Stocks Up Ahead of ECB and BOE Decisions and U.S. Claims Data

August 5, 2010

Equities overnight rose 1.7% in Japan, 2.1% in Indonesia, 0.9% in Thailand and 0.5% in Australia.  In Europe, stocks have traded up 0.9% in France and by 0.4% in Germany and Britain.  Some markets bucked the trend: there were losses of 0.9% in China, 0.3% in South Korea and 0.2% in India.

A disappointing jump in New Zealand unemployment sent the kiwi down 0.9% against the U.S. dollar.  The greenback otherwise shows losses of 0.8% against the Swiss franc, 0.5% against the Canadian dollar and euro, and 0.2% relative to the yen.  Sterling is steady.  So is the yuan.

The 10-year JGB yield rebounded four basis points to 1.04%.  The two-year Treasury yield is five basis points above the recent low of 0.52%.  Bunds are steady, while the 10-year gilt is off two basis points.

Oil prices retreated 0.7% to $81.93 per barrel.  Gold firmed 0.2% to $1198.60 per troy ounce.

Germany continues to excel far faster than the rest of the common currency bloc.  German industrial orders shot up 3.2% in June, slight more than twice expectations.  Ordrs were 2.1% above the 2Q average level and 28.4% greater than in June 2009.  Orders advanced by 7.7% last quarter, an annualized 34.4% pace.  Domestic demand in the quarter soared 25.7% annualized, and foreign orders did even better with a 41.3% annualized increase.  Orders in the second quarter for capital goods rose 6.0% not annualized, 12.3% for foreign capital goods orders.

Industrial output in Hungary was 12.6% greater in June than a year earlier.  The on-month rise was 0.9%.  Spanish industrial production in June was 3.0% above its year-earlier level.  Dutch consumer prices dipped 0.3% in July and recorded a 1.6% 12-month increase.

An IMF spokesman said Greece had made great progress in imposing austerity, and the next aid installment shouldn’t be a problem to that economy.

Sweden’s jobless rate of 9.5% in June was a tick below expectations.  Norwegian unemployment in May of 3.6% was also a tenth less than forecast.

British car registrations in July were 13.2% lower than a year earlier after posting a 10.8% on-year increase in June.

New Zealand unemployment rose to 6.8% last quarter from 6.0% in 1Q10.  There were 0.3% fewer employed workers than in the first quarter.

Consumer prices in the Philippines firmed 0.2% in June and were up 3.9% on year.  Taiwanese CPI inflation rose to 1.3% in July from 1.2% in June.  The WPI was 5.3% higher than a year before. 

Indonesian real GDP increased 2.8% last quarter, lifting the on-year pace to 6.2% from 5.7% in 1Q.  Bank Indonesia yesterday left its interest rate unchanged.

Chinese authorities have instructed banks in that country to run stress tests assuming a 60% plunge in property prices.

Japan’s prime minister hinted at the possibility of fresh stimulus.

Business sentiment in South Africa slid to 84.3 in July from 84.8 in June.

The Bank of England left its interest rate unchanged.

The ECB will announced its rate decision at 11:45 GMT and begin its press conference at 12:30 GMT.  No change seems likely.  The Czech and Peruvian central banks also hold policy meetings today.  No rate changes are anticipated from either of them.

U.S. weekly jobless insurance claims data get released today, as do chain store sales for the whole month of July.  Canada releases building permits.

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

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