04 Septiembre 2006

Inflation is a lot lower in Japan than first thought
ONE of the most glaring mistakes in the recent histor

y of central banking stemmed from a sound response to unsound numbers. The Federal Reserve let inflation get out of hand in the 1970s, because it thought there was more slack in the economy than there turned out to be. A big revision of Japan's inflation figures last week suggests its central bankers may be making the opposite mistake. “price pressures today are where the BoJ thought they were six months ago.” With hindsight, July's rate hike looks premature and there may not be another one this year. The disturbing lack of inflationary pressure suggests that the economy is more productive than its doubters suggest.
And the economy seems to be coping surprisingly well with real interest rates that are, thanks to lower inflation, 0.5 percentage points higher than the BoJ intended. Such optimism drew strength from unemployment's fall to 4.1% in July, resuming a downward drift. There are now 1.09 jobs for every applicant at Japan's government-run employment agencies, the highest ratio since 1992.


The new figures suggest that America's workers are less productive and better compensated, than first thought. As a result, unit labour costs are higher and the economy will have to lose more steam than the Fed had hoped before price pressures subside.....The BoJ, seems to be waiting for October's Tankan survey of businesses before deciding what steps to take next.

Trade, exchange rates and budgets

Prices and wages

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How George Bush fought back against al-Qaeda's assault, and what he got wrong:
IT STANDS to reason that 19 men cannot change history. But they did...
America is deemed a special target for having trespassed on the Arab heartland. Intoxicated by
their defeat of the Soviet Union in Afghanistan in the 1980s, the jihadists are hungry to topple another superpower...


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Japan's Second-Quarter Capital Spending Rises 16.6 Percent, Beats Forecast Japanese capital spending climbed in the second quarter as companies retooled factories and revamped stores as the world's second-largest economy heads for its longest postwar expansion.

Japanese Stocks Advance, Led by Toyota; Komatsu Gains on Spending Report Japanese stocks advanced, led by exporters including Toyota Motor Corp., after a U.S. employment report eased concern higher interest rates will lead to a slump in the world's largest economy.

New Zealand's Consumer Confidence Rises on Jobs, House Prices, Poll Shows New Zealand consumer confidence rose in August amid expectations a record-low jobless rate and rising house prices will buoy incomes.

Australian Dollar May Advance on Speculation of Higher Rates After Data The Australian dollar may gain on speculation investors will be lured to the yield premium offered by the nation's government bonds as economic reports this week could add to the case for higher interest rates.

New Zealand's Dollar May Rise This Week on Appeal of Higher Bond Yields New Zealand's dollar may rise as investors are attracted to the nation's high bond yields amid expectations the central bank will keep interest rates at a record level until at least March.

Petro-Canada Says Terra Nova Production to Resume in October, a Month Late Petro-Canada, the third-largest Canadian oil company, said the Terra Nova offshore field will stay shut a month longer than expected, until late October, to complete maintenance on the field's production ship.

Canadian Bonds Gain After Report Shows Economic Growth Slowed Last Quarter Canadian government bonds rose this week, driving the two-year yield below 4 percent for the first time since March, as investors bet slowing growth will keep the Bank of Canada from raising borrowing costs again this year.

Canadian Stocks Rise as U.S. Employment Report Lifts Industrial Shares Canadian stocks rose as a report showed U.S. employers hired more workers than forecast in August, suggesting the country's economy isn't losing momentum.

U.K. Central Bank Set to Pause After Last Month's Surprise Rate Increase The Bank of England will probably leave its benchmark interest rate unchanged this week after a surprise increase last month, a survey of economists shows.

IMF Raises 2006 World Economic Growth Forecast to 5.1 Percent, Ansa Says The International Monetary Fund will raise its prediction for global economic growth in 2006 to 5.1 percent from the 4.9 percent predicted in April on a stronger- than-expected expansion in China, Ansa news agency reported.

German Factories Probably Increased Production, Orders as Investment Rose Industrial production and factory orders in Germany, Europe's largest economy, probably rose in July after corporate investment and exports increased, surveys of economists show.

Yen May End Slide, Gain Versus Dollar as G-7 Meets, Bank of America Says The yen may rise starting this month on speculation finance ministers from the Group of Seven nations will reiterate their call for stronger Asian currencies, according to Tomoko Fujii, a strategist at Bank of America N.A.

Central Banks Increase Fannie Mae, Freddie Bond Purchases as Yields Fall The central banks that own one quarter of the $4.3 trillion U.S. government bond market are showing a growing preference for debt sold by government- sponsored companies such as Fannie Mae and Freddie Mac.

Japanese Bonds Provide World's Best Returns on Signs of Slowing Economy Japanese government securities are outperforming the world's biggest bond markets on signs growth in the second-largest economy is faltering.

