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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (21545)	11/8/2004 6:00:06 PM
From: ild	Read Replies (1) \| Respond to of 110194

Mixed Data Leaning Toward A Slowing Economy northerntrust.com

To: mishedlo who wrote (21545)	11/9/2004 9:17:18 PM
From: russwinter	Read Replies (4) \| Respond to of 110194

Inflation du jour. Now even I find "tomatoes" a little much, but really no worse than rent adjusted housing costs: UPDATE 3-Pricey tomatoes push Mexican inflation higher Tue Nov 9, 2004 05:38 PM ET MEXICO CITY, Nov 9 (Reuters) - Mexican inflation rose further beyond the central bank's target range in October, due largely to higher tomato prices following recent hurricanes in Florida, the central bank said on Tuesday. Consumer prices increased 0.69 percent in the month, pushing inflation on a 12-month basis to 5.40 percent -- well beyond the central bank's upper limit of 4 percent. The bank said about a third of the overall inflation in October was due to higher tomato prices. Tomatoes are a major staple in the Mexican diet, used for sauce in classic dishes like tacos and huevos rancheros. Shoppers say that tomato prices at supermarkets have as much as doubled in recent weeks. Economists say a large share of imports come from Florida where tomato crops were damaged by the wave of hurricanes in recent months. Prices for locally produced tomatoes have gone up as well. High food and energy costs have plagued Mexico. Analysts and businessmen have said the bank is unlikely to meet its 2004 inflation target despite seven interest rate increases this year, although the economy is considered broadly stable. "(Inflation) isn't at a critical level, but it will take some time to come down," Manuel Medina Mora, head of Citigroup's Mexico operations, said in a speech on Monday. The central bank will make its twice-monthly monetary policy announcement on Friday. Analysts say they expect the bank to push interest rates higher again this year but many do not expect a tightening so soon after its most recent move on Oct. 22. "I don't think they'll modify policy, since local rates are already reacting to the imminent rise in rates in the United States," said Eduardo Avila, chief economist at Prognosis consultancy. Inflation was in line with analysts' average expectations for 0.68 percent in a Reuters poll (MEX17: Quote, Profile, Research) . Core prices -- which exclude volatile food and energy costs -- rose 0.33 percent, leading 12-month core inflation to tick slightly higher to 3.84 percent. "The negative bit in this report is the rise in core inflation, which is getting closer to 4 percent," Avila said. "With this, it is certain that overall inflation will keep rising in coming months to around 5.5 percent."