New Overnight Market Developments: Several Markets Closed For Holiday

October 12, 2009

Japan was closed for Health and Sports Day, and the U.S. will be observing Columbus Day.  Markets are also closed today in Spain, Canada and several Latin American countries including Argentina, Brazil and Chile.

The dollar is mixed, with gains of 0.5% against the yen and 0.3% relative to sterling, no change vis-a-vis the kiwi, and losses of 0.8% against the Canadian dollar, 0.3% against the Swiss franc and euro and 0.2% against the Australian dollar.  Dollar/yen touched a two-week low of 90.46, while CAD/USD hit a 1-year high of 1.0335.

The Thai central bank said it is diversifying its reserve holdings into non-dollar currencies.

European stocks markets show significant advances so far of 1.4% in Britain, 1.3% in Germany and 1.2% in France.  Equities in Asia are mixed, with advances of 2.2% in India, 2.1% in Vietnam, 1.1% in Singapore, and 0.7% in Thailand but declines of 1.3% in Pakistan, 0.7% in Indonesia, 0.9% in Hong Kong, and 0.4% in The Philippines, China, and South Korea.  Australia’s bourse eased 0.3%, while New Zealand’s went up 0.5%.

The ten-year bund yield is flat at 3.203%, while the 10-year gilt fell 6 bps to 3.39%.

Oil prices are 1.4% higher at $72.77 per barrel.  Gold remains well-bid at $1052.80 per ounce, up 0.4%.

Evidence emerged of strong activity in Singapore and India.

  • Real GDP in Singapore advanced 14.9% at an annualized rate last quarter following a 22% pace in 2Q, and on-year growth improved to +0.8% from minus 3.2% in 2Q and minus 9.5% in 1Q.
  • Indian industrial production increased 10.4% in the year to August, the best on-year gain in 22 months and up from 7.2% in July.

And Malaysia reported a smaller 5.7% on-year drop in industrial output in August after a decline of 8.4% in the year to July.

South Korea’s finance minister expects GDP growth to rebound to 4.0% next year following a drop this year of about 1.5%.

Pakistani CPI inflation slowed to a 21-month low of 10.1% in September from 10.7% in August.

The Monetary Authority of Singapore released a statement that the unbiased currency policy directive is being extended.  In upbeat remarks, officials reduced their projected GDP decline in 2009 rather significantly to minus 2 to minus 2.5% and foreseeing a 1-2% increase of consumer prices next year versus no change in 2009.

New Zealand house prices in September rose for a fifth straight month, gaining 0.6% and posting the smallest 12-month drop (just 1.1%) since mid-2008.

In Australia, personal loans increased 4.1% in August.  Finance Minister Swan made remarks that accentuated continuing risks.  The Reserve Bank of Australia last week became the second central bank to hike interest and implied there will be more increases ahead.

German wholesale prices slid 0.2% last month but recorded a drop of 8.1% from a year earlier, the smallest 12-month decline since April.  Analysts were surprised that the monthly change was negative.

Danish consumer prices inflation continued to recede in September, with a 12-month pace of 0.5% after 0.7% in the year to August.

British Prime Minister Brown said the Tory plan to rein in fiscal policy aggressively will prolong the economy’s recession.  He also advocated steps by China to promote faster import demand.

The Czech current account deficit widened 176% in August.  A sharp increase had been expected.  Czech industrial production was revised to show an 8.4% drop in the year to August.  That was the smallest on-year decline this year.  Orders fell 13.6% from a year earlier.

Slovakian CPI inflation slowed to 0.6% in September from 1.3% in the year to August.  The trade surplus of that economy widened to EUR 288 million in August from EUR 39 million in July.  Romanian CPI inflation edged down to 4.9% in September from 5.0% in August and thus still remains a little above the target ceiling of 4.5%.

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


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