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DENVER, CO, USA - 12/16/97
SUMMARY
Concern over the possible impeachment of U.S. President Bill Clinton
continues to limit any U.S. dollar advance, despite renewed tensions over
Iraqi arms inspections and bearish European economic data. UN arms
inspectors were ordered to leave Baghdad, renewing the possibility of armed
conflict in the region. Articles of impeachment will be debated by the US
House of Representatives tomorrow, and if approved, sent to the US Senate
for trial.
EUROPE
The German IFO economics institute reported its west German business climate
index fell sharply again in November, the fourth successive large monthly
drop in the confidence barometer. November's drop in the index to 91.7 from
92.4 in October was slightly worse than analysts' forecasts. In the U.K.,
unemployment edged up for the second consecutive month, as the number of
Britons claiming jobless benefits rose 5,900 in November, after jumping
10,700 in October. The U.K. jobless rate held steady at 4.6%. Belgium's
long-term foreign currency debt was cut overnight to AA-minus, while
Ireland's was upgraded to AAA from AA-plus.
ASIA
Japan's Nikkei stock index rose 85pts on the back of yesterday's 127.70 jump
in the Dow, however, other economic news was not so encouraging. While
Japan's current account surplus fell 12.9% m/m in October, it remains up
21.5%, year over year. Fear of trade tensions between the U.S. and Japan is
likely to increase and weigh on dollar/yen. The Japanese bond market
continued its recent slide as the yield on the benchmark rose to 1.33%, the
highest level since September 4th.
NORTH AMERICA
The Canadian dollar opened firmer this morning, perhaps benefiting from this
week's rebound in a key commodity price index. Canada's manufacturing
shipments rose 2.1% in October, assisted by an expected rebound in the auto
sector. U.S. economics releases this morning reported a 0.3% fall in
November's industrial output and a 2.7% decline in November housing starts.
Respectfully,
Richard Chehovin
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