New Overnight Developments Abroad: A Firmer Pound

December 31, 2008

Aside from a 0.9% drop against sterling, the dollar is narrowly mixed. 2009 is ending with the dollar straddling 90 yen and 1.40 per euro and with sterling not far above parity against the euro. Gold is up on the year, albeit slightly. Most everything else fell in 2008 including a 60.6% drop in oil.

The Hong Kong Monetary Authority continued to intervene to cap HK$ strength.

Many markets were already closed for the New Year, the most universally observed holiday of the calendar year. Closures include Japan, Germany, Italy, Switzerland, and Scandinavia. Most other markets close early, including London at 12:30 GMT.

Stocks are 1.2% higher in Britain and up 1.4% in Paris. Hong Kong and Australian bourses rose by 1.1% and 1.9%, but equities fell 2.9% in Pakistan, 0.7% in India, 0.6% in Malaysia, 0.5% in Singapore, and 0.4% in Russia.

Oil fell 3.2% to $37.80 per barrel, while gold lost 0.5% to $865.70 per ounce.

Central bank officials in China promised to keep an appropriately loose monetary policy and a stable yuan.

Australian private credit rose 0.4% and 8.2% year-on-year in November.

Industrial production in Finland tumbled 10.1% in the year to November. Factory output sank 13.4%.

Russia posted a $27.6 billion current account surplus in the third quarter and a $90.3 bn surplus over the first nine months of 2008. Hungary’s current account deficit widened 19.3% to $6.1 bn in January-September.

South African private M3 growth accelerated to a year-over-year pace of 16.3% in November from 15.6% in October, while private credit growth slowed to 15.3% from 16.4%.

Mortgage loans in Ireland rose by a reduced 6.7% in the year to November, a 22-year low.

South Korean consumer prices were flat in December, yielding a slightly higher-than-forecast on-year gain of 4.1% versus 4.5% in the year to November. Core inflation picked up to 5.6% from 5.3%. GDP growth in Singapore slowed to a 7-year low of 1.5% in 2008.

U.S. data for weekly energy inventories and jobless claims will be released later today. On Friday, factory sector PMI readings in the United States, Euroland, and Britain get announced.


HAPPY NEW YEAR, EVERYONE!  May the force be with you in 2009.


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