New Overnight Developments Abroad: Stocks and Commodity Currencies Slide

September 14, 2009

The U.S. dollar recovered 1.0%, 0.9%, and 0.6% against the Canadian, New Zealand and Australian dollars, respectively.  Gold lost 0.8% and slipped under $1000 to $998 per ounce.  Oil fell 1.1% to $68.56 per barrel.

The greenback also recouped 0.7% against sterling, 0.2% against the Swiss franc, and 0.1% relative to the yen and euro.

The Japanese Nikkei slumped 2.3%.  Other Asian stocks mostly lost ground, too with notable exceptions of China (+1.7%) and Vietnam (+1.6%).  Stocks dropped 1.4% in Indonesia and Australia, 1.1% in Hong Kong and Taiwan, 1.5% in Singapore, and 1.9% in Thailand.  In Europe, The German Dax and Paris Cac are trading 1.0% lower than their Friday closes, while the British Ftse has so far lost 1.2%.

The 10-year JGB yield slid another basis point to 1.30%.

The EU Commission revised GDP forecasts.  The old forecasts were released in May.  Although Euroland growth in 2009 is still projected at minus 4.0%, officials are more optimistic about Germany and France and more bearish about Italy, The Netherlands, and Spain.  British growth is now penciled in at minus 4.3% versus minus 3.8% before.  Euroland growth in 3Q09 and 4Q09 is projected to be positive but sluggish at +0.2% and +0.1%.

Industrial production in Euroland fell 0.3% in July after dipping 0.2% in June.  Output declined by 15.9% from a year earlier.  Energy and capital goods dropped in the latest month by 1.2% and 1.8%.  After declining 2.7% in 2Q (10.5% at an annualized rate), output began 3Q 0.1% below the 2Q average level.

Jobs in Euroland declined 0.5% last quarter and by 1.8% from 2Q08.  Germany had a small 0.1% drop in the year to 2Q09 compared to decreases of 7.1% in Spain, 1.1% in France, 3.0% in Finland, and 0.9% in Italy.

Japan revised industrial output growth in July up to +2.1% from +1.9% reported initially.  The inventory ratio plunged 4.0% but was still up 20.4% from a year before.  Capacity dipped 0.1% and by 2.0% from July 2008, while utilization jumped 3.9% on the month but dropped 24.8% on the year.

Today’s downbeat market tone was set by New Zealand retail sales, which unexpectedly fell 0.5% in July instead of firming 0.4% as expected.  Such had also dipped in June by 0.1%.  Home sales in New Zealand went up 1.2% in August and were 3.9% greater than in August 2008.

Swiss producer/import prices firmed 0.1% in August and fell by 5.5% from August 2008, less than the 6.1% decline in the year to July.  Import prices rose 0.3%, while domestic producer prices were flat compared to July.

Czech retail sales climbed 1.1% in July and fell less in on-year terms (4.9%) than had been expected.

The IMF expects the G-20 summit in Pittsburgh next week to favor retaining economic stimulus measures for now.

Finnish consumer prices climbed 0.3% in August but dropped 0.7% from a year earlier.

Brazilian real GDP rose 1.9% in 2Q but fell 1.2% from 2Q08.

Hong Kong reported a 1.0% drop in industrial production last quarter and a 9.5% drop from 2Q08.  Producer prices fell 2.9% in the year to 2Q after a drop of 1.4% in the year to 1Q.

Today marks one year since Lehman Brothers was allowed to fail and finds financial market reform legislation still undone.  There are no U.S. data releases today, but Canadian quarter capacity utilization figures will arrive.

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

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