New Overnight Developments Abroad: Stock Slip in Profit-Taking

August 4, 2009

Moderate counter-trend movements have been seen in several markets.  Yen and dollar are up.  Stocks fell.  Gold down but oil up.

While stocks were mixed in the Pacific Rim (up 1.1% in Australia and +1.8% in the Philippines but down 1.2% in Singapore and 1.4% in Taiwan), such have traded down by 0.7% in Britain and Germany and by 0.6% in France.  A lower open is indicated by Futures in the United States.  The Nikkei firmed 0.2%.

The dollar dropped 0.6% against the yen but has risen 0.3% against the Swiss franc and Australian dollar, 0.2% against the kiwi, and 0.1% versus the euro.  Sterling is up 0.1%, and the C-dollar is unchanged.  Canadian markets reopen today after Monday’s holiday.

Oil firmed 1.3% to $70.64 per barrel.  Gold slid 0.2% to $956.50 per ounce.

The Reserve Bank of Australia retained a 3.0% cash rate level, discarded an easing bias, but managed to release a statement that was not as hawkish as assumed.  The current stance was called “appropriate,” and officials played down the likely strength of the global rebound.

Romania’s central bank cut its monetary policy rate by 50 basis points to 8.5% as was expected.  Reserve requirements on foreign currency-denominated deposits were also eased.  The cut was made in spite of 5.9% on-year CPI inflation, which still exceeds target.

Euroland producer prices firmed 0.3% in June, somewhat more than anticipated, and would have increased by even more except for a 0.1% PPI dip in Germany.  Energy jumped 1.4%, while all other producer prices slipped 0.1%.  Producer prices posted a 12-month decline of 6.6%, most since at least 1981.  The PPI in 2Q slumped at a annualized pace of 5.7% after dropping 12.9% saar in the first quarter.

New Zealand’s commodity export price index went up 1.0% in June but just 0.1% in kiwi terms.  Currency appreciation continues to neutralize the benefit of recovering commodity prices.

New Zealand’s private labor cost index firmed 0.3% in 2Q09 and was 2.6% higher than a year earlier.

Australian retail sales unexpectedly dropped 1.4% in June, but their volume still advanced by 2.0% in the second quarter.  Australia’s business conditions index improved to 35.4 in June from 34.1 in March.  House prices increased 4.2% last quarter, over twice as much as assumed.  The on-year drop in house price declined to just 1.4% in 2Q09 from 6.2% in 1Q.

Growth in Japan’s monetary base slowed further to 6.1% in the year to July from 6.4% in June and a recent high of 8.2% in April.  The base had climbed 7.5% y/y in 2Q and 5.7% in 1Q after edging up 0.1% in full-2008 and falling by 7.8% in 2007.

Swiss consumer prices fell 0.7% in July from June and by 1.2% from July 2008, the fifth on-year drop in a row.

Britain’s construction PMI index improved sharply to a 16-month high of 47.0 in July from 44.5 in June.

South African motor vehicle sales recorded another very steep on-year drop of 27.4% in July after declining 23.7% in the year to June.

U.S. personal income and spending and pending home sales figures get released later today.

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


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