China: Yuan seen reaching 17-year high on rate increase
China’s yuan may hit a 17-year high as stocks rise and bonds fall after the central bank raised interest rates for the third time in four months to curb inflation, if history is a guide. The currency of the world’s fastest-growing economy climbed 0.1% to 6.5555 per dollar in Hong Kong trading yesterday, bringing its gain to 0.26% since the Shanghai market closed for a weeklong break for the Lunar New Year holiday on 2 Feb. The offshore one-year interest-rate swap climbed five bps to 3.72%, suggesting bonds will drop.(Bloomberg)
Japan: Yield curve at steepest since June on GDP growth
Traders are lifting yields on longer- term Japanese bonds to an eight-month high relative to shorter- term debt on expectations the central bank will keep interest rates near zero as the economy returns to growth. Yields on benchmark 10-year government bonds rose to 1.315% yesterday and two-year rates increased to 0.225%, driving the so-called yield curve to 109 bps, the most since June and up from 72 in October. (Bloomberg)
Japan: Current-account surplus in December widens as export grow. The gap expanded 30.5% YoY to JPY 1.195tr (USD 14.5b), the Finance Ministry said. (Source: Bloomberg)
Japan: China sells Japanese debt in December after Yen, bonds declined. China sold a net JPY 177.3b
(USD 2.15b) of Japanese bonds in December, capping the biggest yearly decrease since at least 2005, after the yen and benchmark government debt fell in November. China sold a net JPY 243.5b in short-term Japanese debt and bought JPY 66.1b yen in long-term bonds. That resulted in net sales of JPY 467.7b in 2010. (Source: Bloomberg)
Germany: Industrial output drops on construction slump
Industrial production in Germany, Europe’s largest economy, unexpectedly fell for a second month in December as cold temperatures sparked a construction slump. Output dropped 1.5% from November, when it slipped a revised 0.6%, the Economy Ministry in Berlin said today. Economists had forecast a 0.2% gain, the median of 38 estimates in a Bloomberg News survey showed. In the year, production rose 10% when adjusted for work days.(Bloomberg)
France: Business sentiment jumps to three-year high
French manufacturing confidence rose to the highest in more than three years in January as an accelerating global economy buoyed export orders. The Bank of France’s Business Sentiment Indicator for manufacturers advanced to 110 from a revised 107 in December, the central bank in Paris said in a statement today. That was the highest since October 2007 and more than the 108 reading economists predicted, according to the median of three forecasts in a Bloomberg News survey. (Bloomberg)
US: Job openings in decrease to three-month low
Job openings in the US decreased in December to the lowest level in three months, signaling a sustained labormarket recovery will take time to develop. The number of positions waiting to be filled fell by 139,000 to 3.06 m, the fewest since September, the Labor Department said today in Washington. The number of people hired also dropped, as did the number of workers fired. Employers added a fewer-than-forecast 36,000 jobs in January while the unemployment rate unexpectedly fell to 9%, the lowest level since April 2009, the Labor Department reported last week. (Bloomberg)
U.S: Confidence at small companies climbs in January to a three-year high, as the outlook for sales and profits improved. The National Federation of Independent Business optimism index increased to 94.1, the highest since the recession began in December 2007. The reading was lower than the average 100.7 during the last expansion that started in November 2001. (Source: Bloomberg)
U.K: Retail sales in January advance at fastest pace in 10 months, the British Retail Consortium said. Sales at stores open at least 12 months, measured by value, rose 2.3% YoY compared with a 0.8% YoY decline in December. Pent-up demand after December's snow and New Year discounts contributed to the gain, it said. (Source: Bloomberg)
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