Historically low interest rates to boost economic recovery

The week we leave behind has reminded us the negative economiic moment we are goingh through, a situation with complicated solutions, we have seen some exampler this week, namely in England ith the Boe cuttin interest rates once again, to 1.5% this time, the lowest Bank Rate since the bank started to set monetary policy in 1694.

In the Euro Area economy continues looking gloomier and gloomier, with unemployment figures rising at a fast pace and industrial production declining as fast. germany, the main economy in the Euro aresa has seen evidence of the decline of its Industrial sector, manufacturing production flass continuously, and factory orders have weakened to historically low levels.

The situation in the U.S. does not show any considerable improvement. The FOMC minutes have described the current situationin rather negative terms, and the employment report this week has confirmed the worst expectations, 2008 has closed with a loss of 2.3 million jobs in the U.S., the wo4rst number since 1945.

next week we have several important indicators, focus will be, mainly in the ECB's monetary policy decision on thursday, the bank lending key rate in the Euro Area is now at 2.5% and rumosr has that the ECB could follow the BoE and trim rates by some 50 b.p. in yet another attempt to kick start economy.

U.S. retail sales will be published on wednesday, an impotrtant indicator to assess the impact of the whole economic downturn upon consumption.

Monday January 12th

• 00:01 United Kingdom NIESR GDP Estimate - December (Previous: -1)
• 23:50 Japan Trade Balance - BOP Basis - November (Previous: ¥1113.2B)
• 23:50 Japan Adjusted Current Account - November (Previous: ¥145B)

Tuesday January 13th

• 00:01 United Kingdom BRC Retail Sales Monitor - All - December (Previous: -2.6%)
• 09:30 United Kingdom Goods Trade Balance - November (Previous: -£7.8B)
• 09:30 United Kingdom Total Trade Balance - November (Previous: -£3.9B)
• 13:00 United States Bernanke speaks at London School of Economics
• 13:30 Canada International Merchandise Trade - December (Previous: $3.78B)
• 13:30 United States Trade Balance - November (Previous: -$57.1B)
• 21:45 New Zealand Building Permits - November (Previous: -21.9%)

Wednesday January 14th

• 10:00 European Monetary Union Industrial Production w.d.a. - November (Previous: -5.3% y/y)
• 13:30 United States Import Price Index - December (Previous: -6.7% m/m; 4.4% y/y)
• 13:30 United States Retail Sales - December (Previous: -1.8% m/m; Ex Autos -1.6%)
• 19:00 United States Fed's Beige Book
• 23:50 Japan Core Machinery Orders - November (Previous: -4.4%)

Thursday January 15th

• 00:30 Australia Unemployment Rate - December - (Previous: 4.4%)
• 07:00 Germany Consumer Price Index - December (Previous: -0.5% m/m; 1.4% y/y)
• 09:00 European Monetary Union Consumer Price Index - December (Previous: -0.5% m/m; 2.1% y/y)
• 12:45 European Monetary Union ECB Interest Rate Decision (Previous: 2.5%)
• 13:30 European Monetary Union ECB Trichet's Speech
• 13:30 United States NY Empire State Manufacturing Index - December (Previous: -25.76)
• 13:30 United States Producer Price Index - December (Previous: -2.2% m/m; 0.4% y/y)
• 15:00 United States Philadelphia Fed Manufacturing Survey - January (Previous: -32.9%)

Friday January 16th

• 00:30 Japan BoJ's Governor Shirakawa Speech
• 08:15 Switzerland Producer and Import Prices - December (Previous: -1.4% m/m; 1.1% y/y)
• 10:00 European Monetary Union Trade Balance n.s.a. - November (Previous: €0.9B)
• 13:30 United States Consumer Price Index - December (Previous: -1.7% m/m; core CPI: 0.0% m/m; 2.0% y/y)
• 14:00 United States Net Long-term TIC Flows - November (Previous: $1.5B)
• 14:15 United States Industrial Production - December (Previous: -0.6% m/m)
• 15:00 United States Reuters/Michigan Consumer Sentiment Index Preliminary - January (Previous: 60.1)

ADP Sees December US private Sector Job

ADP Sees December US Private Sector Jobs -693,000

NEW YORK (Dow Jones)--Private sector jobs fell 693,000 in the U.S. in December, according to a revamped national employment report published Wednesday by payroll giant Automatic Data Processing Inc. (ADP) and consultancy Macroeconomic Advisers.

That's far higher than the 515,000 loss forecast in a Dow Jones Newswires survey.

