Thursday 6 August 2009

US Jobless Claims -38K To 550K In August 1 Week; Survey +1K

Thu, Aug 6 2009, 12:45 GMT
http://www.djnewswires.com/eu

US Jobless Claims -38K To 550K In August 1 Week; Survey +1K
   By Sarah N. Lynch
Of DOW JONES NEWSWIRES


WASHINGTON -(Dow Jones)- The number of U.S. workers filing new claims for state jobless benefits fell last week, providing another glimmer of hope that the economy may be on the road to recovery.

Initial claims for jobless benefits fell by 38,000 to 550,000 on a seasonally adjusted basis in the week ended Aug. 1, the Labor Department said in its weekly report Thursday. The four-week average of new claims, which aims to smooth volatility in the data, fell by 4,750 to 555,250, the lowest level since Jan. 24.

The tally of continuing claims -- those drawn by workers for more than one week -- rose by 69,000 during the week ended July 25 to 6,310,000, the highest level since July 4.

Economists surveyed by Dow Jones had predicted an increase in initial claims of only 1,000.

Analysts with both J.P. Morgan Chase & Co. and Barclay's Capital had predicted recently that claims for the week ending August 1 would start to edge downward. Both noted that claims are way down from their peaks in the spring, signaling some positive economic signs.

"Claims are still at a very high level, but the fact you're seeing a downturn in claims is an encouraging sign," said Barclay's Capital economist Michelle Meyer in a Wednesday interview with Dow Jones.

Thursday's numbers represented a return to normalcy following a volatile period in July which included two weeks of steep declines followed by two weeks of rebounds in the figures. The declines occurred after the usual layoffs in the automobile and other manufacturing sectors, which are expected this time of year, never panned out.

On Thursday, an analyst with the Labor Department called the latest data on jobless claims "fairly uneventful."

The unemployment rate for workers with unemployment insurance remained steady at 4.7%.

Still even with the numbers starting to look a little better, Meyer noted that "we are not out of the woods yet."

"We think we will see further job cuts, but a noticeable slowdown in the pace of cuts," she said.

-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; sarah.lynch@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=lwy%2FldcGHKHpqaunEKCa2g%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

August 06, 2009 08:45 ET (12:45 GMT)


Copyright 2009 Dow Jones & Company, Inc.

DJ Table Of US Initial, Continuing Claims

DJ Table Of US Initial, Continuing Claims

Week Initial 4-Week Continuing
Ended Claims Change Moving Claims Change
(000) (000) Average (000) (000)

Aug 1 550 -38 555,250 N/A N/A
Jul 25 588r 29r 560,000r 6,310 69
Jul 18 559 35 567,250 6,241r -10r
Jul 11 524 -45 585,000 6,251r -62r
Jul 4 569 -48 607,000 6,313 -591
Jun 27 617 -13 616,000 6,904 180
Jun 20 630 18 618,000 6,724 -31
Jun 13 612 7 616,750 6,755 41
Jun 6 605r -20 622,750r 6,687 -148
May 30 625 0 632,250 6,835 78r
May 23 625 -11 627,250 6,757 6
May 16 636 -7 629,750 6,751 73
May 9 643 38 632,000 6,678 91
May 2 605 -30 624,500 6,587 207
Apr 25 635 -10 638,250 6,380 87
Apr 18 645 32 648,000 6,293 155
Apr 11 613 -47 651,000 6,138 93
Apr 4 660 -14 658,750 6,045 195
Mar 28 674 17 658,000 5,850 105
Mar 21 657 13 650,250 5,745 178
Mar 14 644 -13 650,000 5,567 129
Mar 7 657 14 646,750 5,438 185
Feb 28 643 -13 636,750 5,253 179
Feb 21 656 25 632,000 5,074 9
Feb 14 631 14 615,500 5,065 117
Feb 7 617 -7 601,500 4,948 193
Jan 31 624 34 581,000 4,755 7
Jan 24 590 15 547,000 4,748 75
Jan 17 575 40 526,500 4,673 97
Jan 10 535 47 523,750 4,576 89
Jan 3 488 -20 528,000 4,487 -42

Source: U.S. Department of Labor; Numbers reflect annual revisions to seasonal factors.

