Obama Sets Goal of Doubling U.S. Exports in Five Years

January 28, 2010

Markets seem somewhat less risk averse, less fearful.  Stocks recovered in Asia by 1.6% in Japan and Hong Kong, 1.8% in Taiwan, 1.0% in South Korea and Sri Lanka, 2.2% in Indonesia, and 1.9% in Singapore.  Australian equities gained 0.6%, and in Europe, the Paris Cac, British Ftse, and German Dax are 0.5%, 0.4%, and 0.3% higher.

Commodity currencies show a firmer tone, with gains against the U.S. dollar of 0.8% in the AUD, 0.7% in the kiwi, and 0.5% in the loonie.  The greenback also lost 0.4% against sterling, but it has recovered 0.3% against the yen and is above 90/$.  The dollar ($1.4001) is up 0.1% against the euro.  The Swissy moved in tandem with the euro after the Swiss finance minister expressed comfort with its present euro cross rate level.

JGB yields are steady, whereas 10-year gilt and bund yields have risen.

Oil and gold rebounded 0.7% and 0.4% to $74.21 per barrel and $1090.10 per troy ounce.

Japanese large-store retail sales in December were 4.6% lower than a year earlier.  Such posted similar on-year declines last year of 7.0% in 4Q, 7.0% in 3Q, 6.7% in 2Q and 7.2% in 1Q.  Total retail sales recorded an on-year dip of 0.3% in December and 0.8% in the fourth quarter, which were milder than the 2.3% drop in 2009 as a whole.

Japan’s parliament approved a second fiscal 2009 supplementary budget with a Y 7.2 trillion extra stimulus.

Japanese stock and bond transactions generated a Y 298 billion outflow last week after a Y 597 billion inflow in the week of January 16.

The Filipino central bank as expected retained its 4.0% overnight borrowing rate.

Obama’s state of the union address to Congress dwelt on the economy, especially jobs, and was laced with many tax cut proposals for small businesses.  Very little of the speech was on foreign policy, and such was tucked into the back of the talk.  He renewed a call for health care reform and set a goal of doubling U.S. exports within five years but without mentioning the fixed Chinese yuan.

Euroland confidence indicators for January showed a further rise in overall economic sentiment to 95.7 from 94.1 in December, 91.9 in November, and 89.6 in October.  In March 2009, the index bottomed at 70.6.  Industrial sentiment rose two points to minus 14, but consumer confidence stayed at minus 16.  Service sector confidence firmed two points, whereas construction sector confidence weakened by a point.  The business climate index improved to minus 1.12 from minus 1.30 in December and minus 3.23 last March.

Italian business sentiment improved more than forecast to 83.2 in January from 82.4 in December.

The last German state, Baden-Wuerttemberg reported a 0.6% monthly drop in consumer prices in January and an on-year rise of 0.8%.  Like the other states, inflation was depressed by discounting of holiday packages and accommodations.  The preliminary German inflation estimate also showed a 0.6% monthly decline and a 0.8% on-year pace of consumer price rises.  Belgian consumer prices firmed 0.5% and by 0.6% from a year earlier in January.

German unemployment only climbed 6K on a seasonally adjusted basis in January.  That was less than half the expected increase and followed a dip of 3K in December and a 1K rise in November.  Unadjusted unemployment, which routinely suffers in January as cold weather impedes construction, climbed 341K.  Germany’s jobless rate edged up a tenth to 8.2% seasonally adjusted and by 0.8 percentage points to 8.6% unadjusted.

Polish GDP remained positive in 2009 at 1.7%, but was only a third as much as the 5.0% increase in 2008.  Investment decelerated to 0.3% from an 8.2% advance.

Many Nordic indicators were released overnight.  Danish unemployment held steady in December at 4.3% but was above September’s 4.0% rate.  Sweden’s jobless rate last month of 8.6% compared unfavorably with 6.4% in December 2008.  Swedish retail sales firmed 0.2% in December and 4.5% from a year earlier; both comparisons were better than assumed.  Swedish consumer confidence also is rising, with a reading of 8.5 in January after 7.6 in December.  Finnish retail sales in volume terms were 1.6% greater than a year earlier in December.  Norwegian unemployment last month of 3.3% was a bit above expectations.

ECB policymaker Tumpel-Gugerill indicated its time for both monetary and fiscal policy to begin normalizing.

South African producer prices increased 0.7% both on a monthly and on-year basis in December, which was almost twice as much as forecast.

Scheduled U.S. data today included the Chicago and KC Fed indices, durable goods orders, and jobless insurance claims.  The reconfirmation vote in the full senate of Chairman Bernanke of the Federal Reserve starts today.

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

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