EU Finance Ministers Meeting Today

January 23, 2012

A slow start to the week, as many Asian markets were closed for the Lunar New Year holiday.  Closed markets include Hong Kong, China, South Korea, Indonesia, Malaysia, The Philippines, Taiwan, Singapore and Vietnam.  In contrast to today, Tuesday through Friday each have big event and data calendars this week.

European finance ministers will be meeting in Brussels today in an effort to nail down details of a Greek debt restructuring, but weekend talks between the Greek government and its creditors failed to yield progress.

Many economists, market players and government officials are starting to gather in Davos, Switzerland for the annual World Economic Forum that starts Wednesday.

The dollar is softer than its Friday close for the most part.  The greenback has lost 0.8% against the kiwi, 0.5% relative to the Swissie and Australian dollar, 0.4% versus the euro, 0.2% relative to the loonie and yuan, and 0.1% against the yen.  Sterling had edged 0.1% lower against the dollar in an exception to the trend.

Share prices closed unchanged in Japan and show gains of 0.5% in London, 0.2% in Paris and 0.1% in Frankfurt.  Equities rose 0.6% in New Zealand but slid 0.3% in Australia.  They advanced 2.3% in Pakistan but dropped 2.0% in Sri Lanka.

Gold and oil prices increased 0.7% to $1675.90 per ounce and $98.98 per barrel.

The yields on ten-year Japanese JGBs and German bunds ticked a basis point higher, while that on British gilts increased three basis points.

The Bank of Mexico left its key Fondeo interest rate unchanged at 4.5% after Friday’s meeting as had been expected.  The Bank of Israel’s interest rate announcement later today is not expected to embody a policy change.

Australian producer prices rose 0.3% last quarter and by 2.9% from a year earlier.  Those results were a tenth of a percentage point less than predicted.  Domestic producer prices were unchanged on quarter and 3.2% higher on year.  In the three years between 4Q08 and 4Q11, the PPI increased just 1.3% per annum.

Japanese supermarket sales in December were 0.6% lower than a year earlier, which was an improvement from a 2.3% on-year drop in November.  This report follows news last Thursday that department store sales had recorded a rare on-year increase, exceeding the December 2010 level by 0.8%.

French business sentiment failed to improve in January as hoped but instead dropped three points to 91.

Danish consumer confidence rose 2.8% this month to a reading of -7.0.  Hungarian economic sentiment worsened 2.2 points this month to a reading of minus 26.8.

In Finnish presidential elections over the weekend, the former finance minister captured the most votes but will face the green party candidate in a run-off round.  The two anti-euro parties together took about 27% of the vote.

The Bank of Spain released very anemic growth forecasts predicting GDP will have firmed 0.7% last year but drop 1.5% in the current year.  GDP in 2013 is only expected to edge 0.2% higher.

Swiss M3 money growth accelerated to 7.7% on year in December from 7.3% in November.

Icelandic wage inflation quickened to 9.2% in December from 9.0% in November.

Newt Gingrich scored a big primary win in South Carolina Republican primary.  The first state contest in a heavily populated state, Florida, is up next.  Such is set for Tuesday, January 31.

There are no scheduled significant U.S. data releases today.  Consumer confidence in the euro area and the Canadian index of leading economic indicators are due later.

Copyright 2012, Larry Greenberg.  No secondary distribution without express permission.  All rights reserved.

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