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

To: Knighty Tin who wrote (24368)	2/25/2005 11:04:03 AM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

Mike, don't hold your breath. They can increase all the price they want (maybe not, since China now is still under negotiation with them), it is up to China whether to buy all those crap or not<g>. And personally, I think those big 3 iron ore producers will get backfired on that dramatic increase. My bet is that they will show some mercy for China and increase the price anywhere 30-50% at most.

To: Knighty Tin who wrote (24368)	2/25/2005 11:07:38 AM
From: mishedlo	Respond to of 116555

Yield Curve the five and dime spread has now reversed 100% of the gains made over the last couple of weeks. spread down to 37 BPs again

To: Knighty Tin who wrote (24368)	2/25/2005 11:08:51 AM
From: mishedlo	Respond to of 116555

DATAWATCH French unemployment hits 5-yr high, unlikely to decline this year Friday, February 25, 2005 12:59:04 PM afxpress.com PARIS (AFX) - French unemployment rose to a 5-year high in January, hitting 10 pct of the population and practically ensuring the government will not meet its 2005 growth target of 2.5 pct, as analysts see little chance for any improvement in the employment rate this year For several months, France's economy has been supported by household spending, which offset declining exports even as unemployment remained stubbornly high But with unemployment now back at 10 pct, the highest level since Feb 2000, analysts warned that consumers are likely to begin reining in their spending plans "Economic trends in the months to come will remain in part dependent on the job market, where the persistent sluggishness could begin to penalise household consumption, the primary driver of the French economy," said Jan-Eric Fillieule, an economist with CCF in Paris Alongside its employment report, statistics office Insee also reported this morning a surprise fall in business confidence, which fell to +104 in February from +105 the previous month Analysts had expected the business climate reading to improve to +106, but the Insee report showed that French businesses saw their export orders weaken in the month, indicating "a likely slowdown in business activity over the 3 months to come," the agency said Laure Maillard, euro zone economist at Ixis, said the cautious outlook will spur companies to pursue productivity gains, rather than hiring new workers As a result, unemployment will remain at 10 pct for at least several months, Maillard said, meaning that GDP growth will only reach 1.7 pct this year Marc Touati, an economist at Natexis Banques Populaires, agreed that the dismal job market outlook will limit GDP growth to 1.8 pct, despite a promise by Prime Minister Jean-Pierre Raffarin to cut unemployment by 10 pct this year "If economic growth of 2.3 pct in 2004 could not stop the unemployment rate from rising from 9.8 pct to 10 pct, how can 1.8 pct growth in 2005 possibly reverse this trend?" Touati said

To: Knighty Tin who wrote (24368)	2/25/2005 11:13:04 AM
From: mishedlo	Respond to of 116555

DATAWATCH Strong euro area M3 argues for rate hike but unlikely to sway ECB yet Friday, February 25, 2005 11:27:15 AM afxpress.com PARIS (AFX) – A further acceleration in M3 money supply growth in the euro area argues for an eventual rise in euro zone interest rates, but it is unlikely to sway the European Central Bank from its current wait-and-see stance just yet, economists said Euro area M3 growth accelerated to 6.6 pct year-on-year in January from 6.4 pct in December, while the pace of growth in loans to the private sector rose to 7.3 pct from 7.0 pct Growth in loans for house purchases increased to 10.1 pct from 10.0 pct Michael Schubert of Commerzbank said the low level of interest rates is clearly stimulating demand for money and supporting robust lending growth, and this factor is outweighing the dampening effect on M3 growth of a correction in portfolio movements "The upside risks for price stability stemming from the monetary analysis are obvious," he said But he said the inflation risks from M3 will not prompt the ECB to hike rates immediately, because of other factors "Since uncertainty regarding future growth prospects is currently so strong, we do not expect the ECB to raise rates in the short term," he said Stephane Deo of UBS said the M3 data clearly put at risk his forecast that the ECB will keep rates unchanged this year and next, but they do not mean it will hike rates in the very near term "Because we believe inflation will trend down this year and because we expect the dollar to decline to 1.40, we think it will be difficult for the ECB to justify a rate hike during most of 2005. However we reckon that today's data significantly increase the probability of rate hike at the beginning of next year," he said ECB council members have expressed growing concern about the strength of M3 growth, but Bank of Greece governor Nicholas Garganas last week played down these worries "Excess liquidity has not impacted on inflation," he said in an interview with Agence France-Presse

