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Slovenia Import Price Inflation Eases In June

FxOpen — Sat, 31 Jul 2010 02:38:37 GMT

Slovenia's import price inflation eased in June from the previous year.

Import price index increased 8.7% on an annual basis in June, slower than a 9.4% growth in the previous month, the Statistical Office of the Republic of Slovenia said on Friday. However, import prices increased for the seventh successive month. A year earlier, import prices decreased 5.2%.

Import price index for manufacturing products grew 8.3% annually in June, while prices for mining and quarrying products climbed 17.6%. Import prices for intermediate goods increased 19.6% in June, while prices for energy grew 23.1%. Import prices for capital goods dropped 1.1% and consumer goods climbed 3.4%. Import prices for non-durable consumer goods rose 4.1%.

On a monthly basis, import prices slipped 0.2% in June, compared to a 1.4% growth in the preceding month. For the January to June period, import prices climbed 6.4% compared to the same period of the previous year.

Slovenia's import price inflation eased in June from the previous year. (Market News Provided by RTTNews)

Irish June Retail Sales Growth Slows Further

FxOpen — Fri, 30 Jul 2010 22:41:51 GMT

Irish retail sales growth eased in June from the preceding month, provisional estimates from the Central Statistics Office showed on Friday.

Retail sales volume rose 1% year-on-year in June, slower than a 3.1% growth in the previous month. However, sales increased for the fifth successive month. A year ago, retail sales slipped 9.6%.

Sales in motor trade rose 13.9% in June from the previous year and non specialized stores grew 1.4%. Sales for clothing, footwear and textiles climbed 2.6%.

On a monthly basis, retail sales volume dropped 0.2% in June, following a 0.1% fall in May. Retail sales decreased for the second consecutive month.

Excluding motor trades, retail sales declined 1.3% on an annual basis in June, compared to a flat reading in the previous month. Sales slipped 0.5% compared to the preceding month.

Meanwhile, overall retail sales value dropped 2.8% annually in June, compared to a 0.3% fall in May. Retail sales value dropped for the second straight month. Month-on-month, the value of retail sales fell 0.7%, after rising 0.3% in May. Retail sales value, excluding motor trades fell 4.8% annually and was down 1.1% compared to the prior month.

The Irish economy is expected to grow 0.8% this year following a 7.6% contraction in 2009. Next year, economic growth would accelerate to 2.8%, the central bank said in its quarterly bulletin today. Irish economy had exited from its worst recession in the first quarter. The gross domestic product increased to 2.7% sequentially from 2.7% decline in the fourth quarter of 2009.

Irish retail sales growth eased in June from the preceding month, provisional estimates from the Central Statistics Office showed on Friday. (Market News Provided by RTTNews)

Chile's Jobless Rate Drops Unexpectedly

FxOpen — Fri, 30 Jul 2010 21:10:01 GMT

Chile's jobless rate dropped unexpectedly in the three months through June from the previous period.

The jobless rate dropped to 8.5% in the three months ended in June from 8.8% in the three months ended in May, a report by the National Institute of Statistics showed on Friday. Economists had expected a rate of 8.9%.

Chile's annual inflation rate eased in June. The consumer price inflation eased to 1.2% from 1.5% in the previous month. The central bank had hiked its benchmark lending rate for the second straight month, with the country's economy rebounding at a faster than expected pace. The bank raised its key rate by 50 basis points to 1.50% on mid-July.

Chile's jobless rate dropped unexpectedly in the three months through June from the previous period. (Market News Provided by RTTNews)

Dollar Backpedals To End Brutal July

FxOpen — Fri, 30 Jul 2010 14:38:22 GMT

The dollar remained at the mercy of the sterling and yen on Friday, ending a brutal July at a multi-month low versus a basket of key majors.

While economic momentum has been picking up elsewhere, particularly Latin America and Europe, where a sovereign debt crisis appears to have run its course, the US recovery remains in doubt amid stubborn weakness in housing and jobs.

