New Developments Abroad: More Bad News from Germany, Britain and Japan

August 6, 2008

The U.S. dollar is mixed, showing gains of 0.5% against the kiwi, 0.2% versus the yen and 0.1% against the C-dollar but losses of 0.2% against the Swiss franc and 0.1% relative to the euro.  It is unchanged against sterling and the Australian dollar.

Stocks rose 2.6% in Japan, 3.1% in Australia, 3.1% in Taiwan, 2.8% in South Korea and 1.4% in Indonesia.  But the German Dax and British Ftse are off 0.3% and 0.2%.

The 10-year JGB yield rose 1.5 basis points to 1.53%.  Sovereign bond yields are lower in the U.S., Ezone, Britain, and Canada.

Gold recovered 1.0% to $892.80 per ounce.  Oil is 0.4% firmer at $119.68 per barrel.

German industrial orders sank 2.9% in June, defying forecasts of a 0.4% advance, and May’s drop was revised to -1.4% from -0.9%.  Orders fell 15.4% at an annualized rate in 2Q08.

The Nationwide gauge of British consumer confidence fell 11 points, most since at least 2004, to 51 in July.  Shop prices rose 3.2% y/y in July, the biggest on-year gain since at least end-2006.

The Japanese cabinet said the expansion since early 2002 has ended, claiming that the economy is now “deteriorating.”  It said this after news that the coincident index of economic indicators had dropped 1.6 points in June.  Expressed as a diffusion index, the coincident index (33.3) was below 50 for the fifth time in 1H08.  The lagging index has been under 50 since March.

Australian housing finance slumped 3.7% in June, almost twice as much as forecast, to a 4-year low.  The leading jobs index fell for a seventh straight month.

Britain’s NIESR Institute said real GDP growth slowed further to 0.1% in May-July from 0.2% in 2Q08.

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