To: Knighty Tin who wrote (24368)	2/25/2005 11:16:27 AM
From: mishedlo	Respond to of 116555

Sterling drops after weak UK mortgage approvals, Q4 GDP just below forecasts Friday, February 25, 2005 11:27:12 AM afxpress.com LONDON (AFX) - Sterling was lower after data this morning revealed weak mortgage approvals numbers, while economic growth figures for the fourth quarter were slightly below analysts' expectations At 10.22 am, the pound was trading at 1.9091 against the dollar, compared with 1.9120 just before the data was released. The euro meanwhile rose slightly to 0.6912 stg from 0.6908 previously The weak mortgage lending data are likely to disappoint those in the market who were hoping to see a pick-up in the housing market, and argue against an interest rate hike any time soon Figures released by the British Bankers' Association showed mortgage approvals by major UK banks slumped 6.2 pct from December and 28 pct from a year earlier Mortgage approvals by major UK banks slipped again in January to 10.3 bln stg, down 6.2 pct from December and 28 pct weaker than the same month last year, while the number of mortgage approvals for house purchase dropped to their lowest level since January 1999, the BBA said CALYON analyst Daragh Maher said the figures may suggest that the outlook for UK interest rates is not quite as hawkish as previously thought "The market has become excessively hawkish relative to both the data and, we believe, the rhetoric from the Bank of England, and data such as this suggests a greater probability that some of the downside risks to growth and inflation currently envisaged by the Monetary Policy Committee may materialise," he said The minutes to the latest MPC meeting revealed that some members believed a hike may be warranted if inflation rises above 2 pct next year as it has forecast. But it stressed, however, that the risks to its inflation and growth forecasts are on the downside Economic growth data for the fourth quarter was also marginally disappointing. GDP growth was left unchanged at 0.7 pct from the previous quarter, compared with analysts' expectations for an upward revision to 0.8 pct CALYON's Maher said the GDP number "might be a slight disappointment for a market hopeful of a modest upward revision," but noted that it "adds little new" to the debate on whether and when the BoE will next hike rates "Even the unrevised 0.7 pct figure is better than was expected three months ago, so it would be misguided to attempt to put too dovish a spin on this release," he said

To: Knighty Tin who wrote (24368)	2/25/2005 11:22:20 AM
From: mishedlo	Respond to of 116555

UK mortgage approvals slip 6.2 pct in Jan from Dec to 10.3 bln stg - BBA UPDATE Friday, February 25, 2005 11:27:10 AM LONDON (AFX) - Mortgage approvals by major UK banks slipped again in January to 10.3 bln stg, down 6.2 pct from December and 28 pct weaker than the same month last year, according to data from the British Bankers Association Giving further details to figures initially released last week, the BBA said the number of loans approved were also weak, dropping to just 126,316 in January from 134,721 in December The number of loans approved for house purchase were at their lowest since January 1999 and by number showed the smallest share (25 pct) of overall approvals -- including remortgaging and other secured lending -- since the series began in September 1997, the BBA said The average house purchase loan approval fell to 116,200 stg from 118,100 stg in December The figures are likely to spark concerns that the UK property market is not picking up as many had been hoping. The BBA data showed that net mortgage lending in January rose by 4.24 bln stg compared with 5.189 bln in December The January rise was weaker than the average of 4.54 bln in the previous six months, although the annual growth rate remained at 14 pct, the BBA said Gross mortgage lending meanwhile totalled 11.6 bln stg in January, down 18 pct from 14.2 bln in December and also down 18 pct from a year earlier "After the series disruption in November and December following the changes to regulation, mortgage lending resumed its relatively subdued trend in January," said David Dooks, BBA director of statistics "This looks set to continue in the near term as approvals of loans for house purchase and equity withdrawal were very weak, even for a January," he added The only area of demand that is holding up is remortgaging, where borrowers continue to find good deals to reduce their borrowing costs, he noted But while the property market slowed, figures show personal debt may be picking up. The BBA survey revealed that loans and overdrafts rose by 730 mln stg in January from 420 mln the previous month, and well above the average rise of 480 mln stg over the previous six months. Credit card debt, meanwhile, rose by 404 mln stg, higher than recent average of 353 mln stg forexstreet.com

