FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

After a long period of sharply rising prices, the headline inflation rate edged down a little from 4.3% in August to 4.2% in September. We had expected a fall to 4.1%. Especially food prices appear to have topped out for now. We believe that lower energy and food price inflation could take the inflation rate down below 3% by early 2009. Food prices were down 0.5% from August to September and now are running “only� 8.5% above their year-earlier level. The fall in food prices, which was driven

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Housing Just Can’t Catch a Break We noted in our last Housing Chartbook that the predominant risk to the housing market was the ongoing mortgage crisis and the tightening in general credit conditions. Our fears were fully justified. The credit crunch has intensified considerably over the past month, making it tougher for potential homebuyers and builders to qualify for new loans. With the pool of qualified potential homebuyers smaller, the tentative signs of stability we have seen in new and

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Finance Ministry published a budget deficit of HUF 58.4bn for September 2008 Finance Ministry published a budget deficit of HUF 58.4bn for September, taking the cumulative deficit for the first nine months of the year to HUF 731bn, 70.8% of latest full-year CF-based deficit forecast. The September monthly deficit figure proved to be lower than the ministry’s preliminary forecast of HUF 80.5bn, mainly due to the lower than predicted deficit of the central state budget. The details of the

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Non-farm employment fell 159,000 with declines in manufacturing, construction, business services and finance. Meanwhile the unemployment rate remains at 6.1 percent while the median duration of unemployment is up over ten weeks. Aggregate hours declined for the third month in a row, thereby suggesting recession.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Earlier this week, the Institute for Supply Management’s manufacturing index plunged to recession territory. Today’s report on the non-manufacturing sector (NMI), where the headline index remained relatively steady at 50.2, suggests that service sector activity is holding up much better than the manufacturing sector.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Overview : Non-farm payrolls fell by 159,000 in September following an upward revised decline of 74,000 in August. With the US economy in recession and a consistent trend in job losses, this confirms other employment dynamic signals. Despite widespread speculation concerning the effect of the recent hurricane on today's employment figures, according to the Bureau of Labour Statistics it is unlikely that the storm had any substantial impact on national employment estimates. The unemployment

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

The value of total construction put in place remained unchanged in August. For the first time since March 2007, residential construction actually increased – up 0.3 percent. The slower economy coupled with tighter lending requirements, however, will continue to put downward pressure on construction spending in the coming months.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Non-farm payrolls dropped by 159k last month, 50 percent more than the market expected. Even though there was a minor upward revision to the August data, the Fed will have no choice but to cut interest rates at the end of the month. Fed fund futures are pricing in a 50bp rate cut by the Oct 29 meeting but we believe that the number is not bad enough to cut by 50bp because the central bank will want save some ammo for the remainder of the year in case the bailout plan fails to stimulate the

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Overview: The ISM manufacturing index fell sharply in September to 43.5 from 49.9 previously, more than either we or consensus expected. In recent months, we have been surprised by the strength of the ISM index with the metric continuously overshooting actual production growth. However, given its decline in September, the ISM index has finally caught up with reality and is now flagging further weakness in the manufacturing sector over the coming months. However, we advise caution when

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

2Q C/A deficit up 32% y/y As expected, the current account maintained its negative trend in 2Q08, with the deficit reaching EUR 1.8bn, a robust increase of 32% y/y. As usual, the strongest pressure came from the merchandise account, where the deficit widened by 23% y/y, supported by the sluggish 2Q monthly trade balance figures. Hence, exports increased by 7% y/y, clearly outpaced by the 15% y/y import growth rate. The trade balance outlook remains rather poor, as exports will have a hard time

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

PMI data at a new low - PMI data for September of 42.3 hit a new low with no bright spots to be found.  - Everything points to a rapid deterioration: orders, production, employment, production plans, etc. - The indicator for prices paid slumped by more than 15 points on dampened global commodity prices and weaker business conditions.  - The decline is rapid and even our modest growth forecast is starting to look too optimistic. In fact there is a risk of negative GDP growth in the

