Dollar Steady Despite Lots of New Information

May 10, 2012

The dollar shows no overnight change against the yen, euro, and Swiss franc.  The greenback lost 0.5% against the Aussie dollar, 0.3% relative to the kiwi, and 0.1% versus the loonie and sterling.  The Chinese yuan dipped 0.1% following a weak export and import data.

Share prices in Europe are down 0.7% in Paris and 0.3% in London but up 0.1% in Frankfurt.  In the Pacific Rim, equities fell 0.4% in Japan and India, 0.5% in Hong Kong, and 0.3% in South Korea.  Stocks rose 0.5% in Australia, aided by strong jobs data, and 0.3% in New Zealand.

The 10-year British gilt yield rose four basis points.  The 10-year German bund is steady, and the Japanese JGB yield firmed a basis point.

Oil and gold prices slipped another 0.4% and 0.2% to $96.43 per barrel and $1591.30 per ounce.

The Bank of England as expected declined to raise its asset purchase plan, whose ceiling remains at GBP 325 billion.  The Bank Rate has been at 0.5% since March 2009.  The central bank will publish its quarterly Inflation Report on May 16 and minutes of this week’s policy meeting on May 23.

Bank Indonesia retained a 5.75% reference interest rate.  This was the third straight monthly meeting without a change.  A cut of 25 basis points had been implemented in February.

Russia’s central bank refinancing rate was left at 8.0% as expected.

The Bank of Korea kept its key interest rate unchanged too at 3.25%.  Such was last changed in June 2011, when a 25-bp hike occurred.

Australia’s jobless rate unexpectedly dropped 0.3 percentage points to 4.9%, a one-year low.  Jobs, which had been forecast to decline after March’s increase of 37.6K, instead climbed by another 15.5K in spite of a 10.5K decrease in full-time positions.

Chinese imports in April were merely 0.3% higher than a year earlier, while export growth of 4.9% was also below expectations.  The trade surplus widened to $18.4 billion from $5.3 billion in March.  The first two months of 2012 had produced a net deficit of $4.1 billion in China’s trade position.

Japan’s economy watchers index printed lower at 50.9 in April following a reading of 51.8 in March.  Prior to March, however, there had been seven straight sub-50 scores.

Bank lending growth in Japan slowed to a 12-month 0.3% increase in April from 0.6% in the year to 1Q12.

Japan had 7.5% fewer bankruptcies in April than a year earlier.

Japan posted a JPY 1.59 trillion current account surplus in March, down from JPY 1.74 trillion in March 2011.  The fiscal 2011 surplus was JPY 7.89 trillion, down from JPY 16.66 trillion in fiscal 2010.  The trade surplus in March was merely JPY 4 billion compared to JPY 237 billion a year before.  The seasonally adjusted current account surplus was JPY 786 billion in March and JPY 1.78 trillion in the first quarter.

Japanese stock and bond transactions last week generated a JPY 274 billion net capital outflow after a JPY 1.058 trillion inflow in the last week of April.

French industrial production sank 0.9% in March and edged 0.1% lower in the first quarter.  The Bank of France index of business sentiment printed at 95 for a third month in a row in April and has been either at that level of 96 since October.  The central bank is predicting no economic growth in France this quarter.

Italian industrial output rose 0.5% in March but was still 5.6% lower than a year before.

British industrial production slid 0.3% in March and was 2.6% lower than a year earlier.

Finnish industrial output dropped 1.5% on month and 5.7% on year in March, weaker than assumed. Czech industrial production rose 0.3% in March but was 0.7% lower than a year earlier, its first on-year drop in over two years.  Czech CPI inflation eased to 3.5% in April from 3.8% in March, and the jobless rate was 8.4% that month.  Irish consumer price inflation slowed to 1.9% in April from 2.2% in March.  Greece had 21.7% unemployment in February and posted an 8.5% plunge in industrial production between March 2011 and March 2012. Danish CPI inflation fell to 2.3% in April from 2.7% in March, while Dutch inflation edged 0.1 percentage points lower to 2.4%.  Swedish CPI inflation fell to 1.3% from 1.5% in March, and industrial production in that Nordic economy rose 0.4% on month but fell 6.5% on year in March.  Norwegian CPI and PPI inflation in April slowed to 0.3% and 2.5%, respectively.

Today sees the release of Canadian and U.S. trade figures, the ECB monthly Bulletin, Canadian home prices, U.S. jobless claims, import prices and monthly federal budget, and interest rate decisions from Norway and Peru.  Bernanke and Kocherlakota of the Federal Reserve speak publicly.  Greek politicians have so far been unable to fashion a workable government in the wake of Sunday’s fractious election.

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

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