New Overnight Developments Abroad: Stocks Higher in Europe and Asia

March 13, 2009

The dollar is mixed, with gains of 0.7% against the yen, 0.4% against the euro, and 0.1% versus the Swissy and C-dollar but losses of 0.5% vis-a-vis sterling and 0.2% against the kiwi and Australian dollar.  Less risk aversion amid some hope regarding U.S. growth and its banks.

G20 finance ministers meet in Britain today and tomorrow with different views over how much government spending is required.

Stocks rose 5.2% in Japan, 4.4% in Hong Kong, 5.3% in India, 5.6% in Singapore, 2.4% in Thailand, 1.7% so far in France, 1.6% in the U.K., and 1.2% in Germany.

Sovereign bond yields are mostly higher. 1.325% yield on 10-year JGB is the highest in over a month.

Oil is steady but firm at $46.97 per barrel ahead of OPEC meeting in Vienna on Sunday that’s expected to cut production. Gold slid 0.4% to $920.60/ounce.

The Chilean central bank benchmark rate was slashed another 250 basis points to 2.25% in the third big cut this year. It was at 8.25% at end-2008.

Peruvian reserve requirements were cut to 6.0% from 6.5%.

Canadian jobs plunged another 82.6K last month, and unemployment climbed a half-percentage point to 7.7%.

New Zealand retail sales sank 1.1% in January and by 3.7% from a year earlier on very weak auto sales. Result much worse than forecast.

Japanese industrial production in January was revised to show a 10.2% monthly plunge versus a 10.0% drop reported initially. The inventory ratio shot up 11.9% and by 51.7% from a year before.  Capacity usage dropped 12.9% and 35.6% on year.  Prime Minister Aso called for another stimulus. $1.2 billion is being put into three Japanese banks.  BOJ Governor Shirakawa said the recession and misfunctioning financial markets continue to intensify, but he said also that commercial paper conditions have improved and that corporate bond buying is not needed by the bank.

Japanese consumer confidence rose to 26.7 in February from 26.4 in January and a cyclical low of 26.2 in December.  It remains very weak.

German wholesale prices dipped 0.1% in February and recorded a 12-month drop of 5.7% versus declines of 5.6% in January and 4.2% in December. At its peak last July, WPI inflation crested at 9.8%.

The Swiss PPI/import price index fell by a greater-than-expected 0.6% in February, doubling the 12-month slide to 1.8%.  Import price deflation widened to negative 5.0%.  The Swiss National Bank pledged yesterday to intervene to prevent any further franc appreciation.

Dutch exports fell 7.1% in January and by 21.3% from a year earlier.

Finnish consumer price inflation slowed a half percentage point to 1.7% in February, but the harmonized CPI rate edged up 2/10ths to 2.7%.

Chinese Premier Wen expressed concern about the security of that country’s Treasury holdings and hinted there will be more stimulus if GDP fails to expand 8% this year.

The French current account deficit more than doubled in January to EUR 2.8 billion from EUR 1.3 billion in December.

Euroland retail sales edged up 0.1% in January but fell 2.2% from January 2008.  The results were about as expected.  Euroland labor costs rose 3.8% in the year to 4Q08, down from 4.2% in 3Q08 but still faster than the pace in 1H08.  Labor costs had climbed 2.9% in the year to 4Q07.

Singaporean retail sales plunged 12% in the year to January, quickening from an on-year drop of 1.6% in December. Weakness was led by motor vehicles.

Canadian trade data are due at 12:30 GMT.  So are U.S. trades and import prices. The preliminary U. Michigan sentiment index arrives at 14:00 GMT.

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

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