Today's slew of economic data did little to generate optimism about the second half of the year.

U.S. economic activity increased at a slightly slower than expected pace in the second quarter, according to a report released by the Commerce Department on Friday.

The report showed that gross domestic product increased at an annual rate of 2.4 percent in the second quarter compared to the revised 3.7 percent jump seen in the first quarter.

Later, the University of Michigan's monthly survey said US consumer sentiment plunged in July to its lowest level in nine months.

The dollar dropped to a new yearly low versus of 85.93 versus the yen, which has replaced the bcuk as the world's preferred safe haven currency.

A move below 84.80 would take the dollar to its lowest since 1995 against the yen.

Versus the sterling the buck slumped to a fresh 5-month low of 1.5721.

Choppy trading left the dollar near its 2 1/2 month low versus the euro. The buck held near 1.3050, having touched 1.3106 on Thursday.

(Market News Provided by RTTNews)

Pakistan Raises Key Policy Rate To Rein In Inflation

FxOpen — Fri, 30 Jul 2010 11:47:34 GMT

Pakistan's central bank has decided to raise its key policy rate by 50 basis points to 13%, as concerns about the persistence of inflation and the weak fiscal position outweighed improvement in the recovery process.

The State Bank of Pakistan, in its monetary policy council meeting on Friday, unexpectedly hiked the rate after keeping it unchanged for three consecutive rate-setting sessions. The central bank was widely expected to keep the interest rate unchanged.

"Concerns of persistence in inflation and fiscal weaknesses are overshadowing the improvement in the external current account deficit and economic recovery," the SBP said.

The bank expects risks to inflationary pressures to persist in financial year 2011. In the last financial year, inflation was 11.7%, 2.7 percentage points above the target.

A increase in electricity prices, general sales tax and revisions in government employees' wages are putting upward pressure on inflation, the SBP said. The bank expects average consumer price inflation to be between 11% to 12% in 2011, higher than the 9.5% target.

The bank observed that the decline in investments has narrowed the gap between national savings and investment. At the same time, aggregate domestic demand, led by public sector consumption expenditures, is picking up while the prospects for aggregate supply remain weak due to energy shortages and dismal law and order conditions.

These conditions, combined with rising debt continue to threaten the macro-economic stability of the country and call for renewed efforts to maintain the economic growth momentum, the bank noted.

Both the fiscal deficit and government borrowing missed their respective targets in the financial year 2010, putting upward pressure on interest rates. SBP forecast a deficit above 5% in 2011.

"Measures to increase the tax to GDP ratio and eliminate the revenue deficit of fiscal accounts are urgently required to provide a firm foundation for sustainable economic growth," the bank observed.

Meanwhile, the government has set an inflation target of 9.5% for 2010-11 fiscal year, down from an estimated 12% in 2009-10. Real GDP growth is forecast to be 4.1% in the current fiscal and may move to 4.5% in the next fiscal year and gradually go up to 5% in 2011-12 and to 5.5% in 2012-13.

Pakistan is trying to bring its budget deficit down to 4% of the country's gross domestic product in the 2010-11 fiscal year from 5% estimated for 2009-10, Finance Minister Abdul Hafeez Shaikh said in his budget speech on June 7.

The government also aims to lower total public debt to 51.5% of GDP from 54.8% estimated for the current financial year. In 2010, the GDP grew 4.1%, mostly due to an increase in total consumption expenditures.

Euro Levels Off Versus Dollar Amid Anxiety Over Recovery

FxOpen — Fri, 30 Jul 2010 10:58:58 GMT

The euro was mixed on Friday, struggling to retain its strong recent gains versus the dollar as stocks wobbled on Wall Street.

After losing significant ground in the early going, the euro improved along with US stocks approaching mid-day, as traders expressed a bit of risk appetite.

Still, the euro is unlikely to extend yesterday's nearly 3-month high of 1.3106 versus the dollar.

Amid a slew of economic data from both sides of the Atlantic, the euro fetched 1.3030 versus the dollar as of 11 am ET.

