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To: John Hunt who wrote (34083)	5/18/1999 11:23:00 AM
From: Alex	Read Replies (1) \| Respond to of 116795

Blink................. Bridge Fx: Uk: NATO Bombing Could Stop for Serb Withdrawal <Picture> London--1410 GMT/1010 ET--May 18 UK Foreign Secretary Robin Cook has said that NATO could stop its aerial bombardment of Serbia and Kosovo to allow Serbian troops to withdraw in "full confidence." Cook's comments in the House of Commons appear to be a slight easing of UK policy on Kosovo. Previously the UK govt has only countenanced a bombing halt once NATO troops are actually entering Kosovo. The EUR should find a bounce from this having been knocked from around 1.0700 to 1.0685 on rpts of a Swiss named seller. Resistance is pegged near 1.0730-40. The pair was last bid at 1.0703. UK Jan-Mar avg earnings are expected to edge further above the BOE's comfort-limit of +4.5% y/y in data released at 0830 GMT Wed. But with the BOE expressing doubts about the figures, and other surveys pointing to a further decline in pay settlements, it is unclear whether this would have much impact. Last month, Dec-Feb earnings posted a surprise rise to +4.6% y/y, the 1st increase since May 1998, with private sector earnings up at +4.8 y/y and public sector earnings up at +3.9% y/y. More worryingly, single month Feb earnings were +5.0% y/y (+5.1% y/y for the private sector, +4.4% y/y for the public sector), suggesting mo re increases to come. Indeed, a Bridge survey finds the avg of 16 economists predicting Jan-Mar earnings to come in +4.7% y/y. However, the Dec-Feb jump was mainly due to bonuses, and given that they are being calculated in a new way, it is difficult to make any comparisons with previous figures. The BOE said itself in its Quarterly Inflation Report last wk that the official data was an "uncertain guide," suggesting it is placing greater emphasis on surveys by the IDS, IRS and NTC/FRES, which are all showing pay settlements drifting down. UK Apr unemployment data is also due at 0830 GMT Wed, and are expected to confirm that the UK labor mkt has turned. A Bridge survey finds claimant count unemployment expected to come in +6,700 vs Mar's +2,000. The govt's preferred ILO measure is seen rising aswell, after jumping +32,000 (for Dec-Feb) last month. This may also have a limited impact on the GBP, with all eyes on the simultaneous release of the minutes of the May 5-6 BOE MPC meeting. BRIDGE ANALYSIS: FX: US asset mkts still key to USD post FOMC London--1257 GMT/0857 ET--May 18 The mkt continues to ponder whether Fri's higher-than- expected US Apr CPI means the FOMC is more likely than not to move to a tightening bias at today's meeting. Some analysts have revised up their inflation forecasts as a result of the data. Others point to the overwh elmingly benign inflation outlook elsewhere, as indicated by PPI, ECI, average earnings and even softer retail sales data. Meanwhile some have gone further, suggesting CPI is an unreliable indicator as it does not take enough account of shifts such as those in the technology sector and the growing influence of computers. But as the mkt continues to weigh up what all this domestic news means for the FOMC today, surely one of the key questions facing Greenspan and Co is still one of wider global concern. More to follow... (c) Copyright 1999 FWN futuresource.com