| Senior German official: Doesn’t expect any firm decisions on the future of the EMU at this week’s summit Posted: 17 Oct 2012 02:12 AM PDT - Doesn’t expect any decisions on details of banking union
- Can see central intervention in national budgets if they are violation of EU rules
- Wants decisive step forward on economic coordination within the Europe
- Not up to Germany to give Spain the green/red light to seek a bailout
- Spain’s on the right course with its reforms and Germany supports their efforts
- Decision rests with Spain to seek aid
- Text from June summit is clear, any direct aid to banks from ESM can’t happen without effective banking supervision in place first.
- More rights for an EU currency commissioner would allow for effective coordination
Reuters reporting |
| Analysis: EMU Construction Firmer In August; Outlook Unstable Posted: 17 Oct 2012 02:10 AM PDT Seasonally adjusted data: August: +0.7% m/m, -5.5% y/y
July: +0.1% m/m (revised from -0.3%)
June: -0.4% m/m (revised from -0.6%)
May: +0.3% m/m (revised from +0.1%)
April: -3.2% m/m (revised from -3.4%)
— PARIS (MNI) – Eurozone construction expanded by 0.7% in August, as
an upturn in building activity offset a decline in civil engineering,
Eurostat estimated Wednesday. Thanks to an upward revision for July, two-month results were 0.3%
above the 2Q average, which had slipped 0.1% on the quarter after
declines of 3.5% in 1Q and 1.4% in 4Q. Activity in August was 5.5% lower
on the year and some 28% below levels in early 2008. Building activity alone, which had recovered 0.5% in 2Q after a
3.9% plunge in 1Q, bounced back 1.2% in August from a 0.3% downturn in
July. Civil engineering fell back 0.7% in August after stabilizing in
July and 2Q. From a longer perspective, recent monthly fluctuations appear like
moguls in a relentless slide that began when housing bubbles burst in
several countries. The downward trend flattened somewhat when other
sectors recovered temporarily, while harsh winters and spring thaws
accentuated volatility. With the economy as a whole now in contraction mode, cutbacks in
business and government investment, rising unemployment and more
cautious bank lending can only delay further any recovery in
construction, despite historically low official interest rates. Certainly there are no signs yet of a turnaround. Builders’
assessment of order books slumped to a 21-month low in September,
according to a European Commission survey. Overall sector sentiment was
below average in all countries except Germany and Austria. The insurance group Euler Hermes sees Eurozone activity contracting
by 1.2% this year, with the ongoing slump in Mediterranean countries
(-2.6% in Greece and -4.5% in Spain) offsetting modest gains elsewhere
(France +0.2% and Germany +0.7%). The financial consulting firm Deloitte sees construction investment
declining by 0.4% in Europe this year and by 1.7% in the Eurozone alone
and expects a recovery of 1.4% in Europe next year. The Commission’s scenario is similar: “Overall, housing investment
is expected to shrink further in 2012 in the EU and the euro area,
before moderate growth sets in 2013. The positive impact of the
improving situation of private households will be partly offset by the
negative impact of fiscal consolidation on the government component in
construction investment.” In Spain the housing market is practically frozen, as prices have
not come down enough in recent years to unload a huge overhang of unsold
units. In August, overall activity edged up 0.6% after declines of 1.2%
in July and 2.6% in 2Q. Public stimulus measures fell victim to budget
consolidation this summer and the creation of a “bad bank” for toxic
real estate assets could further depress prices if unsold units are
dumped into the market. Commerzbank analysts expect the sector to
stagnate for at least a couple years more, with contracting investment
trimming several points from GDP. In the Netherlands, activity was down another 0.1% in August after
four consecutive months of moderate decline. The slide in housing prices
over the past two years accelerated in past months, throttling turnover
and dampening consumer morale and spending. Rabobank analysts expect
changes to tax relief on mortgages to depress prices and turnover in the
medium term and have a stabilizing effect over the longer term. In France, housing prices are just beginning to soften as demand
for mortgages plunges and market turnover stalls. Builders remain quite
pessimistic about near term activity for both home building and
commercial construction, according to Insee’s surveys. Activity
