New Overnight Developments Abroad: Fresh Banking Jitters

May 11, 2009

Risk aversion makes slight comeback on fresh jitters about stress test results.  The dollar and yen are up. Stocks and commodities are down.

The yen regained 0.4% against the dollar, which otherwise rose 0.8% against sterling, 0.7% relative to the Australian dollar, 0.3% against the Canadian dollar and euro, and 0.2% versus the Swiss franc.

Asian stocks were mixed.  Although equities rose 1.8% in Vietnam, 1.1% in The Philippines, 1.0% in Taiwan and 0.2% in Japan, they also dropped 1.7% in Indonesia, 1.8% in India, 2.3% in China, 1.7% in Hong Kong and 1.5% in New Zealand.  In Europe, the Paris Cac is off 1.6%, and the German Dax and British Ftse are each trading 1.1% lower.

Ten-year JGB yields firmed 1.5 basis points to 1.46% ahead of Tuesday’s auction.

Oil slid 2.5% to $57.16/barrel from a 6-month high.  Gold edged 0.3% lower to $912.50/ounce.

French industrial production sank 1.4% in March, about three times more than forecast, and fell 15.5% from March 2008.

Italian industrial output sank 4.6% in March and by 23.8% on year, also more than twice as much as forecast.  Greek industrial output fell 5.3% in the year to March.   Investors are bracing for horrible first-quarter GDP figures at the end of this week but hopeful that the recession has subsequently flattened.

Industrial output slumped 18.0% in the year to March in Slovakia and by 20.7% y/y in Bulgaria.

China released price and money data.

  • The CPI fell by 1.5% in the year to April after posting an on-year drop of 1.2% in March and an increase of 4.0% in the year to October.
  • The PPI fell 6.6% on year in April, more than the 6.0% decline in the year to March.  Such had risen 6.6% in the year to October.
  • M2 growth accelerated to 26.0% in the year to April from 25.5% y/y in March and 15.0% y/y in October.
  • Yuan loans edged down to a 12-month growth rate of 29.7% from 29.8% in March but was much faster than the 14.6% on-year rise in October. Loans in the first third of 2009 already surpass the target floor for the full year.

Australian business conditions improved to a score of minus 10 in April from minus 17 in March.  Business confidence had a reading of minus 14 after minus 13.

Norwegian CPI inflation of 2.9% in April was higher than the 2.5% reading in March a slightly above expectations.  The PPI plunged 4.7% y/y, however.

Danish consumer price inflation slowed to 1.4% in April from 1.8% y/y in March.  Denmark’s current account swung into the red in March.

New Zealand house prices fell 9.2% in the year to April after 9.3% in the year to March.  That was a smaller drop for the first time in a year and half.

Turkish capacity usage improved to 66.8% in April from 64.7% in March and 63.8% in February.

Malaysian industrial production rebounded 6.2% in March but still fell 14.4% from a year earlier.

The leader of Japan’s DPJ opposition party, Ichiro Ozawa, resigned having been embroiled in a scandal.

Bernanke will be speaking in Atlanta after markets close today.  Canadian house price data get released today.

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

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