G-20 Statement a Dud… Greek Concerns Persisting

April 26, 2010

The dollar is mixed, with gains of 0.3% against the euro, Swissy, and yen but losses of 0.5% against the kiwi, 0.4% against sterling, 0.3% against the Australian dollar and 0.1% against the Canadian dollar.  Greek unions continue to protest reforms, and German rhetorical foot-dragging on aid to Greece also persists.

Stocks jumped 2.3% in Japan, 1.9% in Taiwan, 1.3% in Thailand, 1.6% in Hong Kong, and 0.7% in Indonesia.  The German Dax and Paris Cac have traded 0.7% higher, while the British Ftse shows a gain of 0.5%.

Bund and gilt yields are two and five basis points lower, whereas the 10-year JGB edged one basis point higher.

Oil and gold prices are generally steady and firm at $85.16 per barrel and $1155.20 per ounce.

After meeting Friday in Washington, the Group of 20 released a statement of platitudes with no explicit mention of Greece’s debt difficulties hurting the euro or China’s yuan being undervalued.  The G-20 has taken responsibility for exchange rate policy coordination from the G-7.  The G-7 suffered from excluding too many key countries like China and India.  But the G-20 suffers from the tendency of committees to get more unwieldy and less able to take action as they become larger.  Some have put a bright spin on the G-20, claiming the non-confrontational tone of the statement is merely a shift to a more diplomatic approach and actually a sign of a nearer, rather than later, rise in the yuan.  The next meeting of G-20 central bankers and finance ministers will be in South Korea on June 4-5.  G-20 leaders will meet later that month in Toronto, Canada.

Japanese corporate service prices increased 0.5% in March and were 1.1% lower than a year earlier.  That on-year drop was similar to a decline of 1.2% in 1Q but only half as much as the decrease of 2.5% in fiscal 2009, which ended in March.

Sweden’s March trade surplus of SEK 7.2 billion was somewhat less than that of SEK 7.8 billion in March 2009.  Exports rose 8.9% on year.

Britain’s Hometrack house price index firmed just 0.2% in April, slower than in March, but the on-year increase widened to 1.8%.

Industrial production in Singapore retreated just 1.5% in March after February’s 5.2% jump, and such posted a larger-than-forecast 43.0% increase from March 2009.  Taiwanese M2 was 4.6% greater than a year earlier in April.

Czech business and consumer sentiment respectively improved in April by 2.9 points and 5.2 points to +6.6 and minus 5.8.

This has been a typically light Monday data-wise.  There are no significant U.S. or Canadian releases planned.  Central banks in Israel and Hungary will make policy announcements today.  Analysts look for respective tightening and easing by them.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.

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