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Realistbear

U S Just Release I S M Figures And They Are Strong

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http://www.usatoday.com/money/economy/prod...05-01-ism_x.htm

ISM manufacturing index rises in April

Updated 5/1/2006 10:29 AM ET

NEW YORK (Reuters) — Manufacturing activity powered ahead in April despite soaring energy and metals costs, and employment in the sector showed signs of improvement, according to an industry report published Monday.
The Institute for Supply Management's index of factory performance climbed to 57.3 last month, its highest since September, from 55.2 in March. Wall Street analysts had looked for little change.
A reading above 50 indicates growth in the sector, which has been expanding steadily for nearly three years.
"It's not expanding at such a rapid clip," said Anthony Chan, chief economist at J.P. Morgan Private Client Services in Columbus, Ohio.
"But it's still expanding and would suggest that even though the economy may slow as the year progresses, we should still expect reasonably good economic performance out of the manufacturing sector," he said.
Still, the report said businesses reported "major concerns" over high energy and commodity prices, as the prices paid index reached 71.5 from 66.5.
The new orders component eased to 57.6 from 58.4, while the employment index jumped to 55.8 from 52.5.
While the industrial sector makes up a shrinking slice of the economy, it is likely to play an important role in supporting the economy this year given an expected slowdown in consumer spending.
Factories are also useful as an indicator of broader economic trends like inflation and productivity, because they behave in cyclically predictable ways.
For this reason, monetary policymakers track manufacturing trends for signs of inflation pressures.
Both the strong overall level of activity and the spike in prices indicated the Federal Reserve could continue raising interest rates, which hurt government bond prices.

Currency markets in a turmoil again:

http://www.iii.co.uk/news/?type=afxnews&ar...&action=article

NEW YORK (AFX) -- The dollar pared some losses against the euro and yen in the wake of
stronger-than-expected construction spending and manufacturing data.
Factory activity in the United States accelerated in April, the Institute for Supply Management said Monday. The ISM index rose to 57.3% in April from 55.2% in March. The consensus forecast of estimates collected by Marketwatch was for the index to inch higher to 55.3%. Separately, U.S. construction outlays increased 0.9% in March,
far higher
than the 0.4% increase expected by economists. The euro was last up 0.1% at $1.2638, while the dollar was down 0.8% at 112.92 yen.

Fed said they would determine further IR by looking at ISM, employment and construction spending (housing market). Looks like its a hatrick for further hikes.

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I would have expected the $ to strengthen a fair amount on these figures but the slide seems to have reached stupid levels now :ph34r:

Also Damned if I can see why cable is so strong against both the $ & the Euro lately.

Surely cable can't hold these overvalued (IMO) levels for much longer :huh:

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I would have expected the $ to strengthen a fair amount on these figures but the slide seems to have reached stupid levels now :ph34r:

Also Damned if I can see why cable is so strong against both the $ & the Euro lately.

Surely cable can't hold these overvalued (IMO) levels for much longer :huh:

I believe there is still a perception out there that Gordon's Miracle Economy is working. The currency markets seem to react positively every time a VI says house prices are soaring and they equally seem to ignore the data that shows the opposite (ODPM survey, Nationwide's "cooling trend." and Hometrack's "flat in most of Britain" reports). The world still believes in the miracle which seems to be why the pound is soaring. On the other hand, it may be a situation where the spotlight has not yet shone on the pound yet given the frenzy over the Yuan, Dollar and Yen. IMHO, its just a matter of time.

Edited by Realistbear

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I would have expected the $ to strengthen a fair amount on these figures but the slide seems to have reached stupid levels now :ph34r:

Also Damned if I can see why cable is so strong against both the $ & the Euro lately.

Surely cable can't hold these overvalued (IMO) levels for much longer :huh:

Very bearish sign for the USD. Watch Gold shoot off, I've got it at $660.

Blimey. Scrapping M3 will just make it worse now.

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It is hard to see how the dollar can slip much further given the strength of the economy and the probability that Ben will have to keep IR rising. With the US economy at its best for years and the UK faltering CABLE may eventually reflect the imbalance.

http://www.aberdeennews.com/mld/aberdeenne...ws/14473315.htm

Midwest economy strong, survey says

Associated Press

OMAHA, Neb. - A regional economic survey for April puts the
Midwest economy at its strongest since 2004,
despite higher energy prices and interest rates.
"Even with the Fed's foot on the brakes, and rapidly rising energy prices, the regional economy continues to expand at a breakneck pace,
" Ernie Goss, a Creighton University economics professor, said Monday.
But higher commodity prices and interest rates should push down regional growth significantly in the second half of 2006, Goss said.
The Mid-America index is based on a monthly survey of supply managers and business leaders in nine states, including Minnesota. The overall index for April rose to 66, up from March's 63.6 and February's 59.9.
The index is at its highest level since June 2004, according to the survey.

