European Stocks / The Asian Markets

[setravis]

Friday, February 25, 2011...

Overnight Developments

•   Global stocks are trading higher with the European Euro Stoxx 50 index up +0.86% and March S&Ps up +9.70 points. The dollar is stronger and crude oil is slightly higher, but less of a concern after Saudi Arabia and the IEA said yesterday that they could compensate for any disruption to crude oil supplies caused by the turmoil in Libya. The British pound fell to a 1-week low against the dollar after Q4 UK GDP was revised weaker to -0.6% q/q and +1.5% annualized from the originally reported -0.5% q/q and +1.7% annualized. The euro weakened against the dollar after European retail sales failed to increase for the first time in 4 months in Feb after the Feb Euro-Zone Markit Economics gauge of retail sales fell -5.9 to 49.9. A bullish factor for European stocks was the stronger than expected Jan French consumer spending which fell -0.5% m/m, stronger than expectations for a -0.7% m/m decline. Russia's central bank unexpectedly raised its discount rate by 25 bp t o 8.00% and the overnight deposit rate to 3.00% starting Feb 28 and Bank Rossii also decided to raise banks' reserve requirements starting Mar 1 in an attempt to curb inflation.



•   The Asian stock markets today closed higher with Japan up +0.71%, Hong Kong +1.82%, China +0.21%, Taiwan +0.68%, Australia +0.57%, Singapore +1.75%, South Korea +0.62%, India +0.38%. Japan's deflation eased to the slowest pace in 21 months after the Jan Japan national CPI ex-fresh food slipped -0.2% y/y, stronger than expectations of a -0.3% y/y decline, as increases in global energy and food prices prompted companies to raise prices. Information-technology companies led gains in Asia-Pacific markets with Hynix Semiconductor, the world's second-largest maker of computer chips, closing up 4.1% after LIG Investment & Securities said contract prices for chips may rise in March and analysts will increase their Q1 earnings estimates for the company. Elpida Memory, the world's third-biggest maker of computer-memory chips, ended 6.4% higher after it scrapped plans to merge with Taiwanese memory makers because of opposition from the target companies. Toyota advanced 2.2% and led gains in automakers after Credit Suisse lifted its rating on the carmaker to "outperform" from "neutral."

[setravis]

Monday, February 28, 2011...

Overnight Developments

•   Global stocks are trading mixed with the European Euro Stoxx 50 index up +0.02% and March S&Ps down -0.30 of a point. The dollar index fell to a 3-1/2 month low ahead of Fed Chairman Bernanke's semiannual report to Congress tomorrow in which the Fed Chairman may signal that interest rates will remain at a record low. Treasuries and crude are higher as the violent uprising in Libya continues and civil unrest in the Middle East has spread to Oman, which produces about 800,000 barrels of oil a day. Bank stocks are limiting gains in European bourses with HSBC, Europe's biggest bank, down 4% after it reported full-year net income of $13.2 billion, below analysts' estimates of $13.72 billion. Inflation concerns are pushing up bund yields after Jan German import prices rose a more then expected +1.5% m/m and +11.8% y/y, while Jan French producer prices climbed an as-expected +5.6% y/y, their fastest pace in 2-1/3 years. Jan Euro-Zone consumer prices were slightly w eaker than expected, but the +2.3% y/y advance is still the fastest annual pace of increase in 2-1/4 years.



•   The Asian stock markets today closed mostly higher with Japan up +0.92%, Hong Kong +1.42%, China +1.31%, Australia -0.12%, Singapore -0.48%, South Korea -1.13%, India +0.69%. A stronger-than-expected Jan Japan retail sales report helped Japanese stocks close higher, despite Jan industrial production advancing at a slower than expected pace. Asian stocks received a boost and crude oil prices fell back from over a $2.00 a barrel increase in overnight trade after a WSJ report said oil shipments from Libya's rebel-controlled eastern territory might have resumed, even as political unrest spread to Oman. South Korean stocks finished lower as tensions rose on the Korean peninsula after North Korea threatened to take military action if the South continues to drop leaflets and other propaganda encouraging revolt. The North also threatened "all-out war" if there is an attack during annual US-South Korean military drills that began today.

