Morning Economic News - February 4, 2009

Commentary and Overnight Trading

Oil prices have rebounded slightly in overnight trading after falling a bit more than 1% Wednesday. Asian stocks are mixed with the Nikkei down 1.11% with an hour before the close and the Hang Seng up 2.69%. US stock market futures are down with the DJIA futures trading below 7900. The dollar is down against the Canadian dollar and the yen, even against the euro and up against the increasingly beleaguered pound. [1:24 AM Eastern]

Economic Reports

ADP Employment Report - January 2009

• Total Nonfarm Private Employment: 112,702,000


• Monthly Change: Down 522,000

Pending Home Sales Index - December 2008

• Pending Home Sales Index: 87.7


• Monthly Change: Up 6.3%


• Yearly Change: Up 2.1%

Weekly Mortgage Applications Survey - February 4, 2009

• Market Composite Index: 795.4


• Change: Up 8.6%


• Purchase Index: 261.4


• Change: Down 11.2%

What I'm Writing

Stabilizing gasoline demand putting floor under oil

On the demand side, gasoline demand is 0.5% below the same period last
year – stabilizing if not exactly rebounding in the face of retail
prices well below last year's levels...gasoline supply and demand factors may be feeding through to the
increases in crude oil prices that do not seem driven by supply side
fundamentals.

What I'm Reading

CBO: Obama Stimulus Plan Lowers Long-Run Growth

Russia to Expand Bank Support

Russia plans to curb spending and assist banks to shore up its economy.

Bank of Japan Must Take Prompt, Extraordinary Actions, Member Mizuno Says Bank of Japan board member Atsushi
Mizuno said the central bank should take “extraordinary”
actions to counter the recession, indicating it may consider
more steps after buying shares and corporate debt.

Bank of England May Cut Interest Rate Closer to Zero as Recession Deepens The Bank of England will probably
lower the benchmark interest rate closer to zero today as
officials resort to buying securities to revive the economy.

Trichet's Curse Becomes Blessing as Sticky Prices Justify Rate-Cut Delay European Central Bank President Jean-
Claude Trichet’s curse of a year ago may now be a blessing.

Productivity in U.S. Probably Rose Last Quarter Even as Recession Deepened U.S. companies, struggling to contain
escalating losses in the deepening recession, squeezed more
output from their remaining workers last quarter, economists
said before a government report today.

Japan Intervention Depends on Pace of Yen's Moves, Not Level, Gyohten Says Japan will refrain from selling the
yen, trading near a 13-year high against the dollar, unless the
currency’s appreciation gathers pace, a former Finance Ministry
official said.

New Zealand's Fourth-Quarter Jobless Rate Rises to Highest in Five Years New Zealand’s jobless rate rose to a
five-year high in the fourth quarter as a prolonged recession
prompted companies to cut production and fire workers.

Senate Adds Tax Credit for Homebuyers to Stimulus Bill as Final Vote Nears The U.S. Senate voted to cut taxes on
homebuyers and weaken “Buy American” provisions in an economic
stimulus package that tops $900 billion and could come to a vote
as soon as today.

U.K. Corporate Bankruptcies to Surge `Dramatically' This Year, KPMG Says As many as 5,000 U.K. companies may file
for bankruptcy this year as the economy worsens, according to a
report by accounting and insolvency firm KPMG.

Russia Fueling Ruble Tumble With Overnight Bank Loans, Alfa, UniCredit Say Russia’s central bank is exacerbating
the ruble’s 34 percent plunge since August, even as it struggles
to defend the exchange rate, by providing loans to banks that
speculate on the currency, say Alfa Bank and UniCredit SpA.