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It is hard to see how the dollar can slip much further given the strength of the economy and the probability that Ben will have to keep IR rising. With the US economy at its best for years and the UK faltering CABLE may eventually reflect the imbalance.

http://www.aberdeennews.com/mld/aberdeenne...ws/14473315.htm

Midwest economy strong, survey says

Associated Press

OMAHA, Neb. - A regional economic survey for April puts the
Midwest economy at its strongest since 2004,
despite higher energy prices and interest rates.
"Even with the Fed's foot on the brakes, and rapidly rising energy prices, the regional economy continues to expand at a breakneck pace,
" Ernie Goss, a Creighton University economics professor, said Monday.
But higher commodity prices and interest rates should push down regional growth significantly in the second half of 2006, Goss said.
The Mid-America index is based on a monthly survey of supply managers and business leaders in nine states, including Minnesota. The overall index for April rose to 66, up from March's 63.6 and February's 59.9.
The index is at its highest level since June 2004, according to the survey.

Maybe all the sleaze that Nu Labour are currently embroiled in will eventually be the catalyst for a Sterling fall. Then attention should concentrate on Gord's 'Miracle Economy' & maybe at last it will be seen for what it really is, 'Fantasy Island' .

To think I actually voted for this shower back in 97 makes me feel quite ill :angry:

Mind you the Tories give me little confidence. With all that's happening they should have at least a 10% poll lead. Instead Nu Labour still hold a 2% lead in the polls :o

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It is hard to see how the dollar can slip much further given the strength of the economy and the probability that Ben will have to keep IR rising. With the US economy at its best for years and the UK faltering CABLE may eventually reflect the imbalance.

An editorial in the FT this week seemed to think oil will stay above $60 for a few years and, as we're viewed as a petro currency to some degree, that surely must help the £?

You may also be interested in this?

Former bear turns bullish on global economy

By Jennifer Hughes in New York

Published: May 1 2006 18:29 | Last updated: May 1 2006 18:29

The world economy may be able to unwind its current imbalances without serious disruption, Stephen Roach, Morgan Stanley’s famously bearish chief economist, predicted on Monday, in a remarkable revision to several years of gloomy prognosis.

Mr Roach had long warned that the US current account deficit and Asian central banks’ ballooning currency reserves risked destabilising the global financial system.

But on Monday, in a note to clients, he said: “I must confess that I am now feeling better about the prognosis for the world economy for the first time in ages.” His comments came as the dollar hit a one-year low against the euro and seven-month low against the yen, as investors remained confident the US Federal Reserve was nearing the end of its interest-rate-tightening cycle.

Mr Roach said the tipping point had been last month’s decision to mandate the International Monetary Fund to begin multilateral discussions with the aim of resolving the largest trade imbalances. At the same series of meetings, the Group of Seven highlighted the need to address the imbalances, underlining policymakers’ apparent resolve.

“I’ve been wringing my hands over the mounting global imbalances for longer than I care to remember,” said Mr Roach. “The world is finally taking its medicine - or at least considering the possibility of doing so. The risk is that this is so far only on paper, but it’s a critically important first step.”

Mr Roach also highlighted the orderly progression of currency adjustments.

“The dollar is not collapsing, there’s not a run going on here.” said Mr Roach. “This is a gradual decline and while we’re talking year-lows, these levels are not sharp breaks from the levels we saw a month or two ago.”

The dollar has fallen about 3 per cent against the euro since the IMF and G7 met, specifically as the market’s attention has shifted back towards the structural imbalances in the US following meetings. Previously, the currency had been buoyed by the higher interest rates available in the US compared with other leading economies.

Last year, the US current account deficit reached $900bn on an annualised basis and without some significant change in the current patterns, is expected to reach new records this year. At the same time, Asian central bank reserves are still growing, although at a slower pace. Both China and Japan hold more than $800bn each.

But gold prices - a traditional safe-haven asset, hit new 25-year highs above $660 a troy ounce yesterday as the dollar slid. The metal is up more than 25 per cent this year. And crude oil rose back above $72 a barrel on ongoing concerns about supply disruptions in Nigeria and tensions with Iran.

“Oil prices above $70 are especially worrisome for the world’s oil consumers,” conceded Mr Roach. “I am not prepared to give an unbalanced world the green light. But it’s time to give credit where credit is due.”

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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