The December ADP survey is the first to incorporate a major overhaul of the methodology, including new regressions. The changes were introduced because the ADP survey has underestimated the monthly number of job losses as reported by the Bureau of Labor Statistics since the recession began in December 2007.

For instance, under the old calculations, the ADP Survey showed a loss of 250,000 private-sector jobs in November. The new methodology shows a 476,000 job drop in November, closer to the 533,000 reported by the BLS.

The ADP survey tallies only private-sector jobs while the BLS data include government workers. Based on recent public-sector job growth, Wednesday's ADP report suggests December nonfarm payrolls will show a loss of at least 650,000 when the BLS reports the data on Friday.

The new report showed businesses with 500 employees and more shed 91,000 jobs and medium-sized businesses lost 321,000 jobs in December. Small businesses that employ fewer than 50 workers cut 281,000 jobs.

Manufacturing employment dropped 120,000 in December, while service sector jobs fell 473,000.

The ADP employment report provides a snapshot of the private sector job market just ahead of the official U.S. payrolls report, which will be published Friday. ADP's report doesn't include government jobs, which have been rising this year while private jobs have been lost.

ADP, of Roseland, N.J., claims to process the payment of one in six U.S. workers, while Macroeconomic Advisers, based in St. Louis, is an economic consulting firm. The firms release this indicator each month at 8:15 a.m. ET on the Wednesday prior to the release of the Labor Department's Employment Situation report.

-By Matthew Cowley, Dow Jones Newswires; 201 938 5692; matthew.cowley@dowjones.com

(Kathleen Madigan contributed to this report)


(END) Dow Jones Newswires

January 07, 2009 08:26 ET (13:26 GMT)


Copyright 2009 Dow Jones & Company, Inc.

Dollar Broadly Higher On US Economic Stimulus Reports

Dollar Broadly Higher On US Economic Stimulus Reports

  By Don Curren
  Of DOW JONES NEWSWIRES

TORONTO (Dow Jones)--The U.S. dollar is broadly higher and is recording sharp gains against the euro Monday morning as reports circulate about the substantial size of the economic stimulus package contemplated by President-elect Barack Obama.

The U.S. currency has been bolstered by news the incoming administration is considering proposals to stimulate the U.S. economy with a $775 billion stimulus package, including a $300 billion tax cut, analysts said.

"To the extent that there is any news behind it, I guess all we can really point to is the evolving Obama stimulus package," said Adam Cole, head of foreign exchange strategy at RBC Capital Markets in London.

The large gains by the dollar also reflect continued illiquid conditions in currency markets, he added.

Liquidity is likely to remain thin in the next few sessions, he said.

The euro is being undermined by reports that Italian authorities are considering suing the banks that helped them to manage bonds taken out in the 1990s.

The euro was at $1.3594 from $1.3857 late Friday afternoon, according to EBS. The dollar was at Y93.20 from Y92.30, while the euro was at Y126.71 from Y127.78. The U.K. pound was at $1.4487 from $1.4480, while the dollar was at CHF1.1062 from CHF1.0826 Friday.

A report from Brown Brothers Harriman in New York said that, after coiling like a spring against the yen in a JPY90-JPY91 trading range, the dollar snapped out before the weekend and has seen follow-through buying Monday.

"Japanese economic data has simply been horrible in recent weeks, suggesting a deeper contraction than policy makers and investors may have anticipated," the report said.

At 10:00 a.m. EST (1500 GMT), U.S. construction spending data for November will be released. Economists expect a 1.2% decline in new construction activity from the previous month.

Elsewhere, a continued firm performance by energy prices was helping underpin commodity currencies, as tensions in the Middle East continued to increase and Russia and Ukraine remained at loggerheads.

"With the latter standoff intensifying over the weekend and little immediate prospect of an end to fighting in the Gaza Strip, commodity currencies such as the Australian, New Zealand and Canadian dollars are likely to extend their gains early this week," said Daragh Maher, deputy head of global foreign exchange strategy with Calyon Credit Agricole in London.

While those currencies were slightly lower against the resurgent U.S. dollar Monday morning, they were outperforming the euro and the yen.

  Canada Morning

The U.S. dollar was trading at C$1.2161 from C$1.2154 late Friday afternoon.

A report from TD Securities said the Canadian dollar is picking up some support in cross trading against the euro and the yen, which should contribute to buying interest in the Canadian dollar against its U.S. counterpart in the short term at least.

-By Don Curren, Dow Jones Newswires; 416-306-2020; don.curren@dowjones.com

(Nick Hastings in London contributed to this article.)


(END) Dow Jones Newswires

January 05, 2009 09:09 ET (14:09 GMT)


Copyright 2009 Dow Jones & Company, Inc.