from a year earlier.

Dallas Fed President Fisher expects sub-trend growth to continue in 2010 and 2011 and called the present monetary policy stance “appropriate.”  He used to be considered one of the central bank’s most hawkish policymakers.

The U.S. Treasury market will be closed today for Veterans Day.  Canada observes Remembrance Day and will be shut, too.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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Concern #4: Will Massive Fiscal Deficit Spending Drive Price Inflation and Long-Term Interest Rates Skyward?

November 10, 2009 · Leave a Comment

Of the four concerns that I’ve raised today, this one is creating the loudest din in the public discourse.  First, government deficits have soared just about everywhere.  Britain and the United States lead the pack with double-digit imbalances this year expressed as a percentage of GDP.  The red ink in the cases of Japan, the euro area, Australia and India lies between 5% and 10%.  The Chinese and Canadian deficits are somewhat less than 5%  but represent enormous incremental growth from their prior levels.  As widespread as the upward thrust in the deficits has been is public and market skepticism that this increase can or will ever be reversed.  I think that remains an open question.  The gloom ignores 1990s history that saw a huge surplus emerge in the United States from the ashes of chronic deficits for over 20 years and also saw European nations reduce their government imbalances very sharply to qualify for the European Monetary System’s stipulation that deficits of entering nations not exceed 3.0%.  Also ignored is the fact that a slow and aborted fiscal response to the downturn that began in 1929 was a causal factor in the Great Depression. In time, the deficits must be attacked with hard decisions on both taxes and spending.  But it’s clear that no effort in that regard will succeed without the precondition of sustained decent economic growth.  To everything there is a purpose, and now is not the season to shut down fiscal support.

I’ve stated often on this blog that one lesson from Japan’s experience is that it takes a long time to recover from a recession caused by a malfunctioning financial system.  Japanese Cassandras including many at the Ministry of Finance and Bank of Japan were warning more than fifteen years ago about the risk of soaring JGB yields.  Markets are still waiting for that Godot.  The table below documents the trend in 10-year bond yields in the United States, Germany, Japan, Canada and Britain.  Figures shown are period averages (2009 to date for row five) and are compared to current levels in the final row.  There is no evidence of rising inflation expectations to match the shrill tone of the fiscal fear-mongers.  Now one might say, sure, but what about gold?  I believe the climb in gold reflects pessimism about the dollar, not fear of inflation.  Since March 9, gold has risen 20% in comparison to rises of 56.4% in the DOW, 61.4% in the S&P 500, and 69.6% in the Nasdaq.  In the 1970’s when inflation was a real, not imaginary problem, gold climbed sharply, but stocks performed poorly as one would expect.

 

10Yr Yields U.S. Germany Japan Canada U.K.
1994-03 5.68% 5.34% 2.10% 6.22% 6.31%
2004-06 4.44% 3.73% 1.54% 4.29% 4.59%
2007 4.63% 4.23% 1.68% 4.29% 5.01%
2008 3.65% 4.00% 1.49% 3.60% 4.49%
2009 3.20% 3.27% 1.37% 3.21% 3.57%
today 3.48% 3.28% 1.48% 3.49% 3.79%

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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Concern #3: Financial Institutions That Are Too Big to Fail

November 10, 2009 · Leave a Comment

In the darkest days of the financial sector-led recession, deep regret was voiced over and over again that financial institutions must not be allowed to be too large too fail again in the future.  However, the Congress and Obama Administration opted against the most radical suggested reforms like nationalization and separating commercial from investment banking.  Reform proposals do not address the enhanced size of the behemoths in the industry, nor is any effort to address that issue gaining traction.  Anti-trust regulation against banking mergers was a big field in the 1960’s, and when my career at the Fed started over three decades ago, there were many money center banks competing in New York and other big cities. In the buy-or-get-bought banking wars that followed, monopolistic power grew and grew, and the maelstrom of 2007-2009 appears to have left the industry more concentrated than ever.  As in the cases of the U.S. savings rate, Chinese exchange rate policy, and other trade barriers, the half-baked banking reform proposals leave a lot of flash-points for future trouble unrepaired.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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Concern #2: China’s Predatory Currency Policy

