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

To: Jim McMannis who wrote (31694)	6/8/2005 2:21:14 AM
From: mishedlo	Respond to of 116555

Australia's Central Bank Keeps Key Interest Rate Unchanged at 5.5 Percent June 8 (Bloomberg) -- Australia's central bank kept interest rates unchanged for a third month and economists say borrowing costs may not be raised again this year after reports showed slumping manufacturing, job vacancies and retail sales. Governor Ian Macfarlane and his board today left the overnight cash rate target at 5.5 percent as forecast by all 22 economists surveyed by Bloomberg News. The bank raised the rate a quarter point to a four-year high on March 2. Australia's economy, the fifth-largest the Asia-Pacific region, grew less than expected in the first quarter and evidence is increasing that growth slowed in the second quarter. Drought across almost half the nation's farmland is curbing rural production, which may further crimp the economy. ``On all fronts, the case for raising interest rates has dried up,'' Shane Oliver, chief economist at AMP Capital Investors, Australia's second-largest money manager with the equivalent of $60.5 billion in funds under management, said in Sydney. ``Housing activity and consumer spending have slowed substantially.'' Oliver forecasts the central bank will leave rates unchanged this year. The central bank doesn't explain its decision when rates are kept unchanged. Macfarlane will give a speech in Sydney on June 14. Last month, the bank said inflation pressures have receded and March's interest-rate increase has damped consumer demand. Economic Growth There was a case to keep rates unchanged for the ``time being,'' the Reserve Bank said on May 6. Australia has raised its key rate once this year, compared with three increases of a quarter percentage point by the U.S. Federal Reserve. The A$800 billion ($612 billion) economy grew 1.9 percent in the first quarter from a year earlier, a report last week showed. Economists surveyed by Bloomberg News forecast 2.2 percent. Australia's economy is being outpaced by the U.S., which grew 3.7 percent in the same period, and by the U.K., which expanded 2.7 percent. The Australian dollar bought 76.77 U.S. cents at 12:19 p.m. in Sydney from 76.84 cents before the decision was announced. The yield on the 6.25 percent bond maturing April 2015 rose 1 basis point to 5.05 percent. A basis point is 0.01 percentage point. ``The Reserve Bank's interest-rate increases over the past 18 months are taking effect,'' said Mark Bouris, chief executive of Wizard Mortgage Corp., Australia's largest non-bank home lender. ``We expect rates to remain steady for the balance of the year,'' Bouris said in an interview in Sydney last week. Wizard is a unit of General Electric Co., the world's biggest non-bank lender. Retail Sales Australians have become more sensitive to interest-rate increases in the past five years as household debt has climbed to 140 percent of disposable income from about 96 percent. Retail sales fell 0.5 percent in April from March, the largest decline in nine months, a government report last week showed. Companies including Just Group Ltd., Australia's largest specialty clothing retailer with 700 stores, Rebel Sport Ltd., and Miller's Retail Ltd. have cut profit forecasts in the past month amid slowing consumer spending. Manufacturing production fell to a three-year low in May as new orders dropped, the Australian Industry Group said last week. The number of jobs advertised in Australian newspapers dropped 7.3 percent in May to a two-year low, a survey by Australia & New Zealand Banking Group Ltd. this week showed. Australia's economy expanded a less-than-expected 0.7 percent in the first quarter from the previous three months as a decline in business investment and farm production tempered an increase in inventories. ``Any talk of further interest-rate increases is obsolete,'' Stephen Koukoulas, chief Asian economist at TD Securities Ltd., said in Sydney. ``The picture is of slowing economic growth with no genuine inflation threat.'' Drought Koukoulas forecasts the bank's next move will be a rate cut, maybe as soon as December. Fourteen of 22 economists forecast borrowing costs will be kept unchanged this year and seven expect an increase by December. Lingering drought may trim 0.2 percentage points from Australia's gross domestic product growth in the year ending June 2006, Westpac Bank said last week. Yesterday, the government commodity forecaster slashed its production forecast for wheat by a more-than-expected 29 percent because of a drought in the country's southeast. Australia, the world's second-largest wheat exporter, controls 15 percent of global trade in the grain. GrainCorp Ltd., Australia's largest grain handler, said last month that profit in the six months ended March 31 slumped 34 percent as drought reduced the amount of wheat and barley delivered to its silos. Futuris Corp., which owns Elders, the world's biggest wool broker, said last month that earnings may be hurt by drought. bloomberg.com

