New Overnight Developments Abroad: Disappointing Chinese Data

August 11, 2009

The dollar rose against commodity-sensitive currencies (up 1.0% versus the kiwi, 0.7% against the Canadian dollar and +0.4% against the Australian dollar) but has lost 0.7% against the yen.  The greenback has dipped 0.2% against the Swiss franc and 0.1% relative to the euro.  Movements are consistent with less risk aversion.

Asian stocks closed higher by 0.6% in Japan and Vietnam, 0.7% in Australia and Hong Kong, 1.9% in Singapore, and 0.4% in Taiwan, India and Indonesia.  In Europe, stocks have softened 0.4% in Germany and 0.2% in Britain.

Gilts and bunds are steady.  The 10-year JGB sild a basis points to 1.46%.

Oil and gold firmed 0.3% and 0.2% to $70.80 per barrel and $948.40 per ounce.

Chinese data for July were softer than expected for the most part.  Most shockingly, yuan lending was 76.7% less than in June.  In on-year terms, exports fell 23%, imports dropped 14.9%, consumer prices fell 1.8%, and the PPI dropped by 8.2%.  The 12-month increase of industrial production (10.8%) was below expectations.  Retail sales went up 15.2% y/y.  Fixed Asset investment climbed 32.9%, less than forecasts of 34%.  The trade surplus was $10.63.  M2 advanced 28.4% from a year earlier.

Central banks in Japan and South Korea left key interest rates unchanged at 0.1% and 2.0%, respectively.

Japanese consumer confidence improved to a 20-month high of 39.4 in July from 37.6 in June.

Singapore GDP rebounded 20.7% last quarter but still showed a drop of 3.5% from a year earlier.

In Britain, the Royal Institute of Chartered Surveyors house price index improved to minus 8.1 in July from minus 17.6 in June.  The Department of Communities and Local Government (DCLG) house price index fell 10.7% in the year to June, less than the 12.7% drop in May.  The goods and services trade deficit widened to Gbp 2.2 billion in June from Gbp in May due to an increase in the merchandise trade shortfall to Gbp 6.5 billion from Gbp 6.2 billion.  The British Retail Consortium reported increases in the year to July of 1.8% in same-store sales and 3.6% in all retail sales.

German consumer prices were unchanged in July and down 0.5% from July 2008, lowest since at least 1990.  These results are a tenth higher than the preliminary data.  Core CPI, excluding food and energy, rose 1.4% from a year earlier.  German wholesale prices fell 0.5% in July and by 10.6% from July 2008, the greatest on-year drop since at least 1968. 

Swedish consumer prices fell by 0.5% in July from June and by 0.9% from a year before.  Hungarian CPI inflation accelerated to 5.1% in July reflecting higher taxes.  Romanian consumer price inflation slowed to 5.1% in July from 5.9% in June.

Turkish capacity usage fell to 72.3% in July from 72.7% in June despite a 0.5% increase of industrial production.  Dutch industrial output fell 13% in the year to June.  Czech industrial production dropped 12.2% in the year to June, much less than the decline of 22% in the year to May.  Russian GDP sank 10.9% in the year to 2Q09, greater than the 9.8% decline in the year to the first quarter of this year.

Australian business sentiment jumped six points to +10 in July, best in two years.  Business conditions improved three points to +2.

The French budget deficit widened 164% from a year earlier to EUR 86.6 billion in the first half of 2009.

Later today, the United States releases quarterly productivity and unit labor costs and monthly wholesale inventories.  Canadian housing starts arrive, too.

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


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