Friday Rundown

June 11, 2010

Compared to closing levels on Friday, June 4, the dollar shows gains of 1.5% against the yen and 0.3% against the pound but losses of 1.2% against the euro, 0.8% against the Aussie dollar, and 0.7% versus the Swiss franc.  CAD/USD is unchanged.  The Dow, Dax and Ftse are up 2.3%, 1.9% and 0.7%, but Japan’s Nikkei has fallen another 2%.  Ten-year Treasury yields are 8 basis points higher, while the Japanese counterpart has fallen by 4 bps.

Some late-week data highlights were

  • China reported CPI and WPI on-year rates in May of 3.1% and7.1%, up from 2.8% and 6.8%.  Growth of 29.9% in M1, 21.0% in M2, and 639.4 billion yuan also underscored the potential for overheating in China.  Retail sales advanced 18.7% in the year to May, up from 18.5% the month before.  Exports soared 48.5% on year, lifting the trade surplus to $19.5 billion from $1.7 billion in April.  Industrial output growth decelerated to 16.5% from 17.8%, and fixed asset investment in January-May was 25.9% greater than a year earlier.
  • Japanese consumer confidence improved to 42.8 in May from 42.0 in April, 40.9 in March, and 37.6 last December. 
  • Revised Japanese GDP growth last quarter of 5.0% at an annualized rate and 4.6% from 1Q09 was virtually the same as the preliminary indications of 4.9% annualized and 4.6% from the same quarter a year earlier.
  • The U.S. goods and services trade deficit widened 7.9% on month to $40.2 billion in April.  The merchandise trade gap reached $52.2 billion.
  • British producer output prices rose 0.3%, while the PPI-input index fell by 0.6%.  A Bank of England survey of expected inflation over the coming year accelerated sharply to 3.3% from 2.5% in the previous quarterly poll.
  • U.K. industrial output slid 0.4% in April after jumping 2.0% in March.  Output in Feb-April was 1.6% greater than a year earlier versus an on-year drop of 3.6% in Nov-January.
  • French and Spanish consumer pricesd in May were 1.6% and 1.8% greater than a year earlier.
  • Canadian capacity utilization rose sharply last quarter to 79.2% from 71.3% in 4Q09.  The Canadian trade balance was in surplus by CAD 175 million in April versus a deficit in April 2009 of CAD 543 million.
  • U.S. retail sales fell 1.2% last month, their first drop since last September.  But the University of Michigan consumer sentiment index for early June improved more than assumed to 75.5 from 73.6 in May.

As expected, the Bank of England and ECB left policy settings unchanged.  New forecasts from the ECB were not radically different from those released in March.

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


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