VFX – Daily Brief Wednesday 01/11/2006

In Brief:

Tim Drayson, global economist at ABN Amro Holding NV in London, says major central banks will all have to tighten credit more than investors now assume.

"Money supply on a global basis is growing quite rapidly as is overall credit growth,'' says Drayson, a former U.K. Treasury economist. ``We don't see much evidence that monetary policy around the world is restrictive.''

Drayson expects the ECB to lift its benchmark rate to 4 percent or higher by the end of 2007. The Fed's target rate will reach 6 percent, from 5.25 percent; the Bank of England's will rise to 5.5 percent from 4.75 percent; and the Bank of Japan's will go to 2 percent from 0.25 percent, Drayson forecasts.

Summary of Overnight News:

• The US dollar was higher against the yen and Euro in mid-afternoon trade though with players reluctant to push the

unit up too much ahead of tonight's ISM manufacturing survey and a speech by Federal Reserve chairman Ben

Bernanke, dealers said.

• The FTSE-100 is expected to open 3.5 points up this morning for the start of the month, following little

movement in New York last night

• Overnight, US stocks ended mixed, with the market uneasy after the Conference Board said its index of consumer

confidence fell to 105.4 from 105.9 in September -- well below the 107.8 analysts expected -- raising concerns on

• Meanwhile, in Asia this morning, indices diverged as Tokyo's Nikkei 225 index closed 24.13 points lower at

16,375.26 but Hong Kong's Hang Seng was 123.52 points to the good at 18,447.87 by midday.

• Signs of weakness in the US economy, the world's largest user of energy, are now having more of an effect on crude

prices, dealers said, while oil prices are also being weighed down by expectations of warmer weather in the US,

which could lead to a drop in demand for heating fuel.

USA

Figures out Today:

• 15:00 US Construction spending, %m/m Sep Exp 0.3 vs Prev 0.0

• 15:00 US ISM manufacturing PMI Oct Exp 52.9 vs Prev 53.0

Figures out Today:

• 09:30 UK Manufacturing PMI Oct Exp 54.4 vs Prev 53.8

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VFX – Daily Brief Thursday 02/11/2006

In Brief:

The focus will be on the euro this morning with a host of PMI surveys due for release after yesterday’s public holiday, and the ECB due to meet later today. No interest rate changes are expected but Mr Trichet is likely to signal a rate hike is on the cards for December, with the use of the term “strong vigilance” in his press conference. The market will also be most interested to see if he has anything to say about the setting of monetary policy in 2007.

Summary of Overnight News:

• The US dollar continued to make inroads into the yen and Euro's recent gains as traders take profits ahead of the

key non-farm payrolls data due in the US on Friday, dealers said.

• The FTSE-100 will open down 28 points, echoing losses last night in New York, as investors continue to fret

over the economic health of the US.

• Wall Street closed lower as the latest batch of economic data revealed manufacturing growth was at its slowest

in more than three years and that the housing market continues to struggle.

• The DJIA fell 49.71 to 12,031.02, the Standard & Poor's 500 dropped 10.13 to 1,367.81, and the NASDAQ

slipped 32.36 to 2,334.35.

• And today, ahead of Friday's October non-farm payroll numbers, investors will eye the latest serving of

economic data, including US weekly jobless claims and third quarter factory orders.

• Meanwhile, the downbeat mood spilled over into Asia this morning, as the Nikkei 225 index closed down 25.24

at 16,350.02, while the Hang Seng was off 50.54 at 18,504.19 by midday.

• Still in Asia, oil prices were relatively unchanged with the latest US energy stockpiles offering little incentive to

boost interest.

USA

Figures out Today:

• 13:30 US Non-farm productivity, % Q3-p Exp 1.6 vs Prev 1.0

• 13:30 US Unit labour costs, % Q3-p Exp 4.9 vs Prev 3.4

• 13:30 US Jobless claims, k w/e 28/10 Exp 308 vs Prev 310

• Dollar slides after manufacturing data: More disappointing data on the state of the world’s largest economy

sent the dollar reeling again on Wednesday. The greenback fell to fresh one-month lows against the Euro and

the yen and dropped to its lowest level so far this year against sterling after the Institute for Supply

Management’s survey on the US manufacturing sector came in weaker than forecast, registering its lowest

reading since June 2003. Analysts said the figures were just the latest in a string of recent weak economic data

from the US.

