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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (2316)	2/21/1998 10:55:00 AM
From: Worswick	Respond to of 9980

Loging off for the day. Have a good weekend. Between times gas prices here are down from $1.35 to $1.01 per gallon. A 34% reduction in our basic energy costs! Amazing and I have never seen anything like it. Further to my deflation scenario. The latest from Phillip Braverman (C) For Private use only The dollar outlook is viewed as somewhat uncertain ahead of this weekend's G-7 meeting. The markets are also awaiting the G-7s assessment of the Japanese stimulus plan and the continuing profound Pacific Rim problem. However, the meetings are unlikely to lead to any meaningful action. Expect exhortations (that Japan stimulate its economy and bolster its banks) and an implied preference for a dollar-yen range near current levels. Japanese proposals for economic stimulus fall far short of efforts necessary to rejuvenate the Japanese economy and Japanese bank lending to Asia. Deflation was amply evident in the January PPI. Finished goods producer prices plunged 0.7%, after declines of 0.2% in both November and December. Over the past 12 months, finished goods prices fell 1.8%, in sharp contrast to a 2.5% 12-month rise just one year ago. In January, food prices dropped 0.4% while energy prices plummeted 3.7%. Even without the steep food and energy decreases, January finished goods PPI still edged down 0.1%, duplicating the 0.1% declines the preceding two months. There also were sharp January price decreases for cars (-0.5%), trucks (-0.8%), computers (-0.3%), tobacco (-0.3%) and consumer goods in general (-0.8%). Deflation was also evident in the PPI pipeline. January producer prices at intermediate stages of production fell 0.6% from December and 1.7% from January 1997. Crude materials prices fell 4.5% in January, after a 5.2% December drop. Over the past 12 months, crude materials prices declined 18.7%, a complete reversal of the 16.1% 12-month rise in the year ended January 1997. PPI pipeline price declines also went beyond food and energy. Excluding food and energy, January core intermediate goods prices decreased 0.1%, while core crude goods prices fell 2.2%.