| China central bank governor says China economic growth will be around 7.8% Posted: 12 Oct 2012 02:10 AM PDT |
| Analysis: EMU Industry Posted Another Unexpected Gain In Aug Posted: 12 Oct 2012 02:10 AM PDT Aug preliminary: +0.6% m/m, -2.9% y/y MNI survey median: -0.5% m/m, -4.0% y/y
MNI survey range: -0.7% to +0.5% m/m July unrevised: +0.6% m/m
June revision: -0.5% m/m (-0.6%)
May revision: +1.0% m/m (+0.9%)
April revision: -1.0% m/m (-1.1%)
March unrevised: -0.1% m/m
– PARIS (MNI) – Eurozone industry output surprised to the upside
again in August, reflecting strong gains in several large economies
reported after most analysts had already released their forecasts a week
ago. Preliminary estimates released Friday by Eurostat show a 0.6%
monthly rise in production, whereas most analysts had expected a modest
correction to the upturn in July. A few last-minute revisions extended
the forecast range into positive territory. Output in August was still 2.9% below the previous-year level and
down some 10% from pre-crisis peaks in 2008. Two-month results show a
promising 1.0% gain from the 2Q average, which contracted 0.4% on the
quarter. The back-to-back monthly expansion should be taken with a grain of
salt, as precise seasonal adjustments are especially difficult during
the summer vacation months. Nearly all goods categories posted gains in August, led by consumer
durables (+3.9%) and non-durables (+1.3%), followed by energy (+0.9%)
and capital goods (+0.7%). Intermediate goods output was flat on the
month. Annual comparisons showed energy output in line with the
previous-year level. Declines in all other categories were largest for
intermediate goods and consumer durables (both -4.9%) and smallest for
non-durables (-1.4%). Leading indicators did not signal the upturn since June and
continue to point to sluggish activity ahead. Even if the PMI polls
appear to have lost some of their predictive value and have begun to
recover since July, they remain far below the threshold for expansion
for the Eurozone as a whole (46.1) and the larger economies. In a broader survey by the European Commission, manufacturing
sentiment continued to erode in September, undermined by ever thinner
order books and weaker output expectations. Last week the national
statistics offices of France and Italy and Germany’s Ifo think tank
projected industry declines of 0.4% in both 3Q and 4Q and an anemic
recovery of 0.2% in 1Q. French industry surprised on the upside again in August with a 1.5%
spurt after a 0.7% upturn since May. As the strongest gains were in the
auto sector, some analysts suspect assembly lines may have been shifted
into high gear in anticipation of industrial unrest this autumn. While
manufacturing output has been holding up fairly well, the steady drain
on order books, the loss of market shares and the compression of margins
to near historic lows suggest that firms lack the means for needed
innovative investment. Production in Italy was also unexpectedly robust in August, with a
1.7% rebound that more than retraced the decline since May, but still
left output 5.2% lower on the year. Spanish production bounced back
nearly as fast with a 1.3% jump that reduced the annual decline to 3.2%.
