New Overnight Developments Abroad: Stocks Down and Dollar Up

November 5, 2009

The dollar climbed 1.1% against the kiwi, 0.5% versus the yen, 0.4% against the Australian dollar, 0.2% relative to sterling and the Swiss franc, and 0.1% against the euro and Canadian dollar.  New Zealand’s central bank governor Bollard again complained that excessive kiwi strength will hurt exports.

The Nikkei lost 1.3% following slide of U.S. stocks Wednesday in final hour of trading.  Stocks also lost 1.8% in South Korea, 1.7% in Sri Lanka, 0.7% in Singapore, Taiwan, Thailand, New Zealand and Australia, 0.6% in Hong Kong, and 0.5% in Pakistan.  In Europe, the Ftse, Cac40 and Dax are down 0.6%, 0.5%, and 0.4%.

Ten-year JGB, bund, and gilt yields are higher by seven, seven, and six basis points.

Gold at $1090.20 per ounce is 0.3% higher but down 0.7% below Wednesday’s intraday record high.  Oil lost 0.6% and slipped marginally below $80 per barrel.

The Bank of England agreed to continue asset purchases financed by created central bank reserves, raising the size of the program by Gbp 25 billion from Gbp 175 billion to a new ceiling of Gbp 200 billion.  The Bank Rate was retained at 0.5%.  A new quarterly inflation report is due November 11, and minutes of today’s meeting arrive on November 18.  The Bank Rate has been at 0.5% since March.

Iceland’s central bank announced its first rate cut since June, a greater-than-forecast 100-basis point decline to 11%.

The Filipino central bank left its key overnight borrowing rate steady at 4.0% as expected.

Serbia’s central bank reduced the two-week repo rate by 100 basis points to 10% following announced budget cuts by the government.

Retail sales volume in Euroland dropped by a greater-than-forecast 0.7% in September and were 3.6% lower than a year earlier.  Sales fell 2.9% at an annualized rate in the third quarter, more than twice the quarterly drop in 2Q09.

British industrial production surged 1.6% in September but were 10.3% lower than a year earlier.  Factory output jumped 1.7%, most since July 2002.  British new car registrations were 31.6% greater in October than a year earlier, buoyed by government incentives.

Swiss consumer prices rose 0.6% last month but were still down 0.8% from a year earlier.

Dutch consumer prices edged 0.1% higher in October and maintained a 12-month 0.7% rate of rise.

Spanish industrial output fell 12.5% in the year to September compared to 12-month declines of 12.7% in August and 17.6% in July.

Minutes from the Bank of Japan’s mid-October meeting stressed that an end to special quantitative support for corporate financing would not be followed quickly by a rise in the targeted 0.1% overnight rate.

New Zealand unemployment rose to 6.5% in 3Q09 from 6.0% in the second quarter.

Australia’s trade deficit widened 12% between August and September.  Both exports and imports climbed by a brisk 5% from August.  Aussie auto sales increased 3.4% last month and posted their first on-year increase (2.2%) since June 2008.  They fell 11.7% in January-October from a year earlier.

Taiwanese consumer prices fell 1.8% in the year to October, the biggest 12-month drop since June.  Filipino consumer prices rose 0.6% and 1.6% on year in October.

Hungarian industrial production increased 3.7% in September and posted a smaller on-year decline of 15.0% versus minus 19.8% in the year to August.

Russia’s PMI services index improved to 54.3 in October, best since September 2008, from 53.0 in September.

Investors await the ECB rate announcement at 12:45 GMT and press conference at 13:30 GMT.  Rate decisions are also due today from central banks in Hong Kong, the Czech Republic, and Peru.  G-20 finance ministers hold a meeting today.  The U.S. reports productivity and unit labor costs and jobless insurance claimsCanada’s IVEY-PMI index is due.

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


Comments are closed.