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European Market Update

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Inflation hawks remain on front burner

Mon, Aug 11 2008, 12:54 GMT
by John J. Phillips IV

TradeTheNews.com

ECONOMIC DATA

• - (CH) China Jul Trade balance $25.3B v $20.25Be
• - (GE) Jul Wholesale price Index MoM: -1.4% v 0.5%e, YoY: 9.9% v 9.00%e
• - (FR) Industrial Production (MoM) JUN -0.4% v 0.6%e, YoY: -1.6% v 0.5%e
• - (FR) Manufacturing Production (MoM) JUN -0.8% v 0.3%e, YoY: -2.1% v 0. 1%e
• - (DE) Current Account (Kroner) JUN 3.2B v 4.0Be; Trade Bal. X Ship 2.6B v 2.5Be
• - (DE) Denmark Jul CPI MoM: -0.3% v -0.3%e, YoY:4.0% v 4.00%e
• - (DE) Denmark Jul CPI - EU Harmonized MoM: -0. 3% v -0.3%e, YoY: 4.4% v 4.30%e
• - (DE) Denmark Jun Ind. Orders MoM: -22.1%% v 14.5% prior
• - (IT) Jul Final CPI (NIC incl. tobacco) MoM: 0.5% v 0.5%e; YoY: 4.1% v 4.1%e
• - (IT) Jul Final CPI - EU Harmonized MoM: -0.6% v-0.5%e; YoY: 4.0% v 4.1%e
• - (NO) Norway Jul Producer Prices incl.Oil MoM: 2.3% v 4.80% prior; YoY 31.9%v 29.30% prior
• - (NO) Norway Jul CPI MoM: 0.7% v 0.1%e , YoY: 4.3% v3.80%e
• - (NO) Norway Jul CPI Underlying MoM: 0.2% v -0.2%e; CPI Underlying YoY: 2.9% v 2.60%e
• - (UK) July PPI Input M/M: -0.6% v 1.0%e ; Y/Y: 30.1% v 29.8%e
• - (UK) July PPI Output. M/M: 0.4% v 0.5%e; Y/Y: 10.2% v 10.3%e
• - (UK) PPI Output Core M/M: 0.3% v 0.4%e, Y/Y: 6.7% v 6.5%e
• - (UK) June Visible Trade Balance: -£7.68B v -£7.4Be; Total Trade Balance: -£4.4B v -£4.2Be; Trade Balance Non EU: -£4.74B B v -£4. 0Be

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

- ECB's Liebscher says has no bias or precomittment on interest rates; decisions are data driven. Notes that lower oil prices are welcome, but it is difficult to project how long the prices will remain subdued. Says must not scare public with unmerited negativity on economy. Reiterates that ECB must watch wage deals for second round effects of inflation. Lastly, Liebscher stated that he Expects financial market crisis to persist into 2009.

- Norway Finance Minister says government must prepare for soft landing as growth likely have peaked.

- (TU) Reportedly Turkey- Baku pipeline fire will be extinguished later today.

- Russian General Staff says Russian forces advanced only to the border of South Ossetia. Russian military denied any alleged bombing reportedly attack of Georgia's Tbilisi Airport Radars. Lastl, Russian President Medvedev says military operation in Southern Ossetia was nearing an end.

NOTES

In currencies ECB's Liebscher reiterated that the inflation battle remains intact which helped the Euro regain a foothold above the 1.50 area. Liebscher stated that the recent drop in oil prices were welcomed, but it was difficult to project just if the price drop would remain a new trend. UK PPI data was below expectations but remained elevated on a year-over- year basis and at their highest level since records began back in 1986. Dealers continue to believe that the Bank of England continue to wait before cutting interest rates as the economy slows.

Russia battled Georgian forces on land and sea. Russian President Medvedev says military operation in Southern Ossetia is near the end

Published on  Mon, Aug 11 2008, 12:55 GMT