In light of the depressed levels of sector sentiment and the
deterioration in producers’ assessment of order books in both countries,
a negative correction in output appears likely in the near term. By contrast, German industry output contracted 0.4% in August after
a 1.3% upturn in July. The Economics Ministry signaled a modest downward
bias due to a holiday effect. While industry appears on track for a
positive 3Q print, the Ifo institutes surveys show producers’
medium-term expectations falling off rapidly. Nearly all of the smaller reporting countries contributed to the
expansion in August, with monthly gains led by Portugal (+6.8%) and
Slovenia (4.0%). Greece posted a second month of strong gains (+2.5%
after +2.2%). Finland sustained a modest setback (-1.1%), while Irish
output was unchanged on the month. Annual comparisons were mixed, with declines in Portugal and
Estonia (both -2.8%), the Netherlands (-1.8%), Finland (-1.6%) and
Ireland (-0.6%) and gains in Greece (+2.6%), Slovenia (+4.2%), Malta
(+4.7%) and Slovakia (+17.0%). –Paris newsroom +331 4271 5540; e-mail: ssandelius@mni-news.com [TOPICS: M$XDS$,MT$$$$,M$X$$$,MTABLE] |
| EMU DATA: August industry output sa +0.6% m/m, wda… Posted: 12 Oct 2012 02:10 AM PDT EMU DATA: August industry output sa +0.6% m/m, wda -2.9% y/y
– EMU August industry output m/m above MNI median fcast (-0.5%)
– EMU July industry output unrev +0.6% m/m
– EMU July industry output rev down -2.8% y/y (-2.3%)
– EMU July+August avg industry output +1.0% vs 2q avg; 2q -0.4% q/q
– EMU August 3mm avg (June-August:May-July) +0.3% after July +0.4%
– Please see MNI Mainwire for further details |
| Greece set to adopt 9bln euros in austerity measures next year Posted: 12 Oct 2012 02:05 AM PDT Looks like there actually might be an agreement here between the Greek government and the ‘troika’ over the 2013 budget. Troika asked for additional cuts to be made, and Greece now looks set to up its austerity measures to Eur 9 bln from the originally proposed Eur 7.8 bln More... ekathimerini |
| Euro zone August industrial output +0.6% m/m, -2.9% y/y Posted: 12 Oct 2012 02:03 AM PDT Stronger than Reuter’s median forecasts of -0.4%, -4.2% respectively. |
| Portugal govt plans financial transactions tax of up to 0.3% 9vs 0.1% floated previously by EU) – 2013 budget blueprint Posted: 12 Oct 2012 02:00 AM PDT Bang goes Lisbon’s position as a preeminent financial centre…. |
| Italy Grilli: Europe Policymakers Committed To Currency Union Posted: 12 Oct 2012 02:00 AM PDT TOKYO (MNI) – European policymakers are fully committed to the
common currency, Italian Finance Minister Vittorio Grilli said in a
speech at the International Institute of Finance’s 30th Anniversary
Membership Meeting here on Friday. “The clear message from European policymakers is that the euro area
is not an experiment but the future of Europe and is not to be
reversed,” Grilli said. “Euro area leaders have lived up to their commitments to do all to
safeguard the stability of the Eurozone,” he said, citing progress
on governance reforms, plans for a banking union and the new,
permanent bailout fund ESM. The ECB played a “major role” in fighting the crisis, Grilli said. “The OMT has been key to influence expectation and address
fragmentation of financial markets,” he said, noting that this should
remove “unfounded fears about a break-up of the Eurozone that should
eventually restore investor confidence. –Frankfurt bureau tel.: +49-69-720 142 Email: jtreeck@mni-new.com [TOPICS: MT$$$$,M$X$$$,M$G$$$,M$$EC$,MGX$$$,MFX$$$,MFGBU$] |
| EUR/USD poll!! Posted: 12 Oct 2012 01:54 AM PDT It’s a mini one. We’re at 1.2970 What’ll we see first 1.2920 or 1.3020? Reason/s always welcome, but not obligatory |
| UK Aug Construction Output Shows Sharp Fall On Year Ago Posted: 12 Oct 2012 01:50 AM PDT -UK Aug Construction Output Down 11.6% y/y; Jun-Aug Ouput Down 11.9% y/y LONDON (MNI) – UK construction output in August fell sharply on the
year, continuing a run of dismal construction data. Non-seasonally adjusted construction output in August was down
11.6% on the year and down 11.9% in the three months through August on a
year ago. The official construction data have tended to be more
