Some Highlights Since Friday

June 9, 2010

The dollar since late Thursday has lost 1.2% against the yen and 1.3% versus the Swiss franc but shows gains of 1.1% against the Aussie dollar, 1.0% versus the euro and 0.2% against sterling. 

Stocks have dropped 4.8% in Japan, 2.4% in Britain, 2.1% in the U.S. and 1.1% in Germany.  Ten-year bond yields are off 13 basis points in the United States, 8 bps in Japan, 5 bps in Britain but just one basis point in Germany.

Revised Euroland national income accounts showed GDP growth of 0.2%, with consumption off 0.1%, government expenditures up 0.6%, and business investment down 1.1%.  Net exports depressed GDP growth by 0.5 percentage points, whereas inventories augumented such by 0.8 ppts.  Growth rates in the bloc ranged from +1.0% in Portugal to 0.5% in Italy, 0.2% in Germany, 0.1% in France and Spain and minus 0.8% in Greece.  GDP advanced 0.6% between 1Q09 and last quarter.

In Germany in April, industrial output and orders rose by 0.9% and 2.8% on month and were greater than the 1Q level by 3.7% and 6.3%.  The seasonally adjusted trade surplus of EUR 13.1 billion was similar to March’s EUR 13.0 billion surplus, but the unadjusted current account narrowed to EUR 11.8 billion from EUR 18.1 billion the month before.

In Japan, core private domestic machinery orders jumped 4.0% in April on top of March’s 5.4% increase.  Such surpassed the 1Q average level by 6.2% after climbing 2.9% between 4Q09 and 1Q10.  Foreign machinery orders fell 3.7% in April but were only 0.3% lower than in 1Q.  The economy watchers index slid for the first time in a half year, dipping to 47.7 in May from 49.8 in April.  The index of leading indicators also was lower in April and than forecast, printing at 101.7 after 102.8 in March.  M2 grew3.1% on year in May, while bank loans fell by 2.0%.  Japan’s current account surplus narrowed to JPY 1380 billion on a seasonally adjusted basis in April from Y1773 billion in March. 

Canada reported another set of solid labor market data.  Although the jobless rate stayed at 8.1%, employment rose 24.7K and by 1.7% on year.  Full-time workers were 67.3K greater than in April.  The IVEY PMI index printed at its best level since July 2008.  Canadian building permits rose 5.4% in April after gaining 12.3% in March, but housing starts of 189K in May were 6.4% less than forecast.

Neither the Reserve Bank of New Zealand nor the Bank of England nor the ECB are expected to change their benchmark interest rates.  All three announcements are due in the next 19 hours.

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


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