New Overnight Developments Abroad: Stocks Up and Dollar Down on Final Day of Week

June 26, 2009

The dollar has lost 0.8% against sterling, 0.7% against the Canadian dollar, 0.6% versus the euro and Swissy, 0.4% relative to the Australian dollar, and 0.2% against the yen.  The dollar is steady against the kiwi after news that New Zealand GDP fell more than forecast in the first quarter.

No chatter yet about Swiss intervention today after heavy operations earlier this week including yesterday.

Asian stocks gained 0.8% in Japan, 1.4% in Sri Lanka, 0.9% in Thailand, 1.0% in Pakistan, 1.7% in Vietnam, and 2.9% in India.  Stocks climbed 2.3% in South Africa and 1.2% in Australia.  In Europe, the German Dax and British Ftse are 0.5% higher.  The Paris Cac is up just 0.2%.

Ten-year Treasury and Gilt yields are 5 basis points higher.  Bund and JGB yields are steady.

Oil advanced 1.5% to $71.25/barrel, spurred by news of a pipeline attack in Nigeria.  Gold firmed 0.6% to $945.20/ounce and is 2.4% above Monday’s close.

Japan’s all-industry index shot up 2.6% in April compared to street forecasts of a 1.7% gain.  Industrial production increased 5.9%.  Services climbed 2.2%, and construction rose 0.6%.  After five straight quarterly losses and an 11.9% drop in the year to March, the all industry index, a supply-side GDP proxy was 0.2% higher in April than its 1Q average level.  The index posted a 9.9% on-year drop, however.

Japanese consumer prices fell 0.4% seasonally adjusted in May and by 1.1% from May 2008 after a 12-month dip of just 0.1% in April.  Non-food CPI, which the Japanese define as core inflation, also fell 1.1% y/y.  Core-core (excluding food and energy) fell 0.5% on the year.  Tokyo consumer prices posted on-year drops of 1.5% total and 1.0% core-core in June.  Tokyo’s CPI tumbled 3.7% at a seasonally adjusted annual rate in the first half of 2009, a distinctly deflationary result.

The Swiss index of leading economic indicators improved more than expected in June to a minus 1.65 print from minus 1.85 in May.

Belgian consumer prices fell 1.1% in the year to June, almost three times faster than the 0.37% drop in the year to May.

Italian hourly wages rose 3.0% in the year to May, down from 3.5% on year in April but well above the 0.9% pace of CPI inflation.

Consumer prices increased 0.1% in the year to June in two German states, North Rhine Westphalia and Saxony.  Energy and food accounted for these higher-than-projected results.  German import prices were steady on month in May, failing to drop for the first time since last July, but the on-year decline of 10.4% was greater than the 8.6% decline in the year to April and the greatest 12-month drop since February 1987.  Non-oil import prices dropped 0.8% from April and by 4.7% over the past 12 months.  Export prices fell 2.7% on year.

New Zealand real GDP fell by 1.0% for a second straight quarter in 1Q09.  Such was the fifth consecutive negative quarter.  Analysts had expected GDP to fall by 0.7% last quarter.  Investment sank 7.3%.  Consumption fell 1.4%.  Net exports made a positive contribution to growth as imports tumbled 8.6%.  The GDP price deflator firmed 2.6%.

French real GDP dropped 1.2% last quarter, reflecting declines of 6.4% in exports and 2.4% in investment.  Inventories exerted a 0.7 percentage point drag for the second straight quarter.  French consumer confidence improved to a 15-month high of minus 37 in June from minus 40 in both May and April and a low of minus 48 in July 2008.

Sweden’s seasonally adjusted trade surplus widened to SEK 8.3 billion in May from SEK 8.1 bln in April.  Both exports and imports fell more than 20% from a year earlier.

Chinese officials again ruminated about a desire for a world currency.

The U.S. will release personal income and spending as well as the U. Michigan consumer sentiment index today.

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


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