volatile, and to show much larger falls, than private sector survey data
and the Bank of England treats the data with caution. The headline figure in the August CIPS construction survey came in
at 49.8, only a sliver below the 50 no-change reading. The BOE Monetary Policy Committee has tended to focus on underlying
GDP measures that exclude construction. The BOE’s August Inflation Report provided detailed analysis of the
official construction data. It suggested the data may have overestimated
growth in construction back in 2010, contribuing base effects which have
exaggerated subsequent declines. The BOE noted that construction sector output was estimated to have
shrunk by almost 10% over the first and second quarters of this year,
knocking 0.4 percentage points off GDP in each quarter. While some of this may have been due to one-off factors, such as
the Diamond Jubilee, the BOE said even taking these factors into
account, “the size of the fall in output was surprising, and much
greater than suggested by survey indicators of construction output
growth.” “The ONS data may provide a reasonable reflection of the
current level of construction output. That is because the rises in
output recorded in 2010 also appear surprisingly large,” the BOE added. The BOE said that the picture of weakness at present in the
construction sector was plausible in part due to cuts in government
investement and the waning effect of Olympic-related construction
projects. –London newsroom: 4420 7862 7491 email: drobinson@marketnews.com [TOPICS: M$B$$$,MABDS$] |
| ECB’s Visco: Government bond yields above 5% are sustainable for Italy Posted: 12 Oct 2012 01:48 AM PDT Hooooooooooooooray!!!!!! - Most of the economic adjustment has already taken place in Italy
|
| ECB’s Asmussen: Seeing encouraging signs that Greece’s fiscal targets for 2013 can be met Posted: 12 Oct 2012 01:43 AM PDT - Best way out of crisis is for Greece to reform within euro zone
- ECB’s new OMT bond-buying plan provides credible backstop, confirms euro is irreversible
- Inflating away sovereign debt burden not an option in euro zone
Reuters reporting. |
| ECB Asmussen: OMT To Help Combat Idea That Euro Is Reversible Posted: 12 Oct 2012 01:40 AM PDT FRANKFURT (MNI) – The announcement of the European Central Bank’s
OMT bond-buying program should help change market perceptions that a
break up of the euro is a possible scenario, ECB Executive Board member
Joerg Asmussen said Friday. However, Eurozone members also need to reduce their debt burdens,
which are still high, Asmussen said. Asmussen said the Outright Monetary Transactions program would ease
investor fears of “destructive scenarios that could lead to a default
or, in the extreme, exit from the euro.” Such fears are prompting some
counties to pay higher yields “that are not fully justified by
underlying fundamentals, making those destructive scenarios
self-fulfilling,” he said. “But this aspect of debt sustainability can be addressed by simply
changing perceptions. Here, the ECB’s recent announcement of Outright
Monetary Transactions should play a supportive role. It provides a
credible backstop for tail risks and confirms that the euro is
irreversible,” Asmussen said in prepared remarks to a panel in Tokyo on
the sidelines of the IMF’s annual meetings there. But the German member of the ECB’s board said investor concerns
were also being fed by worry about debt levels that are “too high” or
still rising. “This is more complex to deal with. Inflating away the
debt burden is not an option in the euro area. So Member States have to
take policy actions to redress public finances. But the evidence
suggests it can be done,” he added. Asmussen said fiscal consolidation efforts were already “well
underway,” and that structural reforms are also needed to improve growth
and back up the consolidation efforts. “To support this [consolidation] process, it is urgent to improve
euro area growth rates, which are projected to remain low for a number
of years. This can be done by unlocking the many rigidities that still
exist in euro area product and labour markets,” he said. On Greece, Asmussen said much has already been done by the
government in Athens to reduce its deficits, but “a lot still remains to
