New Overnight Developments Abroad: Dollar and Sterling Slide Further, Gold and Oil Higher

October 13, 2009

The dollar is unchanged against the pound but down 0.8% against the kiwi, 0.6% relative to the Canadian dollar, 0.5% against the Swiss franc, 0.4% against the euro and Australian dollar, and off 0.3% against the yen.

Gold advanced 0.9% and is trading at a record high of $1067.30 per ounce.  Oil firmed 0.9% as well and is at a 7-week high of $73.93 per barrel.

The 10-year Gilt and JGB yields rose two and one basis points.  The 10-year bund yield eased one basis point.

Stocks in the Pacific Rim were mixed with declines of 0.7% in Thailand and Vietnam, 0.6% in South Korea and of 0.5% in Singapore but advances of 0.6% in Japan, 0.8% in Hong Kong, 1.5% in China, 1.0% in Australia and 2.3% in India.  In Europe, the German Dax and Paris Cac are off 0.4%, and the British Ftse is trading 0.2% lower.

ZEW Institute measures of investor confidence in Germany and Euroland showed unexpected setbacks.  The Ezone expectations measure printed at 56.9 in October after 59.5 in September, but the gauge for current conditions improved to minus 75.4 from minus 77.9.  The German expectations index was 56.0, down from 57.7, while German current conditions printed at a still “very poor” level of minus 72.2 after minus 74.0.

British consumer prices were unchanged in September and recorded a lower-than-forecast 12-month increase of 1.1% compared to 1.6% in August and a peak of 5.2% in the year to September 2008.  Core CPI inflation eased a tenth to 1.7%.  The 12-month changes for the retail price index and the RPIX slid a tenth to minus 1.4% and plus 1.3%.  RPIY inflation was 2.0% in September, down from 2.3% in August.

Several other European countries also reported lower inflation.  French consmer prices fell 0.2% last month and by 0.4% from September 2008.  These too exhibited more disinflation than expected or than reported for August.  Portuguese consumer prices firmed 0.2% last month but fell 1.6% over the past 12 months.  Swedish consumer prices firmed only 0.3%, doubling their 12-month decline to 1.6%.  Hungarian consumer prices slipped 0.1% in September, reducing the 12-month increase to 4.9% from 5.0%.

The Dutch trade surplus widened 23.5% to EUR 2.1 billion in August.  But real exports posted an 8% on-year decline.  The French current account deficit more than doubled to EUR 3.7 billion in August from 1.5 billion euros the month before.

British same-store retail sales jumped 2.8% in the year to September, most in 17 months, according to the Retail Consortium.  Total sales grew 4.9%, also the best 12-month gain since April of last year.  British House price gauges were mixed.  The RICs measure for September, +22, represents a 29-month high, while the DCLG gauge showed a 12-month drop of 5.6%, greater than a forecast decline of 4.9%.

Spanish home sales fell 9.9% in the year to August, a smaller pace of decline than the 31% plunge for January-August from a year earlier.

The Swiss PPI/import price index firmed 0.2% last month and recorded a 12-month drop of 4.9% after declining 5.5% in the year to August. 

Japanese M1 rose 1.0% in the year to September versus a 0.8% gain in 3Q09 and a 0.5% drop in calendar 2008.  M2 growth accelerated to 3.0% from 2.8% in August and 2.1% in 2008.  M3 growth held steady at 2.0%.  Broad liquidity accelerated to +0.5% from +0.1% in the year to August, minus 0.1% in the year to 2Q and minus 0.5% in the year to 1Q.  Japanese bank lending growth slowed to 1.6% on year in September from 1.8% in August and 2.1% in July.  The Bank of Japan began a two-day meeting today and is not expected to change policy.

Sri Lanka’s central bank left its repo and reverse repo rates unchanged at 8.0% and 10.5%.  Analysts had leaned toward expecting a 25-basis point decline.

Australian business confidence retreated a point to 3.0 in September, while business conditions dropped 4 points from August’s 70-month high of 18.

Chinese car sales soared 84% in the year to September, twice the 42% increases booked for the first nine months of 2009 as a whole.

Filipino exports fell 21% in the year to August, a smaller drop than the 25.4% decline in the year to July.

New Zealand retail sales shot up 1.1% in August, twice as fast as expected.  Non-auto retail sales gained 1.2%.

The U.S. NFIB survey and IBD/TIPP optimism index get released today.  So does an estimate of the full fiscal 2009 budget deficit and the Canadian house price gauge.  Numerous central bankers speak publicly today.

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


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