New Overnight Developments Abroad: Stocks Mixed and Dollar Up
June 3, 2009
The dollar recovered 1.2% against the kiwi, 0.4% relative to the euro and Canadian dollar, 0.3% against the Swiss franc and Australian dollar and 0.1% relative to sterling and the yen. A statement from Asian central banks expressed confidence in the dollar. Intervention rumors. Thai intervention was confirmed.
Stocks climbed in Asia but fell in Europe. U.S. equities likely to open on down note. Stocks advanced 2.6% in China, 1.6% in Australia, 1.4% in Thailand, 1.0% in Hong Kong and 0.4% in Japan. The British Ftse, Paris Cac and German Dax, however, have fallen 1.9%, 1.1%, and 0.6%.
The ten-year JGB yield increased to an 8-month high of 1.55%. Gilt and bund yields are lower.
Oil and gold edged lower by 0.5% and 0.2% to $68.23 per barrel and $982.90 per ounce.
Australian first-quarter GDP revealed surprise positive growth of +0.4%, thus averting technical definition of recession. Exports increased 2.7%, and consumption went up 0.5%, offsetting 4.8% drop in investment. Real GDP also climbed 0.4% from 1Q08.
Australia’s service-sector PSI index edged up a tenth to a still-low reading of 39.9 in May despite four increases in a row. Motor vehicle sales dropped 14.9% in the year to May. New Zealand vehicle sales increased 12.9% y/y.
Bank Indonesia cut its key rate by another 25 basis points to 7.0% as expected, noting lower inflation and a firm rupiah. There have been seven cuts in all since early December from a previous peak of 9.5%.
Japan’s service-sector PMI improved 1.8 points to 41.1 in May. Such was the third rise in a row from a recent low of 33.7 in February.
Revised Euroland GDP figures confirm a negative quarterly growth rate of 2.5% (about 10% saar) and an on-year drop of 4.8%. Exports tumbled 8.1% from 4Q and 15.5% from 1Q08. Investment fell 4.2% from 4Q and 10.4% from a year earlier. Inventories accounted for a full percentage point of the 2.5% drop in GDP.
Euroland producer prices, which sank 12.2% saar in 1Q09, dropped another 1.0% in April and by 4.6% from April 2008. Energy prices fell 3.0% m/m and 11.1% y/y.
The British service-sector PMI unexpectedly climbed above 50 to 51.7 in May from 48.7 in April, thus connoting expansion. It was the first reading over 50 in a whole year and the highest reading since March 2008. Business expectations rose to a 19-month high.
The composite euro area PMI in May was revised up a tenth to an 8-month high of 44.0 compared to 41.1 in April. Services rose a point to 44.8, while manufacturing climbed 3.9 points to 40.7.
- Germany posted PMI scores of 44.0 on the composite, up from 40.1 in April and 45.2 in services, up from 43.8.
- France recorded a 46.6 composite PMI score after 43.8 in April and a 48.3 reading on services after 46.5.
- Italy’s service PMI rose 1.1 points to 43.1.
- Spain‘s service PMI bucked the trend of improvement, instead falling to 39.1 from 42.3 in April.
- The Irish PMI-servies jumped by 7.3 points to 39.5.
Norway’s current account surplus narrowed 47.2% from 4Q08 and 27.6% from 1Q08 to Nkr 76 billion last quarter.
Sweden’s current account surplus fell 16.4% in 1Q09 to Skr 53.2 billion. Russia’s PMI-services improved to 46.6 from 44.4.
German car sales jumped around 40% in the year to May, and consumer confidence in Spain increased for a third straight month, rising 1.9 points to 63.8 in May.
In Britain, the Nationwide measure of consumer confidence increased 2 points in May, a fourth as much as in April, to a 6-month high of 53. Same-store shop price inflation eased to 1.3% in May from 1.4% in April.
Kamezaki of the Bank of Japan Board painted a picture of weak growth with negative inflation near 2%, but he expressed reservations against cutting the interest rate target back to zero.
In the U.S., the ADP private jobs data get released at 12:15 GMT, followed by factory orders at 14:00 GMT and oil inventories at 14:30 GMT. Bernanke testifies in the House at 14:00 GMT, and Hoenig will also be speaking in public today.
Copyright 2009 Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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