November 10, 2009 · Leave a Comment

Mercantilism is alive and well in China, now the world’s third largest economy although well down the leader board in per capita terms.  Chinese monthly economic figures for exports, industrial production, and investment will be reported tomorrow.  A massive three-dimensional policy stimulus from low interest rates, deficit fiscal spending and intervention to maintain a highly undervalued yuan has the Chinese economy revving back to pre-global downturn speeds in a hurry.  Re-pegged against the dollar since July 2008 at roughly 6.83, the yuan has followed the greenback southward in 2009 against almost all other world currencies. The last thing the global adjustment process needs is for the biggest surplus economy to have a depreciating currency.  China’s rapid buildup of liquidity from this policy could fan future domestic inflation and makes an international monetary system that revolves around the dollar even more unstable.  Governments around the world have tried to reason with Beijing officials to become enlightened and let the yuan climb.  Incremental competitive pressure on U.S. industries has actually been less severe than for Euroland participants or China’s Asianl neighbors like South Korea.  President Obama visits the region next week and will try to cajole China to budge.  He’ll hear plenty of criticism in return about America’s increasing predisposition to impose trade barriers, neglect the dollar, and exert no leadership in restarting multilateral trade negotiations.  As for yuan policy, Chinese officials will do what they’ve always done, hear what they wish and disregard the rest.  A fundamental impediment is the absence of any real leverage by others to influence Chinese policies other than the cumbersome process of raising complaints with the World Trade Organization.  But as noted, there’s plenty of blame to go around.  A tit-for-tat run of trade grievances could backfire.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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Concern #1: Low U.S. Savings Rate

November 10, 2009 · Leave a Comment

The United States is overly indebted at all levels, but this concern focuses on households.  Families think of savings as any change in wealth, including income that is not spent immediately but also capital appreciation of previously accumulated assets.  An economist’s notion of savings is deferred income.  Personal income not spent on consumption is saved.  In their aggregate, savings influence what is available domestically for business investment, and the size of the imbalance between savings and investment determines the directionality of capital flows with other countries and whether a country is in chronic current account deficit or surplus.

The U.S. savings rate ranged from 6.5% to 9.9% in the 1960s, 8.0% to 14.6% in the 1970s, 5.8% to 12.2% in the 1980s, and 2.0% to 8.9% in the 1990s.  Having plumbed below 1.0% earlier this decade, it recovered to a decade high of 5.9% in May 2009.  The problem with relying upon markets to do the heavy lifting of saving is that asset prices swing excessively up as well as down, and excessive bull markets do not persist forever.  Rather, things have a way of evening out, so a 16.9% per annum rise of the DOW in the 17-1/2 years between August 1982 and January 2000 is followed by a 1.4% per annum decline over the ensuing decade.  The destruction of wealth during the Great Recession created a powerful incentive for families to hunker down, rebuild savings and postpone consumption.  Equity prices have staged a surprising comeback this year, and the savings rates slipped back to 3.3% in September as well as the third quarter.  This remains unsustainably low and would prevent needed structural balance sheet adjustments.  Historically, a U.S. savings rate of 6-8% appears more normal.  A savings rate below 4%, in contrast, would not promote a sustained reduction of global current account imbalance and therefore leave the U.S. and world economies susceptible to future and potentially more cataclysmic financial meltdowns in the future than the one that began in 2007.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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New Overnight Developments Abroad: Fitch Warns About British Credit Rating

November 10, 2009 · Leave a Comment

Sterling lost 0.4% against the dollar as the Fitch credit rating service claimed the U.K. is at greater risk than other triple A rated nations of losing that status.  A huge government deficit was cited.

The dollar otherwise is unchanged against the euro, Swiss franc and Canadian dollar, up 0.1% against the yen and 0.2% higher relative to the Australian and New Zealand dollars.

Ten-year bund and gilt yields settled back four basis points, while the 10-year JGB yield is holding steady at 1.48%.

Stocks in the Pacific Rim are mixed with drops of 1.0% in Indonesia, 2.0% in Pakistan, and 0.4% in India but gains of 0.6% in Japan, 0.8% in Taiwan, 0.5% in Singapore and Malaysia, 0.4% in South Korea, 1.3% in Australia and 0.2% in China.  The German Dax, Paris Cac and British Ftse have edged up by 0.3%, 0.1%, and 0.2%.

