Monday Executive Recap

December 23, 2008

  • The dollar rose 1.1% against the yen, surpassing the 90 level, but lost some marginal ground against the euro and its trade-weighted index.
  • Most equities fell in Asia, Europe, and North America.
  • Oil climbed back above $40, and gold rose too.
  • Chinese interest rates were cut 27 basis points. The new 5.31% lending rate is 216 basis points lower than prior to mid-September. New Chinese data today revealed a $16 billion decline of reserves in October, the first drop since end-2003.
  • More evidence of global economic weakness emerged. 1) Japanese exports sank 26.7% in the year to November. 2) Euroland industrial orders fell 4.7% in October and 15.1% from a year earlier. 3) Belgium’s business sentiment dropped to -31.3 in December from -14.8 in September.
  • Japan’s government and central bank each released monthly reports with a downgraded assessment of the economy. Germany’s Kiel Institute expects GDP to drop almost 3% next year, making such a much worse year than any other since World War II.
  • Inflation continues to drop faster than expected in many places. Chinese corporate goods prices slid 0.4% in the year to November, their first negative 12-month change since end-2002. In November, French producer prices fell 1.9%, and German import prices slumped 3.4%.
  • Ireland’s government is investing EUR 5.5 billion in that economy’s three largest banks.


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