New Overnight Developments Abroad: Dollar and Sterling Up Amid Quarter-End Data Deluge

October 1, 2009

The dollar has climbed 0.6% against the Swiss franc, 0.5% versus the Aussie dollar, 0.4% each versus the Canadian dollar and euro, 0.3% against the kiwi and 0.2% relative to the yen.  But the greenback edged 0.1% lower against sterling.

G7 finance ministers and central bankers will meet October 3rd in Istambul.  Markets are unsure what significance this meeting now has following the decision to vest coordinating authority with the G-20.  However, it will be Japanese Finance Minister Fujii’s first such conference, and there is some nervousness that the meeting could generate currency market-moving remarks.

The Nikkei fell 1.5% as the fiscal half passed and in disappointment over the Tankan results.  Elsewhere in the Pacific Rim, stocks rose 1.1% in China and 1.4% in Thailand but fell by 1.7% in South Korea, 2.1% in Vietnam, 0.9% in Australia and 0.6% in Singapore.  European stocks are lower: Dax off 0.2%, Paris Cac down 0.5% and British Ftse down 0.4%.

Bund and gilt yields firmed slightly, while the 10-year JGB yield was unchanged at 1.30%.

Oil fell 1.1% to settle below $70 at $69.82 per barrel.  Gold eased 0.3% but remained above $1000 at $1006.20 per ounce.

The Bank of Japan’s quarterly business survey, known as the Tankan, produced diffusion indices that were better than those in the June survey, around levels that had been forecast recently by pundits, but levels that also remained deeply in negative territory.  Moreover, projected sales and earnings plus planned investment spending were all revised lower.

Japanese large-store retail sales in August posted an on-year drop of 6.8%, led by a 12.4% plunge in clothing.  Total retail sales advanced 1.0% between July and August gained 1.0%, three times more than forecast, and posted an on-year drop of 1.8% after falling 2.4% in the year to July and 2.8% in the year to 2Q09.

Japanese motor vehicle sales advanced 3.5% in the year to September.  The first on-year increase in 13 months had occurred in August, +2.3%.

Many country PMI-manufacturing scores were released overnight;  here’s the tally:

  • Euroland had a final September reading of 49.3, up from a flash indication of 49.0 and readings of 48.2 in August, 47.6 in July and 46.3 in June.  The improvement would have been greater if not for waning momentum in Germany, Spain and the Netherlands.  This was the 16th straight sub-50 score.
  • The German index gained just 0.4 points to 49.6 after increasing 3.5 points in August.
  • The Dutch index settled back to 50.0 from 50.5 in August.
  • Spain’s index fell 1.4 points to 45.8, worst since June.
  • The French score of 53.0 was 2.2 points higher than in August and 4.9 points greater than in July.  Orders and output are now both above 50, too.
  • Italy’s reading of 47.6 compared to 44.2 in August.  Jobs, output, and orders each had sub-50 readings.
  • The Irish index rose 2.6 points to 46.6.
  • The Swiss PMI jumped to 54.3, versus an expectation of 51 and readings of 50.2 in August and 44.3 in July.
  • Sweden’s PMI advanced 3.5 points to 55.9 in September.
  • Russia scored a 52.0 after 49.6 in August, 48.4 in July and 33.8 last December.
  • Turkey’s index of 53.3 conveyed solid growth but was down from 53.8 in August and 54.0 in July.
  • The Czech index improved to a 14-month high of 49.5 from 47.0 in August and 43.4 in July.
  • Poland’s index stayed at 48.2, still the best since May 2008.
  • India’s index improved to 55.3 from 53.2.
  • China’s PMI was 54.3 after 54.0 in August.
  • South Africa’s PMI was 48.0, best since May 2008 and above August’s 39.3 reading.
  • The British PMI unexpectedly dipped again, falling to 49.5 from 49.7 in August and 50.2 in July.
  • The Greek PMI fell under the 50 threshold to 48.5 from 51.1 in August.
  • Australia scored a 52.0, best since end-2007 and above August’s 51.7 reading.
  • South Korea registered a PMI-manufacturing reading of 52.7 versus 53.6 in August.
  • Taiwan’s score was 57.5 versus 55.1 in August and 53.8 in July.

As expected, the central bank in the Philippines left its policy interest rate steady at 4.0%.

German retail sales were again disappointing.  Analysts had expected a 0.2% dip, but sales instead fell 1.5% in August and 2.6% from a year before.  Sales in July had dropped by 0.7%.

Indonesian consumer prices increased 1.1% in September but just 2.8% from a year earlier. Core inflation was 4.9%.  Indonesia’s trade surplus widened in August to $1.25 billion from $1.0 billion in July.  On-year declines in exports (15.4%) and imports (24.6%) were smaller than in July.

South Korean consumer prices firmed 0.1% last month and 2.2% from September 2008. Analysts looked for a slightly bigger increase.  That economy’s trade surplus widened sharply to $5.4 billion from $1.7 billion in August.  Exports only fell 6.6% from a year before.

India’s trade deficit of $8.4 billion in August was 47% narrower than a year before.  Exports dropped 19.4% on year.

Consumer prices in Thailand firmed 0.2% in September, resulting in an unchanged on-year drop of 1.0%.

Euroland unemployment posted a one-tenth increase for a fourth straight month, printing at 9.6% versus 7.6% in August 2008 and the highest since March 1999.

The IMF released new growth forecasts, revising that for world GDP next year to 3.1% from 2.5% predicted in July.  Assumed growth in 2010 amounted to 9.0% in China, 6.4% in India, 2.1% in Canada, 1.7% in Japan, but only 0.3% in the euro area.

The U.S. has many data releases on this first day of October, including personal income and spending, the ISM PMI index for manufacturing, jobless claims, construction spending, pending home sales, and motor vehicle sales.

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


Comments are closed.