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To: Zardoz who wrote (23015)	11/16/1998 9:25:00 AM
From: goldsnow	Read Replies (1) \| Respond to of 116762

Hutch, IMO if Fed does nothing on Nov 17, the cances that Germany would follow with rate cut of their own would be very slim, and chance for Brazil to make it lower...Thus we shall see Fed cut...and just maybe Germany will follow, by than Gold should be a place to be....

To: Zardoz who wrote (23015)	11/16/1998 5:03:00 PM
From: goldsnow	Respond to of 116762

FOCUS-Germany, France display unity on EMU issues 09:47 a.m. Nov 16, 1998 Eastern By Douglas Busvine BONN, Nov 16 (Reuters) - Top German and French finance officials on Monday displayed unity on preparations for European currency union but stopped short of detailing concrete proposals on tax harmonisation or jobs. Both France and Germany expressed their support for the Stability and Growth Pact, which requires strict budgetary discipline among euro-zone countries. ''The Stability Pact is not in doubt. We in Germany have no problem meeting the Stability Pact criteria,'' German Finance Minister Oskar Lafontaine told a news conference at a meeting of the Franco-German economic council. French Finance Minister Dominique Strauss-Kahn agreed, saying there was no debate surrounding the pact. Lafontaine, the chairman of Germany's Social Democrats, has quickly struck up a close working relationship with fellow-socialist Strauss-Kahn and both have been keen to present a unified front during the talks. The message of support for fiscal discipline was welcomed by the governors of the French and German central banks. Bank of France Governor Jean-Claude Trichet said there was no contradiction between maintaining price stability and economic growth and job creation. For his part, Bundesbank President Hans Tietmeyer also welcomed the two governments' committment to the stability pact. Lafontaine said that he and Strauss-Kahn had agreed Germany and France must seek a way to coordinate fiscal, wage and monetary policies, without going into specifics on exactly what progress had been made during the talks. ''We are entering into a new phase of European politics,'' he said, calling for a ''policy mix that supports growth.'' And progress was made on another key issue for the two countries -- Germany's contribution to the European Union. France had agreed to examine the German position on its EU financial contributions, Lafontaine said. ''I'm very pleased that Strauss-Kahn has offered to find a solution regarding the EU contributions and is also willing to talk about agricultural policy, which is a key issue to France,'' Lafontaine said. Lafontaine appeared to tone down recent calls for foreign exchange trading bands for major world currencies, saying that Germany was not striving for a system of fixed currency rates. ''There is no disagreement whatsoever that stable exchange rates are important. The discussion is how to achieve that,'' Lafontaine said. Rather, convergence in the real economy would be required before currency prices could stabilise, he said. ''Without achieving economic convergence, there won't be any forex stability. In fact, to believe that you can obtain foreign exchange stability without economic convergence would be building castles in the air,'' he said. Turning to interest rate cuts, Trichet said that reduction in European rates resulting from rate convergence among future members of EMU was greater than the rate cuts enacted of late by the U.S. Federal Reserve. Lafontaine appeared to be trying to defuse tensions between Bonn and the Bundesbank when he said his recent calls for lower interest rates to boost economic growth and jobs creation, were not aimed at national central banks. ''The discussion in Germany has been falsly interpreted,'' Lafontaine ''Calls for lower interest rates are not aimed at national central banks.'' Tensions between the German central bank and the German finance ministry under Lafontaine have increased in recent weeks as Lafontaine openly called for lower rates. Tietmeyer said the $41 billion-plus financial aid package for Brazil should help further stabilise financial markets. ''Financial markets world wide have stabilised recently and I hope that the Brazilian package will do its part in bringing even more stability,'' Tietmeyer said. The International Monetary Fund and leading industrialised nations pledged on Friday more than $41 billion in loans to shore up Brazil's ailing economy. The Bundesbank responded by saying rising political pressure would have no effect on its policy or that of its successor, the ECB. ((Frankfurt Newsroom +49 69 756525, frankfurt.newsroom+reuters.com)) Copyright 1998 Reuters Limited.

To: Zardoz who wrote (23015)	11/16/1998 9:44:00 PM
From: goldsnow	Read Replies (2) \| Respond to of 116762