[setravis]

Tuesday, March 1, 2011...

Overnight Developments

•   Global stocks are trading higher with the European Euro Stoxx 50 index up +0.08% and March S&Ps up +5.10 points. Expanding growth in Europe is lifting stock prices and undercutting Treasuries and the dollar, with the dollar index sliding to a fresh 3-1/2 month low. The Feb Euro-Zone PMI manufacturing index was left unrevised at 59.0, a 10-1/3 year high, while Jan Euro-Zone unemployment unexpectedly fell -0.1 to 9.9%. Feb German unemployment fell three times more than expected, -52,000 to 3.07 million, the lowest since Sep 1992, while the Feb German unemployment rate slipped -0.1 to 7.3%, the lowest since Dec 1991. The euro strengthened against the dollar after the European Commission raised its 2011 Euro-Zone GDP forecast to 1.6% from a 1.5% forecast in Nov, while the recent surge in commodity prices prompted the commission to raise its 2011 inflation forecast to 2.2% from a Nov estimate of 1.8%. The British pound surged to a 13-month high against the dollar after Feb UK PMI manufacturing remained unchanged at 61.5, its best level since the survey began in 1992, which suggests the British economy has regained momentum after contracting in Q4 2010.



•   The Asian stock markets today closed higher with Japan up +1.22%, Hong Kong +0.25%, China +0.47%, Taiwan +1.49%, Australia -0.11%, Singapore +1.90%, India +3.50%. Strong economic data out of the Asia-Pacific region benefited stock prices with Japan's unemployment rate in Jan holding steady at 4.9%, while the number of people in work increased by 170,000. The Feb China PMI manufacturing index fell -0.7 to 52.2, stronger than expectations of -0.8 to 52.1, and the twenty-fourth consecutive month that the level has been above 50, which signals continued expansion in Chinese manufacturing. The Feb India PMI manufacturing index rose +0.9 to 57.8, its fastest pace in 3 months, which will keep pressure on the RBI to increase interest rates for the eighth time in a year. Australia's central bank left its benchmark interest rate unchanged as expected at 4.75% and said a stronger currency and forecasted slower growth in employment will help to control inflation.

[setravis]

Wednesday, March 2, 2011...

Overnight Developments

•   Global stocks are trading mostly lower with the European Euro Stoxx 50 index down -0.38%, although March S&Ps are up +2.90 points. A push in crude oil prices above $100 a barrel in overnight trade has weakened most global stock markets on concern the unrest in the Middle East will disrupt supplies. The dollar and Treasuries are weaker and the euro strengthened after European producer prices accelerated more than expected in Jan. The Jan Euro-Zone PPI rose +1.5% m/m and +6.1% y/y, higher than expectations of +1.1% m/m and +5.7% y/y, with the +6.1% y/y gain the fastest pace of increase in 2-1/3 years. Renewed sovereign-debt concerns are also weighing on European stocks with the extra yield investors demand to hold Greek 10-year bonds instead of benchmark German bunds rose to 893 bp, a 2-month high. Standard & Poor's kept Greece's BB+ long-term ratings and Portugal's A- long-term and A3 short-term classifications on credit watch negative, saying both countr ies debt ratings remain at risk of being cut on concern about how a European Union rescue fund may affect holders of the two nations' sovereign bonds.



