Many Japanese and European Data Releases

Daily Forex Fundamentals | Written by CurrencyThoughts | Nov 28 08 12:42 GMT |

Currency movements reflect a little less risk tolerance. The yen firmed 0.2% against the dollar, which otherwise posted gains of 0.5% against the euro and Swiss franc, 0.4% relative to the Canadian dollar, 0.3% against sterling, 0.2% against the kiwi and 0.1% against the Australian dollar. In Asia, the Nikkei advanced 1.7%. Stocks also rose 2.5% in Hong Kong, 3.1% in Thailand, 3.3% in Indonesia, 1.3% in Singapore and 1.2% in South Korea. Australian equities recovered another 4.3%. In Europe, the German Dax and Paris Cac are down 1.0%. Swedish stocks lost 1.7%. The yield on 10-year JGB's rose 2.5 basis points to 1.40%, but bund and gilt yields are lower. Oil is 1.8% lower at $53.46/barrel as oil ministers talk things over in Cairo. Gold edged 0.1% higher to $815/ounce. Mumbai death toll above 140 people, but markets not affected by the terrorism. Released Japanese data showed the Shoko Chukin index of small business sentiment weaker than anticipated and at a 32+ year low of 35.1 in November after 37.6 in October 41.4 in August, and 43.1 last April; industrial production plunging 3.1% in October and projected to dive over 30% at a seasonally adjusted annual rate in 4Q08; large-store retail sales slumping 4.3% in the year to October; total retail sales dropping 0.6% y/y; real household spending falling 1.4% on-month and 3.8% on-year in October; jobs contracting 0.6% in the year to October; job offers sinking 18.1% from a year ago and the job offers:seekers ratio plumbing to a 4-year low; the unemployment rate unexpectedly to a 1-year low of 3.7% from 4.0% in September and 4.2% in August; stock and bond transactions generating a Y1842 billion capital outflow last week; housing starts rising 19.8% in the year to October, down from +54.2% y/y in September; and construction orders that were 47.2% greater than in October 2007. Japanese core (non-food) consumer price inflation eased to 1.9% y/y in October from 2.3% in September and 2.4% in August. Non-food, non-energy consumer prices were unchanged from six months earlier in Japan. Total Tokyo consumer prices dipped 0.4% saar in the six months to November, fanning worries of a return to deflation. Finally, the PMI-manufacturing index sank to 36.7 in November, lowest since at least 2001, from 42.2 in October and 47.0 in July. Euroland's preliminary CPI report revealed a bigger-than-assumed drop in inflation to 2.1% in November from 3.2% in October, 3.6% in September, 3.8% in August and a peak of 4.0% in July. Spanish inflation fell to a 15-year low of 2.4% from 3.6%. Italian inflation dropped to 2.8% from 3.6%. German inflation fell to 1.4% from 2.4%. The Euroland jobless rate rose for a second consecutive month, reaching 7.7% in October after 7.6% in September, 7.5% in July and August, 7.4% in June and May and 7.3% last April and in October 2007. Spanish unemployment climbed 0.7 percentage points between September and October to 12.8%. Irish joblessness rose half a percentage point in the month to 7.1%. Both of those economies are experiencing severe housing sector busts. The 3-month euribor rate slid 2.6 basis pints to 3.85%, a 21-month low. Italian producer prices sank 1.5% m/m in October and rose by a reduced year-on-year rate of 5.2% after 7.3% in September. French producer prices dropped more than twice as much as forecast, a decrease of 0.9% from September that cut on-year PPI inflation to 4.3%. Core French producer prices fell 0.4% m/m and rose just 2.8% y/y. French unemployment surpassed 2 million in October, rising 4.4% from a year earlier. Sweden became the latest European economy to be confirmed in recession, as real GDP slid 0.1% in both the second and third quarters of 2008. A drop of 0.6% in retail sales in October points to a steepening recession in the final quarter. The Riksbank will cut rates further on December 17th. Bulgaria's central bank cut reserve requirements. In Russia, key rates were hiked 100 bps but not until after a 1% drop in the rouble was engineered. Such was the second decline of 1% this week and the third since November 11th. The Swiss index of leading economic indicators swung below zero in November (-0.05) for the first time since mid-2003. Polish on-year growth slowed to 4.8% last quarter from 5.8% in 2Q and 6.7% in full-2007. Business investment firmed just 3.5% y/y, down from 15.5% in the first half of 2008. Malaysian growth slowed two percentage points to 4.7% in the year to 3Q08 from 6.7% in 2Q. South Korean industrial production posted a shocking 2.3% decline in October compared to an expected rise of more than 1%. The 12-month change swung to negative 2.4% from positive 6.2% in September. GDP in India climbed 7.6% in the year to 3Q versus a gain of 7.9% y/y in 2Q. Indian consumer prices rose 10.45% y/y in October, reflecting food costs. One of the Bank of Canada's top policymakers said more monetary stimulus is likely. The Finance Ministry believes a recession began in the current quarter. Britain's distributive trades index, a gauge of the retail sector, returned to August's low-point of -46 in November. A reading of -35 was anticipated. But consumer confidence bumped up to -35 in November from -36 in October and the low of -39 in August. South African credit growth edged down a tenth to 16.2% in November. Canadian producer prices and quarterly current account figures get released at 13:30 GMT. Larry Greenberg CurrencyThoughts