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

To: Gemlaoshi who wrote (22808)	2/3/2005 1:50:42 PM
From: Knighty Tin	Respond to of 116555

Agreed. A lot of people didn't like the politics of Yigal Allon or Moshe Dayan, but there was no question that they were men of courage. Most Israeli leaders are cut from the same cloth, though not all have their skill level.

To: Gemlaoshi who wrote (22808)	2/3/2005 3:11:50 PM
From: mishedlo	Respond to of 116555

Benign inflation outlook gives ECB room to breathe as economy picks up Thursday, February 3, 2005 5:03:12 PM ---- by Matthew Brockett ---- FRANKFURT (AFX) - The European Central Bank appears more confident that growth will accelerate in the euro zone this year, but a benign inflation outlook means there is no immediate pressure on it to lift interest rates, economists said With inflation set to fall below the ECB's 2 pct limit in the course of 2005, economists do not expect the bank to start tightening monetary policy until later this year "Our view is the ECB will only tighten late in the year, probably September," said Julian Callow at Barclays Capital "They seem slightly more confident about growth, but also slightly more confident about near-term inflation, so net-net I think that's offsetting each other." As expected, the ECB elected to keep its key interest rate unchanged at 2 pct at today's governing council meeting -- the 20th straight month the bank has held its rate at this historic low. ECB president Jean-Claude Trichet said conditions remain in place for euro zone growth "to pick up and become more self-sustained in the course of the year". This was a more upbeat assessment than last month, when he said economic growth would "proceed" in 2005 But Trichet also painted a benign inflation picture, saying inflation is still expected to fall below 2 pct in the course of 2005 and there is no significant evidence of underlying domestic price pressures building up Economists said the bank's growing confidence about the moderate economic recovery taking place in a benign inflationary environment means it can afford to leave interest rates unchanged for some time yet. "We get the impression that the ECB's Governing Council is a bit more confident of its baseline scenario of moderate growth, with prices moving within the price stability range during the course 2005," said Bank of America economist Lorenzo Codogno "Although still present, risks appear to have slightly receded, leaving the scenario of a gradual removal of policy accommodation at some point in the second half of 2005 as the most likely outcome." Trichet stressed there are several upside inflationary risks that warrant "vigilance" He said the ECB is concerned about the rate of growth in M3 money supply, as the excess liquidity in the system could eventually translate into inflationary pressures. House price rises in some euro zone countries, such as Spain and Ireland, are of concern, while volatile oil prices continue to pose risks to both the economic and inflation outlooks, he added. Steve Webster at 4Cast said much of Trichet's rhetoric about the bank needing to remain vigilant is aimed at keeping inflation expectations low "They're not alarmed about the outlook for inflation," he said. "I think they see a few trouble spots. There's oil prices, M3 growth and the danger of an asset price bubble in terms of property prices ... but it's not enough to change their views." Morgan Stanley economist Joachim Fels agreed. While the ECB expressed heightened concerns about money and credit growth, these are unlikely to prompt a rate hike anytime soon, he said "Provided that the euro remains broadly stable and the economy keeps growing at around trend (non-inflationary potential) pace, I continue to expect a first rate hike only in the third quarter of this year." forexstreet.com