be done.” He stressed that Greece’s reform efforts would be more
successful from within the Eurozone than from the outside. “The Greek authorities have to demonstrate that they can continue
to stick to their commitments. We are seeing encouraging signs that the
fiscal targets for next year can be met. This is the best way out of its
crisis: for Greece to reform within the euro area,” Asmussen said. Asmussen also said EU leaders need to complete broader governance
reforms, improve incentives for structural reforms and complete
financial market union, including “an integrated framework for bank
resolution.” Europe also needs to complete the single market: “It does not serve
citizens to protect local monopolies that lead to high prices and low
quality. Europe has some of the world’s most sophisticated and
innovative companies, and they should be operating on a European scale.” – Frankfurt bureau: +49 69 720 142; email: ccermak@mni-news.com [TOPICS: M$X$$$,M$$EC$,MGX$$$,M$$CR$,M$Y$$$,MI$$$$] |
| UK August non-seasonally adjusted Construction output falls 11.6% y/y Posted: 12 Oct 2012 01:37 AM PDT and falls -0.9% m/m. Cable’s steady around 1.6054 |
| USD/JPY poll!!! Posted: 12 Oct 2012 01:31 AM PDT That’s if there’s anyone left out there with an interest in this pairing. We’re at 78.45. What’ll we see first, 77.50 or 79.50? Reason/s for choice always welcome, but not obligatory. |
| OECD’s Gurria Urges European Action, Global Banking Reform Posted: 12 Oct 2012 01:30 AM PDT TOKYO (MNI) – Organisation for Economic Co-operation and
Development Secretary-General Angel Gurria on Friday called for
continued efforts in Europe to resolve the debt crisis and restore its
banking system. “The most urgent issue is the euro area crisis,” Gurria said in a
speech. “Let’s not forget the courageous efforts already being made by some
national governments,” he said. “But it’s time to translate these (commitments) into action,” he
said, referring to austerity measures and structural reforms in Greece,
Spain, Italy and Portugal. Gurria also stressed the need to quickly achieve a full banking
union in Europe, saying European banks “also urgently need to be
capitalized.” The OECD chief also called for action in the global banking system,
including the introduction of a simple leverage ratio and separating
commercial banking from the securities business. “Separation of well-capitalized, well-governed and deposit-insured
banks from investment banking will improve the appropriate pricing of
risk by reducing cross-subsidisation and too-big-to-fail guarantees,” he
said. While acknowledging the need for short-term measures such as
austerity action, Gurria also called for growth action from a
longer-term viewpoint, including structural reforms and deregulation. “The global crisis has left policy makers around the world a number
of unwanted legacies — low growth, rising unemployment and inequality,
high budget deficits and debt,” he said. “All pose a threat to long-term
growth.” tokyo@mni-news.com
** MNI Tokyo Newsroom: 81-3-6860-4821 ** [TOPICS: MI$$$$,M$X$$$,MGX$$$,M$$CR$] |
| Finance Ministers Welcome ECB Sovereign Bond Buying Scheme Posted: 12 Oct 2012 01:20 AM PDT By Steven K. Beckner TOKYO (MNI) – The European Central Bank’s plan to buy sovereign
debt of Euro-zone nations is “an important step” in resolving the
continent’s economic and financial problems but more needs to be done,
according to Swedish Finance Minister Anders Borg. A similar view was expressed by Belgian Finance Minister Steven
Vanackere. Beyond Europe, “the global economic recovery is at risk,” said Borg
at the annual meetings of the IMF and World Bank. Borg, speaking on behalf of Denmark, Norway and other Nordic
nations in a statement to the IMF’s policymaking International Monetary
and Financial Committee, said “important steps have been taken in Europe
to tackle the crisis and strengthen the framework for economic policy
cooperation, but challenges still remain, including with respect to
implementation of agreed measures and policies.” Borg welcomed the fact that the European Stability Mechanism will
soon be fully operational with the first two tranches of capital already
paid in. And he hailed the ECB’s so-called Outright Monetary
