New Overnight Developments Abroad: APEC Meeting in Singapore Boosts Stocks and Commodities and Depresses Dollar

November 16, 2009

APEC leaders agreed not to end stimulus and did not make a big issue of criticizing Chinese yuan policy.  There was no breakthrough on climate-warming or world trade.

Stocks have climbed 3.0% in China, 2.7% in Pakistan, 2.1% in Singapore, 1.7% in Hong Kong, Indonesia and Taiwan, 1.3% in South Korea, 1.2% in Thailand, 1.2% in Britain, 1.1% in Germany and 0.9% in France.  A 0.2% rise in Japan’s Nikkei was a disappointing result, by comparison.

The dollar lost 0.3% against the euro, Swiss franc, and Canadian dollar.  The dollar is 0.1% lower against the yen and sterling, unchanged against the Australian dollar and up 0.1% versus the kiwi.

Ten-year bund and gilt yields are five and four basis points lower, but the comparable JGB yield is unchanged at 1.34%.

Gold advanced 0.9% to a record $1127.1 per troy once. Oil recovered 1.2% from a one-month low to $77.25 per barrel.

Today begins the 80th and final calendar year eighth of this decade.  Seems like the Y2K fears were only yesterday.

Japanese real GDP grew 4.8% at an annualized pace last quarter, three times faster than Euroland GDP and nearly twice what had been expected.  U.S. and British GDP, by further comparison, had risen 3.5% and dropped 1.6% in the quarter.  Japanese second-quarter GDP was revised higher such that GDP over the past two quarters increased at an annualized rate of 3.7%.  However, GDP in 3Q remained 5.3% below its 2Q07 peak, an annualized 2.4% rate of decline over the last nine reported quarters.

  • Nominal GDP slid 0.3 annualized and by 4.4% from 3Q08.
  • The GDP price deflator firmed 0.2% from a year earlier.
  • Real GDP fell 4.5% in the year to 3Q09, down from a four-quarter drop of 7.0% between 3Q08 and 3Q09.
  • The 4.8% annualized rise of GDP last quarter resulted from positive contributions of 1.7 percentage points (ppts) from personal consumption, 1.6 ppts from inventories, 1.4 ppts from net exports, 0.9 ppts from investment, and 0.1 ppts from public-sector demand, but a negative 0.9 ppt contribution from residential investment.
  • The Japanese growth rate was leaked early by the new government’s trade minister, who apologized for the mistake.

Foreign direct investment inflows to China advanced 5.7% in the year to October after an on-year gain of 18.9% in September.  Foreign direct investment in January-October remained 12.6% lower than a year earlier, nonetheless.  China’s commerce minister said calls for a strengthening renminbi are unfair and not a development that would promote global recovery.

Euroland consumer prices matched preliminary indications, rising 0.2% last month and posted a 12-month dip of 0.1%.  Core inflation slowed further to 1.0% from 1.1% in September, 1.2% in July and August, and 2.5% in October 2008.

New Zealand producer input prices fell 1.1% in 3Q and by a record 5.8% from the third quarter of 2008.  Producer output prices dropped 1.4%, the third quarterly decline in a row, and by 2.1% from a year earlier.

The British Rightmove house price index dropped 1.6% in November, the first decline in three months, but posted a bigger on-year rise of 1.6%.

Ukrainian real GDP tumbled 15.9% in the year to 3Q09.

Bundesbank President Weber refused to say the German economy is recovering.  It’s merely stabilizing.

Bank of Japan Governor Shirakawa and some Chinese officials warned that the ultra-easy Fed policy could create new asset bubbles.

Czech producer prices slid 0.2% in October and 4.6% from a year earlier.

U.S. scheduled data today feature retail sales and include the N.Y. Fed manufacturing index and business inventories.  Fed Chairman Bernanke gives a major address, and Governor Kohn and Dallas Fed President Fisher also have speeches.  Canada‘s monthly manufacturing survey gets released, too.

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

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