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Equity/Dollar Update
The dollar lost 0.5% against the Australian dollar, 0.4% relative to the kiwi, 0.2% against the euro, yen and Canadian dollar and 0.1% against the Swiss franc. The greenback is unchanged against sterling, says Larry Greenberg of CurrencyThoughts.com. Catch Larry, and TheLFB trade team on ForexTV Live.
Stocks fell 2.6% in Japan, 2.5% in Taiwan, 2.2% in South Korea, 1.6% in Australia, 1.2% in China, 1.1% in Indonesia, New Zealand, India, and Singapore, and 0.7% in Hong Kong. In Europe, the German Dax, Paris Cac and British Ftse are trading 0.6%, 0.5% and 0.4% lower. Investors are uneasy about constraints Obama will be placing on banks and fear such could impede economic recovery.
Ten-year sovereign bond yields are down by 4, 2, and 1 basis points in Britain, Japan, and Germany.
Gold is 0.7% weaker and below the $1100 level. Oil recovered 0.2% to $76.20 per barrel.
Investors continue to speculate about Chinese policies and Greek debt.
After a report from China yesterday that omitted references to “a moderately loose monetary policy” and a “proactive fiscal policy” in the period ahead, the central bank governor today reiterated that policy would be flexible and both support growth and control inflation. Mr. Zhou’s reassuring remarks helped lift the Australian and New Zealand dollars.
Greek officials continue to deny that abandoning the euro is an option. What else can they say? The Greek current account deficit widened 12% on month to EUR 2.8 billion in November.
Japan’s all-industry index firmed only 0.1% in November, half the expected 0.2%, as a dip of 0.2% in services countered gains of 1.8% in construction and 2.2% in industrial production. he all-industry index, a proxy for GDP, was 0.9% greater in October-November than its 3Q level. The index was 3.5% lower than in November 2008. Japanese chain store sales were 5.0% lower in December than a year earlier. Full Article...