Australian and New Zealand Dollars Strengthened

December 29, 2009

The U.S. dollar traded down 1.0% against the Australian dollar and 0.9% relative to the kiwi.  The greenback also lost 0.3% against the euro and Swiss franc and 0.1% against the Canadian dollar.  The yen edged 0.1% lower, and sterling is steady.

Stocks closed flat in Japan and off 0.8% in South Korean, but other Pacific Rim bourses mostly firmed with gains of 1.2% in Thailand, 1.1% in Australia, 0.6% in China and 0.4% in Indonesia.  In Europe, stocks are up 0.5% in Britain, 0.3% in France and 0.1% in Germany.

Gold settled back 0.4% to $1103.50 per ounce, while oil is firm but steady at $78.80 per barrel.

Ten-year gilt yields advanced 8 basis points to 4.07%.  The comparable JGB yield is one basis point lower, while the bund yield has firmed a basis point.

Today represents a brief interval when all markets have reopened following Christmas and before they begin to close for the New Year holiday.

On Monday, Saxony reported a monthly and on-year 0.8% rise of consumer prices in December.  Three more German states reported CPI monthly gains today of 0.8%, while a fourth, Bavaria, announced a 0.9% increase.  On-year inflation in the four states that reported today ranged from 0.8% to 1.0%.  The monthly increases were dominated by seasonal markups in lodging and package holidays.  On-year inflation was concentrated in energy.  Baden-Wuerttemberg will report later today, and then a preliminary estimate of December inflation for all of Germany will be announced based on the figures from these six states.

Final French GDP data for last quarter showed growth of 0.3% from 2Q and a drop of 2.3% from 3Q08.  Final domestic demand and inventories each made zero contributions to the GDP growth rate.  Exports (1.7%) rose four times more quickly than imports (0.4%).  Consumption growth slowed to 0.1%, and business investment dropped another 1.0%, highlighting the fragile nature of even France’s economic outlook.

Italian business sentiment unexpectedly recovered another 3.2 points to 82.6 in December, highest since June 2008.

Spanish retail sales were 5.5% lower in November than a year earlier.

Home owners in Britain repaid Gbp 4.9 billion of net home equity loans last quarter.

The Swiss consumption indicator, a measure compiled by UBS, improved to 1.28 in November from 0.88 in October.

Swedish retail sales slid 0.6% in November but were 3.6% greater than a year earlier.

South Korea’s current account posted a seasonally adjusted surplus for a tenth straight month in November, but such was 64% narrower than October’s.  Consumer sentiment in that economy was steady in December.

In the U.S. later today, the Conference Board releases its index of consumer confidence, and the Case-Shiller home price data also arrive.

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


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