Dollar Down But Stocks and Commodities Up to Start 2010

January 4, 2010

The dollar lost 0.9% against the Canadian dollar, 0.8% versus the Aussie dollar, 0.5% against the euro, 0.4% against sterling, 0.3% against the yen and kiwi, and 0.1% relative to the Swiss franc.  All markets are open following the New Year holiday.

Stocks are up 1.6% in Indonesia, 0.5% in South Africa, Pakistan and India, 1.0% in Japan and France, 0.6% in Britain and 0.7% in Germany.

Oil (+2.0%) and gold (+1.9%) got off to a fast start in 2010, with respective prints above $80/barrel and $1110/ounce.

Ten-year sovereign bond yields are firmer in Germany and the United States, lower in Britain, and unchanged at 1.30% in Japan.

Manufacturing PMIs readings for December were releases by many countries.  Note that scores under 50 connote contraction.

  • The British index shot up to a 25-month high of 54.1 from 51.8 in November.
  • But Australia’s reading fell below 50 for the first time in five months to 48.5 from 51.2 in November.
  • Euroland’s index printed at 51.6, same as the preliminary flash indication and four-tenths above November’s score.  The German index of 52.7 was up from 52.4 but saw the orders component slide to a 3-month low.  The French gauge was 54.7 after 54.4 in November.  Italy’s improved to 50.8 from 50.1 and saw production reach its best level since September 2007.  Spain’s 45.2 score after 45.3 in November and 46.3 in October remained very disappointing.  Ireland’s reading was unchanged at 48.8 and remains in a stagnant trend.  The Greek index also was less than 50 but at a 4-month high, and the Dutch measure reached a 21-month high of 53.1 versus 51.9 in November and 50.5 in October.
  • Taiwan’s PMI improved to 58.7 from 58.4 and was very near to the 2-year high of 59.8 in October.
  • China’s PMI climbed to 56.1 from 55.7.  Export orders reached their best quote since March 2005 as Beijing officials continue to stonewall all calls to let the yuan appreciate.  NYT columnist Krugman wrote another article on this subject over the weekend.
  • India’s PMI advanced 2.6 points to a robust 55.6, near to the best 2009 print of 55.8 last May.
  • Russia posted a 5-month low reading of 48.1, down from 49.1 in November and 52.0 in September.
  • South Korea’s PMI edged upward to 52.8 from 52.6.
  • The Czech PMI was 50.8, up from 50.6 with orders and production readings also slightly above 50.
  • Turkey’s reading was 50.6, down from 51.8 in November.  Activity remains positive but has been decelerating since July.
  • Poland’s index stayed at 52.4.  Such had been below 50 prior to November.
  • Hungary’s PMI of 48.5 was still under 50 but above November’s reading of 47.7 and the cyclical low of 38.5.
  • The Swiss PMI settled back to 54.6 from 56.9 in November but was higher than readings in October, September and August.
  • Sweden’s PMI jumped to a brisk 58.2 from 56.0 in November.

U.S. and British embassies in Yemen have been closed.

The euro area Sentix index of investor confidence improved to minus 3.7 in December from minus 5.5 in November.

Net consumer lending in Britain was less negative in November at Gbp 0.4 billion than in October, and mortgage approvals picked up to 60.5K from 57.7K.  Both results were better than forecast.  U.K. M4 edged up 0.1% in November and recorded on-year growth of 9.3%.  That weak but above November’s 9.2% advance.

After three quarters of positive GDP growth including +14.9% in 3Q09, Singapore saw GDP slide 6.8% at an annualized rate in 4Q.  On-year growth still improved to 3.5% from 0.9%.

Thai CPI inflation picked up to 3.5% in December from 1.9% in the year to November.  Polish CPI inflation quickened to 3.5% from 3.3% in November.  Italian consumer prices rose 1.0% in the year to December versus an on-year rate of 0.7% in November.

Minutes from last month’s Swedish Riksbank interest rate policy meeting revealed two Board members favoring an earlier start to rate increases in spring or summer than the majority favors but a desire to lift rates at a more leisurely pace than if the onset of tightening is delayed until autumn.

Car sales in Spain fell 18% in 2009 but were 25% higher in December than a year earlier.

Scheduled U.S. data today include the manufacturing PMI and construction spending.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.



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