•   The Asian stock markets today closed lower with Japan down -2.43%, Hong Kong -1.49%, China -0.36%, Taiwan -1.23%, Australia -0.48%, Singapore -1.31%, South Korea -0.55%. A rise in crude oil prices above $100 a barrel also spooked Asia-Pacific markets, fueling concern that higher energy costs will hinder the global economic recovery. Qantas Airways, Australia's biggest carrier and Singapore Airlines Ltd., the world's second-biggest carrier by market value, both fell more than 2% and led airlines lower on concern rising jet fuel prices will eat into company profits. Mitsubishi Motors and Toyota fell at least 3% and led carmakers lower on concern rising fuel prices will undercut demand for autos, while China Railway Construction tumbled 7.8% after the company said it halted work on 3 projects in Libya that have a combined value of $4.24 billion. Australia's Q4 GDP rose +0.7% q/q and +2.7% y/y, its eighth straight quarterly expansion, and validates RBA Governor Steven's view that floods and cyclones in the state of Queensland this quarter will be only a temporary drag on growth. Australia's economy is undergoing a boom in resource investment as mining and energy firms boost output to meet demand from China and India.

[setravis]

Thursday, March 3, 2011...

Overnight Developments

•   Global stocks are trading mostly higher with the European Euro Stoxx 50 index up +1.01%, and March S&Ps up +12.50 points. Crude oil is weaker and the euro is slightly bid ahead of the conclusion of the ECB's monetary policy meeting and comments from ECB President Trichet later this morning. Stronger consumer spending in Europe helped to lift European stock prices as both Jan German retail sales and Jan Euro-Zone retail sales were better than expected. Stellar company earnings results are also a positive for stocks with AB InBev up 3.1% after the brewer reported Q4 earnings of $3.9 billion, higher than analysts' estimates of $3.4 billion, while Adecco, the world's largest supplier of temporary workers, rose 5.8% after reporting Q4 net income of 141 million euros ($196 million), stronger than estimates of 115 million euros. A slight negative for stock prices was the unexpected downward revision to the Feb Euro-Zone PMI composite index by -0.2 to 58.2.



•   The Asian stock markets today closed mostly higher with Japan up +0.89%, Hong Kong +0.32%, China -0.67%, Taiwan +1.37%, Australia +0.07%, Singapore +0.33%, South Korea +2.17%, India +0.23%. Most Asia-Pacific stock markets received a boost after the Fed's Beige Book yesterday said the US labor market improved, which benefits the sustainability of the economic recovery. India's services industry grew at its fastest pace n 7 months after the Feb India services PMI rose +2.1 to 60.2, adding pressure to the RBI to raise interest rates. South Korea's Kospi Index closed higher after Jan Korea industrial production jumped +13.7% y/y, higher than estimates of +12.4% y/y. China's Shanghai Stock Index closed lower after China's services industries contracted in Feb for the first time in a year. The Feb China non-manufacturing PMI tumbled -1.3 to 44.1, its lowest level in 2 years.

[setravis]

Friday, March 4, 2011...

Overnight Developments

•   Global stocks are trading higher with the European Euro Stoxx 50 index up +0.28% and March S&Ps up +0.60 of a point. The dollar is little changed and crude oil rose to a 1-week high as Libya's rebels continue to fight off attacks from forces loyal to Muammar Qaddafi. European stocks gained and the euro pushed to a fresh 3-3/4 month high against the dollar after ECB Council member Wellink said that European economic growth in 2011 might very well be "more positive than we now expect." The 3-month Euribor, the rate at which European banks lend each other in euros for 3 months, climbed 6 bp to a 20-month high of 1.162% amid speculation the ECB will tighten monetary policy as soon as next month. The possibility of higher rates may make it harder for Europe's most indebted nations to tackle their debt issues as Portuguese 10-year bond yields climbed to 7.51%, just below the record 7.64% from last month, while Greek 2-year yields jumped 32 bp to 15.24%, t he highest in 10 months.



