New Overnight Developments Abroad: Last Day of Summer Trading Season

September 4, 2009

Markets are awaiting the release of Canadian labor statistics at 11:00 GMT and U.S. labor force survey at 12:30 GMT, each of which will show a further drop in jobs and likely higher unemployment rate.  G20 finance ministers begin a two-day meeting in London.  The U.S. Treasury market will shut early to start the long Labor Day holiday.  For currency markets, today marks the end of the unofficial summer trading season between the Memorial Day and Labor Day weekends.

Currency movements overnight were slight but consistent with less risk aversion.  The dollar firmed 0.2% against the yen but eased 0.7% relative to the kiwi, 0.5% against the Canadian dollar, and 0.2% against sterling and the Australian dollar.  The greenback edged up 0.1% against the euro and Swiss franc.

The Nikkei closed down 0.3%, but elsewhere in Asia stocks closed up 1.9% in India, 1.0% in The Philippines, 2.1% in Pakistan, 0.9% in Singapore, 0.8% in China, 0.7% in Taiwan and 0.4% in Malaysia and Thailand.  In Europe, the German Dax is 1.1% higher, and the Paris Cac and British Ftse have advanced 0.6% and 0.9%.

The 10-year JGB yield increased 3 basis points to 1.35%.  Bund, Treasury and gilt yields also rose.

Oil increased 0.9% to $68.55 per barrel, but gold backed off 0.8% to $989.50 per ounce.

The Japanese Ministry of Finance released results of its quarterly corporate survey showing a 2Q-over-1Q 4.5% decline in investment spending.  The on-year drop was 21.7% after a decline of 25.3% in the year to 1Q09.  Corporate sales and earnings posted quarterly rises of 2.3% and 13.8% but on-year declines of 17% and 53%.  These results suggest a slight downward revision to 2Q GDP growth, reported initially at +3.7% saar.  Revised figures are due September 11.

South Korean GDP growth last quarter was revised to a gain of 2.6% from 1Q and a drop of 2.2% from 2Q08.  GDP had fallen 4.2% in the year to 1Q.

Philippine consumer prices firmed 0.1% in the year to August and posted a 0.2% monthly increase.

Swiss consumer prices firmed 0.1% in August but fell 0.8% from a year earlier.

The French budget deficit in January – July was 112% wider than a year earlier, as spending climbed 5.3% and revenues plunged 23.5%.

The Italian trade deficit of EUR 631 million in June was 38.7% smaller than a year earlier.

British car sales in August rose 6.0% from a year earlier, buoyed by cash for clunkers discounts.

Aside from the monthly labor survey, Canada’s IVEY-PMI monthly survey results will be released today.

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


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