New Overnight Developments Abroad: Asian Stocks Sharply Lower

July 13, 2009

Stocks tumbled 3.5% in Taiwan and South Korea, 2.8% in Vietnam, 2.6% in Japan and Hong Kong, 1.8% in Singapore, 2.1% in Indonesia, 0.9% in India and 0.6% in Thailand.

The German Dax and British Ftse are unchanged, in contrast.

The dollar rose significantly overnight against the kiwi (1.0%), sterling (0.9%), Australian dollar (0.8%) and Swiss franc (0.7%) but is unchanged against the euro and up merely 0.1% against the Canadian dollar.  Dollar/yen slid 0.3% against the yen.

Sovereign bond yields are lower in North America and Europe.  But the 10-year JGB yield increased 1 basis point to 1.31%.

Oil fell another 0.5% and remains below the key $60 level at $59.60 per barrel.  Gold (off 0.3%) is hovering not far above $900 at $909.50 per ounce.

Kim Jong Il of North Korea said to be fighting pancreatic cancer as well as heart disease.  London’s Sunday Times had an article claiming the Lloyds will be announcing additional losses.  Japanese Prime Minister Aso reportedly has decided to call lower house parliamentary election for August 30th.

New Zealand, one of the first economies to enter recession in 2008, reported two pieces of better-than-assumed data.  House prices were unchanged in June from a year earlier, their first failure to decline since March 2008.  Retail sales advanced 0.8% in May, four time greater than forecast, and core retail sales recorded their biggest increase in 27 months.

Japanese industrial production growth in May was revised to 5.7% from 5.9%.  Output had jumped 5.9% in April, and April-May production was 6.4% above the average 1Q level.  Production was 29.5% lower than in May 2008.  Capacity usage increased 8.0% in May, while capacity edged 0.2% lower.

Japanese consumer confidence increased 1.9 points to 37.6 in June, the sixth straight improvement since a trough of 26.2 in December.  The result was near analyst forecasts.

Switzerland’s PPI/import price index was flat in June but showed a larger 5.6% 12-month decline after falling 5.0% in the year to May and rising 4.5% in the year to June 2008.  Concern by Swiss National Bank officials about imported inflation prompted them to launch a campaign of intervention this year to halt franc appreciation against the dollar.  Import prices fell 9.6% in the year to June.

Czech industrial production was revised to show  slightly larger on-year 22.0% decline in the year to May.  Bulgarian consumer prices fell 0.4% in June and posted a reduced 3.7% rise from a year earlier.

Pakistan’s exports (down 19.4%) posted their eighth consecutive on-year decline.  Imports fell 17% in the year to June.

No significant U.S. data are scheduled today.  The Bank of Canada releases a couple of survey indicators.

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


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