New Overnight Developments Abroad: Dollar Higher Against Euro, Yen, and Swiss Franc

September 29, 2009

Despite the weekend victory of the center-right in Germany’s election on Sunday, the dollar is 0.3% higher against the euro.  The greenback also gained 0.6% against the Swissy, 0.3% relative to the yen, and 0.1% against the Canadian dollar, but it is 0.1% lower versus the kiwi and Aussie dollar.

The 10-year JGB is unchanged at 1.29%. Bund yields are also steady.

Yesterday’s rise in U.S. stocks extended into Asian markets, but European shares are lower.  Equities rose 0.9% in Japan, 2.0% in Taiwan, 1.9% in Indonesia, 1.3% in Singapore, 1.0% in India, 2.1% in Hong Kong and 1.6% in Australia.  The German Dax and Paris Cac have traded 0.4% lower.  The British Ftse is off 0.3%.

Oil and gold softened 0.5% and 0.2% to $66.52 per barrel and $992.0 per ounce.

In August Japanese consumer prices posted on-year declines of 2.2% overall, 2.4% excluding food, and 0.9% excluding food and energy.  The CPI dipped 0.1% from the prior month in seasonally adjusted terms.  Core inflation had not posted a bigger on-year decline since at least 1971.

Yet again, Japan’s new finance minister said many things about the yen, not all consistent except that he clearly seems to be backtracking from the strong yen remarks he made initially.

New Zealand building permits rose 1.7% last month after a 5.0% advance in July.

Britain’s current account shortfall of Gbp 11.4 billion in the second quarter was almost three times greater than the revised Gbp 4.1 billion gap in 1Q09.

British GDP growth in 2Q was revised to a drop of 0.6% from 0.7%.  The drop from 2Q08 was 5.5% versus an expected 5.4% decline.  Construction fell less than reported initially.  The savings rate increased to 5.6% from 3.9% in 1Q.  The CBI industrial group released a new retail survey showing a big rise to +3 from minus 16 in August, minus 15 in July and minus 17 in May and June.

British mortgage approvals of 52.3K in August were similar to the July total of 52.4K.  Overall holdings of M4 barely rose in August, suggesting that quantitative easing has failed to stimulate bank lending.  Net consumer credit fell by Gbp 309 million in August.

Russia’s central bank cut its key financing rate by 50 basis points to 10.0%.

Euroland’s retail PMI reading improved to 48.6 in September from 47.1 in August and 47.3 in July.  Germany’s index relapsed 1.7 points to 47.9, but the French and Italian indices climbed 3.2 points each to 50.5 and 47.2.

Euroland’s overall economic sentiment gained two points to 82.8 in September, an 11-month high.  Consumer confidence rose 3 points to minus 19.  Industrial confidence edged up a point to minus 24.  Sentiment in the services sector rose two points, and construction went up a point.  Retail worsened a point unexpectedly.  A separate business climate index printed at minus 2.07 after minus 2.18 in August.

German import prices jumped 1.3% in August, trimming its 12-month drop to 10.9% from 12.6% in the year to July.  Non-oil import prices firmed just 0.3% and fell 6.9% from a year earlier.  Export prices rose 0.3% and fell 3.2% from August 2008.

The Swiss consumption indicator slid to 0.66 in August from 0.75 in July.

Producer prices in Hungary, where the central bank cut its key rate yesterday by 50 basis points, fell 0.5% in August.  On-year PPI inflation slowed to 4.6% from 6.0%.

Spanish consumer prices fell 1.0% in the year to September.  Belgian consumer prices dropped 1.2% from a year earlier.  Spanish retail sales fell 4.0% in the year to August after dropping 4.6% in the year to July.  Slovakian consumer confidence recovered to minus 24.3 in September from minus 32.7 in August.

Retail sales in Hong Kong fell 1.0% in real terms in the year to August, a much smaller drop than 5.2% in the year to July.  South Korea’s current account surplus was 53.5% narrower in August than July at $2.04 billion.

Scheduled U.S. data today include the Case-Shiller house price index and Conference Board index of consumer confidence.

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


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