Central Bank News ( Daily Update )

[surf4sports]

Here all lates Cental Bank News.
Daily update

 

[surf4sports]

Central Banks Australian

Central Banks
Australian employment growth supports argument for rate hike - economists

Thu, Jan 17 2008, 04:53 GMT
http://www.afxnews.com

SYDNEY (Thomson Financial) - Australian employment rose for the fourteenth straight month in December, the longest period of jobs growth for 27 years, as unemployment fell to near 33-year lows reflecting strong economic growth and supporting the argument for higher interest rates, economists said Thursday.

The number of employed people rose a seasonally adjusted 20,100 to 10.6 million in December, with full-time employment jumping by 6,300 to 7.6 million and part-time employment growing by 13,800 to just over 3 million people, the Australian Bureau of Statistics (ABS) said earlier today.

The unemployment rate fell to 4.3 percent from 4.5 percent in November, compared with the market's consensus forecast for a rate of 4.4 percent. Unemployment reached a 33-year low of 4.2 percent in September.

"The Australian job market is in spanking good health. Not only is the country experiencing the longest period of job gains in 27 years, but unemployment is again edging closer to a landmark three-point-something result," said Craig James, chief equities economist at CommSec.

"The latest employment figures confirm the strength of the Australian economy, keeping the Reserve Bank poised to lift interest rates in February."

Many economists expect the Reserve to raise interest rates by 25 basis points in February, adding to the cumulative 50 basis points increases in August and November last year as the central bank attempts to rein in inflation which has been at the top end of its target range.

While recent economic data supports the case for a rate hike, the Reserve's decision has been complicated by the credit market crisis, which is threatening to tip the US economy into recession. A recession in the world's biggest economy could lead to slower growth in the rest of the world, including Australia.

"The central bank still has the tricky issue of weighing up what has been in the main a still overall strong domestic economy against an increasingly uncertain world, coupled with rate tightness in the system (that is) yet to flow through," NAB Capital in a note.

So far, the Reserve's rate hikes in August and November appear to have had little impact on consumer spending.

November retail sales rose a seasonally adjusted 0.8 percent from October, compared with the market's consensus forecast for a 0.5 percent increase, the ABS said last week.

The consumer spending spree came after the Reserve raised interest rates at the beginning of the month and fuel prices increased more than 6 percent.

[email protected]

-

bhx/ng

COPYRIGHT

Copyright Thomson Financial News Limited 2007. All rights reserved.

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

 

[surf4sports]

The Bank of England

BoE's Gieve expects 'sharp rise' in UK inflation in coming months UPDATE

Thu, Jan 17 2008, 13:40 GMT
http://www.afxnews.com

(Updating to add further details from speech)

LONDON (Thomson Financial) - Bank of England (BoE) deputy governor John Gieve warned of a "sharp rise" in inflation in the UK over the coming months, complicating the job of rate-setters at a time when the credit crunch has diminished growth prospects.

In a speech to the London Chamber of Commerce and Industry, Gieve said the big rise in recent months of world oil and food prices, amplified by the sharp fall in the pound, is coming through in food, petrol, gas and electricity prices.

"These are likely to raise our inflation rate well above target in the coming months at a time when short-term inflation expectations remain uncomfortably high," he said.

Tuesday's figures showed the annual CPI inflation rate unchanged at 2.1 pct and still above the BoE's 2.0 pct target.

At the same time, growth is being undermined by the credit crunch, which under normal circumstances "greatly strengthened" the case for the rate-setting Monetary Policy Committee (MPC) to ease policy.

"These are testing times for the MPC," said Gieve, who surprised sterling markets by voting for a reduction in borrowing costs in November, alongside arch-dove Danny Blanchflower -- a month before rates were actually reduced a quarter point to 5.50 pct.

The MPC is widely tipped to cut its benchmark Bank rate another quarter point in February to 5.25 pct.

"In reaching our decisions, the MPC always looks not just at the central projection for the economy but at the risks on either side. That will require not just difficult judgements but careful explanations in the months ahead," said Gieve.

He said the appropriate monetary policy reaction to upside pressures on prices coming from outside the economy, such as an energy price shock, depends on how households and businesses react to that shock.

"In other words, on so-called 'second-round' effects. A key determinant of those effects will be the impact on inflation expectations," said Gieve.

He warned that if households' and businesses' expectations of future inflation rise following the initial price shock, pressures for compensating rises in wages and prices are "much more likely".

The deputy governor, who has been somewhat of a lightning rod for the criticism thrown at the Bank for its handling of the Northern Rock crisis, provided little comfort about future inflation prospects by noting that demand from emerging economies may mean that commodity prices prove resilient to slowing growth in the industrialised economies.

Elsewhere, Gieve was sceptical that the weakening housing market will necessarily have a depressing effect on consumption.

[email protected]

pp/pp/am/pp/am

COPYRIGHT

Copyright Thomson Financial News Limited 2007. All rights reserved.

