New Overnight Developments Abroad: Stocks, Oil Prices, and Commodity Currencies Lower

January 12, 2009

There’s not much news to start the second week of 2009.

Currencies dominated by commodity currency weakness and yen strength. The dollar advanced 2.6% against the Aussie dollar, 2.1% relative to the kiwi, 1.5% against sterling, 0.9% against the Canadian dollar and 0.4% against the Swiss franc. The yen is 0.4% stronger against the dollar.

Oil slumped 4.3% to $39.07 per barrel despite continuing conflict in Gaza. Gold lost 1.0% to $846.20 per ounce.

Japanese markets were closed for the Coming of Age Holiday. Elsewhere in Asia, stocks fell 3.2% in India, 2.8% in Hong Kong, 2.1% in South Korea, 1.7% in Singapore and 1.4% in Thailand. Australian share prices fell 1.4%. In Europe, the Dax is down 0.5%, and the Ftse and Cac40 are off 0.2%.

Sovereign bond yields edged higher in Germany and Britain.

A press report claims the China posted a $39 billion trade surplus in December, bringing the 2008 surplus to $295.5 billion, 12.7% wider than in 2007. Exports slid 2.8% year-on-year in December but rose 17.2% in 2008. Imports plunged 21.3% y/y in December but gained 18.5% last year. Chinese car sales fell 8% y/y in December but rose 7.3% in 2008.

Australian job ads fell 9.7% last month. Newspaper ads dropped by a record 51.8%, foreshadowing a severe turn for the worse in unemployment this year.

Another mini-devaluation of 1.3% was engineered in the Russian rouble to 35.77 against its basket. Russian consumer prices rose 0.7% last month and 13.3% in 2008.

Industrial production growth in India of 2.4% in the year to November after a dip of 0.3% in October exceeded expectations.

South Korean exports posted a 39.3% on-year drop in the first third of January.


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