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

C/A deficit amounted to EUR 1.838bn in 2Q08 The central bank has published the 2Q08 C/A balance figures this morning. The C/A deficit amounted to EUR 1.838bn in 2Q08, exceeding both our expectation and the market consensus of EUR 1.4bn. At the same time, due to methodological changes, the bank significantly revised upwards the 1Q C/A deficit from EUR 1.16bn to EUR 1.647bn and the 2007 FY deficit to EUR 6.51bn from just EUR 5.036bn. The bank and the CSO said in a statement that they revised

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Central bank kept the base rate on hold at 8.50% At its today monetary meeting, the monetary council kept the base rate on hold at 8.50%. The decision did not come as a surprise, expectations for the outcome of this meeting had been unanimous. The main points of the statement of the monetary council are as follows: • the Hungarian economy is characterized by modest growth and a slow decline in inflation • uncertainties stemming from global trends have significantly increased • the current

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Central bank kept the base rate on hold at 8.50% At its today monetary meeting, the monetary council kept the base rate on hold at 8.50%. The decision did not come as a surprise. The detailed statement of the council will be available at 14.30, as usual.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

2Q GDP figures were in line with our expectations (ESBe 3.4% y/y) as GDP growth decelerated from 4.3% y/y in 1Q08. A detailed look at the figures threw up some surprises. Private consumption slowed down significantly in 2Q recording a y/y rise of 2.2%, which was slightly below our expectations. The main factors behind the slowdown in private consumption are well known: some deterioration in purchasing power due to inflationary pressures, moderation of credit activity and poor capital market

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

The development in inflation in August was broadly in line with expectations. CPI inflation in August declined to 2.1% y/y (consensus: 2.1% y/y) from 2.3% y/y in July. The decline in inflation was mostly due to lower prices for fresh food as CPI excluding fresh food was unchanged at 2.4% y/y (consensus: 2.4% y/y). Core inflation remains muted. CPI excluding food & energy declined to 0.0% y/y (consensus: 0.2% y/y). Hence, based on the nationwide figures, there are still no signs of

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Our recession model puts the latest probability of recession at 89 percent. This is certainly overwhelming evidence that at least the domestic economy is in recession while exports have kept the overall reported GDP number in positive territory. Key inputs such as employment and the leading indicators signal continued problems ahead.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

After some signs of stabilisation in recent months, export growth slowed again in August. The overall picture for export growth is that Japanese exports in Q3 will not perform as poorly as in Q2 but nonetheless real export growth remains in negative territory (see chart 2). In our latest forecast we have assumed a slight recovery in exports in Q3 on the back of the sharp decline in Q2. Hence, there could even be some downside risk to our forecast of only 0.1% q/q GDP growth in Q3.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

The index of Leading Economic Indicators (LEI) fell 0.5 percent in August, as weakness in building permits and jobless claims were not offset by positive contributions from the yield curve and consumer expectations. The coincident index also fell with a large negative contribution from industrial production.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Starts fell 59K units in August as both the single- and multi-family segments experienced losses. Permits fell almost nine percent, suggesting the weakness in new construction activity will persist at least through the end of the year. We are not looking for any sustained improvement in starts until the second half of next year.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

The Consumer Price Index declined 0.1 percent in August, marking the first decline in almost 2 years. Falling energy prices were responsible for most of the drop. Energy prices declined 3.1 percent in August, with gasoline prices falling 4.2 percent. Excluding food and energy items, the core CPI rose 0.2 percent and shows signs of moderating.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Overview: PMI fell further in September confirming a picture of a Euroland economy flirting with recession. Composite PMI fell to 47 from 48.2 in August (consensus 47.8, Danske Bank 47.9). The decline was driven by a substantial fall in PMI manufacturing while the service PMI fell only slightly. The report also showed a further weakening in employment while price pressures eased a bit. The balance between orders and inventories continues to be at a very low level and points to further weakness

