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

To: zonder who wrote (28612)	4/27/2005 10:27:57 AM
From: mishedlo	Respond to of 116555

Nigeria set to default? LONDON (AFX) - The pound slumped on fears that Nigeria is heading towards an Argentine-style default on its 33 bln usd of overseas debt, much of which is owed to the UK. The Guardian newspaper reported this morning that the oil-rich west African nation is at risk of defaulting on its debt unless Western creditors accept a deal to alleviate the country's financial burden. The newspaper quotes Farouk Kawan, the chairman of the finance committee of Nigeria's house of representatives, as saying that it is "unconscionable" that the country has paid 3.5 bln stg in debt service over the past two years while the debt burden has simultaneously risen by 3.9 bln even without any new borrowing. "The UK holds 21 pct of total Nigerian foreign debt, suggesting that sterling will suffer most on the likely debt default," said Hans Redeker, global head of FX strategy at BNP Paribas. Once the report hit the trading desks in London, the pound dropped from above 1.91 usd towards the 1.9050 usd mark. "There's no doubt the pound slumped after than story did the rounds," said Neil Mackinnon, chief economist at ECU Group. Sterling may come under further pressure today if the monthly manufacturing survey from the Confederation of British Industry later disappoints to the downside. "If it's weak, then that would put some more pressure on the pound," said Mackinnnon. Elsewhere, the yen slipped back slightly following some disappointing Japanese economic data. Household spending in Japan during March dropped 1.1 pct from the previous month, reinforcing fears that consumers won't be a driving force in the country's recovery from recessi

To: zonder who wrote (28612)	4/27/2005 10:47:41 AM
From: mishedlo	Respond to of 116555

ECB unlikely to raise rates in 2005 as euro zone growth stays below 2 pct - S&P Wednesday, April 27, 2005 2:06:26 PM afxpress.com LONDON (AFX) - The European Central Bank is unlikely to be in a position to raise interest rates in 2005 as a stronger euro and high oil prices dent growth in major euro zone economies, Standard & Poor's Ratings Services said Growth in the euro zone is set to remain below 2.0 pct in 2005, picking up "somewhat" in 2006, with inflation expected to remain below the ECB's official 2.0 pct target, S&P said in a report on the European economy "These forecasts provide little grounds for the ECB to raise its benchmark rate, at least in 2005," said S&P chief European economist Jean-Michel Six In order to mitigate the effects of exchange rate strength and higher energy input costs, European economies would need to improve productivity, S&P said It argued, however, that in practice, productivity-related corporate investment in continental Europe has tended to be very weak in recent years as companies have opted for restoring balance sheets or increased dividends rather than aggressive investment In this context, S&P said it sees the UK as the leading performer among the EU heavyweights in the near term, as strong corporate profitability keeps GDP growth running at about 2.5 pct Italy on the other hand presents "the most worrying picture", with GDP growth expected to be contained to a "very modest" 0.7 pct in 2005 and 1.5 pct in 2006, S&P said