To: Knighty Tin who wrote (24368)	2/25/2005 11:25:59 AM
From: mishedlo	Respond to of 116555

China risks economic hard landing with yuan revaluation - Fitch Ratings Friday, February 25, 2005 7:23:13 AM SINGAPORE (AFX) - China will be risking a economic hard landing if it revalues the yuan because that could significantly slow down investments, Fitch Ratings Asia sovereign ratings head and senior director Brian Coulton said On the sidelines of the Fitch Ratings Asia Conference 2005, Coulton told XFN-Asia that adopting a more flexible foreign exchange regime in China may be detrimental to its effort to gradually slow its rapid economic growth "I might see that as potentially risking overkill -- slowing the economy too much because, potentially, investments might slow down very rapidly," said Coulton. "You could get credit squeeze." He said: "At this point, I don't see the exchange rate as a helpful macro policy tool." A yuan revaluation is not the key to correcting the economic imbalances in the US, either, he argued "Even if the renminbi were to be revalued, it's not clear to me whether there is going to be an impact to the US current account deficit," he said "In terms of helping the US deficit decline, a stronger growth in the rest of the world would be helpful. But stronger growth in China is not something we want. It's already growing too rapidly. China is going to need to slow down." Coulton said that China will need to see investment growth fall below its average GDP growth of 7-8 pct to show that there is, indeed, an economic soft landing "The investment rate should decline below GDP growth, but it was at 26 pct in the fourth quarter. It has not happened yet," he said He said private consumption should accelerate if the Chinese economy is to have a soft landing Coulton said that, to achieve their goal of cooling the economy, the Chinese authorities are more likely to raise policy rates than focus on the undervaluation of the yuan "They are just going to raise interest rates some more. I don't think the exchange rate will come into play to address the rise in inflation," he said forexstreet.com

To: Knighty Tin who wrote (24368)	2/25/2005 11:57:27 AM
From: mishedlo	Respond to of 116555

U.S. existing home sales flat in January [WTF is this all about? They changed how we compare numbers, revised 2004 down, and now we do not know what is going on because numbers are not directly comparable to past reports? WTF?! Oh but never mind that, supply is tight even though inventory has been rising for months. Give me a break.] Friday, February 25, 2005 4:31:44 PM forexstreet.com WASHINGTON (AFX) - Sales of existing single family and condos were nearly unchanged in January from December, the National Association of Realtors said Friday. Sales fell 0.1 percent to a seasonally adjusted annual rate of 6.80 million in January from 6.81 million in December. Sales were up 13.7 percent from January 2004 "Sales strength remains near record levels, while inventory continues to remain very low -- ultimately driving sustained increases in home sales prices," said Mat Johnson, chief economist for ThinkEquity The numbers are not directly comparable to past reports on existing home sales, because they now include both single-family homes and condos. The real estate group released a massive revision to past data, which lowered 2004 sales levels by about 10 percent overall from previous estimates. The group found that it has been oversampling the hottest markets and overestimating sales by owners Despite the revision, sales trends remained in place, with 2004 still a record year with 6.78 million total sales and 5.96 million single-family sales. The peak came in June, with 7.02 million total annualized sales and 6.17 million annualized single-family sales Sales of single-family homes fell 0.5 percent in January to a 5.94 million pace from 5.97 million in December. Condo and coop sales rose 2.3 percent in January to an 858,000 pace. The inventory of homes on the market fell 5.1 percent to 2.09 million, a record low 3.7-month supply at the current sales pace The median price of a sold home rose 10.5 percent year-over-year to $189,000 The price increases are large, signaling a severe supply shortage, said David Lereah, chief economist for the group "The demand for homes remains in record territory, but the supply of homes on the market set an all-time low," said Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City [Yeah right! Mish]

To: Knighty Tin who wrote (24368)	2/25/2005 12:14:33 PM
From: mishedlo	Respond to of 116555

U.S. existing home data revised lower Friday, February 25, 2005 3:25:26 PM afxpress.com WASHINGTON (AFX) -- U.S. existing home sales in recent years were not nearly as strong as first thought, the National Association of Realtors said Friday. The real estate group released a benchmark revision which put the revised level of 2004 single-family sales at 5.6 million units, which is 10.6 percent lower than previous estimates. The group will now include condominium and co-op sales in its monthly report along with single family sales