Glad someone’s confident.
- Sees growth in UK retail sales next year, though could be tough.
The phrase “talking one’s book” springs to mind
Glad someone’s confident.
The phrase “talking one’s book” springs to mind
Sounds like in the .8925/30 area. We’re presently touch lower at .8920.
LONDON (MNI) – Below is a survey of analysts’ forecasts for the
first estimate of third quarter GDP, due out on Tuesday, Oct 26 at 0830
! Q3 ! Q3 !
! GDP ! GDP !
! q/q ! y/y !
! % ch ! % ch !
Median forecast 0.5 2.4
High forecast 0.8 2.7
Low forecast 0.3 2.2
Previous period 1.2 1.7
Number of responses 20 15
4Cast 0.4 2.4
ABN Amro 0.3 n/a
Action Economics 0.4 2.4
Barclays Capital 0.4 2.4
BNP Paribas 0.5 2.5
BoA-ML 0.5 n/a
Capital Economics 0.4 2.4
Citi 0.4 2.2
Commerzbank 0.3 2.3
Deutsche 0.6 n/a
Global Insight 0.4 2.4
Investec 0.4 2.4
JP Morgan 0.6 2.6
Lloyds TSB 0.5 2.5
National Australia Bank 0.5 2.5
Nomura 0.5 n/a
RBS 0.8 n/a
Soc. Generale 0.4 2.4
Standard Chartered 0.6 2.5
UBS 0.5 2.7
For further information contact David Robinson on 4420 7 862 7491
or email: email@example.com.
–UK Q3 GDP May Show The Economy Expanding At Above Trend Rate
–Analysts’ Median Forecast 0.5%; Highest Forecast Is 0.8%
LONDON (MNI) – Third quarter GDP data could show above trend
growth, with a surprisingly strong headline number due to rapid growth
in the construction sector.
The median forecast in a Market News survey is for Q3 growth to
come in up 0.5% on the quarter, but no analyst expects growth of less
than 0.3% while the highest call is for 0.8%. Those analysts coming in
with top of the range forecasts are placing weight on strong
UK construction, according to the official data, surged in the
second quarter, rising 9.4% from Q1. National Statistics now publishes a
monthly data series for construction, which showed continued rapid
growth in July and August. If September continued this trend, then
construction could make a sizeable contribution to third quarter growth.
The construction data are “a bit of a wildcard,” David Tinsley,
economist at National Australia Bank, said, adding “the data up to
August have been surprisingly strong.”
He is forecasting 0.5% quarterly growth, while economists at JP
Morgan are expecting 0.6% and at RBS 0.8%.
In a note, the JP Morgan economists said: “Making a reasonable
assumption about September points to another 6% q/q gain in output
within the (construction) sector.”
This would mean construction adding 0.4 percentage points to Q3 GDP
growth, and they say the risks are to the upside with the 0.2%
ex-construction growth weaker than that implied by the purchasing
managers and British Chambers of Commerce surveys.
If GDP growth does come in at 0.6% q/q or above, it is going to be
above estimates for trend growth. The Office for Budget Responsibility
puts trend at just over 2.25% per year.
A marked upside surprise would entail the Bank of England’s
Monetary Policy Committee at its November meeting would be debating
whether to provide more stimulus at a time when, at least according to
the official data, growth is above trend and the margin of spare
capacity in theory is being reduced.
Richard Barwell, economist at RBS, points out, however, that the
irony is two institutions making the minority call that the MPC will
extend quantitative easing in November are two with the highest
forecasts for GDP. Both RBS and JP Morgan expect the central bank to
resume QE next month.
Barwell, a former BOE economist, believes the MPC will “aim off”
the GDP data. The central bank is not a slavish follower of official
data – it uses a mix of survey evidence alongside official GDP numbers
to assess growth, and the surge in construction output is unlikely to be
“This (data) doesn’t change the fundamentals of the economy and the
need for more stimulus … This isn’t a new dawn for the construction
industry,” Barwell said.
BOE Governor Mervyn King said in a speech on Oct 19 “it is
dangerous to become fixated by the precise profile of quarterly growth
rates. The sensible approach is to focus on the big picture.”
King himself appears to be sympathetic to the need for more
The Q3 GDP data will be released at 0830 GMT Tuesday.
–London newsroom: 4420 7862 7491 email: firstname.lastname@example.org
[TOPICS: M$$BE$ M$B$$$,MABDS$]
EUR/USD sits at 1.4045, seemingly taking the comments in its stride.
Korea is said to have been notable buyer of EUR/USD at different levels throughout this morning. We’re presently at 1.4040.
Still seem to be a lot of euro bulls about, but also a marked reluctance to push the envelope.
