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Euro Pound brief - property Almeria Spain 2nd August 2006
Summary of Overnight News:
The FTSE-100 will open slightly higher today assisted by a handful of positive company results with the market
also clawing back some of the losses made last night driven by a dip in the US market, dealers said.
Across the Atlantic heightened fears of inflation sent US stocks sliding for a second straight session as a key
price index climbed to an 11-year high and an improving manufacturing sector raised the likelihood of another
interest rate hike by the Federal Reserve, traders noted.
While inflation-adjusted consumer spending rose 0.2 pct in June, the Commerce Department also reported that
consumer prices are up 2.4 pct year over year, the highest rate of inflation since April 1995.
The DJIA closed down 60 points at 11,125.70 while the Nasdaq Composite finished the day 29.48 points lighter
at 2,061.99.
After the close there was bad news for car manufacturers with three of America's biggest reporting a slow down
in sales as Americans, for the first time last month, were more likely to get behind the wheel of a new Toyota
than a new Ford.
Meanwhile, in Asia there was mixed sentiment with the Nikkei 225 index rounding the morning down 88.39
points at 15,352.52 while Hong Kong's Hang Seng index ended the morning session up 126.07 points at
17,037.44.
Remaining in Asia, oil prices jumped back above 75 Usd in Asian trade as hopes for a quick ceasefire in
Lebanon faded while concerns grew at the approach of a tropical storm in the United States, dealers said.
New York's main contract, light sweet crude for September delivery, was 0.39 Usd higher at 75.30 Usd a barrel
from 74.91 Usd in late US trades overnight.
USA
Figures out Today:
10:00 EA PPI (Jun) nsa %m/m Prev 0.3
10:00 EA PPI (Jun) %y/y Prev 6.0
Dollar runs out of steam: An early rally for the dollar faded in the afternoon in the US, taking the greenback to
its lowest level in more than three weeks against the euro by the end of the day. In late New York trade, the
euro was at .2821, having traded exactly a cent lower early in the London session. Earlier, strong US data and
a reiteration of the strong dollar policy by Hank Paulson, the new US Treasury Secretary had lifted the dollar,
but the greenback began weakening as European trade wound down.
With no major data releases in the US, Europe and the UK, economic fundamentals will take a back seat ahead
of ECB and Bank of England interest rate decisions on Thursday.
Australia
00:30 AU RBA cash target (Aug) % Exp 6.00 Prev 5.75
02:30 AU retail sales (Jun) %m/m Prev -0.3
02:30 AU retail sales, ex inflation (Q2) %q/q Prev 1.7
The Reserve Bank of Australia is unanimously expected to raise its cash target rate, with all but one economist
on the Bloomberg survey forecasting a 25bp hike to 6.0%. Rates hit a five-year high when the RBA last
tightened policy in May but with inflation having subsequently breached its target further interest rate rises
became all but inevitable. Nor will any hike in August necessarily mark the end of the policy tightening process
with futures markets are currently pricing in a further 25bp hike by year end.
EURO US DOLLAR @ 1.2820 GB POUNDS US DOLLAR @ 1.8755 GB POUND EURO @ 1.4625 USDJPY @ 114.50
About the Author: Debbie regularly writes articles on the Euro Pounds markets and the current
property Almeria Spain market
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