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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 (11988)	9/21/2004 9:31:24 AM
From: mishedlo	Respond to of 116555

OECD says ECB, BoJ right to maintain ´wait and see´ monetary policies Tuesday, September 21, 2004 10:29:09 AM OECD says ECB, BoJ right to maintain 'wait and see' monetary policies PARIS (AFX) - OECD chief economist Jean-Philippe Cotis said the European Central Bank and the Bank of Japan are right to maintain a "wait and see" stance in their monetary policies "The current wait and see monetary stance observed in Japan and the euro area seems warranted," he told a news briefing He said there is no urgent need to increase interest rates towards more neutral levels in any major economy except the UK "Except perhaps in the United Kingdom, where the central bank has rightly been proactive in raising rates, return to neutrality is not a matter of urgency," he said. He noted that the economic recovery has prompted several central banks, including the US Federal Reserve, to start gradually withdrawing the "exceptionally vigourous stimulus" they had given the economy by cutting rates to historically low levels fxstreet.com

To: Pogeu Mahone who wrote (11988)	9/21/2004 9:35:48 AM
From: mishedlo	Respond to of 116555

ECB´S Tumpel-Gugerell sees no knock-on effect from oil price rise Tuesday, September 21, 2004 9:22:19 AM ECB'S Tumpel-Gugerell sees no knock-on effect from oil price rise PARIS (AFX) - The European Central Bank does not expect any knock-on effects on general inflation from oil price rises, said board member Gertrude Tumpel-Gugerell. She also said the recovery in the euro zone is continuing. "We are confident that the recovery is continuing and that we can avoid second-round effects from the oil price increase." she told reporters on the margins of a conference

To: Pogeu Mahone who wrote (11988)	9/21/2004 9:41:54 AM
From: mishedlo	Respond to of 116555

UK house prices in Aug fall for first time in over a year Monday, September 20, 2004 11:15:15 PM LONDON (AFX) - House prices in August fell for the first time since June 2003, as buyers responded to the Bank of England's series of interest rate increases, according to the latest survey by the Royal Institution of Chartered Surveyors "Prospective buyers have clearly been knocked off balance by the rise in borrowing costs and continued talk of a sharp downturn in prices," the survey said The data suggests that outright falls in house prices may be on the cards. If continued declines do occur, the BoE may become reluctant to hike interest rates again for fear that consumers may stop spending too abruptly Since November, the central bank has put up interest rates five times and is widely expected to do so again in November, taking the benchmark repo rate to 5.00 pct. Today's survey showed that in the three months to August, 12 pct more surveyors reported a fall in house prices than a rise, reversing the reading in July when a net 3 pct of those polled said prices had increased In addition, enquiries from buyers fell for the fourth month in a row, leading to sales activity falling to its lowest level since November 2000 There was also a rise in the number of unsold properties in the three months to August "This shows that selling activity has seen little notable pick-up despite speculation over price falls," RICS said. But RICS said dramatic falls in house prices are unlikely due to the stable economic climate and firm employment situation The biggest falls in prices were seen in the South East and the Eastern regions while firm rises were recorded in Scotland and the North East Chartered surveyors expect sales to steady after the summer lull, but also predict some downward pressure on prices in the months ahead. RICS national housing spokesman, Ian Perry, said: "The summer is always a quieter period as people are away and tend to take a break from house hunting. Warnings from the Bank of England have reduced confidence, but houses that reflect their asking price are still attracting plenty of attention." "Some speculation in the housing market is quite gloomy at the moment. However, we are confident that a prolonged slide in prices will be avoided, underpinned by the strength of the economy and good employment prospects," he added fxstreet.com

To: Pogeu Mahone who wrote (11988)	9/21/2004 9:47:12 AM
From: mishedlo	Respond to of 116555