Central Banks Increase Fannie Mae, Freddie Bond Purchases as Yields Fall The central banks that own one quarter of the $4.3 trillion U.S. government bond market are showing a growing preference for debt sold by government- sponsored companies such as Fannie Mae and Freddie Mac.

FAZ

Annan ohne Erfolg in Teheran

Iran bleibt im Atomstreit unbeugsam/Merkel: Eine militärische Option gibt es nicht

Annan hat die iranische Führung bei einem Besuch in Teheran nicht dazu bewegen können, sich im Atomstreit den Forderungen der Vereinten Nationen zu beugen…

Wahlstreit in Mexiko schärfer

Nach dem Eklat in der mexikanischen Abgeordnetenkammer vor der geplanten Rede zur Lage der Nation von Präsident Vicente Fox in der Nacht zum Samstag haben die verfeindeten politischen Lager am Wochenende abermals den Ton verschärft.

Chatami in Amerika

Der frühere iranische Präsident Mohammed Chatami hat zum Auftakt eines zehntägigen Privatbesuchs in den Vereinigten Staaten am Samstag bei einer Rede nahe Chicago zur Verständigung zwischen dem Westen und der islamischen Welt aufgerufen.

IHT

Iran tells Annan it won't halt atom work

Kofi Annan, said Sunday that Mahmoud Ahmadinejad, the president of Iran, was willing to enter into negotiations on his country's nuclear program but would not agree to suspend uranium enrichment beforehand, as demanded by the UN Security Council powers.

Europe, East and West, wrestles with falling birthrates

Birthrates have reached a historic and prolonged low in European countries, straining pension plans and depleting the work force across the Continent.

Jobless rate drops in U.S., but wages stall

The U.S. economy added more jobs in August than it did in July, and the national unemployment rate ticked down a tenth of a point. But the average American worker is logging fewer hours on the job and wage gains are minimal, according to statistics released Friday.

In its monthly employment report, the Labor Department said that private employers created 128,000 nonfarm jobs in August. That is a slight improvement on the revised figure of 121,000 for July, though it is still too few to keep up with population growth.

Dollar gives back gains on jobs report

Dealers said the dollar's initial move higher was mostly due to the closing of short positions before the long holiday weekend. U.S. markets will be closed on Monday.

A positive report on job creation and unemployment was not far enough off consensus expectations to alter the prevailing outlook for slower growth and easing inflation pressures in the United States.

Banking on Europe yields robust returns

The SSgA International Stock Selection Fund is beating its market benchmark for the sixth straight year, buoyed by investments in French banks.

The fund has 4.1 percent of its $994 million in BNP Paribas and Société Générale, both based in Paris, and about two-thirds of its total assets are invested in European companies. Shares of both banks are up 23 percent this year.

Trichet spoils a rally with signal on rates

European stocks had their first decline in six trading sessions Thursday after the European Central Bank, which kept interest rates unchanged, signaled that it could increase borrowing costs before the end of the year.

"The key question is whether central banks will be willing to put up with a bit of higher inflation if growth slows," said Andy Brough, a fund manager at Schroders Investment Management. "We're seeing jitters" in the market.

U.S. reports spur optimism

sian stocks rose Thursday, taking them to their first monthly gain since April, after the U.S. economy grew faster than estimated last quarter and inflation trailed forecasts.

The dollar bounces back ahead of U.S. jobs report

Wheat gains on weather and demand from India

Wheat was headed Thursday for its biggest monthly gain in at least seven years amid forecasts that India, one of the world's largest consumers of the grain, would increase imports while a heat wave would curb European production.

Europäische Währungshüter bereiten Zinsschritt vor

Bisher keine Hinweise auf scharfen Konjunkturknick in Amerika/Der Bericht vom internationalen Finanzmarkt

In Europa werden die Zinsen im Herbst wohl steigen. Im Oktober und womöglich noch einmal im Dezember dürften die europäischen Währungshüter die Liquiditätszufuhr für den Euro-Raum weiter drosseln.

Leitzinswende

Im Gegensatz zu den meisten Volkswirten an der Wall Street erwarten wir bei Goldman Sachs, daß die Federal Reserve nächstes Jahr aggressiv die Geldpolitik lockern wird. Gegen Ende 2007 wird der Leitzins statt den derzeitigen 5,25 Prozent nur noch etwa 4 Prozent betragen. Diese Vorhersage beruht auf drei einfachen Überlegungen.

FTD

Chance auf diplomatische Lösung im Atomstreit sinkt

Uno-Generalsekretär Kofi Annan ist es nicht gelungen, den Iran zur Änderung seiner Haltung im Atomstreit zu bewegen. Nach einem Gespräch mit Präsident Mahmud Ahmadinedschad in Teheran sagte Annan gestern, der Iran sei zu Verhandlungen über sein Atomprogramm bereit, lehne die Einstellung der Anreicherung von Uran aber weiter ab.

HB