Commodity-Sensitive Currencies and Sterling Strengthened

March 30, 2010

The U.S. dollar lost 0.9%, 0.5%, and 0.4% against its Canadian, New Zealand and Australian counterparts.  The greenback also fell 0.7% against sterling but is otherwise steady, showing a 0.1% uptick against the yen, no change relative to the Swiss franc, and a 0.1% dip against the euro.

The Nikkei advanced 1.0% and closed above 11K for the first time since October 2, 2008.  Japan’s fiscal year ends tomorrow.  Equities jumped 2.3% in Thailand and rose 0.7% in Hong Kong, 0.5% in South Korea, and 0.4% in Australia.  European stocks are showing trivial change.

Ten-year gilt yields are down 3 basis points, and yields on ten-year German bunds and Japanese JGBs slid a basis point.

Oil and gold prices are trading steadily but firmly at $82.19 per barrel and $1110.50 per troy ounce.

Japan’s jobless rate in February stayed at 4.9%, lowest since March 2009.  The job offers ratio improved a tick to 0.47 from 0.46 in January and 0.43 in December.  Employment was 1.3% lower than a year before.

Japanese industrial production fell 0.9% in February, the first decline in nearly a year, but was 31.3% greater than in February 2009.  Officials survey indications point to a likely 1.4% advance in March.  Analysts had projected a 0.5% February decline following January’s 2.7% leap.  Output in January-February was 4.3% greater than the 4Q09 average level.  Japanese motor vehicle output soared 74.9% on year in February after climbing 8.6% in the year to January.

Japanese real household spending posted a monthly 1.6% drop in February and a decline of 0.5% from February 2009.  Such had risen 1.7% in the year to January.  Real disposable income was 1.5% greater than in February 2009.

A debate appears to be happening between Japan’s government agencies over whether to let the yuan rise.

Britain reported a much smaller Gbp 1.684 billion current account deficit last quarter, equal to just 0.5% of GDP.  That was considerably smaller than forecasts of a Gbp 5.1 bln deficit and down from a gap of 1.7% of GDP in 3Q09.  Net investment earnings doubled to Gbp 10.3 billion, accounting for this pleasant surprise.

Real British GDP growth in 4Q09 got revised upward from 0.3% to 0.4%.  Such was the first positive growth since 1Q08.  Inventories accounted for the onset of recovery.  Net exports exerted a 0.3 percentage point drag and real domestic final sales were flat.  GDP fell 3.1% between 4Q08 and 4Q09 and by 4.9% in calendar 2009.  The Nationwide British house price index increased 0.7% in March and recorded a 9.0% 12-month increase.  Both changes surpassed expectations.

French real GDP growth was confirmed at a quarterly 0.6% in 4Q09 and an on-year dip of 0.3%.  France had Europe’s briskest growth last quarter but has lost noticeable momentum in the present quarter.  French housing starts in December-February were 12.8% weaker than in the previous three months and down 17.3% on year.

Strauss-Kahn of the IMF indicated that it would help Greece if asked and then would also determine the conditions of any loan.

The UBS Swiss consumption indicator worsened to 1.20 in February from 1.32 in January.

German import prices increased 1.0% in February on top of a 1.7% advance in January, producing an on-year increase of 2.6% compared to minus 1.0% in December and minus 13.0% last July.  Non-oil import prices also rose 1.0% but were 1.4% lower than a year ago.  The euro’s depreciation has lifted import price inflation.  Export prices rose 0.4% on month and 0.8% on year.

Hungarian producer prices increased 0.9% in February but were 2.8% lower than a year earlier.  Spanish consumer price inflation accelerated to 1.4% in March from 0.9% in February.  Belgian consumer prices rose 0.4% in March and by 1.7% from a year earlier.

Consumer confidence in Portugal worsened one point to minus 35.4 in March.  Norwegian retail sales volume firmed 0.3% last month and rose 3.3% on year.

South African private credit growth slowed for a fifth straight month.  New Zealand M3 was 5.1% lower than a year earlier in February.  But the kiwi got a boost from a strong 5.9% increase in building permits last month, their first advance in three months.

Scheduled U.S. data today include weekly chain store sales, the Case-Shiller house price index, and consumer confidence.  Canada releases PPI data.

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

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