New Overnight Developments Abroad: Bomb Blasts in Jakarta

July 17, 2009

The dollar and yen are firmer.  The buck rose 0.8% against sterling, 0.7% versus the Aussie dollar, 0.6% relative to the kiwi and 0.3% each against the euro and Swiss franc. The dollar is flat against the Canadian dollar and up 0.1% against the yen.

Stock markets continued to climb in reaction to positive earnings reports.  Equities gained 2.4% in Hong Kong, 2.3% in Thailand, 3.7% in India, 1.3% in Singapore, 1.5% in the Philippines, 1.1% in Malaysia, 1.0% in Taiwan, 0.6% in South Korea, 1.0% in Sri Lanka, and 0.6% in Japan.  The German Dax and Paris Cac are trading 0.9% higher, but the British Ftse is up just 0.1%.  Exceptions to the rising trend were Indonesia, down 0.6%, and Vietnam, off 1.1%.

Sovereign bond yields are lower in Japan (off 2 basis points to 1.33%) and Europe.

Oil softened 0.5% to $61.74 per barrel, while gold is steady at $935.20 per ounce.

Bomb blasts at two Indonesian hotels have not affected markets much.  Details on responsibility remain unclear.  There has also been civil disobedience at Tehran University in Iran.

Japanese Prime Minister Aso will apparently not be stepping down before August 30th elections as some LDP lawmakers had hoped.  The new Vice Finance Minister for International Affairs, Tamaki, hinted at a greater readiness to intervene than under his predecessor.

A 0.3% on-year drop of Canadian consumer prices in June was the first 12-month decline since November 1994.

Construction output in the eurozone fell 2.0% in May, the most since December, and by 8.0% from a year earlier.

Euroland’s seasonally adjusted trade position was in surplus for a second straight month, albeit by only EUR 0.8 billion after EUR 0.7 bln in April. The unadjusted surplus was EUR 2.7 billion, with a year-to-May accrued deficit of EUR 6.5 billion.  Imports and exports both plunged 27.5% from Jan-May 2008.  The energy deficit is considerably smaller, but so is the surplus from all other commerce.

Australian export prices tumbled 20.6% last quarter, much more than a 6.4% drop in import prices.  New Zealand house prices recorded a fifth consecutive quarterly drop in 1Q09, falling 1.0% from 4Q08 and by 9.3% from a year earlier.  Non-oil domestic exports in Singapore fell 5.2% in June and by 11% from June 2008.  The Philippine balance of payments swung back to a $73 million surplus in June.

Italian industrial orders rose 0.4% in May, their first increase in ten months but less than half what had been forecast. Spain’s industrial orders tumbled 29.5% in the year to May, less than the 31.4% drop in the year to April.  Finnish producer prices were unchanged in the second quarter and just 0.7% higher than in 2Q08.

U.S. housing starts and building permits and Canadian leading indicators will be released later today.  The Bank of Mexico is expected to cut interest rates today, albeit by a reduced amount because of continuing above-target inflation.

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


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