Quiet Start to New Week

February 22, 2010

There have been few and inconsequential data releases this Monday. No market-shattering statements, either.   China finally reopened following a week-long Lunar New Year holiday, and officials there renewed a pledge to maintain a moderately loose monetary policy and a pro-growth fiscal stance. 

Stocks rose in the Pacific Rim by 2.4% in Hong Kong, 2.7% in Japan, 2.1% in South Korea, 1.8% in Australia, and 1.6% in Taiwan, but the Chinese market fell by 0.6%.  European bourses show scant change, with the Dax flat, the Cac40 up 0.1% and the Ftse advancing 0.2%.

The dollar is well last week’s highs and hovering around a number of big figures: 1.3600 per euro, 0.90 per Aussie dollar, and 0.70 per NZ$.  Changes from Friday’s close are limited to drops of 0.3% against the kiwi, 0.2% against the yen, and 0.1% versus the Australian dollar and gains of 0.1% against the euro, Swiss franc and sterling.  CAD/USD is unchanged.

Sovereign bond yields firmed sharply in Britain, by 1.5 basis points in Japan and by 1 bp in Germany.  The debt situations in Portugal, Italy, Ireland, Greece and Spain and lack of a common fiscal policy to complement Euroland’s common currency and monetary policy continue to bother investors.

Oil and gold prices are barely changed at $79.85 per barrel and $1121.40 per ounce.

Japanese convenience store sales and department store sales in January were 5.3% and 9.1% lower than a year earlier.  Prime Minister Hatoyama urged the Bank of Japan to act appropriately against deflation.

Former U.S. Treasury Secretaries Snow and O’Neill (who served Bush43), Brady (who served under Bush41), Schultz (Nixon), and Blumenthal (Carter) have endorsed Volcker’s bank regulatory proposals.

Australian motor vehicle sales fell 3.4% last month, their first monthly decline in six months.

Taiwanese on-year growth in real GDP advanced to 9.2% last quarter but was negative 1.9% in 2009 as a whole.  Thai growth was 3.6% on a 4Q-over-3Q basis and accelerated to 5.8% in on-year terms from negative 2.7% in the year to 3Q09.

Swiss M3 expanded 5.6% between January 2009 and January 2010, down from 6.6% in the year to December.

Dutch consumer confidence weakened more than forecast to minus 13 this month from minus 10 in January and minus 11 in December.

Saudi consumer price inflation reached 4.1% last month.

Italy’s trade shortfall with non-EU countries narrowed 20% to EUR 3.2 billion last month.

A 25-bp rate cut is expected later today in Hungary.  The Bank of Israel is expected to hold its key interest rate steady, but a hike is possible.  Mexican GDP data will get released today, but no U.S. or Canadian data are scheduled.

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


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