Europe - Economic Data & News 01 (May 08 - Oct 08)

[millionairemind]

Italian Consumer Confidence Plunges to Lowest in 15 Years

By Flavia Krause-Jackson

July 22 (Bloomberg) -- Italian consumer confidence in July slumped to the lowest since 1993, when the country was in a recession, after record food and energy prices eroded the purchasing power of households.

The Rome-based Isae Institute's index, calculated from a survey of 2,000 families, fell to 95.8 from a revised 99.9 last month. Economists had expected a decline to 99, according to the median of 13 forecasts collected by Bloomberg. In November 1993, the 26-year-old index hit a record low of 95.4.

``The economic situation in Italy is sliding down fast,'' said Marco Valli, an economist at UniCredit SpA in Milan.

Oil prices have risen also 37 percent this year, clouding the outlook for economic growth and driving up consumer prices in the 15 euro nations at the fastest pace in more than 16 years. To counter inflation, the European Central Bank raised its benchmark interest rate on July 3 by 25 basis points to 4.25 percent.

A sub-index measuring optimism about the broad economic situation dropped to a 14-year low of 72.2 from 81.6, Isae said today in its report. A gauge of households' perception about their short-term prospects decreased to 88.4 from 97.6.

Italian families are cutting back on spending, including putting off car purchases and eating out less, the institute said. Retail sales declined for the 16th consecutive month, the Bloomberg purchasing managers index showed on June 27.

Fiat Sales

Sales in Europe's second-biggest car market fell 19.5 percent in June, a sixth straight monthly decline. Registrations at Turin-based Fiat SpA fell 16.5 percent in the month and the company has announced that it will temporarily shut four of its six Italian factories for three weeks between September and November because of weaker demand. Autogrill SpA, the world's biggest manager of airport restaurants, cut its full-year sales target on July 16 because the rise in gasoline prices has led to a decrease in highway travel and caused a 1.5 percent drop in air traffic.

Europe's economic recovery may take longer than the ECB forecasts and could come after the fourth quarter, Italian daily La Stampa reported today, citing an interview with board member Lorenzo Bini Smaghi. He also told the newspaper that the ECB's current benchmark rate wasn't ``exactly restrictive.''

Italian Prime Minister Silvio Berlusconi has abolished a property tax on first homes and unveiled a plan to freeze mortgage payments to try to offset price increases and revive growth. Consumer spending accounts for two thirds of Italy's $2.4 trillion economy.

Italy's economy will expand 0.4 percent this year, the slowest pace since 2003, the Bank of Italy and the state-funded Isae research institute said in new forecasts released last week. That's even gloomier than the European Commission's forecast of 0.5 percent growth, which would make Italy the laggard among the world's advanced economies, defined as the Group of Seven countries and the 15 nations sharing the euro.

Italy's growth rate has trailed the European Union average for more than a decade.

The Isae survey was conducted between July 1 and July 16.

[millionairemind]

Darling Says Global Credit Crunch `More Profound' Than Expected
By Gonzalo Vina and Paul George

July 22 (Bloomberg) -- Chancellor of the Exchequer Alistair Darling said fallout from a global credit crunch is proving worse than previously expected, a sign that U.K. policy makers are bracing for slower growth.

``The effect of what has happened is going to be far more profound than people predicted even at the turn of this year,'' Darling said in an interview with Bloomberg Television, which will air excerpts today. ``It is quite clear that if you look during the course of this year, conditions have become more difficult across the world.''

The finance minister, whose tenure has coincided with the sharpest decline in house prices and the steepest rise in living costs in a decade, reiterated his belief the British economy will escape recession and pledged to keep up the fight against inflation.

The deteriorating economic outlook, together with a run on deposits at Northern Rock Plc in September and a series of U- turns on tax policy, have eroded Prime Minister Gordon Brown's popularity. Darling won't release new economic forecasts until his pre-budget statement in the fourth quarter.