UK Pooled Property Funds See 1st Net Inflow For 12 Months In 2Q-Study


UK Pooled Property Funds See 1st Net Inflow For 12 Months In 2Q-Study

LONDON -(Dow Jones)- Unlisted pooled property funds, or PPFs, in the U.K. posted the first net inflow in a year in the second quarter, demonstrating investor confidence due to improving economic conditions, the Association of Real Estate Funds reported in a study.

"Not only were net sales positive for the first time in a year, but actual redemptions have also started to see a significant slowdown over the past couple of quarters," said AREF Chief Executive Rachel McIsaac.

"This could be an indication that the direct property market cycle might be in the process of stabilizing."

In its Investment Quarterly study, AREF said PPFs had an overall net inflow of GBP52.4 million in the second quarter, compared with an outflow of GBP39.2 million a year earlier.

The study showed that in total, GBP320.4 million of new money went into PPFs, with redemptions totaling GBP268 million. Like in the first quarter, redemptions in the second quarter were significantly lower than in previous quarters.

AREF examines data provided by 67 unlisted member funds with a net asset value of some GBP21.1 billion.

Company Web site: www.aref.org.uk

By Anita Likus, Dow Jones Newswires; +44 20 7842 9407; anita.likus@dowjones.com

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(END) Dow Jones Newswires

August 06, 2009 08:43 ET (12:43 GMT)




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2nd UPDATE: Pound Plunges As BOE Expands Asset Purchases

2nd UPDATE: Pound Plunges As BOE Expands Asset Purchases

(Adds further comments.)

LONDON (Dow Jones)--The pound has fallen sharply after the Bank of England announced Thursday that it intends to expand its bond-buying program by GBP50 billion.

Sterling has dipped by over 0.8% to hit a low of $1.6833 against the dollar, while the euro jumped by nearly 1% against the pound to hit GBP0.8547.

Economists had been split in their predictions on what the BOE was likely to decide at its policy meeting this month. However, a run of surprisingly positive U.K. data Wednesday had encouraged some economists to expect that the BOE might suspend or trim back its bond purchases.

Now it appears that growing optimism about the U.K.'s economic outlook may have been misplaced.

"The U.K. still has a long way to go, and that's what the bank is reacting to," said Geoffrey Kendrick, a currencies analyst at UBS in London.

Kendrick said that the U.K.'s unexpectedly weak reading of gross domestic product for the second quarter should have been a reminder that the economic outlook was precarious. GDP shrank by 0.8% in the second quarter and dropped 5.6% on the year, the largest annual decline since quarterly records began in 1955.

"The market got ahead of itself back in June, with the pound supported by its correlation with global banking stocks," he said.

It remains to be seen whether the pound's shift lower Thursday will prove to be a knee-jerk reaction or the start of a sustained move lower.

Some sterling bulls remained unfazed. French bank Calyon, which has long predicted that the pound will end the year at $1.75, said the slip in the pound should be viewed as a neat opportunity to buy.

"The central bank has again shown a willingness to act to ensure the recovery can gain traction and get inflation back on target in the medium term. This, in turn, should make the market more, not less, confident about recovery and ultimately drive sterling higher," said Daragh Maher, a senior currencies analyst at Calyon in London.

"The BOE has simply provided a better level to start buying sterling afresh," he added.

At 1215 GMT, the pound had regained a little stability. It was trading at $1.6852. The euro was at GBP0.8528.

-By Katie Martin, Dow Jones Newswires; +44 (0) 207 842 9346; katie.martin@dowjones.com

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CURRENCIES: Euro And Pound Fall After Policy Announcements


CURRENCIES: Euro And Pound Fall After Policy Announcements

By William L. Watts

The euro and the British pound fell versus the U.S. dollar on Thursday after both the Bank of England and the European Central Bank kept interest rates unchanged.

