August 27th, 2010 07:35:16 GMT

Germany: NRW Aug CPI +0.2% M/M; Above Pan-German Median Fcast

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North-Rhine Westphalia CPI

August: +0.2% m/m, +1.0% y/y
July: +0.2% m/m, +1.1% y/y

Pan-German CPI

MNI median forecast: +0.1% m/m, +1.1% y/y
MNI forecast range: flat to +0.2% m/m

July: +0.3% m/m, +1.2% y/y

BERLIN (MNI) – Consumer prices in the western German state of
North-Rhine Westphalia rose 0.2% in August, dampening the annual
inflation rate to 1.0% from +1.1% in July, the state statistics office
said Friday.

The monthly result was slightly above the +0.1% median forecast for
pan-German CPI in an MNI survey of analysts. Earlier today, Saxony
reported a flat reading of monthly CPI.

As in Saxony, downward pressure on monthly inflation came from food
prices, which fell 0.6%, with seasonal produce down 4.8%. Prices for
alcoholic drinks and tobacco products were flat on the month.

Energy price developments were mixed. Electricity rose 0.5% on the
month, gas climbed 0.1%, while motor fuel fell 2.2%. Heating oil prices
were flat on the month.

Prices for packaged holiday tours were 1.3% higher than in July.
Prices for clothing and shoes climbed 2.9%.

In the annual comparison, heating oil prices rose 16.9%,
electricity prices 3.4% and motor fuel prices 4.9%, while gas prices
were down 0.8%. Food prices were 3.8% higher than a year ago, while
prices for clothing and shoes fell 0.2% on the year.

Core inflation also remained tame in August. CPI excluding heating
oil and motor fuel was up 0.3% on the month and 0.7% higher on the year.

Despite the ongoing robust economic upswing, both headline and core
inflation rates are seen remaining low over the coming months. The
remaining slack in the economy is expected to offset any increase in
imported inflation related to the weaker euro.

The Bundesbank asserted in its August Monthly Report that “for the
coming months a continued moderate price increase is to be expected
despite the upward pressure from imports.”

Analysts point out that the pricing-power of businesses remains
weak, as private consumption is not expected to become a major growth
engine in coming quarters. Wage growth in all likelihood will stay
subdued, given that pay deals have been very moderate up to now.

At the eurozone level there are also few inflation risks seen at
the moment.

“We continue to expect price developments to remain moderate over
the policy-relevant medium-term horizon, benefiting from low domestic
price pressures,” European Central Bank President Jean-Claude Trichet
said earlier this month.

For detailed information see data table on MNI MainWire.

–Berlin bureau: +49 30 2262 0580; email: twidder@marketnews.com

[TOPICS: M$G$$$,M$X$$$,MAGDS$,M$XDS$,MT$$$$]

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August 27th, 2010 07:15:44 GMT

Germany’s Schaeuble Doesn’t Rule Out Tax Cuts Before 2013

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BERLIN (MNI) – The German government might lower tax rates in the
current legislature if it would still be able to meet its deficit
reduction goals, German Finance Minister Wolfgang Schaeuble said in a
newspaper interview published Friday.

“I don’t rule out tax cuts if they are in line with our debt
limitation rules,” Schaeuble told German daily Bild. “However, our main
goal is now to simplify the tax code, something that we want to
implement next year.” The legislature runs still until autumn 2013.

In other remarks, Schaeuble said the German government strictly
opposed a separate EU-levied tax. “Such a tax has absolutely no chance.
The [German] federal government as well as other [EU member] states
strictly oppose such proposals,” he said.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$G$$$,MFX$$$,M$X$$$,MFGBU$,MGX$$$]

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August 27th, 2010 07:05:18 GMT

Germany: Saxony August CPI Flat M/M; Below Pan-German F’cast

by

Saxony CPI

August: flat m/m, +1.1% y/y
July: +0.2% m/m, +1.2% y/y

Pan-German CPI

MNI median forecast: +0.1% m/m, +1.1% y/y
MNI forecast range: flat to +0.2% m/m

July: +0.3% m/m, +1.2% y/y

BERLIN (MNI) – Consumer prices in the eastern German state of
Saxony were overall flat in August, dampening the annual inflation rate
to +1.1% from +1.2% in July, the state statistics office said Friday.

The monthly result — the first from the six states to release
preliminary inflation figures — is slightly below the median forecast
of +0.1% for pan-German CPI in an MNI survey of analysts.

Downward pressure on monthly inflation came from food prices, which
fell 1.2%, with seasonal produce down 5.2%. Prices for clothing and
shoes fell 0.3%.

Energy price developments were mixed. Heating oil rose 0.9% on the
month, while motor fuel fell 0.3%. Both electricity and gas prices were
flat on the month.

Prices for alcoholic drinks and tobacco products climbed 0.2% on
the month. Prices for packaged holiday tours were 1.3% higher than in
July.