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Following up on our mid-year report, benchmark indicators do not suggest an early end to the sub-par growth experience in the U.S. The housing/credit market correction continues to roll ahead with implications for jobs, production and monetary policy. There is no easy-out for financial markets with the Fed likely to remain on hold.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Overview: Consumer prices declined 0.1% m/m in August (DB: 0.0%; Consensus: -0.1%) due to lower energy prices. Core inflation rose 0.194% (DB: 0.2%; Consensus: 0.2%) as expected. Annual headline inflation is now running at 5.4% after peaking in July at 5.6% while annual core inflation held steady at 2.5% y/y. Details: Headline inflation was pulled down by a 3.1% m/m decline in energy prices. Gasoline fell 4.2% over the month and fuel oil 6.5%. Food price inflation remains relatively high with

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Final Euroland HICP for August confirmed the flash estimate of a 3.8% increase in consumer prices on a yearly basis. We think it is safe to conclude that this marks the beginning of a period of gradually declining inflation rates and that inflation peaked in June and July at 4.0% y/y. On first glance, today's inflation figures did contain a small surprise as core inflation (i.e. total ex energy, food, alcohol and tobacco) rose by 1.9%, up 0.2 percentage points relative to July. According to

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

CPI moderated to 7.4% y/y August brought expected inflation slowdown, still surprising slightly on the positive side. On the monthly side pressures slowed down as priced declined by 0.3%. Fuel prices decline have been behind moderating pressures as transportation prices declined by 3.4% m/m and housing, water, electricity, gas other fuels prices lowered 0.9% m/m. On top of that clothing and footwear prices still supported by seasonal sales effect eased 1.3% m/m. Food and nonalcoholic beverages

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

There was positive news from the Polish Statistical Office today as it published numbers on consumer price growth in August. Inflation in August was unchanged at 4.8% y/y and thus surprised on the downside - our forecast was in line with the consensus expectation of a small increase to 5.0% y/y. Inflation was helped down in August by a fall in food and fuel prices.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Overview: The August retail sales data disappointed posting a decrease of 0.3% m/m (DB: 0.3%, consensus 0.2%) and a decline of 0.7% m/m ex. autos (DB -0.3% m/m, consensus -0.2% m/m). The upward trend in retail sales stemming from the tax rebate boost has been reversed and the trend in core retail sales is now back at its four year average. The disappointing reading for August serves as an indication that a pay-back of the positive boost from tax rebates on the growth rate in consumer spending

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Details : In August industrial production slowed by more than expected to 12.8% y/y from 14.7% y/y in the previous month. We believe one major reason for the slowdown in industrial activity in August was the temporary closure of heavy industry around Beijing in preparation for the Olympic Games. For example, production of steel products dropped sharply to just -1.0% y/y from 6.9% y/y in July. Hence, we should probably be careful not to read too much into the August numbers. That said, we do

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

• The Japanese economy has contracted sharply in Q2 and could well slip into recession at some point in 2008. The recent spike in inflation has cut into real incomes and private consumption and exports plunged in Q2 as the current crisis turned increasingly global. The short-term outlook remains weak. That said Q3 and Q4 are not expected to turn out as bad as Q2. The gradual decline in inflation will improve private consumption and at the moment exports do not seem to be falling off a cliff.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Hungarian consumer price inflation (CPI) was published this morning, and fully in line with our expectations the data showed that inflation in Hungary slowed slightly in August - down to 6.5% y/y from 6.7% y/y in July. The consensus expectation was 6.6% y/y, while our own expectation was 6.5% y/y. 6.5% y/y is the lowest inflation rate YTD in Hungary. In fact inflation, which started the year at 7.1% y/y, has been on a downward trend apart from one upward blip in May (see graph below). August's

