New Overnight Developments Abroad: Focus on Commodities

October 7, 2009

Gold is in uncharted waters and behaving so.  With a further 0.8% increase to $1047.80 per ounce, gold prices have risen $48.60 since Thursday.  Oil firmed 0.6%.

The U.S. dollar declined against commodity-sensitive currencies, with losses of 0.4% against the loonie, 0.3% against the kiwi and 0.2% versus the Aussie dollar.

Japanese Finance Minister Fujii is a throwback to the old days when every day brought a new remark about yen policy.  Now he’s quoted saying that present yen levels “are not extremely abnormal,” which helped the yen climb 0.7% against the dollar.  Otherwise, the dollar is up 0.3% against sterling and 0.2% relative to the Swiss franc, but EUR/USD is unchanged at $1.4715.

In the Pacific Rim, stocks closed up 1.1% in Japan, 2.1% in Hong Kong, 2.3% in Australia, 1.1% in China, 1.0% in Taiwan and 1.4% in Thailand.  In Europe, equities are up 0.2% in France and Germany and by 0.1% in Britain.

The ten-year JGB yield firmed 1 basis point to 1.27%, while bund and gilt yields edged a bit lower.

Euroland reported an unexpected downward revision in second-quarter GDP to minus 0.2% from 1Q and minus 4.8% from a year earlier.  Quarter-on-quarter revisions amounted to minus 0.1 percentage points (ppts) to 0.1% for consumption, -0.2 ppts to -1.5% for investment, +0.3 ppts to 0.7% for public expenditures, minus 0.4 ppts for exports and minus 0.1 ppt for imports.

The EU Commission cited Germany, Italy, Austria, Belgium, Holland, the Czech Republic,Portugal, Slovakia and Slovenia for having excessive budget deficits.

German industrial orders advanced another 1.4% in August, beating forecasts, after a gain of 3.1% in July.  August was paced by a 2.8% increase in intermediate producer goods.  Total orders in August were still off 20.4% from August 2008, but the July-August result was 7.8% higher than the level in 2Q09.

According to the British Retail Consortium, shop prices firmed 0.1% last month and were 0.1% lower than in September 2008.  The Nationwide index of British consumer confidence improved more than forecast to a 15-month high of +71 last month from +65 in August.

Swiss unemployment edged higher to 3.9% last month from 3.8% in August.

Japan’s index of leading economic indicators rose to 83.3 as expected in August from 82.5 in July and 80.9 in June.  The coincident indicators index and lagging economic index increased by 1.6 and 1.0 points respectively in August.

Australian housing loan approvals slid 0.6% in August on top of a 2.2% drop in July.  The economy’s index of leading job indicators improved to minus 0.934 in Octoberfrom minus 1.104 in September.

South African reserves jumped $1.1 billion in September.  The South African Reserve Bank has been buying dollars to temper rand appreciation.

Finnish GDP slumped by 1.5% in July and 11.6% from a year earlier.

Romanian retail sales firmed 0.4% in August but were 12.1% lower than a year earlier.  Czech trade produced a CZK 10.6 billion surplus in August, 13.5% smaller than in July.  On-year export and import declines narrowed sharply.

U.S. consumer credit and a Peruvian central bank rate decision will be reported today.

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


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