May in Figures
May 31, 2010
End-April to End-May market changes illustrate how Europe’s sovereign debt problem may infect Japan and the United States with economic weakness of a different sort. The return of risk aversion lifted the dollar and yen. The appreciation of those two currencies in turn hammered Japanese and U.S. stocks more sharply than European stocks, and yield curves flattened. One mitigating development was a more-than-10% decline in oil prices. Greater global growth risks, lessening commodity price inflation, and much lower long-term interest rates create a more difficult backdrop for either the Fed, ECB, or Bank of Japan to raise their interest rates. In an extreme case, Japan has recycled through similar patterns for the past fifteen years, and the Bank of Japan has not lifted its overnight rate target above 0.50% since 1995 despite its good intentions to do so.
| 10-Yr Yield | 04/30/10 | 05/31/10 | Chg vs End-April |
| U.S. | 3.66% | 3.28% | -38 Basis Points |
| Germany | 3.02% | 2.56% | -46 |
| Japan | 1.29% | +1.26% | -3 |
| U.K. | 3.85% | 3.58% | -27 |
| Canada | 3.64% | 3.36% | -28 |
| Switzerland | 1.83% | 1.57% | -26 |
| 3-month euros | |||
| U.S. | 0.33% | 0.77% | +6 Basis Points |
| Euroland | 0.61% | +0.51% | -10 |
| Japan | 0.24% | +0.25% | +1 |
| U.K. | 0.68% | +0.88% | +20 |
| Canada | 0.51% | 0.60% | +9 |
| Swiss | 0.25% | 0.11% | -14 |
| FX | Pct Chg in US$ | ||
| EUR/$ | 1.3309 | 1.2301 | +8.2% |
| $/JPY | 93.97 | 91.28 | -2.9% |
| $/CHF | 1.0764 | 1.1552 | +7.3% |
| GBP/$ | 1.5297 | 1.4536 | +5.2% |
| AUD/$ | 0.9242 | 0.8453 | +9.3% |
| NZ$/$ | 0.7269 | 0.6800 | +6.9% |
| $/CAD | 1.0167 | 1.0440 | +2.7% |
| Equities | Pct Change | ||
| Nasdaq | 2461 | 2257 | -8.3% |
| Djia | 11009 | 10137 | -7.9% |
| Dax | 6136 | 5964 | -2.8% |
| Nikkei | 11057 | 9769 | -11.6% |
| Ftse | 5553 | 5188 | -6.6% |
| Canada TSE | 12196 | 11733 | -3.8% |
| Swiss SMI | 6617 | 6313 | -4.6% |
| Commodities | Pct Change | ||
| Oil, $ per brl | 86.17 | 74.44 | -13.6% |
| Gold, $ per oz | 1179.20 | 1217.90 | +3.3% |
Copyright Larry Greenberg 2010. All rights reserved. No secondary distribution without express permission.
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