rebounded by 1.4% in August after a dip in July and a 3.0% recovery in
2Q. Insee hopes that a further recovery in civil engineering will offset
declines in other branches in 3Q. In Germany, by contrast, rising home prices, favorable financing,
demand for housing and promising investment returns all argue for
further expansion. However, a recent MNI report suggested that home
sellers are coming up against price ceilings in the most attractive
markets like Munich, Hamburg and parts of Berlin. In general, building
firms appear quite satisfied with current business but are increasing
worried about medium-term prospects. Activity fell back 2.8% in August
after gains of 1.4% in July and 4.4% in 2Q. The construction association
HDB sees home sales rising 7% this year and commercial sales up 5%, more
than offsetting a 1% contraction in public works. In Italy, seasonal adjustments for the vacation month of August
transformed a 46.5% nominal plunge into a gain of 5.3%. This still left
activity 9.0% lower on the year. In contrast to other sectors, where
sentiment has followed the overall economy lower, construction
confidence has been on the mend since a trough in early 2010, according
to Istat. September’s level, boosted by a strong rebound in the building
branch, was the highest in three years. Only three other Eurozone countries reported construction results
for August. Activity slipped another 0.5% in Slovakia to stand 11.9%
lower on the year. Slovenia posted a 0.9% upturn for a 14.8% decline on
the year. Portugal’s 10.4% rebound followed a flat reading in July and a
12.0% dive in 2Q, leaving activity 17.3% lower on the year. –Paris newsroom +331 4271 5540; e-mail: ssandelius@mni-news.com [TOPICS: M$X$$$,M$XDS$,MTABLE] |
| ECB Allots $2.860 Bln In 7-Day USD Liquidity Providing Op Posted: 17 Oct 2012 02:10 AM PDT FRANKFURT (MNI) – The European Central Bank said Wednesday that it
has allotted $2.860 billion in its 7-day USD liquidity providing
operation. The central bank said it received 6 bids. Today’s operation was carried out at a fixed rate of 0.66%. The
Euro/USD rate was set at 1.3107. –Frankfurt Bureau tel.: +49-69-720 142, email: frankfurt@mni-news.com [TOPICS: MT$$$$,M$$EC$,M$$FI$,M$X$$$,MGX$$$] |
| EMU DATA: August construction output +0.7% m/m, y/y.. Posted: 17 Oct 2012 02:10 AM PDT EMU DATA: August construction output +0.7% m/m, -5.5% y/y
– EMU July construction output rev up +0.1% m/m (-0.3%)
– EMU 2q const. output rev -0.1% q/q (-0.4%), 1q -3.5%, 4q -1.4%
– EMU July+August avg const output +0.3% vs 2q avg, 2q -0.1% q/q
– EMU August structural const +1.2% m/m;civil engineering -0.7% m/m
– Please see MNI Mainwire for further details |
| Hollande: Way out of the euro crisis is near Posted: 17 Oct 2012 02:02 AM PDT Interviewed in Le Monde. - Worst is over from euro crisis
- Expects deepening of EU at start of 2013 (guess he means more members)
- ECB plans ensure inflation isn’t a risk
- Recession threatens Europe as much as deficits
- He favors multi-speed Europe
- Spain needs precise terms for financial aid
- Euro area must take a political dimension
Bloomberg reporting. - Countries in budget surplus must stimulate interior demand with salary rises and tax cuts
- Backs monthly meetings of euro zone leaders
- Euro zone must also set goals of reducing differences in interest rates
Reuters reporting comments from same interview EUR/USD trading remains confined to a narrow range eitherside of 1.3100, presently at 1.3098. |
| Swiss October ZEW investor sentiment -28.9 Posted: 17 Oct 2012 02:01 AM PDT Strong improvement from -34.9 in September August Current conditions -4.4 from +4.6 in September |
| Japan EconMin Maehara: Economic stimulus won’t rely on fiscal measures Posted: 17 Oct 2012 01:57 AM PDT - Must find ways to benefit from yen’s strength
- Not considering issuing additional deficit-covering bonds to fund economic stimulus now
- Seamless policy measures should be taken to end deflation and revive economy
|
| Update: BOE Agents Report Sees Little Job Creation Next 6m Posted: 17 Oct 2012 01:50 AM PDT -Adds Detail To Version Transmitted At 0831 GMT LONDON (MNI) – Employment intentions suggest that there will be
very little job creation in the private sector over the next six months,
according to the latest Bank of England Agents Report. The agents September scores showed employment intentions in the
services sector falling from -0.1 to -0.2. The score for consumer
services dropped from -0.2 to -0.3 and the score for business services
remained flat at 0, while manufacturing to 0.1 from 0.2. These scores
overall are so close to the zero reading they suggest stagnant private