Eurozone annual inflation rose to a 20-month high in July, while the unemployment rate in the 16-nation currency bloc remained at a 12-year high, data showed today.

The annual inflation rose to 1.7% in July, logging the highest rate since November 2008, according to a flash estimate from Eurostat, released on Friday.

Meanwhile, U.S. economic activity increased at a slightly slower than expected pace in the second quarter, according to a report released by the Commerce Department on Friday.

The report showed that gross domestic product increased at an annual rate of 2.4 percent in the second quarter compared to the revised 3.7 percent jump seen in the first quarter.

Later, the University of Michigan's monthly survey said US consumer sentiment plunged in July to its lowest level in nine months.

The euro dropped toward its July lows versus the sterling, hitting 0.8321.

Against the yen, the euro dropped to a weekly low near Y112 before finding its footing.

(Market News Provided by RTTNews)

Revisions Show Recession Was More Severe Than Estimated

FxOpen — Fri, 30 Jul 2010 10:41:24 GMT

The U.S. economy slid into its downturn somewhat faster and more severely than previously estimated, according to new information from the Commerce Department.

The department's Bureau of Economic Analysis Friday released its annual revisions to previously published data on the Gross Domestic Product figures for 2007 through 2009.

The revisions, though relatively minor, primarily reflect better and more complete data on the economy reported to the bureau since its last estimates.

According to Brent Moulton, associate director for national economic accounts, the data shows GDP growth slowed more than previously reported in the third quarter of 2007, while the uptick in the second quarter of 2008 was weaker than previously believed.

From that uptick, the data also show that the GDP slide into negative territory began slightly sooner than previously reported, and though the trough came a quarter earlier, the last quarter of 2008, the same was true of the path toward recovery.

"We're showing the decline coming a little earlier," Moulton said. "I will point out that none of the quarters changed sign, from plus to minus, so in terms of peaks and troughs of GDP that hasn't changed."

He added, "The biggest upward revision came in the first quarter of 2009, where previously that had been the biggest decline in GDP and with the revised data, now it's the fourth quarter of 2008."

The new data, however, continues to confirm the severity of the economic downturn, Moulton said.

"It actually now surpasses all of the other post-war [WWII] downturns in GDP," he said. "We don't have quarterly estimates for the period of the Great Depression �?� [but] the Great Depression was much bigger than this."

According to the revised figures, the relatively anemic overall GDP growth of 0.4 percent in 2008 was revised down to zero, driven by a drop in gross private domestic investment, which shrank by 1.53 percent rather than the previously reported 1.18 percent.

The worsening of GDPI was partly offset by somewhat stronger growth in exports than had been previously reported, with export growth in 2008 revised to 0.72 percent from 0.64 percent.

The GDP drop for 2009 also proved somewhat worse than expected, with the economy shrinking by 2.6 percent for the year. The previous figures had shown a 2.4 percent drop.

Moulton attributed that drop to even worse personal consumption rates than previously reported, with the revised figures showing a drop of 0.84 percent rather than 0.42 percent.

However, the revised figures also showed slight improvements in GDPI and exports, somewhat offsetting the personal spending drop.

"We had a fairly large downward revision to personal consumption" in 2009, Moulton said.

The new figures also reflect an overall downturn in corporate profits for all three years, with the biggest drop coming in at $97.6 billion in 2008, $50.9 billion in 2009 and $31.1 billion in 2007.

The personal savings rate for the country was revised up in all three years as well, from 1.7 percent to 2.1 percent in 2007, from 2.7 percent to 4.1 percent in 2008 and from 4.2 percent to 5.9 percent in 2009.

The U.S. economy slid into its downturn somewhat faster and more severely than previously estimated, according to new information from the Commerce Department. The department's Bureau of Economic Analysis Friday released its annual revisions to previously published data on the Gross Domestic Product figures for 2007 through 2009. (Market News Provided by RTTNews)

Chicago Business Barometer Shows Unexpected Acceleration In Growth

FxOpen — Fri, 30 Jul 2010 10:39:32 GMT

The ISM Chicago said its business barometer rose to 62.3 in July from 59.1 in June, with a reading above 50 indicating growth in Chicago-area business activity. The increase surprised economists, who had expected the index to fall to a reading of 56.3.

