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

To: Chispas who wrote (18831)	12/17/2004 9:21:54 AM
From: Knighty Tin	Respond to of 116555

Yeah, it will die a slow death like the Limey Pound Startling.

To: Chispas who wrote (18831)	12/17/2004 9:42:49 AM
From: mishedlo	Respond to of 116555

BoE planning to change the way it measures the value of the pound Friday, December 17, 2004 12:16:08 AM afxpress.com LONDON (AFX) - The Bank of England is planning to change the way it measures the value of the pound next year In research published in its quarterly economic bulletin, the central bank said it is looking to publish new sterling trade-weighted indices that incorporate services trade and a broader set of countries to reflect current economic realities In effect, the Bank conceded that its current method of calculating the value of the sterling is too narrow, noting that the current sterling index was last updated in 1995 and based on trade patterns for manufactured goods only in 1989-91, before the explosion in trade with Asia, particularly China and India It said it will publish a "narrow" and "broad" index, similar to the practice of the US Federal Reserve and the European Central Bank The pool of countries included will evolve over time according to whether they account for more than 1.0 pct (narrow) and more than 0.5 pct (broad) of either UK imports or exports In addition, the central bank said it plans to update the weights incorporated in the new method each year to reflect changes in the pattern of trade The Bank said it is looking for views about the new indices ahead of the proposed launch in the spring of next year and conceded that there are a range of possible alternative methods with differing degrees of complexity The central bank also said it is reviewing the need to publish exchange rate indices (ERIs) for individual countries on a daily basis, given that it is not possible for the proposed new method for the overall ERI to be applied to individual countries because of a lack of detailed bilateral services trade data It is therefore seeking comments about this too The rate-setting Monetary Policy Committee looks at the sterling index when it meets every month and has voiced its concerns recently about the inflationary impact of the pound's depreciation against the euro over the last couple of years. The euro zone is the UK's largest trading partner

To: Chispas who wrote (18831)	12/17/2004 9:51:15 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

UK household debt problem may be overdone - BoE Friday, December 17, 2004 12:16:29 AM afxpress.com LONDON (AFX) - Concerns about the level of household debt in the UK may have been overdone, the Bank of England said today In research in its quarterly economic bulletin, the central bank said overall household debt appears to be affordable even though it stands at over 1 trln stg "While circumstances can change suddenly, the survey evidence suggests that, by the standards of the past decade, relatively few households are close to a stressed position," it said "This partly reflects buoyant house price inflation in recent years, but also appears to be due to fewer households borrowing at very high loan to value ratios," it added The picture though is not uniform across households, the Bank said, with people living in rented properties more likely to have bigger debt problems than homeowners, despite the recent rises in the cost of borrowing. Homeowners appear to be having few difficulties in servicing their debt even though the central bank has raised its key repo rate to 4.75 pct from 3.50 pct in November 2003, the Bank said "This may be because the background economic conditions of low interest rates and a strong labour market, together with a buoyant housing market, have been favourable to them," the bank said In addition, it noted that homeowners who might otherwise have experienced some debt-related problems have probably been able to take advantage of the equity in their homes and interest-free borrowing on some unsecured debts, like credit cards, to ease what could have been pressing financial difficulties "At present, the proportion of people with limited housing equity who are also devoting a high proportion of their income to servicing their debts is low compared with the mid-1990s," it said "This is consistent with the very low level of mortgage arrears," it added The research may help ease concerns that consumption growth will stall in the wake of higher borrowing costs and a slowing housing market One of the reasons the BoE has not raised interest rates since August relates to concerns over the outlook for consumption, which kept the economy out of recession over the last couple of years Though homeowners seem to be coping pretty well, the central bank found that a somewhat higher proportion of renters are borrowing money than was the case a decade ago Though the the proportion of renters having problems with their debt has not increased, the Bank found that the amount borrowed by those in difficulty is higher than in the past In addition, it found that renters who borrow unsecured are more likely to have problems than homeowners, partly because they do not have the "safety valve" of housing equity to relieve pressures forexstreet.com

To: Chispas who wrote (18831)	12/17/2004 9:59:01 AM
From: mishedlo	Respond to of 116555

