New Overnight Developments Abroad: Chinese Exports and German Factory Orders Plunged
March 11, 2009
The dollar is mostly marginally softer, with drops of 0.3% against the euro and kiwi, 0.2% versus the yen and Australian dollar, and 0.1% against the Canadian dollar. The greenback firmed 0.2% against the Swiss franc and shows no change against sterling, however.
Stocks mostly rose following yesterday’s U.S. rally. Gains amounted to 4.6% in Japan, 2.0% in Hong Kong, 1.9% in Australian, 3.2% in South Korea, 1.6% in Vietnam, 1.5% in The Philippines, 0.5% in Germany and 0.4% in France. Main exception is a 0.9% in China following disappointing trade figures. Stocks also fell 2.0% in India and 0.3% in Britain.
Bund yields are higher, while Gilt yields are softer. The 10-year JGB touched 1.315%, highest in a month.
Oil slid 1.4% to $45.08 per barrel, while gold firmed 0.8% to $903.10 per ounce.
China’s trade surplus dropped 87.6% on month in February. Exports plunged 25.7% from February 2008, five times more than anticipated. Imports fell 25% y/y.
Chinese fixed asset investment recorded similar on-year growth of 26.5% in January-February to the 26.1% advance in full-2008.
Australian consumer confidence weakened less than expected in March, dipping only 0.2% from February. Such was 3.4% lower than a year earlier. Housing finance in Australia rose 3.5% in January, while the number of house mortgage approvals fell 1.4%.
New Zealand export prices rose 21.4% on year in December, while import prices advanced 19.2%. The terms of trade slid 0.9% m/m but rose 1.9% on year.
Japanese core machinery orders fell 3.2% in January and by 39.5% from a year earlier. These declines were slightly less than feared. However, on-month and on-year plunges in foreign orders of 49.0% and 71.2% are very worrisome. Japanese corporate goods prices ticked down 0.4% in February and posted the biggest on-year decline (1.1%) since 2003.
British trade data for January were worse than anticipated. The goods and services deficit widened 10.4% to Gbp 3.58 billion. The merchandise trade gap increased to Gbp 7.75 billion form Gbp 7.23 billion in December, and the Gbp 5.70 billion deficit with non-EU countries was the most in over 400 years. Export shipments to non-EU areas slumped 16%.
German labor cost growth accelerated to 3.9% in the year to 4Q08.
Swedish unemployment firmed to 4.7% in February from 4.5% in January.
Fourth-quarter GDP data in the Czech Republic, Hungary and Estonia got revised to show larger declines than reported initially.
Denmark’s Dkr 2.7 billion current account deficit and Dkr 0.5 billion trade shortfall in January were worse than expected.
Canada’s prime minister warned a world recovery first needs to have the U.S. banking problems fixed.
German producer prices fell 1.2% m/m in January, and their 12-month rate of rise was halved to 2.0%. Non-energy PPI edged only 0.2% higher from a year earlier, a clear sign that the risk of deflation cannot be readily dismissed.
German factory orders plummeted 8.0% in January, eight times more than expected, and December’s drop was revised to 7.6%. This is an awful report.
Central Banks in New Zealand and Brazil make interest rate announcements later today. The U.S. budget and Canadian house price figures will be released.
Copyright 2009 Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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