•   The Asian stock markets today closed higher with Japan up +1.02%, Hong Kong +1.24%, China +1.52%, Taiwan +0.53%, Australia +1.20%, Singapore +0.79%, South Korea +1.90%, India -0.02%. The decline in US weekly jobless claims to a 2-3/4 year low increases confidence in the prospects for a sustained US economic recovery and boosted Asia-Pacific stock markets. Exporters such as Li & Fung Ltd., the biggest supplier to Wal-Mart Stores, closed up 4.4% and Toyota Motor, the world's largest carmaker, finished 1.2% higher. Also benefiting Japanese exporters was the slide in the yen to a 1-week low against the dollar. Newcrest Mining, Australia's largest gold producer, surged 4.7% after it revised up an exploration target in a Papua New Guinea gold deposit to more than 30 million ounces of gold and 8 MMT of copper from an earlier estimate of 16 million ounces of gold and 4.9 MMT of copper.

[setravis]

Tuesday, March 8, 2011...

Overnight Developments

•   Global stocks are trading higher with the European Euro Stoxx 50 index up +0.14% and March S&Ps up +3.20 points. The dollar is stronger and crude oil is weaker after Kuwait's oil minister said OPEC members are holding "consultations" and have not yet decided on raising output. European stocks gained on stronger-than-expected Jan German factory orders, which climbed +2.9% m/m and +16.0% y/y. Stock prices rallied further after Bundesbank President and ECB Council member Weber said Germany's "strong" economic recovery would continue this year as companies increase investment to meet export demand and "private consumption increases amidst continued positive labor market developments." Limiting stock market gains and undercutting the euro are concerns over the ongoing European sovereign-debt crisis after the extra yield between 10-year Greek bonds and similar maturity German bunds climbed 38 bp to a 2-month high of 944 bp. Greece rai sed 1.625 billion euros ($2.28 billion) in an auction of 26-week T-bills that had a yield of 4.75%, up from a 4.64% rate for a similar auction last month, with a bid-to-cover ratio of 3.59, weaker than the 4.59 seen at last month's auction.


•   The Asian stock markets today closed higher with Japan up +0.19%, Hong Kong +1.71%, China +0.09%, Taiwan +0.38%, Australia +0.21%, Singapore +1.22%, South Korea +0.72%, India +1.19%. Chinese bank stocks gained after Reuters reported that China canceled punitive increases of required reserves previously imposed on several banks. Asian shipping lines closed lower and were led by a -2.5% drop in Nippon K.K., Asia's largest listed line, after the company said it may slow vessels speed to cut fuel costs. Asian semiconductor stocks also closed lower on the heels of Wells Fargo's cut in its ratings on the semiconductor industry to "market weight" from "overweight."

[setravis]

Wednesday, March 9, 2011...

Overnight Developments

•   Global stocks are trading mostly higher with the European Euro Stoxx 50 index unchanged and March S&Ps up +3.90 points. Treasuries and the dollar are little changed and crude oil is slightly lower. The decline in crude has boosted European automakers and travel companies, while increased M&A activity has lifted the entire market. Daimler and Rolls-Royce offered to buy German engine maker Tognum for 24 euros a share, while Iberdrola Renovables agreed to but out minority investors in its renewable energy unit. A larger-than-expected +1.8% m/m and +12.5% y/y increase in Jan German industrial production is also boosting stock prices as well. Limiting market gains, however is the statement from the managing director of European sovereign ratings at Standard & Poor's, who warned some countries in the Euro-Zone might have their credit ratings cut further while a Greek debt default is a "possibility." Portugal's 10-year bond yield rose to 7.70%, t he most since data began in 1997, as demand fell for a debt sale by the government.


•   The Asian stock markets today closed mostly higher with Japan up +0.61%, Hong Kong +0.42%, China +0.04%, Taiwan +0.03%, Australia -0.84%, Singapore -0.35%, South Korea +0.18%, India +0.16%. A larger-than-expected +4.2% m/m increase in Jan Japan machine orders, the biggest jump in 5 months, helped to lift Japanese stocks on signs companies will increase spending as economic recoveries abroad strengthen. Asia-Pacific airlines closed higher after crude oil prices fell for a second day, while Nintendo, the world's largest maker of video-game consoles, climbed 3.7% after saying it sold more than 1.08 million new Pokemon games after 1 day. Feb China passenger-car sales climbed +2.6% y/y to 967,200 units, its slowest pace of growth in more than 2 years, after the government ended vehicle-buying incentives and the weeklong Lunar New Year holidays last month stymied demand.

