The positive closure on Wall Street encouraged Asian markets on Tuesday morning, which are making good progress in the mid-session. Data on American household consumption was positive, with a monthly increase in volume of 0% (over 0.5% annualized). The savings rate has dropped, but remains positive at the 6% level, a sign that the damage to family budgets is being repaired. Oil sensed the good news and climbed to $5 a barrel, after dropping to $87 a week ago.
Even the increase in the unemployment rate in Japan to 4.7% has not affected the good mood of the stock market, which seems to be granting credit to the new government of Yoshihiko Noda. The yen continues to remain strong, but the real exchange rate, given the ongoing deflation, is not very different from the long-term average.
Source: Bloomberg
