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

To: TH who wrote (21711)	1/19/2005 8:45:17 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Mortgage applications volume jump 16.2% in latest week Wednesday, January 19, 2005 12:34:33 PM afxpress.com WASHINGTON (AFX) -- Applications for mortgages jumped 16.2 percent on a seasonally adjusted basis in the week ended Jan. 14, the Mortgage Bankers Association's latest survey shows. Strength was seen both in mortgages to purchase homes and in refinancings, as reflected in respective increases of 14.0 percent and 19.1 percent compared to the prior week. Refinancings accounted for 48.9 percent of mortgage volumes, off from the prior week's 49.0 percent, while adjustable-rate mortgages nosed up to 32.8 percent from 32.7 percent. According to the MBA, average contract interest rates slipped across the board last week. Rates on 30- and 15-year fixed-rate mortgages fell to 5.64 percent and 5.14 percent, respectively, from 5.70 percent and 5.17 percent on a week-to-week basis. The rate on one-year ARMs averaged 4.13 percent last week, off from 4.16 percent a week earlier

To: TH who wrote (21711)	1/19/2005 8:53:02 AM
From: yard_man	Read Replies (1) \| Respond to of 116555

yeah, guess I shouldn't have posted that -- probably on the list now -- LOL!!

To: TH who wrote (21711)	1/19/2005 9:19:11 AM
From: mishedlo	Respond to of 116555

BoE unlikely to be too concerned by wages pick-up Wednesday, January 19, 2005 11:55:00 AM afxpress.com LONDON (AFX) - A modest pick-up in wage inflation in November is unlikely to generate too much concern on the Bank of England's rate-setting body just yet Analysts said the Monetary Policy Committee has spent a lot of time in recent months seeking to analyse why wage inflation hasn't picked-up following more than ten years of uninterrupted economic growth In a recent speech, the BoE's governor Mervyn King sought to explain why inflation may be subdued despite a little, if any, spare capacity in the economy and suggested that the labour market may have become more flexible. In addition, he noted that a decline in collective bargaining and an increase in migrant labour may have kept wage increases down "Although there are creeping tensions in earnings and the labour market continues to tighten, the fundamental changes in the labour market highlighted by the BoE several times in the past should allow monetary policymakers to remain relatively relaxed about today's figures," said Lorenzo Codogno, co-head of European economics at Bank of America "In other words, there is no convincing sign suggesting a risk of substantial inflation pressures stemming from the labour cost side," he added. Nevertheless, analysts agreed that the MPC will keep a close eye on crucial wages settlements over the next few months, adding that another rate hike is possible if workers seek to bid up wages in the wake of higher borrowing costs and inflation, evidenced in yesterday's consumer price data John Butler, economist at HSBC, agrees that the market remains focused by housing and consumption risks but that the labour market may creep up onto the MPC's radar screen in the coming months, a period which is typically crucial for pay settlements "The question over the next few months is whether companies, which are more profitable and currently cash rich, respond to the labour market conditions," he said "The answer to that may well dictate whether the next move in rates is up or down," he added. Official figures earlier showed average earnings, excluding bonuses, in the three months to November rising by 4.4 pct, unchanged from the previous three months, and in line with expectations The last time the rate was higher was in January 2002, when it stood at 4.5 pct, the maximum level considered by the MPC to be consistent with meeting its inflation target Despite the modest increase, some analysts are arguing that the rise in average earnings growth acts as no barrier to lower interest rates Capital Economics' economist Vicky Redwood doubts the MPC is "a slave to this rule of thumb" given its response in 2001 when it cut borrowing costs by 2 percentage points even though the 4.5 pct threshold was breached Moreover, Redwood said the recent pick-up in productivity growth has pushed the annual growth of unit labour costs to just 1.0 pct in the third quarter of 2004, its lowest in eight years "Overall, then, we do not expect the recent, or any further, acceleration in average earnings growth to stand in the way of lower interest rates," she said. "We continue to expect interest rates to fall to 4 pct by the end of this year, as the housing market downturn gathers pace against a backdrop of benign general inflation," she added The MPC has raised the cost of borrowing a quarter point on five occasions since November 2003, taking its key repo rate up to 4.75 pct, as it sought to stem inflationary pressures arising from above-trend growth and rampant consumer demand But evidence of a general economic slowdown, alongside subdued inflation data, has raised expectations that the next interest rate move may actually be down. The money markets have already begun to factor in unchanged rates for the first few months of this year, especially after the minutes of the December MPC meeting showed the nine-member panel discussed the possibility of cutting rates pp/ec For more information and to contact AFX: www.afxnews.com and www.afxpress.com