[setravis]

Thursday, March 10, 2011...

•   Global stocks are trading weaker with the European Euro Stoxx 50 index down -0.71% and March S&Ps down -5.80 points. Treasuries and the dollar are higher, with the dollar index at a 1-week high, while most commodities fell after Chinese and German exports unexpectedly declined and Moody's Investors Service cut Spain's credit rating by one level to Aa2, saying the government has underestimated the cost of shoring up the banking industry. Moody's forecasts that Spanish lenders will need as much as 50 billion euros ($69 billion) to meet new capital requirements, more than the 20 billion-euro estimate seen by the government. Moody's adds the risks to Spain's public finances are "skewed to the downside" and the outlook is "negative," which suggests more rating cuts are under consideration. The euro slid to a 1-week low against the dollar as the cost to insure European government debt rose. The cost to insure Spain's government bonds rose 8 bp to a 1-month high of 258, while the cost to insure Portugal's debt rose 8.5 bp to a 2-month high of 505.5, and the cost to insure Greek debt climbed 6 bp to a record 1,040, according to CMA. European stocks were also pressured after Jan German exports unexpectedly fell -1.0% m/m, weaker than market expectations of a +0.7% m/m increase. As expected, the BOE kept its benchmark rate unchanged at 0.50% and kept its asset purchase target at 200 billion pounds ($324 billion).



•   The Asian stock markets today closed lower with Japan down -1.46%, Hong Kong -0.82%, China -1.76%, Taiwan -1.22%, Australia -1.43%, Singapore -0.56%, South Korea -1.22%, India -0.77%. Chinese stocks closed lower and weighed down other global equity markets after China reported an unexpected -$7.3 billion trade deficit in Feb. Feb China exports rose +2.4% y/y, the least in 2 years, while Feb imports climbed +19.4% y/y. The weakness in Chinese exports undercut other world stock markets on concern a slowdown in China, the engine of world growth, may also slow the global economy as well. Japanese stocks were also pressured after Q4 Japan GDP was revised down to -1.3% annualized, more than the -1.1% previously reported, because of a downward revision to capital investment and consumer spending. The Bank of Korea raised the benchmark 7-day repurchase rate by 25 bp to 3.00%, the second rate increase this year, after inflation exceeded the central bank's target ceiling for 2 consecutive months.

[setravis]

Friday, March 11, 2011...

Overnight Developments

•   Global stocks are trading lower with the European Euro Stoxx 50 index down -0.67% and June S&Ps down -5.50 points. The dollar and Treasuries are stronger and most commodities sold off after the biggest earthquake hit Japan in a century. Crude oil fell below $100 a barrel for the first time in over a week and copper plunged to a 2-3/4 month low. The 8.9-magnitude quake also unleashed a 30-foot high tsunami with over 20 countries, including the US west coast, issuing tsunami warnings. Insurance and reinsurance stocks are sharply lower amid the Japanese quake with Munich Re and Swiss Reinsurance, the world's biggest reinsurers, both down over 5%. The extra yield investors demand to hold Irish, Portuguese, and Spanish securities instead of benchmark 10-year bunds widened ahead of a meeting of EU leaders in Brussels later today to discuss measures to tackle the debt crisis, while anti-government demonstrators in Saudi Arabia are advocating a "Day of Rage&quo t; today with police in anti-riot vehicles patrolling Riyadh.