sector employment ahead. “While those in manufacturing still experiencing stronger growth
were increasing headcount, firms more exposed to weaker spending by
households and the public sector continued to shed jobs,” the report
said. The agents summary of business conditions said that many companies
reported that the cost of borrowing appeared to be stabilising, albeit
at levels well above a year ago. Larger firms had access to credit on
good terms, but smaller firms still struggled to secure it. Overall,
demand for credit remained subdued, the report said. The report also noted slowdowns in the manufacturing and
construction sectors. In terms of the manufacturing sector, it said that
output slowed further between late August and late September and was now
broadly flat on a year ago. Output in the construction sector also continued to fall as the
slow recovery in private sector activity remained below the scale needed
to replace public sector projects as they reached completion. The report also showed that in sectors of the economy where growth
remained stronger, firms were operating close to capacity. By contrast,
in areas of persistent demand weakness there was typically a higher
degree of slack. Manufacturers had seen capacity utilisation fall back
recently as activity slowed, the report added. The agents scores showed capacity constraints in the services
sector remained flat at -1.1 and capacity constraints in the
manufacturing sector fell to -0.7 from -0.6. –London newsroom: 4420 7862 7492; e-mail: wwilkes@marketnews.com [TOPICS: M$B$$$,M$$BE$,MT$$$$] |
| Japan chief cabinet sec Fujimura: PM instructed ministers to compile economic measures Posted: 17 Oct 2012 01:40 AM PDT - To decide on economic measures by end of November at latest for swift implementation
- See downside risks emerging as economy is weakening
- Need to quickly end deflation, accelerate economy
- Bond bill needed to execute this years budget
|
| UK Analysis: Claimant Count Posts Further Drop In Sep Posted: 17 Oct 2012 01:40 AM PDT -Sep Claimant Count Unemployment -4,000; rate 4.8%
-Aug Claimant Count Unemployment revised to -14,200 from -15,000
-Aug Average Weekly Earnings total pay +1.7% vs +1.6% in Jul
-Jun-Aug ILO Unemployment -50,000; Rate 7.9% LONDON (MNI) – Claimant count unemployment continued to fall in
September, and employment rose strongly in the three months to August,
another surprisingly strong performance against a backdrop of weak
output growth. With the Olympics out of the way it wouldn’t have been surprising
to see an uptick in the claimant count as the temporary hiring came to
an end pushing up claimants. While there was a rise in the claimant
count in London, the overall decline shows a resilient jobs market.
Also, the continued impact from benefit changes also suggests the actual
fall over the month would have been around 10,000. Claimant count unemployment fell 4,000 between August and
September, against the median forecast for a flat outturn. There was a
small revision to August which now shows a fall of 14,200 compared with
the originally estimated 15,000 fall. Cuts to lone parent income support means more women have applied
for Job Seekers Allowance in recent months. Latest data show this
boosted the claimant count by 6,220 in August which seems likely to have
been repeated in September. The ILO measure of unemployment, posted a fall of 50,000 in
Jun-Aug, compared with the previous three months, probably helped by
extra Olympic hiring. Experimental data shows that ILO unemployment was
down 212,000 between July and August, and again the Olympic may have
helped here. There was also a very strong rise in employment which rose 212,000
on the month, leaving the employment level at a record high, although
the employment rate at 71.3% is some way off record levels. Earnings growth continued to remain subdued as it has done since
the start of the financial crisis. Headline Average Weekly Earnings
growth ticked up to 1.7% in the three months to August compared with a
year earlier, from 1.6% in July. This was slightly above the median
forecast of 1.6%. Regular average weekly earnings, which exclude bonus payments, rose
to 2% from 1.5%, in line with the median. -London bureau: 00 44 207 862 7491 e:mail: puglow@marketnews.com [TOPICS: MABDA$,M$B$$$,MT$$$$,MABDS$] |
| BOE Agents Report: Little Job Creation Expected Next 6 Months Posted: 17 Oct 2012 01:40 AM PDT LONDON (MNI) – Employment intentions suggest that there will be
very little job creation in the private sector over the next six months,
