New Overnight Developments Abroad: Very Weak European Data
January 8, 2009
The yen jumped 1.1% against the dollar, which otherwise rose 1.5% against the Australian dollar, 0.7% versus the Canadian dollar, 0.6% against the kiwi, and 0.4% against the euro and sterling. Markets await the Bank of England interest rate cut at 12:00 GMT.
Stocks fell sharply overnight. The Nikkei lost 3.9%. Other drops in Asia were by 3.8% in Hong Kong, 1.8% in South Korea, 1.3% in Indonesia, 2.8% in Singapore, 2.2% in China, and 1.7% in the Philippines and Vietnam. Stocks fell 2.3% in Australia and 2.0% in South Africa. The Paris Cac, German Dax and British Ftse show losses of 1.7%, 1.5%, and 1.3%.
Japan’s 10-year JGB auction did not go well despite sinking share prices. The yield is up 6 basis points at 1.31%. Yields are also higher in Euroland.
Oil recovered 0.6% as rockets from Lebanon hit Israel. Gold edged 0.1% higher to $842.80.
German exports plunged 10.6% in November, about four times more than anticipated and the most since at least 1990. Imports posted a monthly decline of 5.6%. The current account surplus and trade surplus were 56.3% and 50.0% smaller than in November 2007.
German industrial orders fell 6.0% in December on top of a 6.3% decline in November. Orders in October-November were 22.4% lower than a year earlier. Domestic capital goods orders dropped 7.5% in the latest month. Foreign orders dropped 4.4%. Intermediate goods orders plunged 9.3% m/m.
The business climate index for Euroland worsened to -3.17 in December, worst since at least 1985, from -2.10 in November. Overall economic sentiment in the common currency bloc hit a record low of 67.1, down from 74.9 in November. Consumer confidence fell 5 points to -30. Industrial sentiment was 8 points lower at -33. Services sentiment fell 5 points to -17. All of these readings were new record lows. Retail and construction worsened, too. The report’s price components showed severe disinflation.
Euroland third-quarter growth was confirmed at -0.2% against 2Q and +0.6% from the third quarter of 2007.
Euroland unemployment rose to 7.8% in November, the fourth increase of a tenth in a row. Youth unemployment stood at 16.4% versus 14.5% in November 2007.
Norwegian factory output fell by 0.8% in November.
Polish unemployment climbed four-tenths to 9.5% in December from 9.1% in November.
Swiss consumer prices slid 0.5% in December, halving the on-year pace to 0.7% from 1.5% in November. The Swiss jobless rate edged higher.
Spanish unemployment rose 47% in the year to December. Dutch consumer prices edged 0.1% lower in January and were up 2.5% y/y.
Japanese stock and bond transactions generated a Y 547 billion outflow last week. BoJ Governor Shirakawa said scope for supporting financial markets has not been exhausted.
Australian building approvals dived 12.8% and 34.7% year/year in November. The Australian trade surplus of A$ 1.448 billion in November was about 30% less than forecast. Exports fell 3.6%.
South African real factory output fell 3.0% on month in November and by 4.4% from a year earlier.
The Bank of England cut its benchmark rate only 50 basis points to 1.5%, matching consensus expectations.
U.S. jobless clams and consumer credit data will be released later today. The Canadian PMI-IVEY index is due, too.
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