Currency Market Pause on Thanksgiving Day

November 25, 2010

Dollar movements have been narrowly mixed.  The U.S. currency is holding onto recent gains for the most part.  It is 0.4% stronger against the Swiss franc, up 0.1% versus sterling and the yuan, unchanged against the kiwi and yen, down 0.1% relative to the euro and Aussie dollar, and off 0.2% against the loonie.

Stocks advanced 1.5% in China, 1.2% in Indonesia, 0.7% in Singapore, 0.5% in Japan, and 0.2% in Australia, but they fell 1.0% in Thailand, 0.7% in India and 0.6% in the Philippines.  In Europe, the Ftse and Dax are 0.3% and 0.2% firmer, while the Cac40 is down 0.2%.

Ten-year JGB and British gilt yields rose by two and three basis points, while German bund yields are steady.

Gold is also flat, while oil prices are 0.3% higher.

According to Japanese customs trade data, export volume growth slowed sharply to 5.3% on year in October, lowest since November 2009, from 16.1% in the year to September and 18.6% on average last quarter.  The JPY 822 billion trade surplus was only 2.7% wider than a year earlier, as gains of 23.6% in the surplus versus the United States and of 14.6% versus Asia were offset by a 10.1% contraction in the surplus in trade with the EU. 

Japanese corporate service prices fell 0.1% on month in October and by 1.2% on year.  That was the greatest 12-month decline since March.

Australian CAPEX investment spending rose 6.2% last quarter, twice as much as forecast and more than reversing a 4.0% decline in the second quarter.

Export and import on-year growth slowed in Hong Kong to 13.9% and 14.0% in October.  Year-to-date on year export growth remains at 24.6%, while that for imports is 27.2%.

South African producer prices dropped 0.4% on month in October and posted a smaller-than-projected 6.4% on-year advance, down from 7.6% in the year to September.

French consumer sentiment continued to weaken gradually in November, dropping to minus 32 from minus 34 in October and minus 35 in September.

Italian business sentiment improved to 101.6 in November from 100.1 in October.  A slight drop had been expected.  Dutch business sentiment slid two-tenths to 0.3.  Euroland business sentiment and consumer confidence figures are due next Monday.

German construction orders were 1.1% lower than a year earlier in September but 2.3% higher in January-September.

Britain’s CBI retailers survey index rebounded to a solid score of 43 in November after falling to 36 in October from 49 in September.  Analysts anticipated a reading of +33.  Britain’s Nationwide authority on home prices, however, is warning that such will fall further.

Swiss employment increased 0.5% in the third quarter to 4.08 million, exceeding expectations of 3.98 million.

Spanish producer prices climbed 0.6% last month, increasing the 12-month rate of rise to 4.1% from 3.6%.  Icelandic consumer price inflation of 2.6% this month is a shade less than expected.  Swedish producer prices fell 0.7% in October but were 2.3% higher than a year earlier.

Nakamura of the Bank of Japan expressed worries about the firm yen and said downside growth risks slightly exceed upside ones.

Several Bank of England officials testified in British Parliament.  Governor King reiterated that excess capacity in the longer run should reduce inflation but noted that considerable uncertainty surrounds the use of quantitative easing.  Miles called the present policy stance expansionary.  Sentance predicted that CPI inflation will rise to 4.0% or above in the short run, while Posen reaffirmed his preference for using quantitative easing as a counterweight to the coming fiscal restraint.

Constancio of the ECB urged China to adopt a more flexible exchange rate policy.  Euroland peripheral bond markets remain under pressure.

U.S. markets are closed today.  Happy Thanksgiving everyone!

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


One Response to “Currency Market Pause on Thanksgiving Day”

  1. jessebak says:

    A Happy Thanksgiving to you too! Thanks for taking the time to write this blog/website.