•   The Asian stock markets today closed lower with Japan down -1.72%, Hong Kong -1.55%, China -1.00%, Taiwan -0.87%, Australia -1.17%, Singapore -1.04%, South Korea -1.44%, India -0.84%. Japan's Nikkei 225 Stock Index sank to a 1-1/4 month low after an 8.9 magnitude earthquake struck northeast of Tokyo and spawned tsunami warnings. Most stocks sold-off after the quake, although building stocks such as Fukuda surged 30% and another builder Ueki, jumped 23%. Crude oil tumbled as Japanese refiners shut plants after he quake and the BOJ set up an emergency task force and said it will do everything it can to provide ample liquidity. China's inflation and industrial production exceeded forecasts in Feb, which prompted PBOC Governor Zhou Xiaochuan to say that interest rates will be used to curb inflation, a sign of additional interest rate hikes. Feb China consumer prices were unchanged at 4.9% y/y, stronger than expectations of 4.8% y/y, while Feb China industrial production climbed 14.9% y/y. stronger than expectations of +13.3% y/y.

[setravis]

Monday, March 14, 2011...

Overnight Developments

•Global stocks are trading mostly lower with the European Euro Stoxx 50 index down -0.32% and June S&Ps down -6.0 points. Crude oil sank to a 1-1/2 week low on speculation the worst earthquake in Japan's history will hurt growth and reduce fuel demand in the world's third-largest economy. The euro strengthened against the dollar and default swaps on European sovereign debt declined after European leaders over the weekend agreed to expand the scope of their rescue fund, allowing officials to buy debt in primary markets, while also cutting the cost of bailout loans to Greece by extending the repayment period of Greek loans to 7-1/2 years from 3 years. A final agreement is slated for a summit on Mar 24-25. European bank stocks rallied sharply on news of the agreement, with JPMorgan Chase raising its recommendation for European banks to "overweight" from "neutral." Gains in European stocks were limited as insurers fell for a second day after AIR Worldwide said the insurance industry may face claims of as much as 2.8 trillion yen ($34 billion) from the Japanese earthquake, although estimates don't include damage caused by the tsunami that followed the quake. European utility companies also weakened on concern explosions at two reactors in Japan may persuade Germany to backtrack on extending the life of atomic plants after German Chancellor Merkel had extended the lives of Germany's 17 nuclear power plants by an average of 12 years in 2010



•The Asian stock markets today closed mostly lower with Japan down -6.18%, Hong Kong +0.41%, China +0.48%, Taiwan -0.56%, Australia -0.40%, Singapore -0.41%, South Korea +1.50%, India +1.46%. Japan's Nikkei 225 Stock Index plunged to a 4-1/4 month low as the extent of Japan's earthquake damage is unknown and its rebuilding costs are likely to be astronomical. The yen weakened and fell back from a 4-month high against the dollar after the BOJ pumped a record 15 trillion yen ($183 billion) into money markets today and doubled the size of its asset-purchase program in an attempt to assure financial stability amid a plunge in stocks and surge in credit risk. BOJ Governor Shirakawa said cash injections would continue as needed and it is "crucial" the central bank stabilizes money markets; a signal it will take additional steps in coming days. Manufacturers from Sony to Toyota closed plants today, with Sony halting operation at 10 factories and 2 research centers, while Toyota said it would close all 12 of it Japanese factories through Mar 16.

[setravis]

Tuesday, March 15, 2011...

Overnight Developments

•Global stocks are trading sharply lower with the European Euro Stoxx 50 index down -2.63% and June S&Ps down -28.80 points. The dollar rose and Treasuries surged to a 3-1/4 month high on increased safe-haven demand, while commodities tumbled, with crude oil cascading down to a 2-week low, on concern a nuclear disaster is unfolding in Japan. Japanese Prime Minister Kan said "there is still a very high risk of further radioactive material escaping" after a third blast at the Fukushima Dai-Ichi nuclear power plant today sent radiation levels soaring to 8 times permitted levels outside the facility. European utility stocks plummeted on concern government officials will close existing nuclear power plants in Europe, while the euro fell against the dollar after as an unexpected decline in German investor confidence pressured stock prices further. The March German ZEW investor confidence fell -1.6 to 14.1, weaker than expectations of +0.1 to 15.8 and its first decline since October.