according to the latest Bank of England Agents Report. “While those in manufacturing still experiencing stronger growth
were increasing headcount, firms more exposed to weaker spending by
households and the public sector continued to shed jobs,” the report
said. The agents summary of business conditions report also said that
many companies report that the cost of borrowing appeared to be
stabilising, albeit at levels well above a year ago. Larger firms had
access to credit on good terms, but smaller firms still struggled to
secure credit. Overall, demand for credit remained subdued, the report
said. The report also noted slowdowns in the manufacturing and
construction sectors. In terms of the manufacturing sector, the report
noted that output slowed further between late August and late September
and was now broadly flat on a year ago. Output in the construction sector also continued to fall as the
slow recovery in private sector activity remained below the scale needed
to replace public sector projects as they reached completion. The report also showed that in sectors of the economy where growth
remained stronger, firms were operating close to capicity. By contrast,
in areas of persistant demand weakness there was typically a higher
degree of slack. Manufacturers had seen capacity utilisation fall back
recently as activity slowed, the report added. –London newsroom: 4420 7862 7492; e-mail: ukeditorial@marketnews.com [TOPICS: M$B$$$,M$$BE$,MABPR$,MT$$$$] |
| BOE Minutes: United Vote For No Change; Doubts Over QE Impact Posted: 17 Oct 2012 01:40 AM PDT -BOE MPC Voted 9-0 for unchanged QE, Bank Rate at Oct meet
-BOE MPC Agreed little to be gained from changing policy at Oct meet LONDON (MNI) – The Bank of England Monetary Policy Committee voted
unanimously for unchanged asset purchases and Bank Rate at its
October meeting, with members agreeing there was little to be gained by
changing policy at this month’s meeting ahead of the November forecast
round. The minutes of the October meeting showed, however, cracks within
the committee with some members raising concerns over whether further
quantitative easing would have much impact on the real economy. There
were also differences over the likelihood of further QE. The minutes, which show no consensus on the MPC over the need for
more stimulus, will fuel the debate among analysts over whether the MPC
will actually press ahead with what has been the widely expected QE
extension in November. “Some members felt that there was still considerable scope for
asset purchases to provide further stimulus,” the minutes said. But this optimistic view of the impact of QE was disputed. “Other members, while acknowledging that asset purchases had the
scope to lower long-term yields further, questioned the magnitude of the
impact that lower long-term yields on corporate debt and equity would
have on the broader economy at the present juncture,” the minutes said. Inflation is not expected to fall back to the 2% target near term
and the latest utility price hikes will only reinforce this view. “Inflation was a little above the 2% target and was likely to
remain so in the near term,” the minutes said. They look at the reasons behind the UK’s remarkably low, or
negative, productivity growth and suggested “it was possible that
constraints on the supply of credit from the banking system were the
dominant factor.” More QE is not seen as near inevitable by at least some on the MPC. “There were some differences of view between members about the
outlook and the likelihood that further easing in policy would be
required,” the minutes said. “But there was agreement that there was little to be gained at this
meeting in changing the current programme of asset purchases,” the
minutes concluded. -London newsroom: Tel: +44 207 862 7491; email:drobinson@marketnews.com [TOPICS: M$$BE$,MT$$$$] |
| UK DATA: Sep Claimant Count Unemployment -4,000;….. Posted: 17 Oct 2012 01:40 AM PDT UK DATA: Sep Claimant Count Unemployment -4,000; rate 4.8%
-Aug Claimant Count Unemployment revised to -14,200 from -15,000
-Aug Average Weekly Earnings total pay +1.7% vs +1.6% in Jul
-Jun-Aug ILO Unemployment -50,000; Rate 7.9%
————————————————————————
Claimant count unemployment continued to fall in September, and
employment rose strongly in the three months to August, another
surprisingly strong performance against a backdrop of weak output
growth. With the Olympics out the way it wouldn’t have been surprising
to see an uptick in the claimant count as the temporary hiring came to
an end pushing up claimants. While there was a rise in the claimant
count in London, overall another decline shows a resilient jobs market.