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Consumer prices dropped by 0.3% m/m in August, while the 12-month CPI inflation rate slowed to 6.5% (from 6.7% published for July). The y/y figure was slightly lower than our expectation of 6.6%. The structure of the monthly index did not really come as surprise. Due to the seasonatilty, prices of foods and clothes contributed most to the monthly decline (-1.5% m/m and -3.7% m/m, respectively). In addition, fuel prices dropped by 4.5% last month. As exepcted, these price decreasing effects

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FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

CPI inflation accelerated in August due to imputed rents - Consumer inflation accelerated in August to 5.0% y/y (up from 4.8% in July), exceeding our and market expectations. We assumed that the headline inflation could decline for the first time in a year to 4.7% y/y (this view was also shared by the market). However, a sharp increase in imputed rents kept inflation on its upward path. As expected, food prices declined thanks to summer season, as new crop is making its way into shops

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Finance Ministry published a budget deficit of HUF 91.2bn for August 2008 The Finance Ministry published a budget deficit of HUF 91.2bn for August, taking the cumulative deficit for the first eight months of the year to HUF 672.5bn, 65.1% of latest full-year CF-based deficit forecast. The August monthly deficit figure was minimally lower than the ministry’s preliminary forecast of HUF 94.14bn. The details of the August budget processes will be released on September 17. The August actual

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Overview : The US unemployment rate jumped to a five-year high of 6.1% in August from 5.7% in July. Labour market dynamics are now sending mixed signals, as the move in the unemployment rate is consistent with a recessionary US economy, while the trends in job losses continue to look more moderate. The economy shed 84K jobs in August (DB -90K, Consensus -75K) and the net revision to employment figures for the previous months amounted to -58K. Thus, overall job losses amounted to 142K persons.

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

On Friday, we are expecting the number one most market moving release for the US dollar - August Non-farm payrolls. Based upon the leading indicators for NFP, there is a decent chance that job losses could have topped 100k last month. The US dollar hit a 7 month high against the Euro following the hotter than expected service sector ISM number, but rather than buying into the dollar rally, we are more worried about the sharp drop in the employment component of service sector ISM, which has a

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Economy grew by 7.6% in 2Q08, thanks to consumption and investments  * Statistical Office confirmed 2Q08 GDP growth at 7.6% y/y, in line with the flash estimate . * Similar to 1Q08, the economic growth was driven by domestic demand. Household consumption remained decisive but was not the only driver, as gross fixed investments contributed significantly to the growth as well, which is positive for the future economical prospects. More specifically, household consumption slowed down from

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

Industrial output dropped by 0.3% y/y The June industrial output figures, published this morning surprised on the downside. According to the CSO preliminary figures, both the working day adjusted and unadjusted industrial output figures showed a decline of 0.3% y/y in June. Compared to May, industrial output dropped by 1.6%. Some slowdown in the industrial performance had been expected, due to the poorer Eurozone growth prospects, as slower growth in the Euro-zone could reduce demand for

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

• PCE rebounded favored by tax rebates, but could decelerate significantly once the effect of the fiscal stimulus vanishes  • Residential investment declined less than expected; however, the adjustment will continue in coming quarters  • We have revised our forecast up for 2008 and down for 2009 Second quarter GDP growth came out above our expectations at 1.9%. On a year-over-year basis, growth was 1.8% from 2.5% in 1Q08. Growth in 2Q primarily reflected positive contributions from:

FXstreet.com: Fundamental: Reports on Economic Indicators
FXstreet.com: Reports on Economic Indicators. Economic Indicators explained. A resource to understand how big institutions handle the various economic informations.

• Boosted by tax rebates and monetary policy, consumer spending proved resilient in 2Q08 • Non-residential investment was solid, while residential investment declined  • Risks are tilted to the downside, we expect GDP to weaken in 2H08 Economic activity in the second quarter According to our estimates, the U.S. economy proved resilient in the second quarter. We expect 0.93% real GDP growth in 2Q08 from 0.96% in 1Q08. This is equivalent to 1.8% year-over-year growth rate in 2Q08 from 2.5%