New Developments Abroad
May 19, 2008
There have been hardly any significant developments abroad to start the new week, data-wise or official comment-wise.
The Aussie dollar hit a 24-year high of $0.9571 and shows a 0.2% gain on net. U.S. dollar also is 0.6% lower against the Canadian dollar and -0.2% versus the kiwi. Gold jumped 1.1% and is 6.7% firmer than on May 1st. Oil settled back 0.5% but is trading above $125 at $125.69/bbl.
USD also lost 0.3% against the yuan and Swissy and 0.1% versus the yen, euro, and sterling.
10-year JGB yield slid 3.5 bps to 1.66%. Technical move follows 7-month peak hit last Friday. Other sovereign bond yields are mostly firmer.
The Nikkei, Hang Seng, and Dax indices show gains of 0.4%, 0.5%, and 0.2%. The Ftse is flat. The CSI-300 index in China dropped 0.6%.
According to the Bank of France, business sentiment fell to 101 in April from a downward revised 104 in March. The central bank projects 0.3% GDP growth in 2Q, half as much as in 1Q.
A monthly proxy measure compiled by Reuters to mirror movements in the quarterly Bank of Japan Tankan index showed further deterioration in May, with a drop of 3 points to -2 in Japanese manufacturing and of 3 points to zero in non-manufacturing.
Harvard professor and NBER member Martin Feldstein believes a U.S. recession began around the start of this year, claiming that GDP data have been somewhat misleading.
Britain’s Rightmove house price index recovered 1.2% m/m and to a 12-month rate of 2.2% in May from 1.3% in April. Bank of England Deputy Governor Lomax will step down when her first 5-year term expires at midyear. An accountants’ survey of British business sentiment slumped to -19.7 in 2Q08 from -7.2 in 1Q.
Unemployment dipped in Hong Kong to 3.3% from 3.4%.
U.S. data calendar today will be limited to just leading index of economic indicators, a minor and fairly predictable measure.
The German Bundesbank expects a significant acceleration of inflation in coming months and no improvement before late Autumn.
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