Shortage of steel, other materials affecting Japanese economy - BoJ's Fukui Friday, December 17, 2004 8:08:58 AM afxpress.com Shortage of steel, other materials affecting Japanese economy - BoJ's Fukui TOKYO (AFX) - The shortage of steel and other materials is affecting the recovery of the Japanese economy, which had already slowed sharply due to other factors, Bank of Japan governor Toshihiko Fukui said "The Japanese economic recovery is now pausing due to the impact of the slowdown of overseas economies, as well as the continued production adjustment of IT products, and the influence of supply-side problems such as the shortage of steel," the central bank chief told a news conference "However, judging from the continued growth in corporate profits and the strength of corporate capital spending, and the improvement in labor and wage conditions, I believe that the recovery momentum remains intact." Earlier this week, the BoJ's latest Tankan survey showed business confidence among major manufacturers fell for the first time in seven quarters, and pointed to a further deterioration over the next three months But the survey also showed business confidence holding up surprisingly well among non-manufacturers, and that industry-wide capital spending and pretax profits for the current financial year to March 2005 are both expected to rise by more than previously expected Yesterday the Nihon Keizai Shimbun reported, citing results of its own survey, that winter bonuses this year paid by some 903 major Japanese companies increased 3.43 pct to 770,970 yen The business daily said it was the second straight year of increase, with the scale exceeding 3 pct for the first time in eight years and near a high of 3.76 pct recorded in 1991 Economists say many companies are concentrating on rewarding workers for a big improvement in earnings by increasing bonuses rather than fixed wages. They are doing so to link remuneration more directly to corporate financial performance and to avoid raising fixed costs Other data shows monthly wages remain stagnant. Fukui was speaking shortly after the BoJ's nine-member policy board voted unanimously after a two-day meeting to leave its super-loose credit policy unchanged The decision was widely expected as the core consumer price index (CPI) -- the central bank's primary gauge of price trends -- is still declining, and economic growth slowed to a virtual standstill last quarter, raising fears that the world's second-largest economy could slip back into recession Fukui has repeatedly vowed that Japan's central bank will not abandon its super-loose credit policy until several conditions are met, including steady economic growth

To: Chispas who wrote (18831)	12/17/2004 10:08:49 AM
From: mishedlo	Respond to of 116555

Europe, Japan may not act jointly to curb the US dollar's slide - Gyoten Friday, December 17, 2004 8:34:15 AM afxpress.com Europe, Japan may not act jointly to curb the US dollar's slide - Gyoten TOKYO (XFN-ASIA) - Joint intervention to strengthen the US dollar by the monetary authorities in Japan and Europe may not materialize, former senior financial diplomat Toyoo Gyoten said. Speaking at a luncheon meeting here, Gyoten, who once served as a vice-minister in charge of Japan's currency policy, said concerted action between the European Central Bank (ECB) and Japan to curb the dollar's slide is unlikely "The ECB's stance on the euro is unclear," Gyoten said. "I don't see any increasing signs" that the ECB will act on the dollar's weakness Earlier this month, the dollar dived to an all-time low of 1.3470 usd against the euro. On December 2, in Asian trade, the US unit fell sharply to 101.83 yen -- its lowest level since January 2000. Early in December, a Japanese senior currency official, Hiroshi Watanabe, reportedly said that Japan and Europe could take "harmonized action" to curb the appreciation of their currencies against the dollar, raising speculation that the monetary authorities in Europe and Japan could take concerted action to stem the dollar's fall Part of the dollar's weakness was the result of speculation that central banks in Russia and China may reduce their holdings of the US Treasury bonds Gyoten said that he does not expect the Japanese government, for its part, to cut its holdings of US Treasuries. Gyoten said that market worries about the US current account deficit are behind the dollar's slide, but remarked that there is no quick solution to this problem forexstreet.com

To: Chispas who wrote (18831)	12/17/2004 10:14:47 AM
From: mishedlo	Read Replies (2) \| Respond to of 116555

U.S. Nov. CPI up 0.2%, core rate up 0.2% Friday, December 17, 2004 1:45:33 PM afxpress.com WASHINGTON (AFX) - U.S. consumer price inflation moderated in November after a sharp rise in the prior month, the Labor Department said Friday. The seasonally adjusted consumer price index rose 0.2 percent in November after rising 0.6 percent in October, the department said. The core CPI, which excludes volatile food and energy costs, rose 0.2 percent for the second consecutive month in November. Both were in line with expectations, according to a survey of economists by CBS MarketWatch. Real average weekly earnings fell by 0.4 percent in November