To me, the following data is far more relevant to the price of oil than is weather. Industrial and consumer demand for energy WILL rise substantially in the upcoming quarters throughout Europe. This is why I ain't sellin' OSX 65 or not. I'll be so glad to see the back end of Oct stupid season I could sp_t!
UK:
news.bbc.co.uk
Europe:
Top Financial News
Wed, 27 Oct 1999, 8:43am EDT
Euro-11 M3 Money Supply Expands Greater-Than-Expected 6.1% in September
By Sonja Dieckhoefer and Hellmuth Tromm
European Economies: M3 Growth Accelerates in Euro-11 (Update1)
(Adds commentary, details on bond market.)
Frankfurt, Oct. 27 (Bloomberg) -- Money supply growth in
the 11 nations sharing the euro accelerated in September,
fueling expectations the European Central Bank will raise
interest rates in coming weeks.
M3, the central bank's main yardstick of future inflation,
accelerated to an annual rate of 6.1 percent last month from 5.7
percent in August, the bank said. ECB officials have warned that
faster money supply growth will spur inflation, currently at a
1.2 percent annual rate -- up from 0.8 percent in January.
After this report, ``it's extremely likely the ECB will
raise rates next week,' said Otmar Lang, senior economist at
Deutsche Bank AG in Frankfurt.
European Central Bank President Wim Duisenberg set the
stage yesterday for an increase in the bank's 2.5 percent
benchmark rate, saying higher rates would help put a lid on
inflation rather than sap a rebound in the region's economies.
Investors agreed, sending bond prices higher. The benchmark
German 10-year government bond rose enough to push yields down 6
basis points to 5.35 percent. The euro rose on prospects higher
deposit rates would increase the currency's attractiveness
compared with the dollar. Investors' reaction may signal rising
confidence in the ECB's handling of monetary policy, after the
euro's slide of as much as 13 percent earlier this year.
`Vigilance'
ECB officials watch money supply growth to gauge the danger
that inflation will rise in the future, on the expectation that
too much cash chasing too few goods will drive prices higher.
The bank's target for M3 money supply growth, 4.5 percent,
has been surpassed every month this year. The ECB will revise
this target at the end of the year.
In its latest monthly report, the ECB said brisk money
supply and credit growth in the region ``call for great
vigilance on the part of monetary policy at a time of
accelerating economic activity.' Recent evidence from across
the euro region indicates that factory orders, exports and
industrial output is rebounding.
Speaking to the European Parliament yesterday, Duisenberg
said that the best way the bank can ensure growth is to fight
inflation, and that rate increase ``may be more akin to lifting
the foot from the pedal than braking the momentum of the
economy,' Duisenberg said.
The ECB said the three-month M3 money supply average rose
at an annual rate of 5.9 percent in September, compared with an
annual rate of 5.6 percent in August.
Bank lending to companies and private households rose at an
annual rate of 10.5 percent in September, after rising at a
revised 10.8 percent rate in August. Overall credit lending rose
at an annual rate of 7.9 percent in September, the same pace as
in August. The August figure was revised up from 7.8 percent.
Long-term financial liabilities -- investment in longer-
term securities or savings accounts that take money out of M3 --
rose at an annual rate of 5.6 percent in September from 5.7
percent in August. The August figure was revised down from 5.8
percent.
The money supply figure measures overnight deposits,
deposits with an agreed maturity of up to two years, deposits
redeemable at notice for up to three months, repurchase
agreements, debt securities with a maturity of no more than two
years and money market funds.
¸1999 Bloomberg L.P. All rights reserved.
bloomberg.com |