Britain's economic growth will probably slow to 1.6 percent this year and 1.3 percent in 2009, the weakest since 1992, according to a survey of 40 economists by the Treasury released on July 16. In March, Darling expected growth of up to 2.25 percent this year, compared with 3.1 percent in 2007.

Slower Growth

The Bank of England has already presented a more somber outlook. Governor Mervyn King said then that there may be ``an odd quarter or two of negative growth.'' His deputy, John Gieve, said policy makers must grapple with inflation ``well over'' 4 percent, double the government's target.

The central bank expects growth to slow to 1 percent in the first quarter of 2009. Consumer prices climbed 3.8 percent in June from a year earlier, the most since records began in 1997.

House prices fell the most in 15 years in June as higher borrowing costs reduced mortgage lending, triggering the worst property slump since Britain's last recession in 1991, according to HBOS Plc, the U.K.'s biggest mortgage lender.

``Times are tough,'' Darling said in the interview, which was recorded July 14. ``They are tough for everyone.''

The Conservative opposition had a 22 percentage point lead over Labour in a YouGov Plc survey published on July 13. Forty- six percent of people predicted a recession in the next year, compared with 31 percent in June, YouGov said in its survey of 1,800 people. Brown has until June 201o to call the next election.

Tax Cuts

In May, Darling announced a 2.7 billion-pound ($5.4 billion) emergency tax cut for 22 million people and last week postponed for six months an increase in fuel duty to cushion the effect of record oil costs.

In the interview, Darling said the worst of the credit crisis is far from over, noting action to prop up the mortgage lenders Freddie Mac and Fannie Mae in the U.S. In Britain, Alliance & Leicester Plc agreed to be acquired by Banco Santander SA of Spain for 1.26 billion pounds, less than half of its market value at the end of last year.

Worldwide, banks and securities firms have raised $324 billion in the past year after record writedowns and credit losses of almost $410 billion from the collapse of the subprime mortgage market, according to data compiled by Bloomberg.

``I don't think anyone would be wise to start speculating on how long the present difficulties will last,'' Darling said. ``We are dealing with them here and other countries are dealing them as well. If you look at the problems the banks have had, they have moved into a different phase and governments have to take account of that.''

[mojo_]

from http://www.joe-duarte.com/free/market_summary_weekday.asp on one of the above articles (kindly posted by MM):

July 22, 2008

"Maximum Danger" Headline. Chicken Little Or True Warning Sign?

A Sign of Impeccable Timing?

The sky is falling, according to an interesting Op-Ed piece in the U.K.'s Telegraph penned by Ambrose Evans-Pritchard who starts his missive with the eye catching lines: "It feels like the summer of 1931. The world's two biggest financial institutions have had a heart attack. The global currency system is breaking down. The policy doctrines that got us into this mess are bankrupt. No world leader seems able to discern the problem, let alone forge a solution."

And with the U.S. stock market poised to open significantly lower, barring a major change of direction, this analysis takes on some major significance.

According to Evans-Pritchard, the world leaders, and thus the rest of us mere mortals just don't get it as the key to the whole thing is bad policy from central banks who "have pushed debt to fatal levels by holding interest too low for a generation, and now the chickens have come home to roost."

Evans Pritchard says that the International Monetary Fund's "mean-reversion" model, "misses the entire point of this crisis," and that if the I.M.F. really understood what was going on, it would be forecasting "debt deflation on such a scale that would, if abrupt, threaten democracy."

So why is the analyst so worked up? According to the article, the central banks are getting it wrong by considering further interest rate increases to respond to the inflationary pressures caused by the rise in oil prices.

As Evans-Pritchard sees it, there are some significant processes at work here as "The eurozone is falling into recession before the US itself. Its level of credit stress is worse, if measured by Euribor or the iTraxx bond indexes. Core inflation has fallen over the last year from 1.9pc to 1.8pc. The US may soon tip into a second leg of this crisis as the fiscal package runs out and Americans lose jobs in earnest. US bank credit has contracted for three months. Real US wages fell at almost 10pc (annualised) over May and June. This is a ferocious squeeze for an economy already in the grip of the property and debt crunch."