The British currency dropped after the BoE boosted its quantitative-easing program by an unexpectedly large 50 billion pounds ($84 billion) Thursday, signaling that worries about the fragility of the economic outlook continue to dominate the monetary-policy-making process.

Policy makers "surprised the market by extending its asset-purchase plan' by that much and for three months, said analysts at Brown Brothers Harriman. "This drove sterling sharply lower."

The BOE also left its key rate unchanged at 0.5%.

The British pound fell to $1.6868, from $1.6968 before the announcement and from $1.7020 in late North American trading on Wednesday.

Also Thursday, the European Central Bank left its key lending rate unchanged at a historic low of 1%, as expected. ECB President Jean-Claude Trichet's monthly news conference is scheduled to begin at 8:30 a.m. Eastern.

The euro bought $1.4373, down from $1.4432 Wednesday.

Many analysts had pointed to signs that the British economy could pull out of recession by year's end to justify expectations that the central bank would put its 125-billion-pound ($211 billion) asset-purchase program on hold

The dollar index (DXY), which tracks the U.S. unit against a trade-weighted basket of six major currencies, rose to 77.881, from 77.515 late Wednesday.

One dollar bought 95.61 Japanese yen, up from 94.99 yen late Wednesday.

Looking further ahead, investors were awaiting the U.S. government's monthly report on nonfarm payrolls for July, due out Friday. Economists surveyed by MarketWatch expect a loss of 275,000 jobs, which would be the fewest jobs lost since August.

"Investors should stay cautious" ahead of Friday's U.S. non-farm payrolls report for July, wrote strategists at UniCredit MIB in Milan.

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(END) Dow Jones Newswires

August 06, 2009 08:26 ET (12:26 GMT)

UPDATE: Sterling Plunges As BOE Expands Asset Purchase Scheme

UPDATE: Sterling Plunges As BOE Expands Asset Purchase Scheme

(Adds detail, comments.)

LONDON (Dow Jones)--The pound has fallen sharply after the Bank of England announced Thursday that it intends to expand its bond-buying program by GBP50 billion.

Sterling has dipped by over 0.8% to hit a low of $1.6833 against the dollar, while the euro jumped by nearly 1% against the pound to hit GBP0.8547.

Economists had been split in their predictions on what the BOE was likely to decide at its policy meeting this month. However, a run of surprisingly positive U.K. data Wednesday had encouraged some economists to expect that the BOE might suspend or trim back its bond purchases.

Now it appears that growing optimism about the U.K.'s economic outlook may have been misplaced.

"The U.K. still has a long way to go, and that's what the bank is reacting to," said Geoffrey Kendrick, a currencies analyst at UBS in London.

Kendrick said that the U.K.'s unexpectedly weak reading of gross domestic product for the second quarter should have been a reminder that the economic outlook was precarious. GDP shrank by 0.8% in the second quarter and dropped 5.6% on the year, the largest annual decline since quarterly records began in 1955.

"The market got ahead of itself back in June, with the pound supported by its correlation with global banking stocks," he said.

It remains to be seen whether the pound's shift lower Thursday will prove to be a knee-jerk reaction or the start of a sustained move lower.

At 1150 GMT, the pound was at $1.6843. The euro was at GBP0.8533.

-By Katie Martin, Dow Jones Newswires; +44 (0) 207 842 9346; katie.martin@dowjones.com

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(END) Dow Jones Newswires

August 06, 2009 07:58 ET (11:58 GMT)

2nd UPDATE:Romania Ctrl Bk Revises Dn 09 CPI Forecast-Mediafax



2nd UPDATE:Romania Ctrl Bk Revises Dn 09 CPI Forecast-Mediafax

(Adds further comment referring to 2009 GDP contraction)

BUCHAREST (Dow Jones)--Romania's central bank has revised down its forecast on the country's inflation rate for 2009 to 4.3%, from 4.4% estimated in May, Central Bank Governor Mugur Isarescu said Thursday, news agency Mediafax reported.

The central bank also revised its projection on 2010 annual inflation to 2.6%, from 2.8% seen three months ago.

