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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (1765)	3/10/2004 11:12:50 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

U.S. Dec. transportation index rises to 14-year high Wednesday, March 10, 2004 7:07:22 PM WASHINGTON (AFX) -- The Transportation Services Index rose to its highest level in 14 years, the Department of Transportation said Wednesday. The index rose 1.0 percent in December, the fourth straight monthly increase. On a year-on-year basis, the index is up 0.1 perent. This is the first monthly release of the new index. It is a measure of the month-to-month changes in the output of transportation services. It includes railroads, air, truck and inland waterways transportation, pipeline transportation and local transit. On a seasonally adjusted basis, the freight index rose 2.9 percent. The index for passengers was down 3.6 percent, the first decline after six straight monthly declines. fxstreet.com =================================================== Interesting right as dow transports seemed to have peaked an falling considerably M

To: yard_man who wrote (1765)	3/10/2004 11:30:30 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Dollar rallies vs. euro, pound on economic uncertainty - Wednesday, March 10, 2004 9:34:14 PM CHICAGO (AFX) -- The U.S. dollar rose sharply against its European counterparts Wednesday but slipped against the Japanese yen, as conflicting economic data from the world's industrial giants continued to invite volatility. "The dollar's gains appear to be more a case of position squaring rather than fresh outright buying coming to the market," said Marc Chandler, currency analyst with HSBC. Some analysts said the currency market continues to weigh whether the U.S. economy or Europe's has the better chance to strengthen, and investors grew nervous their very bullish euro and sterling positions had now become too risky. [I proposed this idea earlier. Is Europe headed for recession? - mish] When the euro had trouble advancing much past $1.23 earlier Wednesday, new selling emerged. Europe's shared currency was down 0.6 percent in late U.S. trading, with the euro valued at $1.2246. It traded as low as $1.2198 but remains above the three-month low hit last week before weaker-than-expected U.S. jobs data dashed chances for a mid-year U.S. interest-rate hike. A region's higher interest rates would presumably draw greater foreign demand for its assets, increasing the value of the home currency. U.S. trade data showed the deficit widened in January, in part, as U.S. consumers continue to spend. Germany's DIW economic institute lowered its first-quarter growth forecast, suggesting the eurozone's largest economy was showing few signs of growth acceleration. The British pound retreated 1.2 percent and earlier fell below $1.80. Sterling declined for a second session after trade data issued Tuesday showed a richer currency had taken a bite out of the U.K. export market. The likelihood for Japanese intervention to lift the dollar and depress the yen also hangs over trading, despite Wednesday's dollar decline vs. the yen. The U.S. currency fell 0.4 percent against the yen, at 110.75 yen per dollar. The U.S. trade deficit widened by 0.9 percent in January to a record $43.1 billion, the Commerce Department reported earlier. The consensus forecast of Wall Street economists was for the deficit to narrow slightly, to $41.9 billion. Both imports and exports fell in January, but exports fell faster of the two. <b<Imports fell 0.5 percent to $132.1 billion. Exports fell 1.2 percent to $89 billion. This is the largest decline in exports since last August. U.S. trade data in general presents questions about sustainable foreign financing of U.S. imbalances -- which earlier this year drove the dollar to multiyear lows. "Much of the lack of improvement in trade owes to the more rapid internal demand within the U.S. economy continuing to draw in imports at a more rapid pace than the rise in exports can offset," said Mat Johnson, senior economist with Quantit Group. "While the further dollar decline may help, [by] curbing import growth, accelerated exports will be more dependent on foreign trading partner growth, [which is] mostly weak still." The yen gained against the dollar as an unexpected downward revision of Japan's gross domestic product data temporarily allayed concerns that Japan would intervene in foreign-exchange markets to weaken its currency. Making the yen weaker with a concurrent stronger dollar keeps Japanese exports more competitive on global markets. Japan GDP revision Japan said its economy grew at a real 1.6 percent rate in October-December from the previous quarter, revising its initial GDP reading of 1.7 percent released in mid-February. It was still the best performance in 13 years. "The market downplayed the unexpected revision of Japan's GDP amid the recent excessive volatility in dollar-yen exchange rates," said Keiko Takeda, currency analyst at Bank of Tokyo-Mitsubishi. "The market's focus is only on Japan's intervention." Traders estimate the Bank of Japan has spent 3 trillion yen ($27 billion) buying dollars since late February on behalf of the Finance Ministry, in order to stem the yen's rise and prevent a strong currency from derailing Japan's economic recovery. Depending on whether or not intervention continues, the dollar could rise to 113 yen or possibly even 115 yen, said Takeda. fxstreet.com

