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

To: Knighty Tin who wrote (5703)	5/6/2004 10:39:52 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Trichet says data slightly better in early Q2, but oil prices pose risk UPDATE Thursday, May 6, 2004 2:44:58 PM (Updating with further comments on oil prices, global growth, inflation) HELSINKI (AFX) - European Central Bank president Jean-Claude Trichet said euro zone economic data are slightly better at the start of the second quarter "Most recent information has been more encouraging, with the latest euro area survey data offering more positive signals with regard to the beginning of the second quarter," Trichet told an ECB news conference But he said the recent rise in oil prices could pose an inflation and growth risk in the short term "The adverse terms-of-trade effects of recent rises in oil and other commodity prices pose risks at shorter horizons," he said "At the current juncture, the increase in commodity prices in general, and oil prices in particular, may pose an upside risk to price stability. It will therefore remain important to pay close attention to inflation expectations," he said. Trichet reiterated that euro zone inflation could be volatile in the coming months. Inflation rose to 2.0 pct in April from 1.7 pct in March "The recent rise in annual inflation rates is likely to mainly reflect a strong base effect in the energy component resulting from the marked decline of oil prices a year ago," he said "Moreover, recent oil price increases have exerted additional upward pressure. As these factors will also play a role in the next few months, inflation rates of 2 pct or somewhat above are possible over the short term," he said But in the longer run inflation is expected to remain in line with the ECB's price stability goal, he said Trichet said euro zone economic data remain mixed overall, but the ECB still expects to see a continuation of the gradual economic recovery already under way "While the latest positive signals need to be confirmed by future developments, they underpin the expectation of the gradual recovery in the euro area continuing and strengthening over time," he said Trichet said ECB rates therefore remain in line with the maintenance of price stability in the medium term The ECB left interest rates unchanged at its council meeting today Trichet said low interest rates across the maturity spectrum are supporting the recovery in the euro area He said global economic growth continues to be robust and world trade has strengthened, so euro area exports are expected to grow significantly this year and next Favourable financing conditions, improvements in corporate efficiency and earnings and the strength of global demand should help investment, he said And increases in real disposable income should support private consumption, especially since households appear not to face financial constraints that might impede stronger spending, he said "Over time, consumer spending should also be supported by an improvement in labour market conditions," he said. "These considerations underpin our confidence in a continuation of the economic recovery, an expectation which is mirrored by available forecasts and projections, he said fxstreet.com