Leaders lock horns with new Euro bank By Sheryle Bagwell, London The architects of the single currency may have lofty aims of uniting Europe. But just six weeks before its arrival, it has already set off a power struggle between the fledgling European Central Bank and Europe's left-leaning politicians. European finance ministers are expected to sign a joint statement next weekend that will seek to exert their political will over the ECB, the institution charged with setting monetary policy -- supposedly independent of political interference -- across the whole "eurozone" of 11 countries adopting the single currency from January 1. The statement will reportedly call on the ECB to take into consideration not only price stability but job creation when framing policy. It will also seek a relaxation of budgetary rules to allow countries belonging to the single currency to borrow for public investment. The draft statement is expected to be signed by all of Europe's 11 left-leaning finance ministers including Germany's Mr Oskar Lafontaine, France's Mr Dominique Strauss-Kahn and Britain's Mr Gordon Brown, at a meeting next Sunday. Titled "The New European Way -- Economic Reform and the Framework of Economic and Monetary Union", the statement will also call on the ECB to be politically accountable for its policies. It said European Governments should "hold the ECB to account for its actions by generating the necessary openness and transparency for our European-wide policy. Such a policy must be conducive to credibility, predictability and certainty". The statement is likely to further trouble the ECB which has been fighting off attempts from centre-left leadersacross Europe to interfere in its business. But with unemployment still remaining high in Europe and inflation at historic lows, the politicians believe they have the support of voters who fear a euro run by unaccountable bankers intent on pursuing inflation targets rather than boosting growth and jobs. "The kind of passive government that we have seen in Europe in the lead-up to monetary union has been detrimental to growth and employment," said Mr Jean-Paul Fitoussi, head of the OFCE, a leading Paris-based economic think-tank that is considered to be close to the French socialist government of Lionel Jospin. Mr Fitoussi added: "The fact that governments now see they have a role to play is good news." However, a recent poll in a leading German business newspaper suggested that Germans' faith in the stability of the euro has been shaken since the country's new left-wing finance minister, Mr Lafontaine, began his push for governments to have a greater say in the single currency's management and future. Only 34 per cent of Germans now believe that the euro will be as strong as the deutschemark, compared with 38 per cent last month, while 44 per cent expect it to be weaker, according to the poll. Mr Lafontaine has been calling for a cut in core European interest rates, which the French and German central banks have so far resisted. His high-profile role in the new German Government has already led to speculation that a new job may soon be found for him -- as the next president of the European Commission. Although Mr Lafontaine has dismissed the reports as mere rumours, his shift to the EC would resolve the question in Germany of who is really running the Government, while at the same time extending to Brussels the influence of Europe's burgeoning left. afr.com.au

To: Zardoz who wrote (23015)	11/18/1998 7:55:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116762

Full story European gold bumps range roof, palladium firms 12:11 p.m. Nov 18, 1998 Eastern LONDON, Nov 18 (Reuters) - Gold rose more than $2.00 to the ceiling of its recent range during late European trade on Wednesday, nudging above $297.00 on buying dealers attributed variously to funds, options writers and others. London gold fixed at $296.50 a troy ounce in the afternoon, up on the morning's $294.40. Also boosting sentiment were World Gold Council figures showing improving demand in the third quarter and the European Parliament's call for gold euros to be struck to mark the single currency launch. One London dealer cited stop-loss buying as the main spur for gold's move, a factor he said pushed prices sharply higher once they exceeded $295.00. ''I think there was a bit of fund buying on the floor which triggered the stop losses after that,'' he said. A second dealer agreed on the stop loss effect but put the initial rise down to strength in the Australian dollar prompting options writers to buy gold to cut their exposure to the market. Options holders secure the right, but not the obligation, to buy or sell gold at an agreed future date and price by paying a premium to options grantors. Australian dollar strength is relevant as that country is a major gold producer with miners who are typically very active in currency and spot price hedge markets. One dealer played down the significance of Wednesday's gain, pointing out that prices remained in the $10 band they had been in since October 20. Spot gold was last at $296.90/$297.40, $2.90 up on New York's previous close, while spot silver was up six cents in sympathy at $4.98/$5.01. Gold demand in 25 key markets monitored by the World Gold Council reached 1,712.2 tonnes in the first three quarters of 1998, a decline of 20 pct from the same period last year, the industry body said in a quarterly report. But third quarter demand had recovered to be just one percent below the same period in 1997, it added. Palladium took a hike North when New York opened, jumping $9.00 to $288.00 before the afternoon fix on what one dealer suggested was a delayed reaction to Tuesday's bullish demand news from refiner Johnson Matthey. It was last at $286.00/$291.00, $8.00 up on Tuesday's New York close, while platinum was at $351.00/$353.00, more than $4.00 higher. ((Patrick Chalmers, London Newsroom +44 171 542 8057. london.commodities.desk+reuters.com)) Copyright 1998 Reuters Limited

To: Zardoz who wrote (23015)	11/18/1998 9:44:00 PM
From: goldsnow	Respond to of 116762

lower rand is expected in wake of Fed cuts..Time to overweight SA gold? bday.co.za

To: Zardoz who wrote (23015)	11/22/1998 12:01:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116762

