Archive for May, 2007

11 May, 2007 | No comments

Euro on Target to Break Through 2004 Record

The Euro is quickly closing in on its all-time record against the USD. The record exchange rate was clocked in December 2004, at $1.37 Euro/USD, but I suppose records exist for the sole purpose of being broken. Besides, it was never really a question of if, but rather when the Euro would smash through the record. If current trends continue, it looks like the when will be sooner rather than later, since the European economy appears to be entering a period of pronounced growth while the US economy has probably already peaked. Analysts are now predicting that the European Central Bank will raise its benchmark lending rate by 25 basis points to 4% at its June meeting, which should give the Euro a further boost.

Read More: http://www.ft.com/cms/s/71aa4a0c-f30d-11db-9845-000b5df10621.html

11 May, 2007 | No comments

UK Feb manufacturing PMI 55.4, highest since July 2004 - sources UPDATE

(Updating to add analyst comment)

LONDON (AFX) - UK manufacturing sector activity rose to its highest level in two and a half years in February, coming in well above analysts’ expectations, sources said of a key survey.

They said the Chartered Institute of Purchasing and Supply’s purchasing managers index jumped to 55.4 in February, its highest level since July 2004, from an upwardly revised 53.2 in January.

Analysts polled by AFX News had predicted a much more moderate rise to 53.0 from the original January estimate of 52.8.

A reading above 50 in the index indicates expansion.

A more detailed look at the survey showed that the index measuring output rose to 56.9 from a 54.1 in January, revised up from 53.6.

New orders rose to their highest level since July 2004 of 57.6 from 54.8, again revised up from 54.1, while export orders were also at their highest since July 2004 at 55.7 from 53.7.

The index measuring employment jumped to 52.1 to reach its highest level since March 2005 from an upwardly revised 50.6 in January.

Meanwhile, rate-setters at the Bank of England will be concerned to see output prices rising further in February as manufacturing firms continued to pass on higher costs into their prices.

Output prices surged to 56.9 to mark their highest level since the series began from 54.2 in January.

Input prices dropped back slightly, however, to 60.8 from 61.7 in January, revised up from 61.4 previously.

“UK manufacturing is building up a strong head of steam again and bolstering faster growth prospects ahead,” said Bear Stearns economist David Brown.

He added that the sharp jump in output prices will be “alarming” to the Bank of England’s Monetary Policy Committee and encourage them to raise interest rates again soon, possibly as early as next week’s meeting.

“This is the sort of strong number that could justify a Bank of England rate hike as early as next week”.

“The MPC monetary hawks will jump on this as an excuse for another quick rate hike. It underlines that UK inflation risks are still rising and should warrant further rate tightening,” he said.

jessica.mortimer@thomson.com

jkm/nes//jkm/slm

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

11 May, 2007 | No comments

Italy Feb new car registrations 223,504, up 5.66 pct year on year UPDATE

(updating with further manufacturer data)

MILAN (AFX) - Italy’s new car registrations rose 5.66 pct in February to 223,504, from 211,534 in the same month a year earlier, said the transport ministry.

In the first two months, registrations were up 4.76 pct to 472,678, from 451,184 a year earlier, the ministry said.

In February, Fiat SpA’s own brand registrations rose 11.65 pct to 54,985, with market share rising to 24.60 pct, from 23.28, it said.

Fiat brand Alfa Romeo registrations rose 16.67 pct to 7,341, representing a market of 3.28 pct, against 2.97 a year earlier, it said.

Fiat brand Lancia registrations were 10,426, up 9.33, representing a market share of 4.66 pct, against 4.51, it said.

Overall, this means Fiat’s market share rose to 32.54 pct, from 30.76.

Among other manufacturers, Ford registrations rose 18.44 pct to 19,171, representing a market share of 8.58 pct, against 7.65.

General Motor’s brand Opel registrations rose 12.14 pct to 15,716, representing a 7.03 pct market share, against 6.63.

Volkswagen registrations rose 8.88 pct to 13,299, representing a market share of 5.95 pct, against 5.77.

Citreon registrations fell 8.51 pct to 12,537, representing a market share of 5.61 pct, against 6.48.

Peugeot registrations fell 5.26 pct to 11,354, representing a market share of 5.08 pct, against 5.67.

nigel.tutt@thomson.com

nt/jlc/nt/jlc

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

11 May, 2007 | No comments

Palestinian PM appeals for end to boycott

The Palestinian Prime Minister and Hamas leader, Ismail Haniyeh, has appealed to the West to end its economic and diplomatic boycott of the Palestinian Authority.

The call comes in the wake of a deal struck in Mecca last week to form a new Palestinian government of national unity.

Mr Haniyeh says last week’s deal justifies the lifting of the boycott imposed by the European Union and the US.

“We are saying to the American Administration and to everyone who has doubts about this agreement that this is a collective Palestinian agreement,” he said.

“This is the expression of a shared Palestinian attitude and everyone should respect the will of the Palestinian people.”

- BBC

11 May, 2007 | No comments

Rising Stocks Gnaw Into Bond Appeal, But Subprime Lending Concerns Limit Losses

BY REUTERS

Posted 3/8/2007

U.S. government bond prices fell on Thursday as firmer equities stalled flight-to-quality flows into Treasuries, but losses were limited by speculation about a subprime mortgage lender in trouble.

Safe-haven buying in the wake of last week’s global stock market turmoil and problems in the subprime mortgage sector drove benchmark government bonds to their strongest performance in six months.

Traders said Treasuries are taking their cues from the stock market.

Benchmark 10-year Treasury notes fell 9/32 in price during the session, but pared losses to trade down 6/32 for a yield of 4.52% in late New York trade.

Yields, which move inversely with prices, traded around 4.49% late on Wednesday.

The recovery was sparked by market rumors that New Century Financial Corp. would file for bankruptcy as trading in its shares was briefly halted.

The company later said that it had filed with the SEC not to accept new loan applications while it sought additional funding.

U.S. stocks pared earlier gains, but managed to finish higher. The Dow Jones industrial average ended up 68.25 points, or 0.6%, at 12,260.70. The Standard & Poor’s 500 index rose 9.92 points, or 0.71%, to 1,401.89.

Traders also attributed the pullback in Treasury prices from session troughs to investors covering short positions ahead of Friday’s key nonfarm payrolls report.

A Reuters survey predicted that employers created 100,000 new jobs in February, down from 111,000 in January.

A softening jobs market will bolster expectations of an interest rate cut by the Federal Reserve by the third quarter of the year, analysts say.

U.S. interest rate futures were pricing in a roughly 64% chance of a 25- basis-point rate cut by June, down from a 74% probability late on Wednesday.

Two-year notes, which respond closely to expectations for Federal Reserve interest rate moves, tapped a strong flight-to-safety bid last week. They fell 2/32 in price to yield 4.57% compared with 4.53% on Wednesday as the flight-to-safety trend reversed.

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