New Overnight Developments Abroad: Big Tumble in Equities

March 30, 2009

Stocks and oil are sharply lower.  The yen, dollar and bond yields rose in fresh wave of risk aversion.

GM CEO Wagoner is gone.  Obama administration gave thumbs-down to GM and Chrysler consolidation plans.  Geithner suggests some banks will need more federal money. Bank shares tumbled overnight.  A Spanish savings bank, CCM, was nationalized.

The Nikkei (off 4.5%) had worst day in 2-1/2 months.  Elsewhere in Asia, stocks fell by 1.8% in Malaysia and Vietnam, 4.6% in India, 4.2% in Singapore, 4.5% in Hong Kong, 3.2% in South Korea, and 2.5% in Thailand.  Australia’s bourse lost 1.9%.  In Europe, the German Dax, Paris Cac and British Ftse have traded 3.5%, 2.8%, and 2.5% lower.

Gilt and bund yields are sharply lower, as are Treasury yields.  But 10-year JGB’s firmed another point to 1.34%. Oil fell 3.6%. Gold is steady at $925.20/ounce.

The dollar fell 1.3% against the yen but gained otherwise by 2.0% against the Australian dollar, 1.5% relative to the kiwi, 1.2% against sterling, 0.9% against the euro, and 0.5% each against the Canadian dollar and Swiss franc.  The new Taiwan dollar was supported with central bank intervention.

Although Japanese industrial production tumbled another 9.4% in February and 38.4% from a year earlier, likely increases were indicated for both March and April, and the inventory ratio rose 4.6% last month, suggesting the sector may soon bottom.  January-February output was 22.6% lower than the 4Q08 level.

The EU Commission reported record low readings in March for overall Euroland economic sentiment (64.6) and most of its components like industrial sentiment (-38), consumer confidence (-34), services (-25).  Expected inflation also had record low readings both among consumers (+1) and firms (-14). Results were weaker all around than forecast. A separate business climate index sank to a record low of -3.58.

Retail euro area PMI’s compiled by Bloomberg indicated significant trends of contraction continue in Germany (44.4) and Italay (41.9).

Spanish consumer prices fell 0.1% in the year to March, Euroland’s first negative on-year reading.  Belgian consumer prices rose just 0.6% y/y, down from 1.9% in the year to February and 4.4% in the year to March 2008.

Japanese exports in March 1-10 were 49% lower than a year earlier.  That’s a similar drop to the decline of 49.4% in full-February.

The South Korean current account recorded its largest current account surplus in 11 years.  Exports rose 13% but fell 18.3% in the year to February.

New Zealand building permits fell 4.0% in the year to February. Australian new home sales rose 3.9% on month in February.

Norwegian retail sales volume slid 0.3% on month in February, worse than forecast.

British lending data were better than assumed.  Mortgage approvals rose to 38K in February from 32K in January.  Total net lending recovered 1.3% last month but was still 85.5% below its year-earlier level.  M4 growth accelerated to 18.7% in the year to February from 17.5% in January.  The Hometrack house price index posted the smallest monthly drop since May 2008 but still fell 10.3% on year.

Greek industrial output fell 10.2% in the year to January.  The Greek PPI fell 5.8% in the year to February.

South African private sector credit growth slowed for an eighth consecutive month to 11.1% in the year to February.

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.


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