Gloomy French, German data bolster rate cut lobby EUROPEAN interest rate cut advocates garnered more ammunition yesterday as data showed deflationary forces at work in the German economy and further weakness in French industry. Economists said the figures heightened the potential for a recession in Europe's manufacturing sector, but were unlikely to convince French and German central bankers of the need for lower rates. Producer prices in Germany, Europe's largest economy, fell 1.2 per cent in October, the biggest year-on-year decline since 1991 and the third consecutive drop. German business surveys from the influential Ifo institute have become increasingly tinged with pessimism as the world's economy shifts down a gear, prompting economists to begin talking about deflation, even recession. It's a similar story in France, Europe's second largest economy. Surveys have shown firms are not yet planning to rein in production, but the figures paint a dark picture. Data released yesterday showed French manufacturing output fell a larger-than-expected one per cent in September from August. Industrial production slumped 0.9 per cent in September after a revised 0.1 per cent fall in the prior month. Few expect the situation to improve anytime soon. ""There's a common feature between French manufacturing, the Ifo survey and German PPI, and the common feature is that the slowdown in the European manufacturing industry is turning into a recession,'' Eric Chaney, economist at Morgan Stanley in Paris, said. If European interest rate convergence was not the main priority ahead of the launch of the single currency in January, many believe rates in Germany and France could be cut now. France's Socialist-led coalition and Germany's new ""red-green'' coalition have called on bankers to cut the cost of borrowing, while at the same time professing to respect the European Central Bank's (ECB) independence. A minority believe the Bundesbank and the Bank of France may be primed for a cut as soon as Dec 3 when both hold policy meetings only two days after an ECB meeting. -- Reuters business-times.asia1.com.sg

To: Zardoz who wrote (23015)	11/30/1998 6:31:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116762

Hedge fund sales tipped to hit yen By Peter Hartcher, Asia-Pacific Editor Asia's recent happy months sheltering under the umbrella of a strong yen could come to an end in the weeks ahead, and perhaps very sharply, according to senior international officials. The Japanese yen's exchange rate against the US dollar is one of the key determinants of the economic health of the rest of Asia. The yen's strength of the past two months has transformed markets across Asia, lifting currencies, easing interest rates and boosting stockmarkets. The director of the foreign exchange and money market division of Japan's Ministry of Finance, Mr Junichi Murayama, said that stressed hedge funds could precipitate a weakening in the yen. The reason? Subscribers to some US hedge funds are expected to redeem their investments in the weeks ahead. To meet their demands, the funds reportedly will be obliged to sell some of their yen-denominated assets for US dollars, Mr Murayama said. This would weaken the yen and strengthen the American currency. Once the trend was in place, the yen value against the US dollar could drop by as much as 25 per cent, he said in an interview with The Australian Financial Review. There would be some historical symmetry here. It was the hedge funds which brought the yen to its current strength, snapping it from an eight-year low of ¥147 to the US dollar in August to the current level of around ¥123. In that episode, American hedge funds had borrowed vast volumes of yen at low interest rates to finance their investment plays elsewhere. One fund alone had borrowed $US20 billion, a central banker estimated. This was known as the "yen carry trade". But when the hedge funds moved to repay some of this money, they produced the most extreme short-term currency swings seen since the war. However, Mr Murayama, who visited Sydney to speak at the Forex98 conference on the weekend, was careful to add that he was not making a forecast and that the yen might also swing in the other direction. Separately, the first deputy managing director of the International Monetary Fund (IMF), Mr Stanley Fischer, said he expected some weakening of the yen. Asked whether the yen's recent strength could persist, Mr Fischer told the AFR recently: "We've been thinking about that. I don't know if the yen can stay up where it is, as the yen carry trade repayments slow down, but I doubt it will go back where it was [around 140 to 150]. "Of course, nobody should predict exchange rates." Market commentators expect Japanese investors to send more of their savings to the US from today, undermining the yen against the US dollar. The reason is that a regulatory change effective today will permit Japan's financial institutions to offer retail clients the opportunity to invest in American mutual funds for the first time. afr.com.au

To: Zardoz who wrote (23015)	11/30/1998 6:52:00 PM
From: goldsnow	Respond to of 116762

GERMAN BANK ASSOC.:UNCLEAR IF ECB TO SET REPO RATE BELOW 3.3% BONN (MktNews) - It's "not at all certain" whether the European Central Bank will cut official short-term interest rates below the 3.3% core level when it assumes control of Euroland monetary policy in January, according to the German Association of Savings and Clearing-House Banks (DSGV). In its monthly report for November, the DSGV also rejected calls made earlier this month by members of the Social Democrats-led federal government for lower Bundesbank interest rates. If the BBK were to cut its official rates in the remainder of 1998 this would "further complicate" ongoing convergence of European short-term rates, the DSGV warned. The DSGV was critical of the fact that hopes for lower German interest rates have grown in recent weeks following the U.S. Federal Reserve's triple cut in rates. "Whether or not those rate-cut expectations are justified must be questioned, at least over the short-term period until the end of 1998," the report said, emphasizing "fundamental" cyclical disparities between the U.S. and Europe. The DSGV said it sees no risks to price stability in the "foreseeable future," noting that stability in consumer prices has now been "fully achieved." Turning toward the German economy, the DSGV said it's unclear whether the expected slowdown in 1999 GDP growth would imply a merely temporary weakening or -- worse -- mark the beginning of a new cyclical downturn. What matters now is lastingly strengthening conditions for new investments, the DSGV said. "Should the prospects for (economic) growth now worsen considerably, one would then have to prepare for an unfavourable job outlook," the report said. Thus, the federal government's planned net DM15 billion reduction in overall income tax burden by the year 2002 isn't bold enough to create incentives for new investments, the DSGV warned. In fact, the tax burden on businesses will rise under Bonn's plan because of the cancellation of corporate tax breaks, which could also hurt job creation efforts. economeister.com