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

To: Chispas who wrote (14176)	10/28/2004 10:42:20 AM
From: mishedlo	Respond to of 116555

ROUNDUP - New Zealand central bank signals end to interest rate increases Thursday, October 28, 2004 8:48:38 AM afxpress.com WELLINGTON (AFX) - New Zealand's central bank today hiked interest rates for the sixth time this year but also signalled that its tightening phase is now over, giving a sharp boost to a relieved market Reserve Bank governor Alan Bollard raised the cash rate to 6.50 pct from 6.25 pct, leaving New Zealand with the developed world's highest interest rates The stock market clearly welcomed the move, with the NZSX50 gross index putting on 1 pct to close at 2,807.15 points In a four-paragraph statement, Bollard said the economy was still performing strongly, continued to provide positive surprises and that resources would remain stretched "However, the recent monetary policy tightenings still have to work their way through the economy and the high exchange rate will also have its effect," Bollard said "Given this, we believe that the current settings of monetary policy are now doing enough to ensure price stability," he said in remarks signalling that the central bank was through with interest rates for now Bank of New Zealand economist Stephen Toplis said the decision was a gamble "This is either a brave and visionary, or foolhardy approach." Toplis was critical that Bollard had closed the door on a rate rise in December, noting today's news had sent the local dollar down half a US cent from this week's near historic high of 70.51 US cents as the market priced in the changed outlook. "Indeed, Alan Bollard has increased the likelihood that he will need to move again by creating a sell-off in the New Zealand dollar." ANZ National Bank chief economist John McDermott said the move was "extremely dovish" and a big U-turn "He's playing a dangerous game because you can target the currency or target inflation but you can't do both and the statement looks very much like it's focused on the currency." The central bank's decision also came despite its own forecasts that inflation will rise above the 1.0-3.0 pct range the bank is mandated to maintain However, it does have the leeway under its current mandate to allow a breach of the target range for limited periods so that the central bank does not otherwise cause undue volatility in economic growth In its September quarter bank forecasts, Bollard had signalled he would almost certainly hike rates at today's cash rate review and would probably do so again on December 9 Economic data since September, particularly in the labor market and for retail sales, has been generally much stronger than economist forecasts At the same time, world oil prices have shot up to over 55 usd a barrel and although they have since moderated, the impact on inflation is to be feared Helping offset the impact of such imported inflation, however, has been the strong New Zealand dollar, which has also put domestic producers under pricing pressure given that it affords cheap imports Opposition politicians were not impressed with the latest move on interest rates, with the right wing ACT Party's finance spokesman Richard Prebble saying the central bank was out of step with the rest of the world "The New Zealand Reserve Bank is the only bank in the Western world to have increased interest rates six times this year to give this country the highest interest rates in the Western world," he said New Zealand First leader Winston Peters accused the bank of 'voodoo economics' and "hiding behind a facade of economic growth" while ordinary people struggled to pay their mortgages and run businesses

To: Chispas who wrote (14176)	10/28/2004 10:47:24 AM
From: mishedlo	Respond to of 116555

China´s steel products exports to surge by 72 pct yr-on-yr in 2004 Thursday, October 28, 2004 7:37:07 AM afxpress.com China's steel products exports to surge by 72 pct yr-on-yr in 2004 BEIJING (AFX) - China's steel products exports are expected to surge as much as 72 pct year-on-year this year reaching nearly 12 mln tons as domestic manufacturers take advantage of higher prices overseas, Luo Bingsheng, vice chairman of the China Iron and Steel Association, said At the same time, imports of steel products are forecast to fall 18.9 pct year-on-year to 30 mln tons Luo said the average price of steel products in the international market is 100 usd higher than the domestic market "Imports of steel products are estimated to fall around 20 pct this year to 30 mln tons, while exports will surge 58-72 pct to 11-12 mln tons, against 6.96 mln tons last year," Luo said at a meeting to discuss the industry's performance in the first nine months of this year In the nine months to September 30, steel production rose 21.6 pct year-on-year to 194.2 mln tons, while steel products output increased 22.8 pct on a yearly basis to 213.9 mln tons, the association said Output of pig iron rose 21.2 pct year-on-year to 178.4 mln tons Looking ahead, steel products production is expected to reach 277 mln tons this year, up 14.9 pct year-on-year, from 241 mln tons last year, Qi Xiangdong, the vice secretary general of the association, told the meeting The forecast output nearly matches the full-year consumption target, which the steel association has set at 276 mln tons, up 13 pct year-on-year Steel output is likely to grow by 17 pct on a yearly basis to 260 mln tons, and pig iron production will reach 240 mln tons, up 18.6 pct from a year earlier After reaching heady heights earlier this year, prices for domestic steel and steel products have returned to reasonable levels as the government's macro-economic tightening measures dampen demand, Qi said, adding this trend will largely continue for the rest of the year "In the fourth quarter, prices of high value-added products will remain high, but prices of low level products such as reinforced bars and wire rods will decline slightly because of sufficient supply in the market," Qi said However, the sector is still at risk of overheating as some illegal steel manufacturers closed down during the government's crackdown restart production, Luo said