Tuesday, June 29, 2004
Treasuries Slide as Inflation Indicator Exceeds Expectations
The New York Times | "Treasury prices slid yesterday after an inflation measure closely watched by Federal Reserve policy makers proved more robust than analysts had envisioned, leading to a sell-off that later took on a life of its own.
Investors worry that a continued evidence of a spike in consumer prices could prompt the Federal Reserve to abandon its vow to raise interest rates at a measured pace, forcing it to tighten monetary policy more aggressively.
The core price index of the consumer spending report rose 0.2 percent in May, or double the 0.1 percent gain that many had anticipated. The core index excludes the prices of food and energy. "
Monday, June 28, 2004
The measured Fed
FT.com | "The last time the Federal Reserve raised interest rates, Bill Clinton was in the White House. So it is only to be expected that this week's predicted rise - albeit a minor adjustment from 1 to 1.25 per cent - is being greeted with a little trepidation in some quarters.
But the signs are that the Fed will be able to start the tightening cycle of monetary policy without causing undue alarm. That it can do so owes much to its recently improved communication with the markets and the public, and the leeway it has been given by the nature of the economic recovery.
US interest rates, to be sure, have a good way to rise. The long-run real rate of interest in the US is probably about 3 per cent. Add on 1-2 per cent inflation, and the neutral nominal level of interest rates is 4-5 per cent, well above the current Fed funds rate of 1 per cent. But the large amount of slack most likely left in the US economy suggests the Fed can get there slowly, perhaps with two or three quarter-point hikes this year and smooth upward rises through next year and beyond. It is unlikely that rates will have to jerk sharply upwards by 3 percentage points in 12 months, as they did during the 1994-95 tightening that caused a bond market bloodbath.
This means that investors, households and companies should have plenty of time and no excuses to prepare themselves for higher rates. Worries that the Fed is substantially behind the curve, which always looked a little alarmist, have dim"
US nears end of low interest rates period
Yahoo! News | "The Federal Reserve is widely expected to raise interest rates by a quarter point on Wednesday, bringing to an end a 12-month period in which it kept the the federal funds rate at a 45-year low of 1 per cent."
Wednesday, June 23, 2004
Senate Votes to Repeal Media Rules
The New York Times | "The Senate voted on Tuesday to repeal rules adopted by the Federal Communications Commission that make it easier for the nation's largest media conglomerates to expand and enter new markets.
The rules, approved last June by a divided F.C.C., largely removed previous ownership restrictions on media companies. They struck down the rule that in most markets had prevented one company from owning both a newspaper and a television or radio station in the same city. In the largest markets, the new rules also enabled a company to own as many as three television stations, eight radio stations and a cable operator. And they allowed the largest television networks to buy more affiliated stations, although Congress later rolled back that provision.
The new rules have already been blocked temporarily by the United States Court of Appeals for the Third Circuit in Philadelphia, which is considering a challenge."
Formal probe for Vivendi ex-boss
BBC NEWS | "Jean-Marie Messier, the ex-head of French media giant Vivendi Universal, has been placed under investigation for alleged 'financial misappropriation'.
Mr Messier was detained by Paris police on 21 June as part of a probe into share buybacks and sales in late 2001.
Four other people, including Vivendi's ex-finance chief Guillaume Hannezo, are already under investigation. "
Black threatens to block Telegraph sale
The Guardian | "Conrad Black has threatened to block the Barclay brothers' deal to buy the Daily Telegraph, attacking the paper's owners at Hollinger International for failing to deliver greater value to shareholders.
Criticising Hollinger's "faltering strategic process", the Tory peer - whose holding company, Hollinger Inc, has a controlling stake in Hollinger International - demanded a say over the £665m sale of the Telegraph group agreed last night."
Monday, June 21, 2004
Japan's shares and yen strengthen
BBC NEWS | "Japanese share prices surged upwards on Monday, and the yen hit a six-week high against the US dollar.
Traders said optimism about Japan's economic growth was fuelling demand for stocks among foreign investors, who were therefore buying yen.