Europe:

Figures out Today:

• 08:55 GE Unemployment rate, sa Oct Exp 10.6 vs Prev 10.5

• 08:50 FR PMI manufacturing Oct Exp 56.0 vs Prev 56.3

• 09:00 EA PMI manufacturing Oct Exp 56.6 vs Prev 56.8

• 12:45 EA ECB rate announcement Oct Exp 3.25 vs Prev 3.25

• 15:00 US Factory orders, %m/m Oct Exp 0.0 vs Prev 4.0

• The main event of the day in the Euro area is the ECB press conference. Most expect the ECB to reiterate

that monetary policy decisions will remain conditional on the baseline scenario materialising.

South Africa

• ONE swallow doesn't make a summer. And one month's trade figures don't mean that SA no longer has a

balance of payments (BoP) problem. But tell that to the currency market, where the rand firmed 10 cents in the

blink of an eye on Tuesday after the release of the September trade data. The customs and excise figures show

that the trade deficit narrowed to a tiny R175m in September, from a whopping R5.3bn and R7.7bn in the

previous two months. The market cheered the 8.4% decline in imports and 4.6% rise in exports.

www.fin24.com

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Euro Pounds Daily Brief Friday – 03/11/2006

Summary of Overnight News:

• The FTSE-100 should open around 5 points lower this morning following a cautious performance last

night in New York ahead of today's US jobs report for October, with the volatile non-farm payrolls

number always a key focus for investors.

• The UK blue chip index closed 0.3 points easier yesterday at 6,149.3.

• Overnight on Wall Street, the DJIA closed 12.48 points weaker at 12,018.54, while the S&P 500 index

lost 0.47, to end at 1,367.34, and the NASDAQ composite index slipped 0.33 points to 2,334.02.

• New York stocks extended their recent poor run after further weak economic data, with news that US

productivity was flat in the third quarter, while wages rose nearly 4 %, touching off concerns that the

Federal Reserve will continue to wrestle with inflation, and possibly raise interest rates again.

• Today's main focus will be on the US jobs report, with economists expecting a 135,000 jump in US

non-farm payrolls in October, after a 51,000 advance in September, although the jobless rate is

forecast to remain static at 4.6 %.

• In Asia, Tokyo markets are closed for a public holiday today, while in Hong Kong the Hang Seng

ended its morning session 25.76 points lower at 18,689.02 on mild profit-taking after the benchmark

index hit fresh record highs yesterday.

• Meanwhile oil prices were little changed in Asian trade today on forecasts of a warmer northern

hemisphere winter which should dampen demand for heating fuel.

USA

Figures out Today:

• 13:30 US Non-farm payrolls, k Oct Prev 51 vs Exp 123

• 13:30 US Unemployment rate, % Oct Prev 4.6 vs Exp 4.6

• 13:30 US Average hourly earnings, %m/m Oct Prev 0.2 vs Exp 0.3

• 15:00 US ISM non-manufacturing Oct Prev 52.9 vs Exp 54.7

• US non-farm payrolls rose a disappointingly sluggish 51k in September, though benchmark changes

and a 60k upward revision to August left the recent trend increase of around 120k a month intact.

UK

Figures out Today:

• 09:30 UK PMI services Oct Prev 57.0 vs Exp 56.7

Europe:

Figures out Today:

• 10:00 EA Unemployment rate, % Sep Prev 7.9 vs Exp 7.8

• ECB statement boosts the Euro: The Euro advanced on Thursday after the European Central Bank all

but confirmed a further rise in eurozone interest rates next month. The ECB, as expected, left rates on

hold at 3.25 per cent after its policy-setting meeting. However, But Jean-Claude Trichet, ECB

president, used the magic words “strong vigilance” right at the start of his post-decision press

conference – a phrase that has prefaced all five of the interest rates rises in the current ECB tightening

cycle. If any further proof were needed, as to the ECB’s intentions, Mr Trichet rammed the point home

by stating that saying he would do nothing to alter current market expectations towards the path of

interest rates this year. Markets were fully pricing in a December move.

EURO US DOLLAR @ 1.2770 GB POUNDS USD @ 1.9065 GB POUNDS EURO @ 1.4930 USDJPY @ 117.10