Uneventful Day Thus Far

March 9, 2011

The dollar has eased 0.5% against the Swiss franc, 0.2% relative to sterling, and a scant 0.1% versus the yuan and commodity currencies such as the Aussie, New Zealand and Canadian dollars.  The dollar rose 0.2% overnight against the yen with Japan’s currency not getting any lift from fiscal yearend accounting-inspired capital inflows.

The 10-year German bund yield slid two basis points, while 10-year Japanese JGBs and British gilts are steady.  Premiums on the peripheral bond yields continue to creep higher ahead of Friday’s summit of EU leaders.  European sovereign debt remains a concern following Moody’s downgrade of Greek debt and Fitch’s decision to change Spain’s debt rating outlook to negative.

Stocks rose 0.6% in Japan, 0.5% in Indonesia, 1.6% in Pakistan, 0.4% in Hong Kong and 0.3% in South Korea.  Equities were steady in China and fell by 0.8% in Australia, 1.0% in Vietnam and 1.4% in Sri Lanka.

West Texas Intermediate oil slid 0.2% to $104.80 per barrel.  No major changes to report from Libya.  Western governments are still trying to decide how to respond to this humanitarian crisis.  Gold prices firmed 0.2% to $1430.60 per troy ounce.

Core Japanese machinery orders climbed 4.2% in January and exceeded the year-earlier level by 5.9%.  Both changes surpassed expectations, and January’s 4.3% rise relative to the 4Q10 average level was greater than government forecasts of a 2.7% advance this calendar quarter.  Export orders surged by 71.4% and were 51.2% greater than the 4Q10 average level.

As expected, there was another 25-basis point increase in Thailand’s central bank rate to 2.5%.  It was the third straight move.

Britain’s trade deficit was considerably smaller than forecast in January.  The goods and services shortfall, GBP 2.95 billion, was the smallest since February.  Analysts had predicted a gap of GBP 3.9 billion following GBP 5.475 billion in December and a 2010 monthly average deficit of GBP 3.92 billion.  The merchandise trade deficit of GBP 7.057 billion was also its smallest since February 2010 and well below December’s outsized GBP 9.686 billion.  Between December and January, goods exports advanced 5.4%, while imports contracted 4.0%.  The oil trade balance swung from a GBP 727 million deficit to a GBP 118 billion surplus.

On the day before the Bank of England announces its latest monetary policy decisions, the British Retail Consortium announced that U.K. shop prices increased 0.7% last month, most since February 2009, and by 2.7% on year, most since November 2008.

A 1.8% increase of German industrial production in January was a shade better than forecast but entirely attributable to a 36.3% revival of construction after December’s foul weather.  Factory output edged just 0.2% higher and exceeded the 4Q average level by 0.6%.  On-year growth in overall industrial production was robust at 12.4% after a gain of 11.0% in the year to December.

Greek unemployment climbed for a sixth straight time, reaching a hefty 14.8% in December after 13.9% in November and 10.2% at end-2009.

Swedish industrial output recovered 4.1% in January, five times as much as predicted, after dropping 2.1% in December and was 15.0% greater than a year earlier.  Industrial orders in Sweden were 12.1% greater than a year earlier.  Sweden’s buoyant growth has bolstered the krona 9.5% against the euro during the past year including a gain of around 1.5% in 2011.

Swiss CPI inflation of 0.5% in the year to February was two-tenth’s higher than January’s on-year pace.  Consumer prices rose 0.4% on month.  Czech CPI inflation firmed to 1.8% in February, two-tenths below target, from 1.7% in January.  The Czech trade surplus of CZK 15.7 billion in January exceeded expectations by 15.4%.

Australian business confidence jumped to +14 in February from +4 in January, snapping back sharply from the shock of the country’s recent floods.  Business conditions had a reading of minus 2 after minus 6 in January and +6 in December.  The value of Australian owner-occupied home loans fell 4.6% in January.  Investment housing loans fell by 6.8%.

South Korean M2 growth slowed to 6.5% on year in January from 7.2% in December.

The United States reports wholesale inventories and weekly oil stocks and mortgage applications today. Canadian house prices, Belgian final GDP figures, and Mexican consumer price and trade data arrive today as well.  The Reserve Bank of New Zealand announces its interest rate decision at 20:00 GMT, with a possible cut looming.  China releases trade data tonight, and the Bank of England’s monthly policy decision will be revealed at 12:00 GMT tomorrow.

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

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