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

To: zonder who wrote (12926)	10/6/2004 9:10:48 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Pound loses early steam after dismal UK industrial output data Wednesday, October 6, 2004 12:38:21 PM afxpress.com LONDON (AFX) - The pound has had a see-saw session, losing some of its early gains after dismal data from the UK manufacturing sector called into doubt the prospect of a November Bank of England rate hike. Having started the session weak, the currency rallied when house price data came in unexpectedly strong, only to give back most of those gains when official industrial and manufacturing numbers proved very weak The office of National Statistics said manufacturing output in August fell 0.8 pct from the previous month, against expectations of a modest 0.3 pct increase. That was the biggest monthly decline since October 2002, when output slid by 1.3 pct Meanwhile, the wider measure of industrial production, which also includes utilities output, also declined by 0.8 pct in August from July, in sharp contrast to the 0.3 pct improvement predicted by analysts. That was the biggest monthly decline since August 2003, when production fell by 0.9 pct The industrial production data clearly damaged the case for further monetary policy tightening in the UK, said Daniel Katzive at UBS The data is likely to cement expectations that the Bank of England's Monetary Policy Committee will keep its key repo rate unchanged at 4.75 pct at its rate-setting meeting which begins today and concludes tomorrow. The question now is whether the MPC will raise rates again in November, which until recently had largely been expected by the analyst community Ray Attrill, research director at 4CAST, said the data corroborates evidence elsewhere that there is a "definite" slowing in overall economic growth in the UK As a result, he said GDP growth in the third quarter is likely to be around trend of 0.6 pct "at best." "This is adding to the case for a lengthier rates pause," said Attrill, who last week abandoned his belief that the MPC will raise interest rates again in November in light of the subdued data Earlier, the pound found a boost from stronger-than-expected UK house price data. The pound had been sold down by a large bank ahead of the house price data, spooking the market into speculating that the numbers would come in very weak. In the event, the data allayed fears of a crash in UK house prices, helping the pound recoup losses The monthly house price index from HBOS unit Halifax found that house prices rose by 1.4 pct in September from the previous month for an annual rise of 20.5 pct, taking the average house price to 162,911 stg In August, prices fell 0.6 pct from July but rose 21.3 pct from the year before. While the quarterly data from Halifax shows clearly that property prices are very much in a cooling trend, the market chose to focus on the headline numbers. "The headline figure eased some of the market's worst fears of a housing market crash," Attrill said According to Halifax, in the three months to September prices rose by 2.7 pct compared with the 6.1 pct increase recorded in the second quarter of the year. The third-quarter reading is the smallest since the first three months of 2001 Elsewhere, the dollar stayed firm ahead of the crucial September job market report on Friday. The data will go a long way to help US rate hike expectations The markets are pricing in just one more quarter-point rate hike in the US this year, although the rate setting Federal Open Market Committee has two more meetings left this year. Evidence of strong job creation in September will help solidify US rate hike expectations, boosting the dollar. "The dollar appears likely to hold within its recent range, equivalent to 1.2250 usd to 1.2450 usd against euro the in the run-up to the employment report on Friday," UBS' Katziev said A disappointing result could be the long-awaited catalyst needed to generate a break of the broader range, he added. Separately, markets also continued to watch oil prices after benchmark crude in New York scaled new heights above 51 usd/barrel overnight Concerns over the debilitating effects of higher oil prices on economic growth have the potential to put a drag on the major currencies such as the dollar, yen, euro and pound. But notably the spike in oil prices could not prevent share prices in Tokyo from rising, in turn helping to prop up the yen. In Japan, the Nikkei 225 index gained a further 0.9 pct to hit a two-month high

To: zonder who wrote (12926)	10/6/2004 9:24:32 AM
From: mishedlo	Respond to of 116555

German Aug manufacturing orders down 1.5 pct vs July; consensus down 0.7 pct Wednesday, October 6, 2004 10:20:42 AM afxpress.com FRANKFURT (AFX) - German manufacturing orders fell a seasonally-adjusted 1.5 pct in August from July, according to preliminary data from the Economy and Labour Ministry. Economists had forecast on average a drop of 0.7 pct month-on-month. In July, manufacturing orders rose 2.8 pct from June. The ministry said the drop in orders in August was primarily due to a below-average number of large orders, and a 2.1 pct drop in foreign orders. Domestic orders fell 1.0 pct, it said. Orders for investment goods fell 2.1 pct month-on-month in August after rising 3.9 pct in July. Orders for consumer goods fell 5.4 pct in August following a 2.8 pct rise in July, while orders for intermediate goods rose 0.2 pct in August after a 1.4 pct rise in the previous month. On a two-monthly basis, orders rose a seasonally-adjusted 0.2 pct in July and August from May and June, with foreign orders up 0.4 pct and domestic orders flat, the ministry said.

To: zonder who wrote (12926)	10/6/2004 9:29:59 AM
From: mishedlo	Respond to of 116555

UK jobs growth creation ´peaking´ - REC Wednesday, October 6, 2004 10:02:45 AM afxpress.com UK jobs growth creation 'peaking' - REC LONDON (AFX) - The rate of growth of job creation in the UK is showing signs of peaking, according to the latest monthly Report on Jobs by the Recruitment & Employment Confederation and accountants Deloitte Though the survey found that the number of new jobs being created by UK businesses increased markedly again in September, it said signs of peaking in the rate of growth have become more apparent However, the survey found that strengthened demand for staff from employers and rising skills shortages amongst available candidates resulted in a further marked increase in average pay rates. Gareth Osborne, managing director at REC, warned the government not to sign up to the EU Agency Workers Directive, as it may harm temporary employment growth. Hundreds of thousands of jobs across Europe would be put at risk, he said ============================================================== I do not see a single thing in the text that suggests peaking - mish

To: zonder who wrote (12926)	10/6/2004 9:35:07 AM
From: mishedlo	Respond to of 116555

UK GDP up 0.4 pct in 3 months to end-Sept - NIESR Wednesday, October 6, 2004 12:45:25 PM afxpress.com LONDON (AFX) - A slump in August industrial production has pushed growth in the UK economy below trend, according to a leading think-tank The National Institute of Economic Research estimates that the UK economy grew by only 0.4 pct in the three months to end-September, down from the 0.5 pct it is now predicting for the three months to end-August The new August estimate is down 0.2 percentage points on the previous forecast made by NIESR The trend rate of growth is estimated by the Bank of England to be around 2.5 pct on an annual basis or about 0.6 pct on a quarterly basis "We take the view that, while quarterly figures can be erratic, this figure, taken after the strong growth of the second quarter, suggests that the underlying rate of growth of the economy is probably close to trend," NIESR said. "While the figure obviously makes an early interest rate increase very unlikely we take the view that in the medium term rates may well be above current market expectations," it added Today's estimates come in the wake of disappointing industrial production data for August Official figures earlier showed that the UK's manufacturing recovery appears to be on the wane, with output in August down for the third consecutive month for the first time since January 2002 The office of National Statistics said manufacturing output, which accounts for just less than 20 pct of the total economy, in August fell 0.8 pct from the previous month, against expectations of a modest 0.3 pct increase That was the biggest monthly decline since October 2002, when output slid by 1.3 pct, and raises concerns that the recovery in the sector witnessed earlier in the year has stalled in the face of higher UK borrowing costs and slower-than-anticipated growth in the US The wider measure of industrial production, which also includes utilities output, also declined by 0.8 pct in August from July, in sharp contrast to the 0.3 pct improvement predicted by analysts That was the biggest monthly decline since August 2003, when production fell by 0.9 pct