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To: Earlie who wrote (238571)	5/1/2003 5:41:28 PM
From: Secret_Agent_Man	Read Replies (2) \| Respond to of 436258

It is not the critic who counts; not the man who points out how the strong man stumbled or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs and comes short again and again; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who, at the best, knows in the end the triumph of high achievement, and who, at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who know neither victory nor defeat. -Theodore Roosevelt

To: Earlie who wrote (238571)	5/2/2003 5:49:24 PM
From: Jeff Jordan	Read Replies (1) \| Respond to of 436258

Isn't everything imported in dollars more expensive for the french germans belgians and russians with a weaker dollar. Or just need more of them. I have that backwards right? Cheaper for them in dollars, exporter gets more in EU exchange. Still goes back to cost of goods right. It will be interesting to watch exports closer for recovery.

To: Earlie who wrote (238571)	5/2/2003 5:55:31 PM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 436258

Euro-zone: Weaker PMI survey fuels expectation of imminent rate cut (BNP Paribas) Friday, May 2, 2003 research.bnpparibas.comtoday's PMI survey for the manufacturing sector points to the absence of any post-war bounce back in April. The headline index declined further to 47.4 from 48.4 in the previous month. The sub-index for output fell to 49.4 from 50.4 in March, signalling a contraction for the first time in seven months. The main forces behind the further deterioration of the European manufacturing sector are the continuing de-stocking and the steady appreciation of the euro, which has weakened competitiveness. In the euro-zone, enterprises have seen a further reduction in export orders, which cannot only be attributed to softening in demand from the trading partners. With inflationary pressures easing -- Eurostat estimates that inflation in April declined to 2.1% compared to 2.4% in March --, most of the geopolitical uncertainties lifted and the lack of momentum in the economy, further easing of the monetary stance looks desirable. Most likely is a 50 bp. cut before July. In our view, the market is underestimating the chances of a surprise cut already at the next ECB Governing Council meeting on 8 May. A weaker PMI survey. Output sub-index fell below 50 Today's PMI survey for the manufacturing sector points to the absence of any post-war bounce back in April. The headline index declined further to 47.4 from 48.4 in the previous month. The sub-index for output fell to 49.4 from 50.4 in March, signalling a contraction for the first time in seven months. Among the major euro-zone countries, the sharpest decline was recorded in Germany, where the headline index declined by almost 2 points to 45.9. The output index even fell by 3.6 points to 47.2, well below the 50-expansion line. In France, the PMI survey slightly improved, the headline PMI gaining 0.2 point to 48.3. The output index edged up to 49.9, indicating that activity was again virtually stagnant. Only the Italian output index remained above the 50-expansion line (50.5 in April vs. 51 in March). The main forces behind the further deterioration of the European manufacturing sector are the continuing de-stocking and the steady appreciation of the euro. In all the major countries, enterprises indicated that they had reduced their purchases of material inputs. Moreover, the sub-index for stocks of purchases declined further to 46.5 from 47.0. Only in Italy, entrepreneurs indicated that stocks of material inputs were still growing, but this was largely due to a further decline in output growth. Another factor is the steady appreciation of the euro. Since April 2002, the euro has appreciated by around 15% in effective terms and more than 25% against the US dollar. This has substantially weakened the competitiveness of European manufacturers, all the more so since margins have already substantially narrowed. Enterprises have seen a further reduction in export orders, which cannot only be attributed to softening demand conditions. For example, export orders for UK enterprises were virtually stable last month, the sub-index going up to 49.8 compared to 47.3 in the previous month (EcoFlash 215). An easier monetary stance Today's results are in line with the worrying signs coming from the European business survey (EcoFlash 03-213). For the moment, the manufacturing sector lacks the driving forces, which can turn sentiment around. Given its poor correlation with actual spending, the improvement in consumer sentiment is unlikely to boost consumer demand. Moreover, the ISM survey for the US manufacturing sector, which has proved to be a good leading indicator for the European business cycle, also turned out to be weaker in April -- the headline PMI fell to 45.4. With inflationary pressures easing -- Eurostat estimates that inflation in April declined to 2.1% compared to 2.4% in March, -- most of the geopolitical uncertainties lifted and the lack of momentum in the economy, further easing of the monetary stance looks desirable. Most likely is a 50 bp. cut before July. The next ECB Governing Council meeting takes place on 8 May. In our view, the market is underestimating the chances of a surprise cut already at this occasion.