Stronger Aussie and New Zealand Dollars

May 9, 2013

Rises of 0.9% in the kiwi and 0.6% in the Australian dollars versus the greenback were inspired by better than expected labor statistics in those economies.

  • Australian employment jumped 50.1K in April, easily reversing a 31.2K decline in March and forecasts of a 12-15K recovery.  The Aussie unemployment rate eased back to 5.5%, and labor participation rose to 65.3% from 65.1%.
  • New Zealand unemployment fell 0.6 percentage points to 6.2% in the first quarter, and jobs rose 38K or 1.7% above their 4Q12 level.

The U.S. dollar also eased 0.2% against the yen, yuan, and sterling but firmed 0.1% versus the euro, Swissie and loonie.

Several markets were shut for Ascension Day such as Indonesia.  The Japanese Nikkei fell 0.7%, and European share prices are lower.  Stocks fell 0.6% in China but rose 1.2% in South Korea, aided by an unexpected central bank rate cut.

The 10-year German bund and British gilt yields dipped a basis point, while the 10-year Japanese JGB remained steady.  Results of Spain’s sovereign debt auctions today were decent.  The ECB Bulletin rehashed what Pdt Draghi had told reporters at last week’s press conference.

Oil and gold prices are 0.5% and 0.3% softer at $96.18 per barrel and $1469.40 per ounce.

The Bank of Korea’s seven-day repo rate was cut by 25 basis points to 2.5%.  This was the first easing since similarly sized reductions implemented in July and October of 2012 and is being perceived as a response to won appreciation against the yen.

Bank Negara Malaysia left Malaysia’s main central bank policy rate at 3.0% as expected, marking the twelfth straight meeting to end with unchanged policy.  Previously, four hikes of 25 bps were implemented between March 2010 and May 2011.

The Bank of England left the British Bank Rate at 0.5% and did not change the GBP 375 billion size of its asset purchase program.  The results were expected.

Chinese consumer prices rose 0.2% on month and 2.4% on year in April.  The 12-month increase was the most since December and slightly surpassed expectations, seemingly reducing the likelihood of a central bank interest rate cut in China.  Producer prices fell 2.6% in the year to April, their largest on-year decline since a drop of 2.8% between October 2011 and October 2012.

Japan’s index of leading economic indicators dipped 0.1 to a reading of 97.6 in March, but a 0.8 point rise of the index of coincident indicators surpassed expectations.  Japanese international reserves increased $3.608 billion to $1.258 trillion in April.

British industrial production rose 0.7% in March on top of a 0.9% gain in February.  But both it and factory output were 1.4% lower than in March 2012.

Spanish industrial production slid by a smaller 0.6% between March 2012 and March 2013 adjusted for the two months’ differences in the number of working days. Portuguese unemployment climbed 0.8 percentage points (ppts) on quarter to 17.7% in 1Q13, while the Greek jobless rate rose 0.3 ppts to 27.0% in February.  Czech retail sales rose 1.4% in March but remained 3.3% lower than a year earlier.

Irish CPI inflation held steady at 0.5% in April, as consumer prices recorded no change from March. 

Malaysian industrial production posted a smaller on-year drop of 0.2% in March.  South African industrial output fell 2.2% in the year to March, but business confidence in that economy recovered 2.1% according to the Sacci index.

U.S. wholesale inventories and weekly jobless insurance claims get released today.  So do Canadian home prices.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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