Most Key Dollar Pairs Steady Awaiting Bank of England and ECB

March 4, 2010

The dollar has risen 0.2% against the Swiss and 0.1% versus sterling and the euro, but the greenback is down 0.2% against the Canadian dollar and 0.1% versus the yen.  Bigger dollar moves have been made against the kiwi (+0.6%) and Aussie dollar (+0.3%).

Pacific Rim stocks fell mostly with drops of 2.5% in China, 1.4% in Hong Kong, 1.1% in Japan. 0.6% in Thailand, 0.5% in Singapore and 0.3% in South Korea.  The German Dax, Paris Cac and British Ftse have lost 0.4%, 0.2% and 0.1%.

Ten-year German bund and British gilt yields firmed one basis point.  The ten-year JGB is steady at 1.34%.

Oil and gold prices eased 0.4% and 0.3% to $80.55 per barrel and $1139.90 per troy ounce.

Bank Indonesia left its 6.5% policy rate unchanged as had been expected.  Inflation there is presently a shade below target and not expected to rise above the target range.

Malaysia’s central bank implemented its first rate hike in nearly four years, a 25-basis point increase to 2.25%.  The move was called a “normalization” now that recovery appears to be firmly established.

Japan’s Ministry of Finance released its quarterly corporate survey.  Investment spending showed an on-year drop last quarter of 17.3%, down from 24.8% in the year to 3Q09 and identical to the 17.3% decline in the year to 4Q08.  Profits swung into the black, rising 35.2% on year, while sales accelerated from on-year growth in 3Q of 0.5% to 2.9% last quarter.

In a designed protest against the yen’s strength, Japan’s FY10/11 budget includes a bigger Y 145 trillion authorization of resources for exchange market intervention.

Developments from Greece include 1) German leaders apparently still dissatisfied with the EUR 4.8 billion extra package of austerity measures, 2) intensifying domestic popular protest against the austerity, and 3) the government’s launch of a 10-year EUR 5 billion bond sale.

Australia’s trade deficit narrowed 46% to AUD 1.176 billion in January compared to December.  Exports rose 1.4%.  Imports fell 3.3% on the month.

The second release was made of Euroland fourth-quarter GDP figures.  Real growth amounted to 0.1%, with a boost of 0.3 percentage points from net exports.  Exports advanced 1.7%, while imports gained 0.9%.  Personal consumption was flat on the quarter, and government spending dipped 0.1%.  Business investment sank 0.8%, depressing GDP growth by 0.2 percentage points.  GDP was 2.1% less than a year earlier.

French unemployment rose to 10.0% last quarter from 9.5% in 3Q.  For the mainland only, such increased to 9.6% from 9.1%.  Jobs were 1.0% lower than a year earlier.

Dutch consumer prices firmed 0.7% in February, but the 12-month rate of increase was a very benign 0.8%.

In Hong Kong, real retail sales increased 3.2% between January 2009 and January 2010.

Britain’s Halifax house price index recorded an unexpected drop of 1.5% in February and rose just 4.5% on year.  New car sales were 26.4% higher last month than a year earlier.

U.S. pending home sales, factory orders, chain store sales, and weekly jobless claims get released today.  Canada reports building permits and the IVEY-PMI index.

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



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