To: TH who wrote (21711)	1/19/2005 9:38:26 AM
From: mishedlo	Respond to of 116555

BoJ Gov Fukui says forex movements have become unsteady Wednesday, January 19, 2005 8:56:23 AM afxpress.com TOKYO (AFX) - Bank of Japan Governor Toshihiko Fukui said currency exchange rate movements have become unsteady recently, raising the possibility that Japanese monetary authorities may resume intervening in the currency market "I believe that recent movements in the forex market have become unstable, and we will monitor closely whether these developments will have any psychological and real impact on the Japanese economy," the Japanese central bank chief told a regularly-scheduled press conference Fukui also said he expected the finance ministers and central bank chiefs from the world's seven largest economies to reaffirm their commitment to orderly forex markets when they meet in London on Feb 4-5 "I think that the G7 members will discuss at the next meeting the outlook for the global economy as well as imbalances, and with regard to forex issues, they will reaffirm more strongly the previously stated policy," he said The G7 previously called for currency exchange rate movements to reflect market fundamentals. "It is the duty of member countries to manage macro-economic policy and achieve sustained economic growth for the sake of having stable foreign exchange market development," he said Fukui also said the Japanese economy had not performed as well as expected when the BoJ issued in October its latest biennial economic forecast "Because inventory in the IT sector is more prolonged than we had previously thought, the Japanese economy is now deviating on the downside from our view in the October outlook report "Having said so, I believe inventory adjustment in the IT sector will come to an end sometime after this spring, and the Japanese economy will regain recovery momentum and will gradually shift to a self-sustained recovery." "At any rate, the ongoing economic adjustment will not develop to an extent which we had witnessed after the burst of the IT bubble in 2000-2001," Fukui stressed Fukui was speaking just hours 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 means the BoJ board will leave in place a policy aimed at keeping short-term interest rates around zero. The policy is aimed at ending Japan's six-year battle with deflation Fukui said that he has recently come to acknowledge that one negative stemming from the prolonged quantitative monetary policy stance is that residential property prices in a limited area in central Tokyo have begun to rise "We will monitor closely if there will be any further developments, but I am sure that (the rebound in some residential property prices) is not signalling something that we should be alarmed about," Fukui said "And I believe that before core CPI starts to move stably above zero (on a year-on-year base), the demerits of our present policy will not exceed the merit of it," the central bank governor stressed "However, as the economy continues a recovery, the net impact of the demerit of the current policy and the merit could fluctuate, so we will continue to closely examine it," Fukui added The BoJ also issued a monthly economic report today that said the nation's economy continues to recover despite weakening production That was the first time in three months that the BoJ left its economic assessment unchanged. The BOJ downgraded its assessment of the world's second-largest economy in November for the first time since May 2003, and downgraded it again in December

To: TH who wrote (21711)	1/19/2005 9:52:47 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Tanigaki says Japan will act to counter unjustified forex moves - Wednesday, January 19, 2005 10:04:51 AM afxpress.com (Adds more comments, background) TOKYO (AFX) - Finance Minister Sadakazu Tanigaki said Japan will take decisive action to counter unjustified movements in the yen's exchange rate against other currencies At a press conference, Tankgaki was asked his view of the monthly economic report for January, released today, in which where the Cabinet Office added foreign exchange rates to a list of major risk factors, which also include high oil prices and inventory adjustment in the information technology (IT) sector. "I can't comment on recent moves in currency exchange rates, but we need to have a close look at movements, and if there are unjustified movements, we will take decisive action to counter them," said Tanigaki Shortly after the press conference ended, the US dollar was trading at 102.32 yen, and the euro was trading at 133.73 yen Earlier this week, the Japanese unit surged to 101.67 yen against the dollar -- its highest level since December 1999. And it has climbed 6 pct against the euro since late December This has fuelled concern that the firmer yen could shrink profits earned overseas by Japanese exporters, one of main drivers behind Japan's economic growth. Asked about the January economic report's unchanged assessment of the Japanese economy, Tanigaki said: "I understand the economy is in an adjustment phase, in an upward climb." Asked also about what might be discussed at the Group of Seven industrial nations' meeting in early February, Tanigaki said likely topics include measures to help the countries hit by the Indian Ocean tsunamis and global structural issues. Tanigaki also said his ministry held a seminar in London for foreign investors on Japanese government bonds (JGBs) to expand the pool of holders of Japanese debt. Foreign investors currently hold some 4 pct of the outstanding amount in JGBs. "We need to diversify investor sources," Tanigaki said.