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

To: Pogeu Mahone who wrote (11247)	9/1/2004 10:14:40 AM
From: mishedlo	Read Replies (2) \| Respond to of 116555

UK Aug manufacturing PMI comes in below forecast to rise by 53.1 Wednesday, September 1, 2004 9:43:19 AM (Updating to add details from official release, including revision to July figures) LONDON (AFX) - Manufacturing sector activity in the UK fell sharply below expectations to rise by just 53.1 in August compared with the downwardly revised reading of 56.0 the previous month, the Chartered Institute of Purchasing and Supply said Consensus estimates had predicted a much smaller dip to 56.0 from the initial estimate of 56.3 in July. A reading above 50 indicates an expansion in activity, while a sub-50 figure indicates contraction The index measuring new orders fell to 53.5 from 57.9 in July, suggesting that manufacturers are using up available stocks Raw material costs slipped to 64.7 from 65.2 in July "Purchasing managers saw overall growth in the manufacturing sector sustained in August underpinned by increased output and new orders. However, this was set against a weaker rate in production compared with previous months, as well as a cooling in new business levels," said Roy Ayliffe, director of professional practice at CIPS "Panelists faced intense pressure from the soaring cost of oil and commodities and reported raising their rates as a result, in order to pass costs on to customers," he added fxstreet.com

To: Pogeu Mahone who wrote (11247)	9/1/2004 10:19:59 AM
From: mishedlo	Respond to of 116555

Forex - Sterling falls as UK data show BoE has little room for more rate hikes Wednesday, September 1, 2004 9:37:34 AM LONDON (AFX) - Sterling was weaker after data this morning provided yet more evidence that the Bank of England has little scope left for further interest rate hikes This morning's closely-watched Nationwide survey reported further signs of a deceleration in the housing market, with annual house inflation falling to 18.9 pct in August from 20.3 pct in July Additionally, a survey released this morning showed that manufacturing sector activity in the UK fell sharply, with the purchasing managers index at 53.1 in August against a revised 56.0 in July. The figure was well below expectations for a much smaller dip to around 56.0 "Sterling is under assault from a series of weaker data releases that are curtailing expectations of the extent and durability of the domestic monetary policy tightening cycle," said Steve Pearson, currency analyst at HBOS Today's data come hot on the heels of yesterday's figures from the Bank of England showing that mortgage lending, mortgage approvals and consumer credit all fell in July, as well as a CBI report that UK retail sales growth in August was at its slowest since March 2003 The pound's strength in recent months has come on the back of expectations for higher interest rates. As the phase of monetary tightening appears to be approaching an end, sterling's popularity as a high-yield currency is starting to wane, analysts said. "Sterling has been supported by short-term interest rate differentials, but this support will now abate as UK rates are likely to top out near current levels, while other currency interest rates are expected to rise," BNP analysts said Elsewhere, the dollar was marginally higher against major currencies but remained stuck within tight ranges on caution ahead of today's release of the national US ISM survey of purchasing and supply managers. Yesterday's sharp decline in the Chicago area purchasing managers index, coming in the wake of similar falls in the equivalent Empire and Philly Fed surveys, "raises a significant downside risk to this afternoon's National ISM survey", HBOS' Pearson said A "sizeable plunge" from 64.7 previously to well below 60 is now likely, he said, adding that the one "crumb of comfort" for the dollar is that the market's expectations are now at least firmly pointing to the downside The key focus for this week, however, is Friday's US non-farm payrolls report, which is expected to provide direction to the market The data is expected to be the main influence on the US Federal Reserve's interest rate decision on Sept 21, and will confirm whether or not the US labour market has entered a weakening trend The euro was little changed after a disappointing reading in August's euro zone manufacturing sector purchasing managers' index, released this morning The index fell below expectations to a seasonally adjusted 53.9 in August, from 54.7 in July. The Swiss Franc meanwhile outperformed other currencies after official figures showed Swiss inflation rose by 0.4 pct in August, above expectations for a rise of around 0.2 pct. Stronger-than-expected inflation is likely to increase the pressure on the Swiss National Bank to raise interest rates sooner, analyts said fxstreet.com