Softer Yen on this Japanese Holiday

February 11, 2013

Trading today was subdued by market closures in Japan and China. Japan is celebrating National Foundation Day, a patriotic commemoration of the accession of the country’s first emperor.  China will be shut most of this week for the Chinese Lunar New Year, which ushers in the year of the snake.

The biggest news of the day has been the announcement from the Vatican that Pope Benedict XVI is resigning effective February 28, the first pope to do so for reasons other than death since 1415.  His age (85) and health were the reasons cited.

Euro area finance ministers are meeting today in Brussels, mainly to consider possible aid to Cyprus and to discuss the Greek situation.  It will be the final such meeting presided over by Juncker.  Concern is mounting ahead of Italy’s February 24th election that the result will be fractured and leave Italy with a weak government.  Italian bond yields are higher.  Yet another worry is the swirling corruption scandal in Spain. 

The dollar has risen 0.7% against the yen, 0.6% versus sterling, 0.5% relative to the Australian dollar and 0.4% against the Canadian and New Zealand dollars.  The greenback has dipped 0.1% versus the euro and ticked 0.1% higher versus the Swiss franc.  The yuan is steady.

Share prices have slid 0.2% in Australia and 0.1% in India.  In Europe, stocks are down 0.4% in Spain and Italy but up 0.6% in France, 0.3% in Britain, and 0.2% in Germany.

The 10-year German bund and British gilt yields are one and three basis points firmer.

Gold and oil prices have settled back 0.3% and 0.2% to $1661.20 per ounce and $95.53 per barrel.

Australian home loans slumped 1.5% in December, their greatest sequential drop since last February.  Investment lending for homes dropped by 2.4%.  New Zealand home prices were 6.2% higher in January than a year earlier.

French industrial production in December was 0.1% softer than in November and 3.1% weaker than at the end of 2011.  Analysts expected a better result.

Ireland’s construction purchasing managers index printed at 45.8 in January, up from 43.0 in December and 42.6 in November and signaling the slowest rate of contraction since May 2012.

Price data reported in several European economies signaled receding pressure.  Danish consumer price inflation slowed to 1.3% in January from 2.0% in December.  Czech CPI inflation of 1.9% was down from 2.4% in the year to December.  Norwegian consumer prices slid 0.2% on month and slowed in on-year terms to 1.3% in January from 1.4% in December.  Norwegian producer prices were 2.4% lower in January than a year before.

Portugal’s trade deficit of EUR 2.58 billion in December was 7.7% narrower than that in November.  Romania posted a EUR 890 million trade gap in December.

There has been a 32% devaluation of the Venezuelan Bolivar.

The U.S. and Canadian data release calendars are blank today.  Mexico reports industrial output.  Fed Vice-Chairperson Yellen speaks publicly today.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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