By Angelika Papamiltiadou
ATHENS (MNI) – The Bank of Greece’s interim report, due to be
published Tuesday, will argue that the Greek economy cannot withstand
further tax increases and the government must now focus on boosting
growth and competitiveness as well as finding alternative sources of
revenue, well-placed officials in Athens told Market News International.
These sources said that Bank of Greece Governor George Provopoulos,
who is a member of the European Central Bank’s Governing Council, is
expected to stress the need for “more intensified efforts to combat tax
evasion and better use of the state’s assets in order to avoid hiking
The report will also highlight progress made by the Greek economy,
but will note that “not all problems are solved,” that the road is still
long, and there is no room for complacency or delay. Greece’s E110
billion loan agreement with the Eurozone and IMF was a necessary “tool”
to exit from the crisis, the report will say.
The report will also urge the government to seek greater investment
from abroad, the officials said. It will argue that two-thirds of
planned deficit reductions should be achieved by spending cuts and
one-third by increased revenues. No more taxes should be imposed on
businesses and households, which have shouldered the bulk of the
austerity package announced last May, the report is expected to argue.
According to figures for January through September, published by
the Greek finance ministry, the government again missed its (downwardly
revised) revenue target while, for the first time, spending cuts were
also below target.
The Greek government, which is planning another round of cuts in
the public sector under the current plan, is withholding announcement of
2011 budget proposals until after the municipal elections on November 7
Despite the repeated promises of Finance Minister George
Papaconstantinou that “there will be no additional [austerity] measures
in 2011,” the European Commissioner for Economic and Monetary Affairs,
Oli Rehn, indicated last week that the upward debt and deficit revisions
expected to be announced by Eurostat for the years 2006-2009 will likely
create a need for additional measures.
Rehn’s statement, made during the Eurogroup press conference in
Luxembourg, generated political waves in Greece since it came only a few
hours after Prime Minister George Papandreou had said there would be “no
new measures.” Following Rehn’s statement, Papandreou revised his
position to say there would be no new measures “that will burden people
with low incomes and low pensions.”
Eurostat, in an unexpected move, refrained from publishing its
revisions for the Greek data last Friday along with the figures for
other EU countries. Instead, it will release the revised Greek figures
on November 15, one day after the municipal elections in Greece.
Opposition parties have accused the Commission of abetting the
socialist PASOK government, which is trying to avoid defeat. But the
Commission argued that Eurostat was not ready to publish the data
because the examination is as yet inconclusive.
According to Commission sources, the findings so far put Greece’s
2009 public deficit at 15.6% of GDP — compared with the current
official number of 13.5% — and debt close to 127%. Finance ministry
officials have publicly indicated that the 2009 deficit could reach 16%.
The revisions are mainly due to state obligations and loan
guarantees for indebted utility companies (DEKO), social security funds,
hospitals, and local government organizations.
In its report, the Bank of Greece will make special mention of the
DEKOs, saying that their restructuring must be speeded up and improved,
and that the government should proceed with another round of mergers
while shutting down unviable public companies.
The report estimates that the Greek economy will contract by around
4% in 2010 and says that return to growth will demand “a multi-pronged
and holistic approach, which should be based on a new growth model.”
Under no circumstances, the report says, should Greece return to
the pre-crisis model, which was based on consumption, since growth can
no longer be financed by “domestic means.” That is because net savings
are shrinking and at the same time the banking system does not have the
necessary liquidity to boost the economy, the report says.
In the report, George Provopoulos, the central bank governor, once
again calls on Greek banks to “make the necessary strategic moves” in
order to ensure the sustainability of the banking system.
–Angelika Papamiltiadou, +306-937-100071; email@example.com
EUR/USD sits at 1.4037, almost exactly where it was when I arrived more than 5 hours ago.
Hedge fund buying is being reported on dip to 1.4020 area in recent trade.
Trailing stops said to be gathering down in 1.3990/00 area.
On topside, 1.4100 barriers noted.
FRANKFURT (MNI) – The German federal government sold E2.945 billion
in new twelve-month bubills at a weighted average yield of 0.8521%, the
Bundesbank announced Monday.
The weighted average yield was higher than the 0.6070% yield at the
last twelve-month auction September 27.
The average price of today’s auction was 99.14579 and the highest
accepted yield was 0.8600%. 40% of bids at the highest accepted yield
There were E5.235 billion in bids for the bubills, including E700
million in non-competitive bids. 100% of the non-competitive bids were
The bid/cover ratio (excluding retention) was 1.8, lower than the
2.3 b/c at the September 27 auction. The government retained E55 million
of the issue (or 1.8%), bringing total issue volume to E3 billion, as
The bubills will settle on Wednesday, October 27 and mature on
October 26, 2011.
–Frankfurt newsroom: +49-69-720142; firstname.lastname@example.org
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