ECB´s Issing sees euro zone inflation falling below 2 pct from Q2 2005 Monday, September 20, 2004 7:12:00 PM ECB's Issing sees euro zone inflation falling below 2 pct from Q2 2005 UPDATE (updating with comments on oil prices, growth, stability pact) FRANKFURT (AFX) - European Central Bank chief economist Otmar Issing said the ECB expects euro zone inflation to remain above 2 pct into early 2005, but then fall below the 2 pct level in the second quarter of next year "In the next few months inflation will remain above 2 pct, depending on oil prices. As of the second quarter of 2005 the rate will fall below 2 pct and remain there for the foreseeable future," Issing said in a speech He said this is why the ECB governing council has left interest rates unchanged at recent meetings "We are confident we will see a situation next year that is in accordance with our understanding of price stability," he said The ECB defines its price stability goal as an inflation rate below but close to 2 pct. Euro zone inflation is currently running at 2.3 pct Issing said the current level of oil prices is not a reason for concern "If oil prices were to rise a lot, that would cause problems, but the rise would have to be very great for the ECB to paint a gloomy picture," he said He said inflation has been above what the ECB would have hoped for this year because of the oil price rise, but over the 5-1/2 years since the launch of the euro, it has been below 2 pct on average The ECB is not happy with the current level of inflation, but there is very little risk of a price-wage spiral developing, he said He said rises in taxes and administered prices have boosted inflation by 0.7 percentage points this year Issing said the euro zone economic recovery is well under way and likely to expand and strengthen in the months ahead, so that it is less dependent on exports "The euro zone cannot rely on impulses for growth always coming from outside," he said He said it is not true that euro zone leading indicators are pointing downwards. The data are mixed but this is not unusual for a period of economic recovery, he said Issing said the EU stability and growth pact, which governs euro zone fiscal policy, should be enforced more firmly, but without focusing excessively on the 3 pct of GDP deficit limit This limit can only work in downturns if countries have implemented appropriate policies at times of stronger growth, he said But the ECB still sees the pact as a suitable framework for fiscal policy and does not want any change in the wording of the pact, he said fxstreet.com

To: Pogeu Mahone who wrote (11988)	9/21/2004 9:57:05 AM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Housing Starts inch up, Permits down 5% U.S. housing starts inch higher in August - Tuesday, September 21, 2004 1:22:18 PM WASHINGTON (AFX) -- U.S. homebuilders stepped up the pace of new construction in August, pushing housing starts higher by 0.6 percent to an annual pace of 2.0 million on a seasonally adjusted basis, the Commerce Department estimated Tuesday Economists had expected a decline to 1.93 million starts, according to a survey conducted by CBS MarketWatch. Meanwhile, new construction of single-family homes increased 0.4 percent to a 1.667 million annual rate, the most in nine months. Starts of apartment buildings rose 1.5 percent. Building permits, meanwhile, fell 5.5 percent to a 1.952 million annual pace. Permits for single-family homes fell 3 percent to 1.538 million Housing starts in July were revised higher to 1.988 million from 1.978 million, while permits also were revised higher -- to 2.066 million from 2.055 million in the previous estimate Starts increased during August in three of the nation's four regions, with only the West showing a decline. Starts in the Northeast -- the smallest region -- increased to a 14-year high, while starts rose 1 percent in the South despite a series of powerful storms The financial markets rarely react to data on housing starts any more, because they've been so strong for the past three years. With interest rates relatively low and incomes rising, housing starts should remain healthy for a while longer, even if they decline from August's pace, economists say 'Cannot be sustained' "Starts at 2.0 million cannot be sustained if new home sales remain at their July level," said Ian Shepherdson, chief U.S. economist for High Frequency Economics. Sales fell nearly 12 percent combined in June and July. The data will in all likelihood have no impact on the deliberations of the Federal Open Market Committee, which meets later Tuesday to consider changes in U.S. monetary policy Economists and traders are nearly unanimous in predicting the FOMC will raise the federal funds rate to 1.75 percent, which would be the third increase in the past three months. Looking ahead, opinion is divided about whether the FOMC will continue to raise rates at every meeting or pause for a while to see if the growth slows further. The government cautions that its housing data are subject to large monthly swings due to sampling and other statistical problems. Five months of data are needed to establish a new trend Over the past five months, the nation's starts have averaged 1.949 million, the same as in the five-month period ending in July So far in 2004, 1.131 million housing units have been started, up 10.4 percent from last year. In all of 2003, 1.848 million housing units were started fxstreet.com