Oil and gold edged 0.1% lower to $79.35 per barrel and $1100.60 per ounce.

Japanese M2 and M3 growth accelerated by more than forecast to on-year gains of 3.3% and 2.4% in October.  Bank lending growth slowed a tenth, however, to 1.5%.  Japanese stock and bond transactions in October, the first month of the second fiscal half, generated a Y 1.7 trillion inflow.  Japan recorded a Y 1.568 trillion current account surplus in September, almost identical to the September 2008 surplus.  The merchandise trade surplus of Y 599 billion was 87% wider, as imports (down 37.7% from September 2008) fell more sharply than exports (off 32.1%).  The seasonally adjusted current account surplus of Y 1.338 trillion was 8.4% wider than in August.  The trade surplus in October 1-20 swung to a Y 222 billion surplus from a Y 189 billion deficit a year earlier.  The on-year decline in exports and imports remained steep but is trending in an improving way.

Japan’s Economy Watchers index suffered a setback in October with a print of 40.9 after 41.3 in September, 41.7 in August and 42.4 in July.  The index bottomed at 15.9 last December.  Japanese corporate bankruptcies posted a smaller on-year drop of 13.1% in October.  Associated liabilities were down 74.3%.

Britain’s trade deficit in September widened considerably because of a big jump in car imports.  The merchandise trade shortfall of Gbp 7.19 billion represented an 8-month high.  The goods and services gap widened to Gbp 3.47 billion from Gbp 2.15 billion in August.

The U.K. DCLG house price index fell 4.1% in September.  That was better than forecast.  The RICs house price balance jumped from 21% in September to a 34-month high of 34% in October.  Same-store sales, according to the British Retail Consortium, were 3.8% greater than a year earlier in October.  Total sales rose 5.9% on year.  These comparisons improved partly because of very weak sales in October 2008.

Italian industrial production fell 5.3% in September — bigger than expectations of a 4% drop — and by 15.7% from a year earlier.

French industrial output also disappointed with a decline of 1.5% after a rise of 2.8% in August.  Such were 10.4% lower than a year earlier.  Factory production fell 1.6% and by 11.0% from a year before.

Finnish industrial production fell 1.7% in September and by 23.0% from a year earlier, continuing the pattern of weakness at the end of 3Q09.

Swedish industrial output rose 0.2% in September but was 15.7% lower than a year earlier.  That too was weaker than assumed.  Industrial orders advanced 0.7% in September but was 12.1% less than in September 2008.  Sweden’s all-inclusive activity index slid 0.3% and by 3.6% in the year to September.

German consumer prices firmed 0.1% between September and October, same as their preliminary reading, and were unchanged from October 2008.  The German WPI fell 0.4% in October but registered a smaller 12-month drop of 7.0% after falling 8.1% in the year to September.

The ZEW Institute reported unexpected setbacks in investment sentiment toward both the German and euro area economies.  The expectation index in Germany fell 4.9 points to 51.1 in November, while that for Euroland lost 5.1 points to 51.8.  This erosion of optimism occurred despite improved current circumstances of minus 65.6 after minus 72.2 in Germany and minus 70.3 after minus 75.4 in Euroland.

Norwegian consumer prices posted an on-year rise of 0.6% in October, half as much as in the year to September and less than forecast.

Danish consumer prices were steady in October and just 0.6% higher than a year earlier.

Australian business confidence improved to a reading of 16 in October from 14 in September.  Business conditions increased more dramatically to a score of 12 from 3 in September.

South African manufacturing output fell 11.4% in the year to September, slightly less than expected.

Malaysian industrial production fell 6.0% on year in October after a drop of 7% in the year to August.

Indonesian real GDP jumped 3.9% last quarter and by 4.2% from 3Q08.

The ruling Conservatives in Canada won two by-elections.

Fed Governor Tarullo expressed doubt that dividing commercial banking from investment banking would reduce risks of systemic financial risk.

