Stronger Asian Stocks and Softer Euro to Start the Week

February 14, 2011

The euro and kiwi are down against the dollar by 0.7% and 0.6%.  Other major dollar pairs have changed no more than 0.1% since Friday’s close.

Equities rose 3.2% in China, 2.7% in India, 1.9% in South Korea, 1.3% in the Philippines  and Hong Kong, 1.8% in Thailand, and 1.1% in Japan and Australia.  The Paris Cac and British Ftse are 0.2% lower, however, while the German Dax is up 0.3%.  U.S. stocks have opened softer.

Ten-year German bund and Japanese JGB yields are unchanged. British gilt yields slid a basis point, and 10-year Treasuries have firmed two basis points.

Oil and gold prices are respectively off 0.1% at $85.52 per barrel and up 0.2% at $1362.80 per ounce.

Japanese GDP contracted 1.1% at an annualized rate last quarter, only half as much as expected.  See my review.

Industrial production in the euro area edged 0.1% lower in December, more or less meeting expectations, but was 8.0% greater than in December 2009.  December output was 0.4% above the 4Q average, thanks to gains of 0.8% in October and 1.4% in November. 

China’s $6.45 billion trade surplus in December was only half as big as anticipated and the smallest surplus since April.  The surplus in 2010 of $183 billion was down from $196 billion in 2009 and $295 billion in 2008.  On-year export and import growth in December of 37.7% and 51.0% was considerably greater than forecast, but perhaps distorted by the Lunar New Year.

Wholesale prices in India increased 1.2% last month and 8.2% from a year earlier.  India and China are battling food-led inflation.

A 1.1% drop in New Zealand retail sales in December was almost three times greater than forecast and largely reversed November’s downwardly revised 1.2% increase.  The news weakened the kiwi.

Australian home loans increased 2.1% in December on top of a 2.5% advance in November.  Analysts had expected just a 1.0% increase.

Portuguese real GDP fell 0.3% in the fourth quarter of 2010, depressed by fiscal austerity.  Portugal’s central bank has predicted a decline of 1.3% this year.

Canadian motor vehicle sales plunged 4.8% in December to just 1.4% above the December 2009 level.

EU finance ministers are meeting this Valentine’s Day.  No significant U.S. data releases are scheduled. 

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.

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