New Developments Abroad

June 11, 2008

The dollar gave gack 0.4% against the C-dollar, 0.3% versus the kiwi, 0.2% relative to sterling, the euro and Swiss franc, and 0.1% against the yen.

The Nikkei advanced 1.2%, but stocks in China and Hong Kong fell. Dax +0.1%. Ftse is flat.

Oil halted its decline and is 2.0% higher at $133.97/barrel than its Monday close. Gold rose 0.8% to $878.40/ounce.

Japanese 1Q GDP growth was revised to 4.0% saar from 3.3%. 4Q07 growth was also revised higher to 2.9% saar. The 3.4% annualized pace of growth in these two quarters followed an annualized drop of 0.8% in the previous two quarters, such that GDP in 1Q08 was only 1.3% greater than in 1Q07. Nominal GDP actually slid 0.2% y/y, and the GDP deflator sank 1.5%.

Japanese domestic corporate goods prices posted their greatest m/m rise since April 1980, a 1.1% jump in May, and on-year CGP inflation of 4.7% was at a 27-month high.

Japan’s April current account surplus of Y 1381 billion was 29.6% lower than a year earlier. The trade surplus contracted 38.4%, as on-year import growth of 13.4% dwarfed export growth of 4.9%. The seasonally adjusted current account surplus narrowed 28% m/m to Y 1511 billion.

Japanese stock and bond transactions generated a Y 1942 billion outflow in May, reversing a Y 1948 billion inflow in April.

Australian consumer confidence fell another 5.6% in June to its lowest level since December 1992. In New Zealand, house prices and house sales were respectively unchanged and down 2% m/m and off by 1.4% and 52.9% y/y. Tight monetary policies are squeezing both of these economies.

The French current account deficit widened 20% in April from March. French consumer prices rose 0.6% m/m and 3.7% y/y in May, most in at least 11 years.

Britain’s goods and services trade deficit increased 15.2% to Gbp 4.325 billion in April. Average earnings growth of 3.8% y/y in Feb-April was less than expected despite news of a 9K rise in unemployment last month.

Chinese producer prices climbed 8.2% in the year to May, marginally less than expected but above April’s 8.1% pace. Export growth of 28.1% y/y in May was much higher than April’s 21.8% rise. Despite import growth of 40% y/y, China’s trade surplus widened to $20.2 billion from $16.7 billion in April.

Canadian capacity usage of 79.8% was the lowest in 15 years. Canadian house price inflation fell to 5.2% in April from 6.1% in March.


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