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

 

[surf4sports]

The Bank of Japan

Central Banks
Bank of Japan governor says economy slowing; sees greater subprime impact

Tue, Jan 15 2008, 05:02 GMT
http://www.afxnews.com

TOKYO (Thomson Financial) - Bank of Japan governor Toshihiko Fukui has reiterated that the Japanese economy is slowing due to a decrease in housing investment but will continue its gradual recovery.

"The Japanese economy is slowing for the time being but it is expected to continue its moderate expansion subsequently," the governor said in a speech at the quarterly meeting of Bank of Japan branch managers.

"The Bank of Japan continues to contribute to the realization of sustainable growth under stable prices, through implementation of appropriate monetary policy with a close examination of the economic and price situation," he said.

Fukui also said the impact from the subprime crisis on Japan's financial institutions was greater than initially expected.

But he said the impact on Japan's financial institutions was smaller than on those of US and Europe and does not see the issue currently having a serious effect on the stability of Japan's financial system.

The governor said there is uncertainty in the global economy, given rising international commodity prices, including oil prices, and the downside risk to the US economy.

"There is a necessity that we continue to closely monitor the impact of the development of international financial and capital markets, the global economy and the international commodity market."

(1 US dollar = 108.00 yen)

[email protected]

-

kk/ng

COPYRIGHT

Copyright Thomson Financial News Limited 2007. All rights reserved.

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

 

[surf4sports]

The European Central Bank

Central Banks
Trichet: Productivity Growth Cyclical, Not Structural

Thu, Jan 17 2008, 15:51 GMT
http://www.djnewswires.com/eu

Trichet: Productivity Growth Cyclical, Not Structural

FRANKFURT -(Dow Jones)- Recent productivity growth in the euro zone is judged by the European Central Bank to be of a cyclical nature, rather than more permanent, President Jean-Claude Trichet said Thursday.

"What we are observing is cyclical and not structural," Trichet said at a presentation on wealth creation.

Structural or trend productivity growth would be of a more permanent or sustained nature, rather than a side effect of the business cycle.

Trichet said labor market flexibility, innovation, as well as service and product market reforms, are needed to improve euro-zone productivity.

"Structural reforms are absolutely of the essence," Trichet added.

During periods of strong economic growth, the reaction is often "to be even more inflexible than in a period of slow motion," Trichet added.

Trichet also noted that public spending, as a percentage of gross domestic product, is still high in Europe compared with the U.S., and impairs economic growth.

Euro-zone countries must make extra efforts to close the productivity gap between the U.S. and the euro zone.

Trichet also said monetary policy can't do this alone. The best contribution it can make to growth is to maintain price stability.

"It is absolutely clear that a solid anchoring of inflation expectations is paving the way for a high level of long-term growth," Trichet said.

-By Monica Houston-Waesch and Nina Koeppen; Dow Jones Newswires; +49 69 29 725 520; [email protected]

(END) Dow Jones Newswires

January 17, 2008 10:51 ET (15:51 GMT)


Copyright 2008 Dow Jones & Company, Inc.

 

[surf4sports]

The Federal Reserve

Bernanke endorses quick, temporary, targeted fiscal stimulus

Thu, Jan 17 2008, 15:16 GMT
http://www.afxnews.com

WASHINGTON (Thomson Financial) - Federal Reserve Chairman Ben Bernanke told Congress any fiscal stimulus package should be quick, temporary, targeted at maximizing immediate spending and not make the long-term federal budget outlook worse.

That's an approach likely to please Democrats who're talking about short-term cuts and benefit increases, and to disappoint Republicans who're talking about using a stimulus bill to extend President George W. Bush's tax cuts beyond 2010 when they're scheduled to expire.

"To be useful, a fiscal stimulus package should be implemented quickly and structured so that its effects on aggregate spending are felt as much as possible within the next twelve months or so," Bernanke said in testimony prepared for the House Budget Committee.

The Fed chairman also repeated his statement last week that the Fed itself is "ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks."

Bernanke said a stimulus package should be "efficient, in the sense of maximizing the amount of near-term stimulus per dollar." And, as important, "any program should be explicitly temporary."

Bernanke warned that a package could be counterproductive, if, for example it provided economic stimulus at the wrong time or compromised fiscal discipline in the longer term.

He is warning against the long-standing tendency for Congressional stimulus packages to bog down in partisan wrangling and finally pass only in time to add stimulus to an economy that has already begun recovering.

"Stimulus that comes too late will not support economic activity in the near term," Bernanke said, "and it could be actively destabilizing if it comes at a time when growth is already improving."

Long-term tax code changes, "whatever their intrinsic merits, will not provide stimulus when it is most needed," he said. And it is long-term changes which also run the highest risk of increasing the federal government's "daunting" budget problems when it comes to dealing with Social Security and Medicare.

On the economy itself, Bernanke told the Budget Committee that the outlook "in 2008 has worsened and that the downside risks to growth have become more pronounced."

He sees several factors including rising energy prices, falling stock and home prices and a weakening labor market as likely to dampen consumer spending.

Business investment also looks to be slowing down and credit tightness remains a serious economic constraint.

[email protected][email protected]

dem/wash/rfw

COPYRIGHT

Copyright Thomson Financial News Limited 2007. All rights reserved.

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