A notable acceleration in the pace of new orders growth contributed to the bigger than expected increase by the index, with the new orders index jumping to 64.6 in July from 59.1 in June.

Production growth also showed a modest acceleration, pushing the production index up to 65.0 in July from 64.2 in the previous month.

The report also showed a turnaround for inventories, with the inventories index climbing up to 50.8 in July from 46.5 in June.

Additionally, the employment index rose to 56.6 in July from 54.2 in June, indicating an acceleration in the pace of employment growth.

With regard to inflation, the prices paid index slipped to 58.1 in July from 61.9 in the previous month, suggesting a slowdown in the pace of price growth.

"On the surface, this is the first semi-major evidence the May-June slump may be giving way to faster growth in Q3," said Chris Low, chief economist at FTN Financial. "We'll see Monday if it carries into the national ISM figures."

Next Monday, the Institute for Supply Management is scheduled to release its report on national manufacturing activity in the month of July. The index of activity in the manufacturing sector is expected to slip to a reading of 53.5 from 56.2 in June.

After reporting slowdowns in the pace of expansion in Chicago-area business activity in the two previous months, the Institute for Supply Management - Chicago released a report on Friday showing an unexpected acceleration in the pace of growth in the month of July. The ISM Chicago said its business barometer rose to 62.3 in July from 59.1 in June, with a reading above 50 indicating growth in Chicago-area business activity. (Market News Provided by RTTNews)

S. Africa Posts Trade Surplus In June

FxOpen — Fri, 30 Jul 2010 10:31:40 GMT

South Africa's trade balance showed a surplus in June, the South African Revenue Service said on Friday.

The trade balance logged a surplus of ZAR 5.6 billion in June, compared to a deficit of ZAR 0.30 billion in the previous month. Economists had expected a shortfall of ZAR 1.6 billion. A year earlier, the trade surplus amounted to ZAR 3.2 billion.

Exports increased 17.8% on a monthly basis to ZAR 55.6 billion in June, faster than the 6.8% growth in the previous month. Exports of precious and semi-precious stones and metals grew 3% in June from the preceding month, while shipments of mineral products rose 4%. Exports of vehicles, aircraft and vessels climbed 3% and machinery and electrical appliances exports rose 8%.

At the same time, imports rose 5.2% to ZAR 49.9 billion, following a 3.1% rise in May. Imports of textile and textile articles grew 37%, while machinery and electrical appliances increased 8%. But, imports of vehicles, aircraft and vessels slipped 23%.

South Africa's trade balance showed a surplus in June, the South African Revenue Service said on Friday. (Market News Provided by RTTNews)

Russia's Central Bank Leaves Key Interest Rate Unchanged

FxOpen — Fri, 30 Jul 2010 10:31:13 GMT

Russia's central bank left its key interest rate unchanged for a second month, as the economic recovery gained momentum and inflation slowed.

The Bank Rossii kept its refinancing rate at a record low of 7.75% on Friday. The central bank had lowered the key rate fourteen times since April 2009.

The bank said in a statement that macroeconomic indicators have showed positive signs. Moreover, inflation continued to ease. Consumer prices rose 5.8% year-on-year in June compared with the 6% increase in May. By July 26, Russia's inflation was 5.7%. The bank said the current inflation level does not warrant a monetary policy revision.

Given that the unemployment rate has already reached pre-crisis level, its further reduction may be a sign that the economy is returning to a sustainable growth period. The central bank also cited an increase in fixed investment, retail trade and bank lending.

However, the volume of consumer lending remained below pre-crisis level, whereas households' deposits volume continued to grow. The central bank said this trend indicates that there is potential for a growth in domestic demand.

(Market News Provided by RTTNews)