This article is continued in the full Market IQ report. To subscribe... Click Here

too bad, am not a subscriber... to read the full story...

[kennynah]

Eurozone Industrial New Orders Tumble In May
7/23/2008 8:34 AM ET



(RTTNews) - Eurozone industrial new orders posted an unexpected decline in May after recording robust growth in April.

Wednesday, a report from the Eurostat showed that industrial new orders decreased 4.4% year-on-year in May, reversing a revised 12.3% increase recorded in April. Economists had expected an increase of 3.2% for May.

Decreases were widespread in almost all industrial sectors. New orders for chemicals and chemical products fell 0.9%. Orders for manufacturing of electrical and electronic equipment dropped 2.8% and 2.5% respectively.

A 6.3% fall was observed in orders for machinery and equipment, followed by decreases of 8.6% and 6.4% in orders for manufacturing of textiles and textile products. Meanwhile, orders for basic metals and fabricated metal products increased 0.9%.

[kennynah]

no time to read, no problem....just see the chart...

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UK June Retail Sales Decline At Record Pace
7/24/2008 8:21 AM ET



(RTTNews) - UK retail sales recorded the largest monthly decline in June since the series started in 1986.

The Office for National Statistics, or ONS on Thursday announced that UK retail sales dropped 3.9% in June from the prior month. June's fall was the largest since records started in 1986 and reversed a revised 3.6% rise reported in May. Economists had expected just 2.6% decline for June.

The decline was widespread in all sectors, excluding non-specialized stores. Sales volume in both predominantly food stores and non-food stores fell at the fastest pace since series began in 1986. Sales volume in predominantly food stores dropped 3.6% and predominantly non-food stores decreased 4.5%.

On an annual basis, retail sales grew at the slowest pace since February 2006. Sales growth eased significantly to 2.2% from 7.9% in May. Retail sales growth slowed more than the 4.4% expected for the month of June.

The initial growth estimate on a monthly basis was 3.5% and 8.1% annually for the month of May.

According to ONS, the implied price deflator climbed 0.5% on an annual basis, following a 0.2% fall in May. This was the first increase since June 2007, probably due to higher food price inflation. Economists at BNP Paribas said the deflator would possibly re-enter negative territory in the next quarter once food price inflation starts to ease.

Further, retail sales value in June was estimated at GBP25.6 billion, up 3.4% compared with the previous year.

During April to June, the retail sales volume on a seasonally adjusted basis showed 0.6% increase, after rising 1.6% in three months to May. This was largely driven by high inflation and falling house prices. The three-monthly growth in sales volume for predominantly non-food stores was 1.1%. Annual retail sales growth during the period stood at 4.4%.

[kennynah]

a trivia

*******
Malta June Jobless Falls
7/24/2008 8:01 AM ET

(RTTNews) - Thursday, the National Statistics Office revealed that Malta's registered jobless decreased by 476 persons year-over-year and reached at 5,861 in June.

The statistical office also reported that registered unemployment rate stood at 4.2% in February compared to 4.3% in January.

[kennynah]

Swedish Trade Surplus Narrows In June
7/25/2008 7:16 AM ET

(RTTNews) - Friday, the Statistics Sweden announced in its report that Swedish trade surplus narrowed to SEK8.2 billion in June from SEK13.3 billion in the year-ago period. June's trade surplus was smaller than the May's SEK10 billion.

On a seasonally adjusted basis, the net trade surplus stood at SEK6.6 billion in June compared to SEK7.5 billion of the previous month.

On an annual basis, export value of goods edged up 5% to SEK102.2 billion in June. On the other hand, import value of goods increased 12% to SEK94 billion.

