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

To: Haim R. Branisteanu who wrote (30727)	5/25/2005 12:30:29 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

U.S. durable goods orders rise 1.9%, first gain in 2005 - Wednesday, May 25, 2005 1:23:37 PM afxpress.com WASHINGTON (AFX) - Led by demand for airplanes, autos and computers, orders for new U.S.-made durable goods increased 1.9% in April after falling in the first three months of the year Economists were expecting orders to rise 1.5%, according to a survey conducted by MarketWatch. Durable orders in March were revised to a 1.6% decline from 2.3% previously estimated The financial markets brushed off the better-than-expected report. Stock futures were lower, while bonds continued to rally, with the 10-year yield falling to 4% briefly. The dollar was little changed. Shipments of durable goods increased 1.6% in April after a 0.2% gain in March. Durable goods are long-lived products, such as airplanes, cars, washing machines and machine tools. Orders are carefully watched for clues about the direction of both consumer and business spending. Orders for transportation goods jumped 8.2%, accounting for all the increase in total orders. Excluding transportation goods, orders fell 0.2% in April Orders for core capital goods equipment rose 1.6% in April after large declines in February and March. A special tax break for investments in capital goods expired at the end of December, perhaps accelerating orders into 2004 at the expense of orders early in the year. Inventories of durable goods increased 0.1% in April, the 17th consecutive gain Demand in April for durable goods was broad-based across sectors, outside of communications and primary metals The durable-goods data are extremely erratic, often rising or falling by as much as 2 percentage points The report gives ammunition to those who say that a soft patch that developed in the economy in the first months of the year was just a temporary bump on the road and not the sign of more fundamental problems "This places the economy on good footing for growth in the second quarter," said Drew Matus, an economist for Lehman Bros "The soft patch is not over," said Ian Shepherdson, chief U.S. economist for High Frequency Economics, who said March and April data taken together are "essentially flat." The factory sector has clearly slowed from the strong growth seen earlier in the recovery. Almost all the factory data show it: Manufacturing output fell in March and barely rose in April. Factory employment continues to decline. And most troubling, factory sentiment indexes - which try to capture the mood of corporate executives - have plunged. The Institute of Supply Management index is edging ever closer to 50%, the line separating growth from contraction in the sector In April, orders for transportation goods rose 8.2%, including a 28.2% rise in aircraft orders and a 3.4% rise in motor vehicle orders. Shipments of transportation goods increased 3.5% Orders for electronics excluding semiconductors fell 5.8%, as orders for communications equipment plunged 18.8%. Orders for computers rose 15.8%. Shipments of electronics rose 0.2% Orders for machinery increased 2.2% while shipments rose 1.5% Orders for electrical equipment increased 3.4% while shipments rose 1.9% Orders for fabricated metals increased 1.7% while shipments increased 2.3% Orders for primary metals fell 0.9% while shipments fell 0.2%

To: Haim R. Branisteanu who wrote (30727)	5/25/2005 12:52:35 PM
From: mishedlo	Respond to of 116555

Forex - Euro remains weak after further weak German data Wednesday, May 25, 2005 12:12:08 PM afxpress.com LONDON (AFX) - The euro remained weak against the dollar after another disappointing economic survey from Germany, the euro zone's largest economy German business confidence slumped to the lowest level in 21 months in May, quashing hopes for a pick-up in economic activity in the euro zone's biggest economy in the foreseeable future The widely watched business climate index, calculated each month by the Ifo economic research institute, fell to 92.9 points in May from 93.3 points in April and expectations of no change Despite the grim economic picture in the 12-nation currency zone, analysts do not expect an imminent interest rate cut from the European Central Bank "In our view, it would require very serious economic troubles to push the ECB into easing; certainly more trouble than is associated with the recent weakening of business confidence," said Holger Fahrinkrug, a UBS analyst That view was apparent in two interviews given by ECB officials earlier today CB governing council member, Erkki Liikanen, told the Financial Times Deutschland that policy remained "very accommodative" and that at some point in the future, policy should move towards a "more neutral position." Meanwhile, his colleague on the bank's executive board, Tommaso Padoa-Schioppa, told the daily Frankfurter Allgemeine Zeitung that "as things look at the moment, it's clear that the only move we can imagine at the moment is a step towards more neutral interest rates." The ECB has held its key interest rates steady at 2.0 pct since June 2003. The euro has been pushed onto the backfoot in recent weeks by fears the French will vote against the EU constitution this weekend in a referendum aws well as concerns about the state of the euro zone economy. Investors have placed greater importance on developments related to interest rate differentials than structural concerns relating to the US's twin deficits Attention will soon turn to US releases this afternoon, in particular durable goods orders for April to be followed by first quarter GDP numbers tomorrow Overnight, the minutes of the US rate setting body's last meeting revealed concerns about rising price pressures and slowing economic growth. Elsewhere, the pound was steady even though UK economic growth fell to its lowest level in nearly two years as the market's main focus of attention remained on Sunday's EU constitution referendum on Sunday The economy grew at a slower pace than initially thought during the first quarter of 2005, climbing by 0.5 percent from the previous three-month period, according to revised figures from the office of National Statistics "It must be noted that we are looking for opportunities to sell the pound but are reluctant to do so before the outcome of this weekend's referendum," said Mark Austin, global head of currency strategy at HSBC