Although the 2009 inflation forecast is not significantly changed, the central bank is more optimistic about next year's annual rate, Isarescu told a news conference at which he presented the quarterly inflation report.

The governor added that there are "potential" reasons for deviations from the main forecast, with the main uncertainty being the development of the international crisis.

"We try to be realistic and say there are so many factors that can alter our forecasts. The main risk factor is that we don't know with enough certainty how the global economic crisis will evolve, as we are seeing very different projections," Isarescu said.

The central bank's revised inflation forecast is based on an 8% economic contraction in 2009, similar to the figure discussed with the International Monetary Fund, central bank's deputy governor Cristian Popa said in his turn.

Also, the central bank estimates a current account deficit of 5%-6% of the gross domestic product by year-end, Popa added.

The country's annual inflation rate was 6.3% at the end of 2008.

Romanian annual inflation slowed down to 5.86% in June, on lower fuel and food prices and a stable Romanian leu exchange rate.

The central bank Tuesday cut its key monetary rate by 50 basis points to 8.5% on the year and lowered the minimum reserve requirements on foreign currency-denominated liabilities to 30%, from 35%.

For 2009, Romania's central bank targets a 3.5% inflation rate, with a one percentage point variation band around the target. The same objective was set for 2010.

Agency Web site: www.mediafax.ro

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(END) Dow Jones Newswires

August 06, 2009 08:11 ET (12:11 GMT)

Romania Ctrl Bker: IMF Financing Might Boost Econ - MediaFax

Romania Ctrl Bker: IMF Financing Might Boost Econ - MediaFax

BUCHAREST (Dow Jones)--Using a EUR1.9 billion second tranche from an International Monetary Fund loan to finance Romania's budget deficit could help revive the economy, Romanian Central Bank Governor Mugur Isarescu said Thursday, news agency Mediafax reported.

The governor said the central bank would discuss using the IMF funds to finance the budget and not for foreign currency reserves consolidation.

"Eventually, the IMF funds will end up at the central bank. If the Finance Ministry spends this tranche locally, then it will sell foreign currency to the central bank and it will buy lei and the foreign currency will go to the reserves. Likewise, if the ministry uses the money abroad, then the central bank's reserves will be spared from certain external payments," Isarescu told a news conference.

Romanian President Traian Basescu said late Wednesday he would talk to IMF representatives on using the second tranche of the IMF loan to finance the budget, instead of raising central bank's foreign currency reserves.

Romania agreed a EUR12.95 billion two-year stand-by loan with the IMF in March as part of a EUR19.95 billion financial rescue package which also includes funds from the European Commission and other international institutions.

The first tranche of EUR5 billion, was released in May and entered the central bank's reserve. The second tranche of around EUR1.9 billion, should be released Sept. 15, based on the results an IMF evaluation of the use of the first tranche, first evaluation and the economic performance in the first six months.

An IMF mission arrived last week in Bucharest for the first evaluation report.

Agency Web site: www.mediafax.ro

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(END) Dow Jones Newswires

Bank of England Rate Decision Statement

Bank of England Rate Decision Statement

The verbatim statement which accompanied the Bank of England's rate decision Thursday follows:

The Bank of England's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.

The Committee also voted to continue with its programme of asset purchases financed by the issuance of central bank reserves and to increase its size by GBP50 billion to GBP175 billion.

The world economy remains in recession, though there have been increasing signs that output in the U.K.'s main export markets is stabilising.

Financial market strains have eased and banks' funding conditions have improved a little, although financial conditions remain fragile.

Household and business confidence has picked up, albeit from the very low levels experienced in the wake of the financial crisis last autumn.

In the U.K., the recession appears to have been deeper than previously thought.

Gross Domestic Product fell further in the second quarter of 2009. But the pace of contraction has moderated and business surveys suggest that the trough in output is close at hand.

Underlying broad money growth has picked up since the end of last year but remains weak.

And though there are signs that credit conditions may have started to ease, lending to business has fallen and spreads on bank loans remain elevated.

