New Overnight Developments Abroad: Optimism From China
April 16, 2009
The yen and dollar are stronger. The dollar lost 0.4% to the yen but has risen 1.4% against the kiwi, 0.7% against the Australian dollar, 0.5% versus the Swiss franc and sterling, 0.3% against the euro and 0.1% against the Canadian dollar.
Asian stock markets closed mixed, with losses of 3.0% in India, 1.8% in Pakistan, and 0.8% in Singapore but rises of 2.0% in Indonesia, 1.4% in Vietnam, 0.3% in South Korea and 0.1% in Japan. European bourses are higher, with gains of 0.6% in France, 0.7% in Britain and 0.5% in Germany.
The 10-year JGB yield firmed 2 basis points to 1.46%. Sovereign debt yields also firmed in Europe.
Oil advanced 1% but remains slightly under the key $50 level. Gold slid 0.3% and remains south of $900.
A considerable number of Chinese indicators were released. On-year GDP growth slowed to 6.1% in 1Q09 from 6.8% in 4Q08, 9.0% in full-2008 and 13.0% in 2007, but officials but a positive spin on the momentum of the trend. On-year growth of 8.3% in March industrial output was above February’s 3.8% reading and better than expected. Retail sales increased 14.7% in the year to March, marginally above forecasts. Consumer prices and the PPI posted on-year drops in March of 1.2% and 6.0%. Fixed asset investment growth accelerated to 30.3% in the year to March from 26.5% in February. First-quarter on-year GDP growth was attributable to consumption and investment. Net trade exerted a tiny drag.
Japanese stock and bond transactions generated a Y 881 billion outflow last week following a Y 2.172 trillion inflow in the week of April 4th.
The Reuters monthly Japanese Tankan measures firmed 2 points to -76 in manufacturing but slid another point to -37 in services during April. Less severe conditions are expected to materialize during 2Q09.
The Central Bank of The Philippines cut its key borrowing rate by another 25 basis points as expected to 4.5% and implied more cuts may be made. There have been four reductions since December 18th. The government revised down projected growth this year and next by about a half-percentage point each.
South Korea revised its March trade surplus downward to $4.29 billion from $4.61 billion. Exports and imports tumbled by 22.0% and 35.9% from March 2008.
In Euroland, harmonized consumer prices firmed 0.4% on month and 0.6% on year in March. Core CPI went up 0.6% m/m and 1.5% y/y. In the year to March 2008, total consumer prices had risen 3.6%, and the core index had advanced by 2.7%. Italian consumer price inflation slowed to 1.1% y/y from 1.5% in February.
Industrial production in Euroland sank 2.3% in February and by 18.4% from a year earlier. Consumer durables, capital goods, and intermediate products each recorded on-year declines that exceeded 20%. Output in January-February was 6.3% below the 4Q08 level, slightly faster than the pace of decline in 4Q08.
Dutch unemployment increased three-tenths to 4.4% last quarter.
The Swiss PPI/import price index fell by 0.5% in March and by 2.8% from a year earlier.
British same store sales fell 1.2% according to the Retail Consortium in the year to March, partly reflecting the distortion of a later Easter holiday this year.
Market players are talking about a perceived split at the ECB over willingness to cut interest rates further. The 1-week euribor rate rose for the first time this month.
A new incoming member of the Bank of England’s Policy Committee expressed the view that the worst of Britain’s recession may be behind.
U.S. data today will included the Philly Fed index, housing starts, and jobless claims. Canada releases manufacturing shipments and orders. Turkey’s central bank is expected to cut its key interest rates.
Copyright 2009 Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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