Spotlight on EcoFin as U.S. Observes MLK Day

January 17, 2011

The dollar rose 0.8% against the euro but fell 0.9% against the kiwi.  Otherwise, the dollar shows gains of 0.4% against the Australian dollar and 0.3% relative to the Swiss franc and declines of 0.3% against the yen, 0.2% versus sterling and 0.1% against the Canadian dollar.

Chinese equities plunged 3.8% in the wake of Friday’s reserve requirement increase.  China on Thursday will be releasing 4Q GDP and monthly data for prices, industrial output, investment, and retail sales.  Elsewhere in the Pacific Rim,  bourses fell 0.9% in Thailand, 0.8% in Australian, 0.5% in Hong Kong, New Zealand and Taiwan, and 0.4% in South Korea.  The Paris Cac and German Dax have eased 0.3% and 0.2%, while the British Ftse is so far unchanged.

U.S. markets are closed today for Martin Luther King’s birthday.

Ten-year sovereign bond yields firmed two basis points in Japan, slid a basis point in Germany, and are steady in Britain.

Oil and gold prices fell by 0.4% and 0.1% to $91.16 per barrel and $1358.80 per troy ounce.  Copper prices also eased.

Ahead of an EU Finance ministers meeting in Brussels later today, reports have surfaced of progress in moving toward a larger and more powerful rescue fund for troubled governments. Orphanides of the ECB said the more hawkish view on inflation expressed in the Bank’s statement last Thursday was not a unanimous opinion of the Governing Council.  He hopes the rescue fund can take over much of the burden that the ECB has been carrying in supporting national bonds in Euroland.  Portuguese officials are again denying any need for a bailout as Ireland and Greece have required.

Japanese consumer confidence slipped 0.3 points to 40.1 in December and had an average reading of 40.5 in 4Q10 after ones of 42.3 in 3Q and 42.8 in 2Q.

Australian motor vehicle sales increased 0.8% last month and were 2.3% greater than a year earlier.  Mortgage finance rose 2.9% in Australia during November.

Food prices fell 0.8% in New Zealand last month, cutting the 12-month rate of rise to 4.2% from 4.8%.

Just ahead of tomorrow’s visit to America, Chinese President Hu said currency appreciation isn’t the proper remedy for elevated inflation.  Property price inflation in China decelerated more than anticipated to 6.4% last month from 7.7% in November.

Britain’s Rightmove house price index firmed 0.3% in January and posted a 0.4% on-year increase, same as in December.

Producer price data were released by Denmark in December (+1.1% on month and +7.7% on year), Finland (+1.5% on month and +7.8% on year in December), and the Czech Republic (+1.0% monthly and +3.6% from a year earlier in November).  Icelandic CPI inflation eased to 3.5% in December from 3.8% in November.

Norway’s NOK 35.6 billion trade surplus in December was 17.5% wider than a year earlier.  Exports were up 17.8% on year.

In Turkey where the jobless rate eased a tenth to 11.2% in October, consumer sentiment slid last month to 90.99 from 91.34 in November.

Canada releases data on its stock and bond transactions with non-residents.  The Fed’s Plosser speaks today from South America.

Copyright Larry Greenberg 2011.  No secondary distribution without express permission.

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