•The Asian stock markets today closed lower as Japan sank -10.55%, Hong Kong -2.86%, China -1.81%, Taiwan -3.35%, Australia -2.11%,Singapore -2.80%, South Korea -2.46%, India -1.47%. Japan's Nikkei 225 Stock Index posted its biggest 2-day drop since 1987 as the stock index collapsed to a 1-3/4 year low. Tokyo Electric Power Co.'s stricken nuclear power plant was hit by 2 more explosions today as workers struggle to avert a meltdown that may lead to more radiation leaks in the wake of the Mar 11 earthquake. Credit-default swaps on Japan's government debt soared 25.8 bp to a record 122.3 as concerns rise about Japan's finances in regard to reconstruction from the earthquake. Tokyo Electric Power, Asia's biggest power generator, sank the daily 25% limit while Sony, Japan's biggest exporter of consumer electronics tumbled 13% after the company halted production at some factories. The BOJ injected an additional 8 trillion yen to the financial system today on top of the record 15 trillion yen the central bank pumped into money markets yesterday as it attempts to stabilize financial markets.

[setravis]

Wednesday, March 16, 2011...

Overnight Developments

•Global stocks are trading mixed with the European Euro Stoxx 50 index down -0.71% and June S&Ps down -4.90 points. The dollar and Treasuries are high on increased safe-haven demand and crude oil jumped over $1 a barrel after Bahrain suspended stock market trading as its government declared a state of emergency and let Gulf nation troops into the country to quell anti-government protests. The Middle East unrest outweighed concerns about radiation leaks from a Japanese nuclear plant damaged by last week's earthquake and tsunami. The euro fell against the dollar after Moody's Investors Service cut Portugal's long-term credit rating 2 levels to A3 from A1 and kept a negative outlook, which implies further downgrades in the future. European bank stocks weakened after Portugal's credit rating was cut with BNP Paribas down 2.3%. Feb Euro-Zone CPI rose an as-expected +2.4% y/y, its fastest pace in 2-1/4 years and Q4 Euro-Zone labour costs rose a more-than-expected +1.6% y/y, which will keep the pressure on the ECB to raise interest rates. On the positive side, Feb UK jobless claims unexpectedly fell -10,200, their biggest decline in 8 months to 1.45 million, their lowest level in 2 years and a sign the labor market is continuing to recover.



•The Asian stock markets today closed higher with Japan up +5.68%, Hong Kong +0.10, China +1.38%, Taiwan +1.09%, Australia +0.65%, Singapore +0.85%, South Korea +2.03%, India +1.05%. Japanese stocks rebounded from the 2-day sell-off that sent valuations to a 28-month low. The advance was limited, however after further temblors struck Japan and as clouds of white smoke started rising from reactor buildings at eh crippled Fukushima Dai-Ichi Plant. Toyota Motor climbed 9.1% after the company said it would restart production at 7 parts plants in Japan from tomorrow. The BOJ pumped an additional 5 trillion yen into the financial system today in one-day operations on top of the 8 trillion yen yesterday and record 15 trillion yen on Monday. Tokyo Electric has begun rolling blackouts across Japan that will continue until the end of April in an attempt to conserve energy lost from the damage to its nuclear facility. Factories have suspended or reduced operations and as a result Goldman Sachs estimates if the power blackouts continue through the end of June, Japan's GDP will contract at an annual 2% pace in Q2 and if the blackouts continue through December, the economy will keep contracting for the year.

[setravis]

Thursday, March 17, 2011...