In June, trade with non- EU countries recorded a surplus of SEK12.6 billion, while the trade with EU countries resulted in a deficit of SEK4.4 billion.

For the first half the year, Sweden recorded a net trade surplus of SEK66.1 billion compared with the surplus of 70.2 billion of the corresponding period last year. During this period, imports rose 12% and exports were up 10%.

[kennynah]

further signs of spain's crumbling economy....stressing Eurozone's overall growth for 2008
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Spanish May Home Sales Decrease
7/28/2008 8:13 AM ET

(RTTNews) - Home sales in Spain decreased 34.3% year-on-year in May, the National Statistics Institute reported Monday. On a monthly basis, sales fell 10.1%.

At the same time, the number of merchantings of rustic property decreased 26% over the previous year, while that of urban property fell 31.8%.

Further, the statistical office said the number of transfers of property fell 22.6% year-on-year to 195,026 in May. Compared to April, this was a decline of 9.2%.

In the case of merchanting of property, the statistical office noted that the number of transfers was 107,947. This represents an interannual decrease of 31.1% and a monthly fall of 10.8%.

[kennynah]

making trichet's job very difficult...using monetary policies to balance growth and inflationary pressures..

***************

German GfK Consumer Confidence Weakest Since June 2003
7/28/2008 7:46 AM ET

(RTTNews) - The German consumer confidence for August deteriorated to its weakest level in more than five years, adversely influenced by fears of recession, continuing financial market crisis and record price increase, resulting from rocketing energy prices.

A survey conducted by the GfK market research group showed Monday that the consumer confidence index for August weakened to 2.1, reaching its lowest level since June 2003. The index stood well below 3.5 points expected by economists. July's reading was revised down to 3.6 points from 3.9 points.

The "GfK consumer climate MAXX survey" was based on nearly 2,000 consumer interviews, conducted on behalf of the EU Commission.

((truncated))

[kennynah]

OECD June CPI Inflation Highest Since March 2000
7/29/2008 10:08 AM ET


(RTTNews) - Tuesday, a report from the Organization for Economic Co-operation and Development said the consumer price inflation in the OECD area increased at a faster year-on-year rate in June compared with May.

The Consumer price index, or CPI rose 4.4% year-on-year in June compared with a 3.9% rise in May. The Paris-based OECD noted that June's inflation rate was the highest since March 2000.

Core inflation, which excludes food and energy, rose 2.2% compared with a 2.1% rise in the previous month.

The main contributor to the annual consumer price inflation was energy prices, which grew 19.3% in the month, faster than the 14.7% rise seen in May. Food prices increased 6.5% compared with the 6% rise in the previous month.

In the Eurozone, consumer prices, measured by the harmonized consumer price index or HICP, were up 4% compared with the 3.7% rise in May. Core inflation increased 1.8% compared with 1.7% in May. Energy prices grew 16%, while food prices rose 4% in the month.

In the European Union, consumer prices increased 4.3%, helped by a 15.4% rise in energy prices and a 7.5% rise in food prices. Core inflation increased 1.9%. For the G7 countries, the CPI rose 4.1%, with core inflation rising 1.8%.

Among the OECD members, the fastest CPI rise of 12.8% was recorded in Iceland. The harmonized consumer price index rose 12.5% in the country. This was mainly due to a 16.6% rise in food and a 28.9% rise in energy prices. Excluding, the two categories, inflation grew 10.9%.

The second highest rise in consumer prices was in Turkey followed by the Czech Republic and Hungary. In Turkey, consumer prices were up 10.6%, while it increased 6.7% each in the Czech Republic and Hungary.

In the United States, consumer prices grew at a faster pace of 5%, compared with the 4.2% growth of May. Moreover, consumer prices also increased in Japan, United Kingdom, France, Germany, among other nations.

Month-on-month, consumer prices rose at a slower pace of 0.6% in the OECD compared with a 0.7% rise in May.