New Overnight Developments Abroad: Very Weak German Trade Figures in July

September 9, 2008

There’s been a minor pull-back in latest dollar advance.  The buck eased 0.8% against the kiwi, 0.3% versus sterling and the euro, 0.2% relative to the yen and 0.1% against the Swissy and yuan.  It firmed 0.1% against the Australian and Canadian dollars overnight.

Stocks in Asia suffered large losses.  Nikkei -1.8%.  Taiwan -3.5%.  Indonesia -3.9%.  Vietnam -1.4%.  South Korea and Hong Kong 01.5%.  Australia -1.7.

But European equities are stronger. British  Ftse up 1.1%. German Dax +0.6%.  Paris Cac +0.7%.

The yield on 10-year JGB’s slid 2.5 basis points to 1.50% and is down from Monday’s one-month high of 1.55.  5-year JGB auction was well-subscribed.

Against the backdrop of an OPEC meeting in Vienna and continuing worries about Hurricane Ike, oil fell 1.5% to $104.78/barrel.  Saudi Arabia appears to be resisting calls by Iran and Libya for production cuts.  Gold edged 0.3% higher to $804.80 per ounce.

Germany’s seasonally adjusted trade surplus fell 35% to EUR 11.8 billion in July, as exports slid 1.7% while imports jumped 7.4% m/m.  The data suggest that net exports may exert a drag on GDP in the third quarter.  Domestic demand remains weak, meanwhile.

Australian retail sales recovered 1.4% m/m in July, 3 times more than anticipated, from June’s 1.0% drop, but other released data were weak.  Housing finance posted a sixth consecutive decline in July, -0.2%.  Business sentiment stayed near a 7-year low, rising to -7 from -9.  Business conditions at -3 in Aug after -5.

South Korean producer prices fell 0.3% m/m after July’s 1.9% upsurge, and recorded a 12.3% on-year advance, down from 12.5%.  The won lost 1.8% in renewed selling pressure.  Consumer confidence in Indonesia recovered from 82.1 to 89.3 in August, still well below the 100 line between pessimism and optimism.

British industrial production and factory output respectively fell by 0.4% and 0.2% in July, somewhat more than anticipated.  Oil and gas extraction slumped 4.4%, most since end-2006.

Same-store sales according to the British Retail Consortium, fell 1.0% in August from a year earlier, their third drop in a row.  The RICs house price balance index remained very depressed in August.  Sales in June-August were the softest since 1978.

Swedish consumer prices firmed 0.2% m/m and 4.3% y/y in August, down from 4.4% y/y in July and engendering some relief that the worst of the spike in inflation may be ebbing.

Greek industrial production fell 1.4% in the year to July.

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