Dollar Strengthening on Penultimate Day of 2011

December 29, 2011

The dollar advanced 0.6% against the yen, 0.4% versus the euro and sterling, 0.3% relative to the Swissie and Australian dollar, 0.2% against the kiwi, and 0.1% versus the loonie.  The yuan is 0.1% firmer. 

Stocks closed mixed in the Pacific Rim.  Share prices fell 1.2% in India, 0.7% in Hong Kong, 0.4% in Australia and Thailand, and 0.3% in Japan.  Equities firmed 0.8% in The Philippines, 1.1% in Indonesia, 0.3% in Taiwan and New Zealand, and 0.2% in China, Singapore and Malaysia.  In Europe, the German Dax so far has gained 0.4%, and the Paris Cac and British Ftse are 0.2% firmer.

Gold tumbled 1.9% to $1533.80 per ounce.  Oil edged 0.2% higher to $99.54 per barrel.

Ten-year sovereign bond yields slumped by seven and five basis points in Germany and Great Britain.  The Japanese JGB yield is one basis point lower.

Italy’s three-year sovereign bond auction raised somewhat fewer funds than hoped but produced a lower average yield of 5.62%, 227 basis points less than the November auction of such paper.

German consumer prices in five reporting states rose a bit less than expected in December.  On-year inflation was about 0.4 percentage points lower than in November, and core inflation was below 1.5%.

Italian business sentiment fell from a downwardly revised 94.0 in November to 92.5 in December, lowest since end-2009 and 11.0 points lower than the 2011 peak of 103.5 last March.

Euro area M3 money growth slowed to a 12-month 2.0% increase in November from 2.6% in October.  The September-November pace fell back to 2.5% after increasing to 2.8% in August-October from 2.6% in the third quarter.  The cause of this deceleration was a drop in on-year growth of marketable instruments (M3-M2) to 1.1% from 7.8%.  Bank loans to the private sector decelerated to a 12-month increase of 1.7% from 2.7% in October. 

Russia’s manufacturing purchasing managers index printed at 51.6.  Although down from 52.6 in November, such was the second highest score since April and just a tad under the 2011 average reading of 51.8.

Austria’s factory PMI improved to 49.0 this month from 47.6 in November and a reading of 48.0 in October.

Spanish retail sales were 7.2% weaker than a year earlier in November.  Sweden’s trade surplus of SEK 3.5 billion in November was 63% smaller than a year earlier, reflecting a 3.8% drop in exports and a 2.1% rise in imports.

Greek PPI inflation slowed to 7.4% last month from 8.1% in October.  Hungary’s current account surplus narrowed 28% to EUR 381 million in the third quarter. 

Singapore PPI inflation rose to 11.9% in November from 11.6% in October.  South Korean industrial production slid 0.4% in November but exceeded the year-earlier level by 5.6%.  South Korea also posted a USD 5.1 billion current account surplus last month, the largest in a year.  Hong Kong’s trade deficit of HKD 44 billion last month was almost twice as big as the October deficit.

As they did at end-3Q, Taiwanese monetary authorities left interest rates unchanged after their latest quarterly review of policy.

South Africa’s trade deficit narrowed 16% to ZAR 8.0 billion in November.

Scheduled U.S. data releases today feature pending home sales and the Midwestern purchasing managers indices.  The Kansas City manufacturing index and weekly jobless insurance claims also get reported.

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

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