No significant U.S. data releases are scheduled today.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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2010 GDP Growth Expectations: Advantage United States

November 9, 2009 · Leave a Comment

The new November Economist survey of forecasters shows an upwardly revised U.S. GDP growth projection of 2.6% for 2010, which is substantially higher than forecasts of 1.5% in the case of Japan, 1.3% for Great Britain and 1.2% in the euro area.  This perceived advantage is not a new phenomenon.  Eight months ago in the March Economist survey, the first to include 2010 forecasts, the consensus of participants saw growth of 1.9% in the United States, 0.7% in Euroland, and 0.5% in Britain and Japan.  Chronic dollar weakness is one factor behind this bias favoring U.S. prospects.

Despite significant across-the-board upward revisions since last spring in projected growth, forecasts of CPI inflation have stayed pretty constant.  The U.S. forecast of 1.6% is a tenth higher than it was in March.  That for Euroland is 0.2 percentage points lower at 1.1%.  Britain’s (1.9%) is two-tenths higher, and Japan’s (minus 0.9% versus a prediction of minus 0.2% back in March) is the only forecast in this group of nations to have changed in a meaningful way.  In the other three regions, these price forecasts underscore the validity of claims that medium-term price expectations remain well-anchored. 

A front-page story in today’s Financial Times suggests just the opposite.  The piece entitled “Markets’ inflation readings edge upward” cites inflation-adjusted fixed-income securities like TIPs to back up its claim.  The case for continuing price stability rests on the current excess of unused productive capital and labor resources and the likelihood of sub-trend economic growth in coming years.  The case for accelerating inflation rests on the ultra-loose fiscal and monetary policies that most nations continue to pursue.  A 24.8% per annum increase in gold prices from two years ago is being interpreted by some as further evidence of untethered price expectations.

I’m influenced by the experience of Japan and am predisposed to thinking that fears of future inflation will in time be proved overblown.  I prefer to associate strong gold demand with mounting concern that the dollar could lose its role as the dominant currency in reserve asset portfolios.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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New Overnight Developments Abroad: Stocks Higher as Yen and Dollar Falter

November 9, 2009 · Leave a Comment

Markets reflect less risk aversion following agreement among G-20 finance ministers meeting in St. Andrews, Scotland to maintain fiscal support.  Officials could not agree on implementation of a Tobin Tax on financial transactions.  India’s Prime Minister Singh is quoted on the wires as saying that faster growth should facilitate a reversal of that country’s fiscal stimulus sooner rather than later.

The dollar edged just 0.1% lower against the yen but has lost 1.8% against the kiwi, 1.2% relative to the Canadian dollar and sterling, 1.1% against the Australian dollar, and 1.0% versus the euro and Swiss franc.

Stocks have risen 1.8% in Germany and Australia, 1.7% in France and Hong Kong, 1.6% in Britain, 2.1% in Thailand and India, 1.3% in Singapore, but just 0.2% in Japan.

Whereas the yield on ten-year JGBs is 3 basis points higher at 1.48%, those on comparable bunds and gilts slid by 2 and 3 basis points.

Oil firmed 1.7% to $78.76 per barrel, while gold surpassed the $1100 milestone with a 1.2% advance to $1108.40 per ounce.

Germany reported two very strong pieces of data.

  • Exports rebounded 3.8% in September, while imports shot up 5.8%.  Surprising weakness in August had punctuated their recent revivals. The German current account surplus widened to EUR 9.4 billion from EUR 4.4 billion in August but was still considerably smaller than EUR 15.5 billion a year earlier.  The year-to-September current account surplus of EUR 70 billion was 44.8% below its year-earlier value, with drops of 22.0% and 18.1% in merchandise exports and imports.
  • Industrial production jumped 2.7% in September, more than 2-1/2 times greater than forecast and following a 1.8% increase in August.  A 5.2% jump in output of capital goods paced the latest month’s advance.  Production rose 3.5% (14.7% annualized) in the third quarter after annualized decreases of 1.7% in 2Q and 40.8% in 1Q.  Industrial output was still 12.9% lower in September than a year ago.

Euroland’s Sentix index of consumer confidence improved to minus seven in November from minus 12.6 in October.