The yen gained too from growing expectations that Japanese interest rates may rise soon.
Tokyo's Nikkei index jumped 2.2%, then closed up 1.9% at 11,600 points; one dollar was buying 108.30 yen. "
Friday, June 18, 2004
Putin Says Russia Wants Yukos to Survive
The New York Times | "A day before an expected court ruling that could cost the Russian oil giant Yukos billions of dollars in back taxes, President Vladimir V. Putin said on Thursday that his government would do its best to assure that the company would not go bankrupt.
'Russian authorities, the government, and the economic officials of our country are not interested in seeing Yukos go bankrupt,' Mr. Putin told reporters during a regional leadership meeting in Tashkent, the capital of Uzbekistan.
'The government will try to do everything not to topple this company,' he said.
Soon after his statement, shares of Yukos jumped as much as 42 percent before trading in the stock was suspended for the day. Russia's benchmark stock measure, the RTS index, rose 8.7 percent on Thursday, its biggest gain since December 2000. Fears of bankruptcy had driven Yukos shares sharply lower this week."
European Body Said to Drop Objections to Music Merger
The New York Times | "Despite earlier objections, European antitrust regulators are now set to approve the merger of the music divisions of Sony and Bertelsmann, people close to the case said on Thursday.
The joint venture of Sony Music and the BMG unit of Bertelsmann would be the world's biggest music company, rivaled only by the Universal Music unit of Vivendi."
Monday, June 14, 2004
UN talks aim to bridge trade gap
BBC NEWS | "Trade representatives from around the world start a week of talks in Brazil on Sunday, aimed at easing the impasse between rich and developing nations.
While the main event - the four-yearly UN trade conference - opens on Monday, a host of other meetings on the sidelines are getting under way.
Hopes of reaching agreement on trade failed last September at the last World Trade Organisation meeting in Mexico. "
Tuesday, June 08, 2004
Blackberry battle goes to court
BBC NEWS |"A court case is beginning in Washington to decide the fate of one of the hottest gadgets of recent years.
The issue is the US patent for the Blackberry, a handheld phone and e-mail device which has become ubiquitous among the corporate elite.
Research in Motion, the Canadian firm that makes the Blackberry, is appealing against an injunction that effectively bars it from the key US market. "
Friday, June 04, 2004
Oil prices drop after Opec deal
BBC NEWS | "The decision by the oil producers' cartel Opec to raise output has had the desired effect of cooling high oil prices.
The group of mainly Middle Eastern producers will raise output quotas by 2 million barrels a day from 1 July and a further 500,000 b/d from 1 August.
The deal falls short of what some oil consuming countries were hoping for.
But the price of a barrel of US-traded oil dropped by 68 cents to $39.28 as news of the agreement emerged. "
Wednesday, June 02, 2004
Manufacturing Index Improves in May
Yahoo! News | "U.S. manufacturing activity expanded for the 12th consecutive month and construction spending rose to its highest level ever, providing fresh evidence that the economy is picking up steam as it heads into summer."
U.S. Oil Strikes New High at $42.45
Yahoo! News | "U.S. oil prices struck a new record high in early Wednesday trade on concerns that a campaign of violence by Islamic militants in Saudi Arabia could destabilize the world's biggest crude exporter.
U.S. light crude in electronic trade hit $42.45 a barrel, the highest since futures were launched in New York in 1983. Prices then drifted and at 2:20 a.m. EDT crude traded off 29 cents at $42.04 a barrel. London Brent crude slipped 38 cents to $38.70.
Oil surged $2.45, six percent on Tuesday, after an attack in the Saudi oil city of Khobar heightened concerns over the ability of the ruling Saudi royal family to contain a wave of violence by Islamic militants. "
Tuesday, June 01, 2004
Oil prices set for fresh surge
BBC NEWS | "Fear of further Middle East unrest pushed oil prices higher on Tuesday, despite signs that exporters will agree to increase output this week.
Islamic militants killed 22 in Saudi Arabia, with oil prices already close to their highest level in years due to soaring demand and the Iraq conflict. "