Transactions scheme. That program of sovereign bond buying “to safeguard the
transmission of monetary policy through the euro area, subject to strict
and effective conditionality, is also an important step in dealing with
the crisis,” he said. But he said more work is needed on a common
European approach to banking supervision. Borg said “the crisis in the euro area weighs on activity and
output has weakened also elsewhere,” and he added, “high unemployment in
many parts of the world brings huge costs to individuals and societies.” Meanwhile, addressing the IMFC on behalf of a group of nations that
includes Austria, Turkey and others, Vanackere also welcomed the new
euro area bailout fund and ECB bond buying plan. “Financial solidarity within the Euro area is being enhanced,” he
said, noting that the effective lending capacity of the European
Financial Stability Fund (EFSF) “has been increased to 440 billion euro
and its instruments for interventions broadened.” Vanackere added that “the permanent successor of the EFSF, the ESM
has been ratified by all 17 Euro area member countries and became
effective on September 22, 2012; it has a lending capacity of 500
billion euro. It is now the main instrument for financing adjustment
programs of Euro area countries.” As for the ECB’s Outright Monetary Transactions Program (OMT),
Vanackere said it “will help stabilize financial markets by securing a
correct functioning of the monetary transmission mechanism and combating
the fragmentation in Euro area financial markets.” “The OMT will provide credible backstopping for sovereign bond
markets and help removing unfounded fears and tail risks in the
financial markets,” he said. “It will help stabilizing conditions in
other markets, such as those for corporate and bank bonds.” “This will feed into more equal borrowing costs for the real
economy across the euro area,” Vanackere continued. But he cautioned that “this new instrument of the ECB, the OMT,
will only be successful if countries vigorously and credibly address the
underlying economic and financial imbalances, if banks are put on a
sound footing and adopt viable business models and when reforms provide
confidence about regaining external competitiveness, output growth and
employment.” [TOPICS: M$U$$$,MFU$$$,MGU$$$,M$$CR$,MT$$$$,MMUFE$,M$$BR$] |
| IEA Sees Oil Market Fundamentals Easing Over Medium Term Posted: 12 Oct 2012 01:20 AM PDT PARIS (MNI) – Rising oil production by non-OPEC producers over the
next five years and expanding OPEC capacity should keep pace with
growing demand, raising hopes for easing barrel prices in the coming
years, the International Energy Agency suggested Friday. Assuming a gradual recovery in global GDP growth to 4.3% by 2017,
the IEA’s medium-term oil market outlook sees oil demand rising by
nearly 6 million barrels per day (mb/d) by 2017 to 95.68 mb/d. Over the same period, non-OPEC supply and OPEC natural gas liquids
would grow by over 5 mb/d, while OPEC spare capacity would expand by 2.5
mb/d. Compared to last year’s medium-term outlook, the IEA revised down
projections for demand and OPEC capacity, while raising projections for
non-OPEC supply from 2014 onward. “Revised assumptions, based on the market developments of the last
18 months, sketch out a seemingly more benign medium-term market
outlook,” the IEA said. “Against the backdrop of sluggish economic growth and increasing
energy efficiency, the demand outlook looks more subdued, while the
transformative power of non-conventional oil production technologies
applied in shale and tight formations in North America exceeds earlier
expectations,” it said. “But this mild outlook is partly deceptive, given exceptional
uncertainty about the global economy and heightened regional
geopolitical risks,” it cautioned. The IEA’s assumptions for average oil import prices foresee a
decline from $107 per barrel this year to $99/b next year and further
easing to $89/b by 2017. However, “oil prices are expected to remain volatile over the
forecast period amid heightened supply and demand uncertainty,” it
warned. “Inherent volatility in oil prices is primarily a result of
uncertainty about global business conditions and lack of data, rather