Consumer price inflation fell back to 1.8% in June, a little below the 2% target. The decline in recent months was mainly accounted for by lower food and energy inflation, though past falls in sterling continued to put upward pressure on inflation.

The margin of spare capacity in the economy increased further and pay growth remained weak.

The future evolution of output and inflation will be determined by the balance of two sets of forces.

On the one hand, there is a considerable stimulus still working through from the easing in monetary and fiscal policy and the past depreciation of sterling.

On the other hand, the need for banks to continue repairing their balance sheets is likely to restrict the availability of credit, and past falls in asset prices and high levels of debt may weigh on spending.

While some recovery in output growth is in prospect, the margin of spare capacity in the economy is likely to continue to grow for some while yet, bearing down on inflation in the medium term.

But the recession and the restricted availability of credit are also likely to impact adversely on the supply capacity of the economy, moderating the increase in economic slack.

In the light of the Committee's latest Inflation Report projections and in order to keep inflation on track to meet the 2% inflation target over the medium term, the Committee judged that maintaining Bank Rate at 0.5% was appropriate.

In the light of that outlook, the Committee also agreed that it should extend its programme of purchases of government and corporate debt to a total of GBP175 billion, financed by the issuance of central bank reserves.

The Committee expects the announced programme to take another three months to complete. The scale of the programme will be kept under review. The Committee noted that the increase in the scale of the programme would necessitate an increase in the range of maturities of government debt that the Bank was willing to purchase.

That is explained in an accompanying market notice. Following today's meeting of the MPC, the Governor and the Chancellor exchanged letters about the expansion of the Asset Purchase Facility.

The Committee's latest inflation and output projections will appear in the Inflation Report to be published at 9:30am on Wednesday 12 August.

The minutes of the meeting will be published at 9.30am on Wednesday 19 August.

Web Site: www.bankofengland.co.uk

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(END) Dow Jones Newswires

August 06, 2009 07:28 ET (11:28 GMT)

BOE Raises Bond-Buying Program To GBP175B, Rates On Hold

LONDON (Dow Jones)--The Bank of England's Monetary Policy Committee Thursday voted to boost its bond-buying program by GBP50 billion to GBP175 billion, suggesting it still harbors concerns about the sustainability of recent signs of economic improvement.

But it kept its main interest rate on hold at a record low of 0.5%.

All eyes will now turn to the bank's quarterly Inflation Report and press conference Wednesday, when it will unveil its latest forecasts for inflation and output, for a clearer indication of the policy outlook.

Economists had been highly divided over the likely outcome of the meeting. Sluggish M4 money supply growth and a larger than expected contraction in U.K. output in the second quarter had persuaded a majority of economists polled by Dow Jones Newswires that the MPC would extend its quantitative easing program, under which it has already bought GBP125 billion of mostly government bonds.

But a large minority had tipped the MPC's nine members to stay on hold Thursday, with many of those saying that more action at a later date remained a distinct possibility. Figures Wednesday supported that view, showing that the dominant U.K. services sector expanded for a second straight month in July.

All those polled thought the BOE would keep its benchmark interest rate at the current record low of 0.5%.

-By Natasha Brereton, Dow Jones Newswires; +44 20 7842 9254; natasha.brereton@dowjones.com

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(END) Dow Jones Newswires

August 06, 2009 07:06 ET (11:06 GMT)

Sterling Plunges As BOE Expands Asset Purchase Scheme


Sterling Plunges As BOE Expands Asset Purchase Scheme

LONDON (Dow Jones)--The pound has fallen sharply after the Bank of England announced that it intends to expand its bond-buying program by GBP50 billion.

Sterling has dipped by over 0.8% to hit a low of $1.6833 against the dollar, while the euro jumped by nearly 1% against the pound to hit GBP0.8547.

Economists had been split in their predictions on what the BOE was likely to decide at its policy meeting this month.

-By Katie Martin, Dow Jones Newswires; +44 (0) 207 842 9346; katie.martin@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=lwy%2FldcGHKHpqaunEKCa2g%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

August 06, 2009 07:11 ET (11:11 GMT)