To: Jim McMannis who wrote (31694)	6/8/2005 2:41:14 AM
From: mishedlo	Respond to of 116555

China Stocks Gain on Optimism of More Market Support Measures [A piss poor reason to rally if you ask me - Mish] June 8 (Bloomberg) -- Chinese stocks climbed, with key indexes on course for their biggest advances in four months, as investors bet the government will introduce more incentives to bolster markets. China Petroleum & Chemical Corp. led gains. The government yesterday said will allow companies to buy back and write off their own shares, a signal regulators want to boost markets which last month fell to eight-year lows on concern a policy of selling state-owned stock will further damp prices. The buyback move ``reinforced investors' belief that more incentives are now in the pipeline,'' said Rico Cheung, who manages the equivalent of $157 million with China International Fund Management Co. in Shanghai. ``It is a policy-driven market in China and investors are placing bets on the regulatory side.'' Stocks also gained after the China Securities Journal said the country's biggest investment bank denied media reports it had forecast a further decline in mainland shares. The Shanghai Composite Index, which tracks yuan-denominated A shares and foreign-currency B shares on the city's stock exchange, surged 44.13, or 4.3 percent, to 1075.34 at 10:42 a.m. The Shenzhen Composite Index, which tracks the smaller of the two Chinese markets, gained 8.95, or 3.5 percent, to 264.97. Both benchmarks are set for the biggest gain since Feb. 2. Trial Sales China Petroleum & Chemical, Asia's biggest oil refiner, surged 0.24 yuan, or 7.4 percent, to 3.49. China Yangtze Power Co., owner of the world's biggest hydropower project, jumped 0.44 yuan, or 5.7 percent, to 8.20. Baoshan Iron & Steel Co., the listed unit of China's biggest steelmaker, gained 0.23 yuan, or 4.9 percent, to 4.96. Companies which are listed for at least a year can buy back publicly traded shares to reduce registered capital, the China Securities Regulatory Commission said yesterday. The buyback must get approval from more than two-thirds of shareholders. The Shanghai and Shenzhen markets are among the worst performers this year of the world's major equity markets tracked by Bloomberg. The Shanghai index has slumped 16 percent this year and the Shenzhen benchmark has dropped 17 percent. The government on May 9 picked four companies in the first stage of a program aimed at disposing of non-tradable shares, which account for about two-thirds of China's $360 billion market capitalization. China International Capital Inc.'s former head of research Xu Xiaonian did not make a forecast that the Shanghai index would slump to 1,000 points, the Securities Journal reported, citing Qiu Jin, the investment bank's head of research. The media reports had undermined the company's reputation, misled investors and hurt market confidence, the newspaper reported.

To: Jim McMannis who wrote (31694)	6/8/2005 3:10:11 AM
From: mishedlo	Respond to of 116555

Italy´s Northern League to outline plans for lira return June 19 - minister Wednesday, June 8, 2005 6:32:55 AM afxpress.com Italy's Northern League to outline plans for lira return June 19 - minister MILAN (AFX) - Italy's Northern League will outline its plans for restoring the lira as Italy's currency on June 19, the Financial Times reported party member and justice minister Roberto Castelli as saying All three of the party's ministers have spoken out in the past week in favour of the lira's return The party, which favours greater autonomy for the north of the country and wins around 5 pct of the national vote in elections, has been condemned for its stance by other euro zone countries as well as its own partners in the centre-right government

To: Jim McMannis who wrote (31694)	6/8/2005 7:04:11 AM
From: John Carragher	Respond to of 116555

one analyst said he was disappointed. these 25,000 reduced jobs is nothing new. gm has been down sizing labor as the workers retire they have not been replacing them.. the 25,000 is over the next three years and normal reduction. gm has not done anything exciting to turn the operation around. his target for the company $20.

To: Jim McMannis who wrote (31694)	6/8/2005 10:40:17 AM
From: mishedlo	Respond to of 116555

China central bank official says US, euro zone responsible for dollar decline Wednesday, June 8, 2005 1:59:58 PM afxpress.com FRANKFURT (AFX) - The US and the euro zone should not blame fixed exchange rates in China and other Asian economies for the decline of the dollar against the euro, but should take responsibility for it themselves, a Chinese central bank official said. Ma Delun, assistant governor at the People's Bank of China, said it is up to countries with reserve currencies to keep their bilateral exchange rates stable He said it is irrational to expect emerging economies to bear part of the burden of the adjustment of global imbalances And he said the US may have issued more dollars than necessary in order to support the competitiveness of US exporters