To: yard_man who wrote (1765)	3/11/2004 12:32:45 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Treasuries Up, Auction Easily Absorbed CHICAGO (Reuters) - U.S. Treasury prices remained slightly higher on Wednesday after results of the latest five-year note auction fell short of high expectations but foreign banks were again active buyers. Bond prices have rallied for several days in a surge driven by sluggish jobs growth that is likely to keep official interest rates low through year-end. Treasuries were unshaken by the auction results. The $16 billion in new five-year notes went at a high yield of 2.695 percent with a bid-to-cover ratio of 2.47, down from February's very high 2.84 but above the average of 2.36 from the previous five auctions. Indirect bidders, which include customers of primary dealers and foreign central banks, fed their appetite for U.S. debt, snapping up some 44 percent of the notes on offer, above February's already high 42 percent. Heavy interventions in the currency market have left Asian central banks, especially the Bank of Japan, with large amounts of U.S. dollars to invest in Treasuries. Five-year notes (US5YT=RR: Quote, Profile, Research) slipped 1/32 to yield 2.66 percent, unchanged from late Tuesday. Many dealers are confident the Fed will keep official rates on hold into 2005 and are positioning themselves accordingly with leveraged bets that have drawn cautionary language from the Fed. Additional buying is also likely from mortgage portfolio managers hedging against home mortgage refinancing. The latest week's mortgage applications came too soon to fully reflect the sharp drop in rates that started on Friday. The Mortgage Bankers Association weekly mortgage market index rose 1.2 percent to 889.1 from 878.7 and its refinancing index rose 1 percent as rates fell. The benchmark 10-year Treasury note (US10YT=RR: Quote, Profile, Research) rose 3/32 for a yield of 3.71 percent, down from 3.73 percent late Tuesday and from near 4.02 percent before Friday's sentiment-changing jobs report. The 30-year bond (US30YT=RR: Quote, Profile, Research) rose 6/32 for a yield of 4.66 percent, down from 4.67 percent. Two-year Treasuries (US2YT=RR: Quote, Profile, Research) slipped 1/32 to yield 1.51 percent Earlier, the Commerce Department's report on U.S. trade figures were consistent with low-rate scenarios. The January trade deficit unexpectedly widened to $43.06 billion from a revised $42.68 billion in December. The deficit had been forecast to narrow slightly. "The bigger than expected deficit will affect GDP forecasts, pulling them down from the current consensus 4.2 percent forecast," said Chris Low, chief economist at FTN Financial. Also on Wednesday, wholesale inventories for January rose 0.1 percent, less than expected, suggesting less of a boost to GDP growth this quarter from inventory rebuilding. Still, many forecasters remain upbeat on the economy. The latest monthly Blue Chip Economic Indicators poll forecast the U.S. economy to grow 4.7 percent this year, versus 4.6 percent forecast in February. [Not to worry... about that last paragrah I bolded, ecomomists upped the GDP forecast - Mish] However, the survey cautioned that optimism was tied to assumptions about large tax refunds, plus faith that the jobs market will improve -- a scenario that has yet to play out. [Are these stupid assumptions or what? - mish] The ABC/Money Magazine weekly index of consumer comfort slipped to -18 from -16 providing further evidence that Friday's soft jobs report was taking its toll among consumers.