New Overnight Developments Abroad: Dollar Higher on Final Day of Quarter

September 30, 2009

The dollar rose 1.4% against the Australian dollar, 1.2% versus the Canadian dollar, 1.1% against the euro, 1.0% against the kiwi, 0.7% against the Swiss franc and 0.6% relative to the yen.

Stocks in the Pacific Rim rose 1.1% in China and Taiwan, 1.6% in India, and 1.0% in Indonesia but fell 0.3% in Hong Kong and Vietnam, 1.0% in South Korea, and 0.2% in Australia.  The Paris Cac is up 0.5%, and the German Dax and British Ftse are 0.3% stronger.

The 10-year JGB is steady, while the yield on 10-year bunds has firmed 1 basis point.

Commodities firmed.  Gold climbed back above $1000, gaining 0.8% to $1002.60 per ounce, while oil increased 1.7% to $67.83 per barrel.

Japan’s manufacturing PMI improved 0.9 points to 54.5, its eighth increase in a row and third straight reading of more than 50.

Japanese industrial output gained 1.8% in August but fell 18.7%.  Indications for September and October are rises of 1.1% and 2.2%, implying a 7.3% jump in the third quarter (32% annualized) and putting October’s level 3.6% above the 3Q mean.  The inventory ratio fell 0.8% in August but was 11.4% higher than a year earlier.

A report out of Japan claims the BOJ may decide next month to stop its emergency support for corporate financing after December.

China’s manufacturing PMI held at 55.0, indicating sustained output and demand growth and accelerating increases in jobs.

British consumer confidence jumped 9 points to minus 16, the biggest monthly improvement since 1995.

Thai factory output fell 10.3% in August, and capacity usage settled back 1.9 percentage points to 60.0%.  Thailand’s current account widened 3.6-fold to $1.92 billion in August from July.

Germany’s monthly labor statistics again reflect generous subsidies and classification of workers.  Unemployment fell 12K and to 8.2% seasonally adjusted from 8.3% in August.  The unadjusted jobless rate was 8.0%, down from 8.3%.  Excluding the distortion, unemployment rose 10K, similar to the August increase.

The ECB’s second 12-month refi auction amounted to EUR 75.2 billion, down from EUR 442 billion in June’s initial auction.  The next tender is on December 15.

Switzerland’s current account widened to Chf 13.2 billion in 2Q09 from 8.5 billion francs in 1Q and Chf 7.3 billion a year earlier.  The Swiss index of leading economic indicators jumped to a 13-month high of 0.85 in September from minus 0.04 in August.

French producer prices rose 0.4% in August and fell 8.5% from a year earlier.  Italian consumer prices slid 0.2% in September, resulting in an unchanged 12-month uptick of 0.1%. Italian producer prices firmed 0.6% and fell 6.7% from a year earlier.

Japanese housing starts and construction orders respectively fell 38.3% and 25.2% in the year to August.  Japanese auto production in August was 25.9% less than a year earlier, as exports tumbled 44.6% on year.

Australian retail sales increased 0.9% in August, reversing July’s drop, and were 5.8% greater than a year earlier.  Residential building approvals, on the other hand, were weaker than forecast, dipping 0.1% on month and showing no on-year change.  Australian private credit firmed 0.1% in August and 2.5% from a year before.

Danish GDP sank 2.6% in 2Q09, twice as much as the 1.3% decline in 1Q.  Exports fell 4.5%, and construction declined 7.9%.  GDP fell 7.2% from 2Q08.

Norwegian retail sales climbed 0.2% in August and 2.0% from a year earlier.

German real plant and machinery orders plunged 43% in the year to August.

Spain’s current account deficit was EUR 2.0 billion in July after a gap of EUR 3.3 billion in June.  Housing permits jumped 20.4% in July but were still off 44.3% from a year earlier.  House prices fell 7.7% in the year to 2Q09.

South Korean industrial output fell 1.3% in August but rose 1.2% from a year earlier.  The index of leading economic indicators improved in August to 9.0% from 7.8% in July.

Business sentiment in New Zealand advanced to 49.1 in September from 34.2 in August.

Britain’s service sector index fell less in the three months to July (0.2%) than in the three months to June (0.6%).

Euroland consumer prices fell 0.3% in the year to September according to preliminary data, versus a drop of 0.2% in the year to August.

The French budget for next year pencils in a 6.4% rise in spending but a 17.7% drop in the deficit.

Irish private sector credit fell 3.0% in the year to August.

Canada reports monthly GDP, producer prices and raw material prices later today.  The U.S. ADP private jobs report will be released, as well as the midwestern PMI readings.  Poland will announce its latest central bank rate decision.

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

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