New Overnight Developments Abroad: Stocks Post Robust Gains

May 4, 2009

Financial markets are shut in Japan for Greenery Day and in Britain for a bank holiday.

Equities advanced 6.4% in India, 5.7% in Singapore, 5.5% in Hong Kong, 4.7% in Vietnam, 3.5% in China, 3.0% in Thailand, and 2.1% in South Korea.  The German Dax and Paris Cac are 1.7% and 1.1% higher.  Australian equities rose 3.0%.

The dollar is narrowly mixed, with gains of 0.3% against sterling and the Canadian dollar and 0.1% versus the yen but losses of 0.4% against the Australian dollar and kiwi.  The dollar shows no net change against the euro or Swiss franc.

Bund yields are 2 basis points firmer.  Oil dipped 0.2% to $53.09 per barrel.  Gold firmed 0.3% to $894.10 per ounce.

Swine flu has spread to majority of U.S. states but is less prevalent than before in Mexico.

The EU Commission released new semi-annual forecasts for the euro area, projecting growth of -4.0% and CPI inflation of 0.4% in 2009, followed by growth of -0.1% and inflation of 1.2% in 2010.  The budget deficit/GDP ratio is now projected to climb to 5.3% this year and 6.5% in 2010. The jobless rate is seen increasing to 11.5% by 2010 from 9.9% this year and 7.5% in 2008.

Final Euroland PMI-manufacturing scores were announced.  The euro area reading was 36.8, up from a 36.7 flash indication and 33.9 in March.  The French index rose to 40.1 from 36.5 in March.  Italy had a 37.2 reading, up from 34.6.  Germany scored 35.4, up from 32.4 in March.  Spain’s index improved to 34.6 from 32.9, and the Dutch index increased to 38.8 from 35.9.  The Greek index was 40.9 (38.2).  Activity is still contracting but less rapidly.

Euroland’s Sentix index, a gauge of investor sentiment, rose to a 9-month high of minus 34.5 in May from -35.3 in April.

PMI’s from non-Ezone economies were at 44.3 in Hong Kong (42.7 in March), 35.6 in South Africa (36.0), 38.8 in Sweden (36.5), 34.7 in Switzerland (32.6), 42.1 in Poland (42.2), 44.3 in Hong Kong (42.7) and 38.6 in the Czech Republic (34.0).  China reported two sets of manufacturing PMI’s, one showing a gain to 50.1 from 44.8 and the other a rise to 53.5 from 52.4.  China’s non-manufacturing PMI improved to 59.0 from 55.7. Russia’s index increased 1.4 points to 43.4, while India’s rose 3.8 points to 53.3.

Germany reported disappointing retail sales, which fell 1.0% in March and by 1.5% from March 2008. A 0.1% uptick had been forecast.  Spanish car sales tumbled 46% in the year to April.

China‘s State Information Center projects on-year GDP growth of 7% in the second quarter, up from 6.1% in 1Q09.

Australian house prices fell 2.2% last quarter and 6.7% on year, worse than anticipated.  Job ads fell 7.5% in April and 49.9% from April 2008.

Norwegian house prices fell 3.0% in the year to April.  South Korean house prices slid 0.1% in the year to April.

Hong Kong retail sales volume dropped 9.3% in the year to March.

U.S. pending home sales and construction spending figures get released at 14:00 GMT.  Hoenig and Lacker, regional Fed presidents, speak today.

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


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