Also, continued impact from benefit changes also suggests the actual
fall over the month would have been around 10,000. There was also a
large 50,00 drop in ILO unemployment and a big rise in employment. |
| BOE MPC voted 9-0 to keep rates on hold and asset purchases unchanged at £375 bln in the October minutes Posted: 17 Oct 2012 01:31 AM PDT In line with expectations - BOE: Some “differences of view” within the MPC about the likelihood of whether further loosening of monetary policy would be needed and questions about it’s effectiveness
- Pick up in activity seen later than in the August inflation report, inflation may pick up later this year, likely to remain above 2% in the near term
- Commodity price increases to boost short term CPIu
- Little news over the past month to change the balance of medium term growth and inflation risks
- Sees limits to what monetary policy can achieve
- Funding for lending offers ‘encouraging’ signs for mortgages, may take longer to help business though
|
| UK September jobless claims -4,000 Posted: 17 Oct 2012 01:30 AM PDT Slightly better than Reuter’s median forecast of unchanged. Claimant count rate unchanged at 4.8%, as expected. Ilo jobless falls by 50,000 in 3 months to August. Rate 7.9%, better than Reuter’s median forecast of 8.1%. Cable marked a little higher in wake of better than expected data, presently at 1.6147. |
| Thank goodness, we’ve reverted to the norm Posted: 17 Oct 2012 01:02 AM PDT Yes, we’re back to going nowhere in a hurry. Phew, I needed a little rest after yesterdays fun and games. EUR/USD has slipped back below 1.3100, presently at 1.3095. Talk of trailing sell stops through 1.3080. I have to suspect they’ll be relatively light. Sell orders clustered 1.3115/25. Above there, technical resistances of note 1.3145 (38.2% fibbo retracement of 1.4940-1.2042 fall) and then 1.3173 (September 17 high) I’m now going off for a little nap. Give me a shout if we approach 1.3080 or 1.3125. Thankyou. |
| Eurozone crisis: interactive timeline Posted: 17 Oct 2012 12:56 AM PDT |
| Spain Could Request Aid Via Credit Line From ESM – Press Posted: 17 Oct 2012 12:20 AM PDT FRANKFURT (MNI) – Plans for Spain to request a precautionary credit
line from the European Stability Mechanism are currently being
discussed, which could clear the way for the European Central Bank to
make use of its new bond-buying program, the Financial Times and the
Financial Times Deutschland reported on Wednesday. Simply “the possibility of ECB intervention” could in itself
“significantly” reduce the risk premium on Spanish bonds, thus
facilitating Madrid’s access to market funding, the FTD cited a senior
Spanish official as saying. Both papers noted that it was unclear when such an application
would be submitted, with the FT saying the request could be weeks away.
“They are moving to a request, yet it may not happen today or tomorrow
or this week,” the FT quoting a senior EU official as saying. The FTD cited sources, which suggested the request could come later
this month following important regional elections in the Spanish prime
minister’s home region of Galicia. Moody’s, meanwhile, eased the pressure on Spain on Tuesday by
confirming its investment-grade rating at Baa3, but leaving it under a
negative watch. A downgrade to junk status could have caused Spanish
bonds to be ejected from some government bond indexes. Spanish bond
yields declined sharply in early trading, with the 10-year government
bond down 27 basis points at 5.53% The FT added that the German government was aware of the Spanish
plan and, citing sources, reported that Berlin had not categorically
rejected it. The paper noted that aid in the form of a credit line would likely
face less resistance from creditor countries than if it were to come in
the form of immediate payments. –Frankfurt bureau: +49 69 720 142; e-mail: frankfurt@mni-news.com [TOPICS: MT$$$$,M$$CR$,M$X$$$,M$S$$$,M$$EC$] |
| Spanish 10 year govt bond yield continues fall, off 18 bps Posted: 16 Oct 2012 11:43 PM PDT At 5.63%. EUR/USD marginally firmer at 1.3108 in slow start to European trade. UPDATE: SPANISH BOND BUYING CONTINUING, 10 YEAR YIELD DOWN AT 5.54% EUR/USD up a further 2 pips at 1.3110. Bit disappointing if you’re a euro bull. |
| ECB’s Asmussen: EU Economic Commissioner should have power to reject national budgets in entirety Posted: 16 Oct 2012 11:41 PM PDT - Backs position of German Fin Min Schaeuble to give EU Econ commissioner greater powers
|
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