New Developments Abroad: Pakistani Stocks Soar 4.5% After Musharraf Resigns

August 18, 2008

The dollar fell 0.9% against the kiwi, 0.7% relative to the Australian dollar, 0.4% against sterling, and 0.3% against the euro and yen.  The Fed is seen raising rates later rather than sooner.  Bernanke speaks Friday at Jackson Hole annual symposium.

The Nikkei rose 1.1%, but stocks fell 5.5% in China, 2.7% in Taiwan, and 1.1% in Hong Kong.  In Europe, the German Dax and Paris Cac are down 0.6%, and the British Ftse has slipped 0.3%.

Sovereign bond yields are lower.  The 10-year JGB yield, for instance, is off 1 basis point at 1.445%.

Oil rebounded to an intraday high of $115.35/barrel and is up 0.5% currently on concern the storm Fay in the Gulf of Mexico could hit some rigs.  Gold advanced 1.2% to exceed the $800 per ounce level again.

The Bank of Japan began a 2-day meeting that is expected to leave the central bank rate at 0.5% and downgrade the monthly economic assessment.

Japanese June wage earnings were revised upward to 0.4% year-over-year, which is still at a 6-month low and below core CPI inflation.

The Bank of France projected French growth in 3Q 0.1% after -0.3% in 2Q and reported a further drop in manufacturing business sentiment from 95 in June to 92 in July, lowest since May 2003.

The British Rightmove house price index fell 2.3% m/m in August and by 4.8% from August 2007, the greatest on-year drop in this six-year-old data series.

Euroland’s trade balance recorded a EUR 0.1 billion deficit in June compared to a deficit of EUR 3.9 billion in May and a surplus of EUR 7.5 billion.  The latest result was weaker than anticipated and resulted from import growth of 11.4% y/y being more than twice as fast as export growth of 4.9%.

Swiss retail sales growth of 0.7% in the year to June was considerably weaker than forecast or May’s pace of 7.4%.

Producer prices in Finland firmed 0.4% m/m and 4.9% y/y in July.

Non-oil exports in Singapore sagged 2.2% m/m and 5.7% y/y in a sign that the global slowdown is spreading to emerging markets.

The British Chamber of Commerce warned of a possible recession.

New Zealand’s service sector index firmed in July but remained below the 50 line separating expansion from contraction for a fourth straight month.

The German Bundesbank said that weaker growth will not necessarily curtail inflation.


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