New Overnight Developments Abroad: More 2Q GDP Data Released

August 14, 2009

The dollar is narrowly mixed with gains of 0.3% against sterling and 0.1% relative to the euro, Swissy and Australian dollar but declines of 0.3% against the yen and 0.2% against the kiwi.  The Canadian dollar is unchanged ahead of a bunch of North American data releases.

Asian stocks closed mixed.  China’s bourse lost 2.8%, and drops of less than 1% occurred in Pakistan, Thailand, Indonesia, India and the Philippines.  Japan’s Nikkei rose 0.8%, and the South Korean Kospi climbed 1.7%.  Australian and New Zealand equities rose, too.  In Europe, the Paris Cac is up 0.3%.  The British Ftse has edged 0.1% higher, and the German Dax is unchanged.

Ten-year bund, gilt, and JGB yields are each lower.  Oil and gold firmed 0.4% and 0.3% to $70.80 per barrel and $959.20 per ounce.

Late yesterday, the Central Bank of Chile left its 0.5% benchmark rate and other easing measures unchanged as was expected.

Like Germany and France, Hong Kong GDP growth returned to the black last quarter.  Such rose 3.3%, led by an 11.6% leap in exports, after falling 4.3% in the first quarter of 2009.  On-year growth was minus 3.8% following a 7.8% decline in the year to 1Q09.  Personal consumption advanced 4% last quarter.

Likewise, Czech real GDP increased 0.3% in the second quarter versus a 3.4% drop in 1Q.  Year-over-year growth worsened to minus 4.9% from -3.4%, however.

Hungary reported a fifth straight quarterly drop in GDP, but at -2.1% it was not as severe as the 2.6% drop in 1Q.  Industrial production in Hungary recovered 1.7% in June, cutting the 12-month decline to 18.8% from 22.1% in May.

Romanian GDP fell 8.8% in the year to 2Q, more than its 7.6% drop in the year to 1Q.

Spanish GDP fell 2.0% in the second quarter and by 4.1% from 2Q08 after drops in the first quarter of 1.9% from 4Q08 and 3.0% from 1Q08.

Finnish GDP fell 0.8% in June and by 11.1% from a year earlier.  Consumer prices in Finland slid 0.1% in the year to June.  The current account surplus of EUR 0.4 billion in June was 64% smaller than a year earlier.

The Japanese tertiary index of service-sector activity firmed 0.1% in June, which was better than expectations for a 0.3% decline.  The index was 5.3% lower than in June 2008, which also bettered the on-year decline of 7.2% in May.  The tertiary index still fell 0.7% in 2Q and by 6.2% from 2Q08, but real GDP due on Monday is very likely to record positive growth.

The Reuters monthly proxy indices for the Bank of Japan Tankan, which measures business conditions, were disappointing in August.  The manufacturing index edged up just a single point to a still-depressed minus 42 reading, and the non-manufacturing index was unchanged at minus 38.

Retail sales in Singapore jumped 2.3% in June, more than twice as much as analysts expected.  Such fell 8.2% from June 2008, down from an on-year drop of 10.4% in May.

Retail sales in New Zealand firmed 0.4% in 2Q — their first gain since 3Q07 — but were 1.8% weaker than a year earlier.  House prices were unchanged in July.

Reserve Bank of Australia Governor Stevens described the present monetary policy as an “emergency” setting and said rates would rise when the emergency is over and normal conditions return.  He added that the economy is stronger than he expected a few months ago and that the budget gap will be accordingly less than forecast previously.

The preliminary report on euro area CPI inflation showed monthly and on-year drops of 0.7%, a tenth greater than forecast.  Core inflation fell 0.6% and to an on-year pace of 1.3% after rising 1.4% in the year to June.  Energy posted drops of 1.8% from June and 14.4% from July 2008.

British home foreclosures were 10% smaller in 2Q09 but will likely rise in the second half of the year.

German new car registrations rose 5.0% in the year to July after having dropped in the first half of the year.

French payroll employment fell 0.5% last quarter and was 2.5% less than in 2Q08.

Scheduled U.S. data today include consumer prices, industrial production, and the preliminary U. Michigan survey of consumer sentiment.  Canada releases the monthly manufacturing survey and auto sales.

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


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