Somewhat Less Pressure on Greek Debt

December 22, 2009

The dollar was narrowly mixed overnight, easing 0.4% against the Canadian dollar and 0.1% versus the euro but advancing by 0.3% against sterling and the Australian dollar, 0.2% against the yen and Swiss franc, and 0.1% relative to the kiwi.

Stocks are mostly higher, with the notable exception of China.  Equities have risen 1.9% in Japan, 1.5% in Indonesia, 1.3% in Thailand and Singapore, 1.5% in Australia, 1.1% in Pakistan, 1.1% in Britain, 0.7% in France and South Korea, and 0.4% in Germany.  Chinese equities fell 2.7% on concern that officials will boost steps to counter a possible asset bubble.  Central Bank Governor Zhou hinted that reserve requirements might be raised, for instance.

Sovereign bond yields are 5, 3, and 1 basis point higher in Germany, Japan and Britain.

Moody’s downgraded Greek debt by only one increment, not two as feared, to A2 from A1.  The Greek-German ten-year yield spread narrowed to 252 basis points from 277 bps.

Meeting in Angola, OPEC oil ministers agreed to leave their output quota at 24.845 million barrels per day.  Oil prices are 0.4% softer at $73.42 per barrel.  Gold is steady at $1096.00 per troy ounce.

British third-quarter growth was revised upward to minus 0.2%.  Analysts had looked for minus 0.1%.  The on-year contraction of 5.1% was unrevised.  The U.K. current account deficit of Gbp 4.7 billion equaled 1.3% of GDP, the same ratio as in the second quarter.

Japan’s monthly big manufacturing Tankan index, which Reuters calculates, improved a point to minus 27 in December, a 14-month high, but the non-manufacturing gauge worsened four points to minus 39 in December from minus 35 in November.  Finance Minister Fujii reinforced his reputation for conflicting verbal messages by saying the government will adhere to its goal of capping JGB issuance at Y 44 billion.

Taiwan’s jobless rate remained at 7.0% in November.

Danish GDP growth in 3Q of 0.6% surpassed expectations, but the on-year rate of contraction remained very steep at 5.2%.

Italian hourly wages were unchanged in November but up 3.1% from a year earlier.  Italy’s trade gap with non-EU countries narrowed to just EUR 30 million in November from EUR 1.23 billion a year earlier.

Swedish total producer prices advanced 0.9% in November and 1.7% from a year earlier due to a monthly 2.1% jump in import prices.  Domestic producer prices firmed just 0.3% on month and 1.1% on year.  Swedish consumer confidence slid for the first time in eight months, printing at 8.8 in December after 11.4 in November.

French producer prices increased 0.2% last month and fell 4.1% from November 2008.

The Swiss trade surplus narrowed 13% on month to Chf 2.14 billion in November.

German consumer confidence sagged more than expected to 3.3 in December from 3.7 in November.

Dutch business sentiment worsened in December to minus 8.6 from minus 5.6 in November.

New Zealand posted a NZ$ 0.34 billion seasonally adjusted current account surplus in the third quarter, the first such surplus since the final quarter of 1988.  The accrued deficit in the four quarters to 3Q09 was NZ$ 5.7 billion, 63% smaller than a year earlier.

The final revision of U.S. third-quarter GDP will get released at 13:30 GMT. Other scheduled U.S. statistics today are the FHFA house price index, the Richmond Fed index, and existing home sales.

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



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