New Overnight Developments Abroad: Asian Stocks Post Sixth Daily Drop in a Row

July 8, 2009

The Nikkei lost 2.4%. Stocks also fell another 2.8% in India, 1.3% in Thailand, 0.7% in Taiwan, 1.0% in Pakistan, 0.6% in Singapore, 0.4% in the Philippines, and 0.8% in Hong Kong.  The German Dax and British Ftse have edged 0.1% and 0.2% higher.

The yen hit six-week highs of 130.42 per euro and 94.08 per dollar.  The dollar is 0.5% lower against the yen but unchanged against the Swissy and euro.  The buck rose 0.3% against sterling, 0.4% against the Australian dollar, 0.2% against the kiwi, but is 0.1% softer against the Canadian dollar.

Sovereign debt yields are lower in Europe and Japan.  The 10-year JGB touched 1.285%, lowest since March 25th.

Oil eased another 0.8% to $62.43 per barrel.  Gold is also off 0.8% at $921.70 per ounce, and this has weighed on the South African rand, which hit a 2-week low against the dollar.

Japanese core domestic machinery orders unexpectedly fell 3.0% in May on top of a 5.4% drop in April, and such posted a 38.3% decline from May 2008.  Foreign orders sank 13.3%.

Japan’s current account surplus in May was 34.3% smaller than a year earlier.  Goods exports dropped 42.2%, even more sharply than the 40.6% decrease in the year to April.  The seasonally adjusted surplus widened 5.1% between April and May, as exports recovered 1.9%.  The trade balance swung to a Y 274 billion surplus in June 1-20 from a deficit of Y 247 billion a year before.

On-year growth in Japanese M2 of 2.7%, M3 of 1.7%, and bank lending of 2.5% during June were each lower than in May and less than forecast.  Japanese corporate bankruptcies were 7.4% higher in June than a year earlier.

Australian data released today corroborated the central bank’s upbeat statement yesterday.  Consumer confidence scored its greatest monthly advance in 22 years last month.  Home loan approvals increased 2.2% in May on top of a 1.8% advance in April.

German industrial production jumped 3.7% in May, the biggest monthly increase since August 1993, but was still 18.1% lower than in May 2008.  Output in April was revised to a drop of 2.6% from minus 1.9% reported a month ago.  Production of capital goods (up 8.3%) and intermediate goods (+4.3%) led the gains in May.  German corporate insolvencies increased 7.1% in the year to April, less than the gain in 1Q09.

Revised Euroland GDP figures for 1Q09 showed an unchanged quarterly drop of 2.5% but a slightly steeper 4.9% decline from 1Q08.  In the year to 1Q09, GDP fell by 6.9% in Germany, 6.0% in Italy and Finland, 8.4% in Ireland, 4.5% in the Netherlands, 3.7% in Portugal, and 3.0% in Spain.

The Bank of France revised its projected GDP drop for 2Q09 to minus 0.4% from minus 0.5%.  The central bank reported a fourth straight rise in French industrial confidence to an as-expected reading of 84 from 81 in May, 75 in April, 74 in March 72 in both January and February and a cyclical low of 68 in December.  Business sentiment in service-sector industries also rose to 78 in June from 77 in May and a recent low of 76 in April.

Turkish industrial output rose 65.5% in May but fell 17.4% from May 2008.

Swiss unemployment rose to 3.8% in June, highest since August 2005, from 3.5% seasonally adjusted in May.

Swedish industrial output fell 2.7% in May and by 21.9% on year, while orders sank 30.1% from a year earlier despite a 3.8% monthly advance.  Sweden’s activity index worsened to minus 0.05 in May from plus 0.11 in April.

The British Halifax home price index unexpectedly fell 0.5% in June but recorded a smaller 12-month drop of 15.0% after declining 16.3% in the year to May.  The NIESR Institute estimates that British GDP fell 0.4% in June on top of a 1.3% drop in May.  The British Retail Consortium said shop prices dropped by 0.7% in the year to June, led by a 1.9% decline in non-food stores.  The Nationwide gauge of British consumer confidence improved to 58 in June from 54 in May and was almost as high as the 59 reading in June 2008.

Romanian real retail sales fell 12.3% in the year to May despite a 0.2% monthly uptick.

Russian President Medvedev again called for modifications in the international monetary system away from reliance on the dollar.

India‘s trade minister said exports fell sharply in June.

Brazil’s IGP price index slid 0.32% in June, somewhat more than expected.

U.S. consumer credit data are due today.  Many central bank rate announcements are on tap for tomorrow.

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


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