US, economic data released this week
included November PPI, which at 1.8% year on year was higher than
expected, whilst industrial production for the same month also exceeded
expectations, at 0.8%. As expected, the FOMC left US interest rates at
0.25%. The Dow fell by 1.4%, with the S&P 500 lower by 0.4%. The Nasdaq
managed to add 1%.
UK CPI for November came in at 0.3% and 1.9% annualised, again higher
than consensus forecasts, whilst November retail sales rose by 3.1% year
on year versus the 3.7% expected and the prior 3.7%. Unemployment for
the UK, in October, was 7.9% against September’s 7.8%. Euro-Zone data
released included Q309 employment, which fell by 2.1% year on year and
November CPI, which at 0.1% and 0.5% annualised was lower than expected.
The FTSE 100 index gave up 1.2%, whilst the French CAC eased by
0.25%.The German DAX, meanwhile, rose by 1.3%.
Out East, the Bank of Japan held interest rates at 0.1%, despite Tokyo
condo sales surging by 10.8% in November versus the prior -20%.
Elsewhere, Singapore’s exports rose in November by 8.7% annualised, the
first rise in 19 months, whilst, according to Moody’s, mortgage lending
is also accelerating in City State. The Nikkei rose by 0.3% and the Hang
Seng lost 3.3%.
The $US index surged by 1.6% to 77.75 and by 3.6% over the fortnight.
Losers included the Yen, lower by 1.5% and the Euro, which gave up 1.9%.
Non US Sovereign debt yields eased this week, with German bund yields
lower by 7bps to 3.13%, whilst Japanese and UK 10-year yields fell by
5bps, and 8bps, ending the week at 1.23% and 3.77% respectively. US
Treasury 5 and 10 year yields rose by 1.7% and 0.2%, ending the week at
2.28% and 3.55% respectively.
Within the commodities complex the $crude oil price ended higher by 3.4%
at $77.75 a barrel, whilst the price of $Gold fell by 0.25% at $1113oz
on the week and by 4% over the fortnight.
Next week sees the latest house price data for the US and for the UK,
with home sales and durable goods orders for the former and mortgage
equity withdrawal numbers in Q309 for the latter. The Euro-Zone will
release October industrial new order numbers and November M3 money
supply details. For Japan we will see December CPI and November store
sales.
As the biggest US banks repay their government debt in what is being
heralded as a successful rescue program, four troubled giants of the
financial world remain on government life support. These companies, the
American International Group, Fannie Mae, Freddie Mac and GMAC, are not
only unable to repay the government, they are in need of continuing
infusions that make them look increasingly like long-term wards of the
state. And the total risk they pose to the taxpayer far exceeds that of
the big banks.
This is the final “week ending” of 2009, with the first of 2010 due for
the 8th January. We wish our readers a happy and enjoyable festive
season plus a healthy and prosperous 2010.
“What everyone wants from life is continuous and genuine
happiness”
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