New Developments Abroad

May 26, 2008

A quiet day looms. No significant data are due, and the British and U.S. markets are closed respectively for a bank holiday and Memorial Day.

The dollar is narrowly mixed, with losses of 0.3% against the Swissy and 0.1% against both the C-dollar and Chinese renminbi but advances of 0.2% against the pound and 0.1% against the yen, euro, Aussie dollar and kiwi.

Asian stocks tumbled. The Nikkei closed off 2.3%. Kospi -1.5%. CSI 300 -3.2%. Indonesia -1.9%. Australia -1.1%. Hang Seng -2.4%.

Little change has occurred in the German Dax (+0.1%) or Paris Cac (+0.2%).

Oil remains firm amid unrest in Nigeria, touching a high of $133.08/bbl overnight and rising 0.6% on balance. Gold slid 0.2% on net.

Chinese reserves advanced by a record $74.46 bln in April to $1.757 trillion.

Icelandic consumer prices jumped 1.4% in May, lifting the 12-month gain to 12.3% from 11.8% in April and 4.7% in the year to May 2007. Spanish producer prices firmed 0.8% m/m in April and 7.2% y/y, up from 6.9% in March and 2.7% in April 2007.

New Zealand’s trade gap of NZ$ 334 mln in April was twice as big as anticipated. Sweden’s trade surplus widened to SEK 11.8 bln in April from SEK 9.8 bln in March and SEK 11.5 bln in April 2007.

Fading expectations that the Bank of Canada will cut rates on June 10th are supporting the CAD.

Warren Buffet anticipates a long-term U.S. recession.

There is some speculation that candidates to fill vacancies on the BOJ Policy Board will be named later this week, but Machimura said the task remains difficult for the Fukuda government.

Trichet of the ECB reiterated the G7 opposition to excessive forex volatility and sharp moves.

The British Hometrack house price index fell 0.5% m/m and by 1.9% y/y, its greatest 12-month drop since November 2005.


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