In the annual comparison, heating oil prices rose 15.8%,
electricity prices 6.2% and motor fuel prices 5.8%, while gas prices
were down 1.8%. Food prices were 2.7% higher than a year ago and prices
for clothing and shoes up 0.2% on the year.

Core inflation also remained tame in August. CPI excluding energy
and seasonal foods was flat on the month and up 0.5% on the year.

Despite the ongoing robust economic upswing, both headline and core
inflation rates are seen remaining low over the coming months. The
remaining slack in the economy is expected to offset any increase in
imported inflation related to the weaker euro.

The Bundesbank asserted in its August Monthly Report that “for the
coming months a continued moderate price increase is to be expected
despite the upward pressure from imports.”

Analysts point out that the pricing-power of businesses remains
weak, as private consumption is not expected to become a major growth
engine in coming quarters. Wage growth in all likelihood will stay
subdued, given that pay deals have been very moderate up to now.

At the eurozone level there are also few inflation risks seen at
the moment.

“We continue to expect price developments to remain moderate over
the policy-relevant medium-term horizon, benefiting from low domestic
price pressures,” European Central Bank President Jean-Claude Trichet
said earlier this month.

For detailed information see data table on MNI MainWire.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$G$$$,MAGDS$,M$X$$$,M$XDS$,MT$$$$]

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August 27th, 2010 06:38:04 GMT

PM Kan missing in action

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The search parties are out looking for him, but no sign as yet.  Well I’d heard he was supposed to  give press conference 06:00 GMT as had a number of my contacts, but he’s not surfaced. It’s a funny old world. I hope he’s OK.

16 Comments

August 27th, 2010 06:15:31 GMT

Analysis: Germany’s July Import Prices Down 0.2% On The Month

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July: -0.2% m/m, +9.9% y/y
June: +0.9% m/m, +9.1% y/y

BERLIN (MNI) – Import prices in Germany fell somewhat less than
generally expected in July, boosting the annual import inflation rate to
its highest level since November 2000, the Federal Statistical Office
reported on Friday.

On the month, imports dropped 0.2%, which left prices 9.9% higher
compared to the same month one year ago.

Upward pressure came mainly from energy prices, which rose 30.4%
y/y and 0.1% m/m. Crude oil was up 35.4% y/y but down 0.1% m/m, while
mineral oil products rose 27.5% y/y and fell 5.6% m/m. Natural gas
prices climbed 29.0% y/y and 4.7% m/m.

Import prices excluding crude oil and mineral oil products were up
7.5% y/y and flat on the month.

Commodities (ex-food and mineral combustibles) were up 35.5% y/y
and down 0.1% m/m. In the foods sub-category, raw coffee prices climbed
37.1% y/y and 3.7% m/m, while crop prices rose 18.5% y/y and 13.2% m/m.

In the longer-term, energy prices are likely to remain contained,
owing to an abundant supply of both oil and gas that is expected until
2015.

However, food and other commodities could at least partially offset
the impact of weaker energy prices on overall import price inflation
over the long run.

Export prices in July were up 4.1% y/y, the hightest annual
increase since June 1982. On the month, export prices were flat.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$G$$$,MAGDS$,MT$$$$,M$XDS$,M$X$$$]

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August 27th, 2010 06:01:24 GMT

Close, but no cigar

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Cable down at 1.5510 from North American close Thursday up around 1.5530.   The cable bulls came close to getting through the 1.5580/00 sell orders we mentioned yesterday, but just came up short, the pairing topping out at 1.5597.  As they say, “close, but no cigar.”

Today we’ve got revision to Q2 GDP data at 08:30 GMT.  Initial reads +1.1% q/q, +1.6% y/y.

EUR/GBP up marginally at .8203.  As I mentioned to Jamie last night, given the UK bank holiday Monday there must be a possibility we’ll see the usual month end EUR/GBP buying (related to UK payments to EU) executed today.

UPDATE: Right Ive just worked out there are 31 days in August and so Tuesday, not Monday, is last day of month.  Whoops.  Anyways, early anticipation of the demand could well lend the cross some underlying support.  How’s that?

1 Comment

August 27th, 2010 05:20:15 GMT

EUR/USD steady during Asian trade

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EUR/USD sits at 1.2730, all but unchanged from Thursdays North American close.  The range overnight in Asia has been a rather pedestrian 1.2693-1.2733.

Euro zone data scheduled for release today:

German CPI for August (provisional) expected flat m/m, +1.1% y/y

06:00 GMT: German import price index for July expected -0.4% m/m, +9,7% y/y

06:45 GMT: French survey of industrial investments

Hard to see that lot impacting market very much, if at all.

Buy orders noted 1.2665/80. Stops below 1.2650.   Stops on topside through 1.2775.   The layered sell orders from 1.2750 through 1.2800 we mentioned yesterday rather easily capped the upside, 1.2764 being the high posted.  Roll on the weekend.  But first let’s see what Mr Kan has to say.

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