Overnight Developments

•   Global stocks are trading mixed with the European Euro Stoxx 50 index up +0.71% and June S&Ps up +9.30 points. The dollar is getting battered with the euro climbing to a 4-1/4 month high and the Japanese yen soaring to a post WWII high of 76.36. The G-7 nations will hold an emergency meeting tomorrow to discuss the financial markets and the Japanese economy, which may indicate possible coordinated intervention in currency markets to curb the yen's gains. Treasuries are little changed while crude oil is up over $1 a barrel as fighting intensifies in Libya. More than 300 workers are attempting to prevent a meltdown and spread of radiation at the crippled Fukushima power plant today, an increase from a group of 50 engineers yesterday. Insurance stocks are leading a rally of European and US shares after UBS AG said the sector has become "unjustifiably oversold" since the Japan earthquake. European stocks were also boosted after Spain sold 4.1 billion euros of 10-year and 30-year bonds today with the bid-to-cover ratio for the 10-year debt at 1.81, compared with 1.54 for last month's auction, a sign of strong demand.



•   The Asian stock markets today closed mostly lower with Japan down -1.44%, Hong Kong -1.83%, China -1.57%, Taiwan -0.50%, Australia -0.06%, Singapore -0.95%, South Korea +0.14%, India -1.14%. Asian stocks fell as workers were sent to connect power to damaged cooling systems of the crippled Fukushima Dai-Ichi power station and Japanese exporters sold-off as the yen surged to a post WWII high. The BOJ added 6 trillion yen to the financial system in one-day operations today, bringing total emergency injections this week to 34 trillion yen. The United Nations' nuclear agency plans an emergency meeting to discuss the nuclear crisis as fear and uncertainty have gripped the financial markets. India's central bank (RBI) raised its repurchase rate by 25 bp to 6.75% and hiked the reverse repurchase rate by 25 bp to 5.75% in an attempt to bring soaring inflation under control. The RBI has now increased interest rates for the eighth time in a year after raising its inflation for ecast twice in 3 months. India's wholesale-price inflation quickened to 8.31% in Feb and the RBI today raised its March-end inflation forecast to 8% from 7%.

[setravis]

Friday, March 18, 2011...

Overnight Developments

•Global stocks are trading mostly higher with the European Euro Stoxx 50 index down -0.11% and June S&Ps up +9.60 points. The yen plunged and most world stock markets rose after the G-7 announced coordinated intervention in the currency markets for the first time since 2000 in order to slow yen strength that threatens to hamper Japan's recovery. G-7 finance chiefs said in a joint statement after a conference call they will "provide any needed cooperation" with Japan and "we will monitor exchange markets closely and will cooperate as appropriate." Stock gains were limited however, after China announced it would raise banks' reserve requirements for the third time this year. Crude oil prices jumped to a 1-week high after the United Nations Security Council voted to establish a no-fly zone over Libya and demanded a cease-fire with rebels. Feb UK nationwide consumer confidence plunged 10 points to 38, the lowest since records began n 2004, as Britons grew more pessimistic about the sustainability of the economic recovery and the outlook for jobs.



•The Asian stock markets today closed mostly higher with Japan up +2.72%, Hong Kong +0.07%, China +0.58%, Taiwan +1.35%, Australia +1.56%, Singapore -0.24%, South Korea +1.00%, India -1.49%. Asian stock markets climbed as concern eased about the spread of radiation from Japan's crippled power plant and after G-7 leaders said their central banks will jointly intervene in foreign-exchange markets to weaken the yen. The Sankei newspaper reported that Japan's government may sell more than 10 trillion yen ($122 billion) of reconstruction debt, all of which the BOJ may buy. The BOJ today added 4 trillion yen to the financial system, bringing its emergency fund injections this week to 38 trillion yen. After the Asian markets closed, China raised banks reserve requirements for the third time this year after inflation and industrial output exceeded forecasts in Feb. The PBOC announced a 50 bp increase in reserve ratios to 20.0% from March 25 for the nation's biggest banks and said it may impose extra requirements on individual lenders as part of efforts to rein in liquidity.