than financial speculation,” it argued. “In the next five years, the global business outlook looks
exceptionally cloudy, and the shift in market share towards the non-OECD
economy more often than not comes with deteriorating rather than
improving data quality.” - Paris newsroom +331 4271 5540; email: ssandelius@mni-news.com [TOPICS: MI$$$$,MI$OI$,M$$CR$,MAUDS$] |
| Italian FinMin Grilli: Europe is ahead of the pack when it comes to fiscal consolidation Posted: 12 Oct 2012 01:18 AM PDT - Fiscal consolidation must be calibrated to not weigh on the global economy
- Worth paying price of slower economic growth to achieve fiscal consolidation
- Result of structural reforms will not be seen anytime soon because it is a “long agenda”
|
| IEA Trims Global Oil Demand Forecasts As Econ Prospects Wane Posted: 12 Oct 2012 01:10 AM PDT PARIS (MNI) – The International Energy Agency said Friday it has
revised down its projections for global oil demand for the second half
of this year and next year, while leaving projections for non-OPEC
supply largely unchanged. Demand in 3Q was cut by 300k barrels per day (b/d) and expected
demand in 4Q by 200 kb/d, giving downward revision of 100 kb/d for the
full-year average to 89.7 mb/d, up 700 kb/d from 2011. Average demand growth next year was confirmed at 800 kb/d, but the
base effect of the revision for this year resulted in a reduction of 100
kb/d in average full-year demand to 90.5 mb/d. The revisions reflect
weaker economic forecasts, the agency indicated, noting that it had
anticipated the IMF’s latest downward revisions for global growth. Projections for non-OPEC supply were little changed, foreseeing
average growth this year of 400 kb/d to 53.2 mb/d and growth next year
of 700 kb/d to 53.9 mb/d. As a result, the IEA trimmed its “call” on
OPEC crude and/or stocks by 100 kb/d this year and next to an average of
30.2 mb/d and 30.0 mb/d, respectively. OPEC crude oil supply in September remained well above these “call”
estimates at 31.17 mb/d, despite a monthly decline of 510 kb/d to an
eight-month low, the agency estimated. Higher supplies from Iraq and
Libya were offset by reduced output from Nigeria, Saudi Arabia and Iran. “Whereas many expected the sanctions to lose some bite in
September, as Iranian exporters and some of their clients were
reportedly seeking ways to get around insurance constraints, in fact
compliance appears to have tightened, and Iranian crude deliveries fell
to an estimated 860 kb/d, a new low,” it noted. OECD industry stocks declined by a counter-seasonal 11.2 million
barrels in August, led by a strong seasonal draw in the US after
Hurricane Isaac disrupted production and imports. Forward demand cover
stood at 58.8 days, 0.1 days lower than July. Preliminary data suggest stocks rebounded by 13.0 mb in September,
refuting the argument that the loss of Iranian supply might be linked to
the draw in August, the IEA argued. Stocks surged by nearly 10 mb in the
US compared to an average 1.5 mb build, barely edged lower in Europe
compared to an average 19 mb draw and built by 5 mb in Japan compared to
a 3.4 mb draw. “The paradox is that US product stocks have been falling faster
than normal and European refiners have been running flat out despite
tepid product demand in both markets,” the IEA observed. “Hurricane disruptions and a string of refinery glitches
(especially on the West Coast) are only part of the US story,” it noted.
“In both regions, the bottom line is that exports have become a key
driver of refining activity and profits, not just the outlet for surplus
product that they used to be.” - Paris newsroom +331 4271 5540; email: ssandelius@mni-news.com [TOPICS: MI$$$$,MI$OI$,M$$CR$,MAUDS$] |
| ITALY DATA: Final September HICP +2.1% m/m, +3.4% up. Posted: 12 Oct 2012 01:10 AM PDT ITALY DATA: Final September HICP +2.1% m/m, +3.4% y/y, up from +3.3% y/y
in August, confirming preliminary readings, ISTAT said.
- HICP m/m rise boosted by end of the summer discount sales — ISTAT
- Main domestic index (NIC) flat m/m, +3.2% y/y, same y/y gain as Aug.
- Core NIC inflation slows to +1.9% from +2.1% y/y in August.
- Preliminary NIC data provides +3.0% ‘acquired’ inflation for 2012. |
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