New Developments Abroad: Nikkei Rallies
July 22, 2008
The Nikkei climbed 381 points or 3.0%. Other Asian stocks were fairly flat. In Europe, the Dax and Cac40 are 0.7% lower. Ftse is off 1.4%.
Scantl movement in the dollar: flat against the yen, euro and sterling, up 0.3% against the C-dollar, and off 0.1% versus Swissy, kiwi and A-dollar.
The 10-year JGB yield rose 4.5 basis points as Japan reopened to 1.61%. Sovereign bond yields mostly lower in Europe and North America.
Oil is flat at $131.00 per barrel. Gold is 1.0% higher at $973.90/ounce.
Japan’s all-industry index firmed 0.4% in May, as a 2.6% jump in industrial production outweighed a 1.7% drop in construction and small declines in services and public administration. The all-industry index, a rough supply-side proxy for GDP, fell 0.5% in the year to May. Japan’s ruling cabinet trimmed projected GDP growth in fiscal 2008/9 to 1.3% from 2.0%.
The Asian Development Bank cut its 2008 forecast for East Asian emerging market growth to 7.6%, a 5-year low. South Korea’s finance minister said present economic troubles are as serious as the Asian financial crisis of ten years ago. A central banker from the Philippines hinted at more interest rate tightening.
Japanese supermarket sales dropped 0.9% y/y in June. Department store sales also fell, depressed by a big drop in clothing demand.
Two ECB Governing Council members, Liebscher and Smaghi, made hawkish remarks defending the July rate increase.
Italian consumer confidence weakened much more than anticipated to a near-15 year low of 95.8 in July from 99.9 in June. The drop was concentrated in forward-looking components of the index. Italy’s non-EU trade gap widened almost 14-fold y/y to EUR 2.328 bln in June and expanded by 34% in 1H08.
Chinese motor vehicle sales rose 18.5% y/y in 1H08. Corporate goods prices rose 9.5% y/y in June, led by a 19.3% rise in oil products.
The June Swiss trade surplus widened 29% from May and 40% from June 2007 despite softer export demand.
ShareThis
