New Overnight Developments Abroad: APEC Finance Ministers Meet in Singapore

November 12, 2009

The dollar is 0.3% firmer against the Canadian, New Zealand, Swiss, and euro area currencies.  The buck is unchanged versus the Australian dollar and sterling and 0.1% easier against the yen.

Finance Ministers from the Asia-Pacific Economic Cooperation praised the strength of China’s recovery and did not make an issue of Beijing’s yuan policy, leaving markets to expect no resumed appreciation against the dollar anytime soon.  Beijing was hit by a massive snowstorm, worst in 54 years.

in Asia, stocks fell by 1.4% in South Korea, 1.0% in Hong Kong, 0.7% in Japan, 3.0% in Thailand, 0.9% in India, and 0.5% in Singapore.  Australian stocks edged 0.2% lower, while the German Dax, British Ftse and Paris Cac are trading 0.3%, 0.4%, and 0.2% higher in Europe.

The ten-year JGB is 6 basis points lower at 1.38% and off 10 bps since the start of this week.  Bunds and gilts are steady.

Oil eased 0.5% to $78.78 per barrel.  Gold firmed 0.1% to 1115.90 per ounce.

As expected, the Bank of Korea left its seven-day benchmark repo rate unchanged at 2.0%.  It made the same decision after the previous eight monthly meetings.  Officials continue to hint that a rate increase may lie not far ahead.

Australia’s monthly labor statistics were better than anticipated, fanning talk of a third rate hike soon by the Reserve Bank of Australia.  The unemployment edged up a tenth to 5.8% and appears to have peaked as that was the level in June-through-August as well.  Instead of declining 10K as forecast, jobs increased 24.5K on top of September’s advance of 39.8K.  A gauge of Australian expected inflation slid slightly to 3.2%, which still exceeds the central bank target.

New Zealand retail sales firmed 0.2% in September, somewhat less than expected.  Retail sales went up 0.5% last quarter but were 1.0% lower than in 3Q08.  The volume of retail sales edged 0.1% higher in 3Q09, however, which surpassed expectations marginally.

Consumer confidence in Thailand slid to 68.0 from 68.4 in October.

A day after a slew of sound Chinese indicators got released, India reported a 9.1% on-year increase of industrial production in September.  That follows an 11.0% rise in the year to August.

Japanese domestic corporate goods prices, the best gauge of inflation at the wholesale level, fell 0.7% in October and by 6.7% from a year earlier.  Export and import prices dropped by 0.9% and 1.0% on the month.  Japanese stock and bond transactions generated a Y 522 billion outflow in the first week of November after a Y 154 billion outflow in the final week of October.

Industrial production in the euro area rose 0.3% in September and 9.1% at an annualized rate (saar) in 3Q09.  Such had declined 4.1% saar in 2Q and by 30.1% saar in the first quarter.  Output in September was 12.9% lower than a year earlier, which was less than the drop of 15.1% in the year to August and 21.4% in the year to April 2009.  There was a wide dispersion in September data among Euroland members, with Germany and Ireland posting gains of 3.0% and 11.2% from August but Italy, Portugal, France, and Spain registering drops of 5.3%, 3.3%, 1.4% and 1.4%.

The CML in Britain released encouraging housing and mortgage market data and a more confident forecast of future trends.

The ECB’s November Monthly Bulletin rehashes what President Trichet said at his press conference earlier this month.

The contraction of Spanish GDP slowed last quarter with a drop of 0.3% from 2Q and 4.0% from 3Q08.  GDP had fallen 1.1% in the second quarter and 4.2% between 2Q08 and 2Q09.

France’s current account deficit narrowed 7.5% to EUR 3.7 billion in September.

The Swiss ZEW index of investor sentiment fell back to 56.4 in November from 65.0 in October.

Swedish consumer prices rose 0.3% in October but fell 1.5% from a year before.

Estonian GDP remained very depressed in the third quarter.  However, this Baltic economy may have passed an inflection point as the quarterly drop of 2.8% was less than the 3.4% decline in 2Q, the slowdown of the rate of contraction since end-2007.  GDP was 15.3% lower than in 3Q08, also a smaller drop than the tumble of 16.1% in the year to 2Q09.

U.S. data today include the monthly federal budget figures and weekly jobless claims.  Canada reports house prices, and Chile’s central bank is expected to announce an unchanged benchmark interest rate of 0.5%.

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


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