New Overnight Developments Abroad: Early Market Closures

December 24, 2008

Markets were closed today for Christmas Eve in numerous European centers such as Germany, Spain, Italy, Sweden, Norway, Switzerland. British and French markets are shutting at 12:30 GMT and 13:00 GMT. Much of Europe doesn’t open until Monday. Early closings are also set for North America.

Sterling has softened 0.4% against the dollar, which otherwise shows losses of more than 1.0% against the kiwi and rand, 0.8% against the Swiss franc, 0.6% against the yen, 0.4% versus the euro, and 0.2% against the Canadian and Australian dollars.

Those stock markets that opened mostly fell. Japanese Nikkei lost 2.4% after being shut Tuesday. China -1.7%. South Korea -1.4%. Pakistan -3.8%. India -1.2%. Indonesia -0.5%. Hong Kong and Thailand -0.3% apiece. France -0.8%. Britain -0.9%. Australia, up 1.4%, was an exception to the downward trend.

The 10-year JGB yield hit a 3-1/2 year low of 1.195% but is flat on balance. Treasury yields are lower on futures markets.

Oil slid 1.8% to $38.28/barrel. Gold is steady at $837.50 per ounce, and platinum has advanced over 1%.

The 3-month euribor rate fell below 3.0% for the first time since mid-2006.

The South Korean won recovered over 2% on suspected intervention support.

Russia engineered the ruble’s 7th mini-devaluation so far this month. Reserve requirements in the Ukraine will be raised on January 5th. The central bank in Georgia cut its refinancing rate by a full percentage point to 8%. Polish central bankers indicated that more rate cuts are possible.

Japan’s cabinet approved an expansionary Y88.5 billion fiscal 2009 budget, which now faces very tough sledding in parliament where the Democratic Party opposition is calling for new elections. Non-debt service spending is slated to rise 9%, while tax revenues are forecast to drop 13.9%. Y 33.3 trillion of JGB’s will be issued, torpedoing any chance of meeting the goal of a balanced budget in fiscal 2011.

U.S. President-Elect Obama and Congressional Democrats are said to be close to an agreement on a massive fiscal stimulus.

Japan’s Ministry of Finance released its quarterly business survey in which sentiment and planned investment fell sharply. For large firms, sentiment had a record low reading of -35.7 after -10.2 in September. Large manufacturers’ scored -44.5 after -10. All small firms had a reading of -40.7 after -34.3.

The Royal Institute of Chartered Surveyors in Britain predicts a 10% decline in house prices next year.

ECB President Trichet opined that markets are not taking sufficient account of the dramatic policy response worldwide to promote growth. But another member of the ECB’s governing council, Nowotny of Austria, hinted that more rate cuts are possible and cited the stronger-than-assumed recession in Germany.

Before the early U.S. closing, a slew of U.S. statistics will be released including weekly jobless claims and monthly durable goods orders an personal income/expenditures. All will accentuate profound weakness in the economy.


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