The Bank of France’s business sentiment index rose more than assumed to 95 in October from 92 in September.

Japan reported no intervention last quarter.  However, the country’s international reserves increased another $4.17 billion to $1.0568 trillion in October on top of a gain of $33.4 billion during the third quarter.

China’s news agency Xinhua reports officials are urging the U.S. and other governments with major currencies to keep exchange rates more stable.

The Assistant Governor of the Reserve Bank of Australia made hawkish remarks about the Asian and Australian economies.  Australia’s is the only central bank to so far raise rates more than once and has signaled more tightening to come.  Australian reported a 5.1% increase in the number of housing finance approvals with a value increase of 6.7% during September.  That’s the biggest monthly rise in six month and nearly twice as much as forecast.  Job ads slipped 1.7% in October and by 44.9% from a year earlier, however.

New Zealand house prices posted their first on-year increase in sixteen months, albeit just 0.2%.

Turkish industrial production fell 8.6% in the year to September, including a 9.3% on-year drop in factory output.  Slovakian industrial output declined 5.2% in the year to September, somewhat less than the 6.3% on-year drop in August and much better than had been forecast.

Czech consumer prices slid 0.2% both on month and on year in October.  Those drops were bigger than assumed.  The Czech jobless rate eased a tenth to 8.5% last month.

Sweden’s government revised upward projected GDP growth to minus 4.9% this year, +2.0% in 2010, and +3.4% in 2011.  Growth of 3.3% is anticipated in 2012.

The U.S. does not have any significant data releases scheduled today.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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Next Week

November 6, 2009 · Leave a Comment

The week ahead begins with a meeting of G-20 finance ministers in Scotland, gets interrupted on Wednesday with holidays in the United States (Veterans Day) and Canada (Remembrance Day) and winds up on Friday the 13th.  Only two central bank meetings of note are scheduled — in Korea and Chile — but the Bank of England’s quarterly Inflation Report and the ECB’s monthly Bulletin will draw market interest, too.  Many Fed and ECB officials have planned speeches: Tarullo, Lockhart, Rosengren, Yellen, Fisher and Evans among the former and Trichet, Tumpel-Gugerell, Weber and Stark from the latter.

Preliminary third-quarter GDP growth figures will be released by Germany, France, Italy, Spain, the Netherlands, and the euro area bloc.  Germany, France, Italy, the Netherlands, and Euroland also report industrial production. German trade statistics, final consumer prices and ZEW index of investor sentiment are scheduled too, as are Spanish and euro area consumer prices.

Britain’s data calendar includes a couple of house price measures, same-store retail sales, labor statistics, and trade figures.  Swedish industrial orders, industrial production, and consumer prices arrive next week, as do Norwegian consumer and producer prices, and Swiss import and producer prices.

This is the week when virtually all Chinese data for the month get released: the CPI and PPI, industrial production and retail sales, trade statistics and fixed asset investment, and money aggregates and bank lending.

Scheduled Japanese data include the current account, corporate goods prices, consumer confidence, the Economy Watchers index, machinery orders, and revised industrial production and capacity utilization.  Other Asian releases of note will be Indian and Malaysian industrial production, Taiwanese trade figures, South Korean unemployment, Hong Kong GDP and Singaporean retail sales.

The U.S. calendar is relatively light, consisting of trade figures, import prices, the monthly federal budget, IBD/TIPP economic optimism, and the U. Michigan consumer sentiment index.  Traders will also be monitoring weekly data such as jobless claims, energy inventories, consumer confidence, chain store sales, and mortgage applications.

Canada releases housing starts, house prices, trade figures and motor vehicle sales.  Among the economic data releases in Latin America will be Mexican consumer prices, trades and industrial production, Argentine consumer and producer prices, and Brazilian retail sales.

In Eastern Europe, the Czech Republic and Hungary announce quarterly GDP.  Poland, Romania and Hungary release consumer prices.  Romania, Poland and the Czech Republic report current account figures.  Czech retail sales are scheduled, too.

Australian labor statistics head up a slate for that economy that also includes business conditions and confidence, housing finance, and job ads.  New Zealand house prices and retail sales get released next week, and so do Turkish industrial production and current account figures and South African industrial output.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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