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Sunday, 24 November 2024
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European Business News (96-07-19)European Business News (EBN) Directory - Previous Article - Next ArticleFrom: The European Business News Server at <http://www.ebn.co.uk/>Page last updated July 18 18:35 CETCONTENTS
[01] Greenspan warns inflation may be on the increaseFederal Reserve chairman Alan Greenspan, is warning that inflationary pressures could be on the increase in the latter part of 1996.Speaking to the Senate Banking Committee in Washington, Mr Greenspan added that he would be willing to raise interest rates to curb rising prices. But his prepared statement also predicted that US growth would slow in the second half of this year, soothing investors' fears over a tighter monetary policy. The markets have reacted positively with bonds and equities pushing ahead on the news. [02] US trade deficit swells to its highest level since January 1992The seasonally adjusted U.S. goods and services trade deficit widened to an unexpected $10.88 billion in May, the largest monthly deficit since January 1992, the Commerce Department reported.The May deficit was much larger than analysts' expectations, most of whom were expecting to see a narrowing of the deficit. A Dow Jones News Services' survey of 12 economists published Tuesday predicted a $7.97 billion deficit. US imports in May soared to a record $80.63 billion. The rise was mostly because of a increase in automotive cars and parts, consumer goods and industrial supplies and materials. [03] European markets wait on Greenspan testimonyEuropean markets were subdued ahead of Federal Reserve Chairman - Alan Greenspan's testimony before the US congress later.His semi-annual report on the state of the US economy will be scrutinised particularly closely, amid the recent market turmoil, for hints on the Fed's interest-rate intentions. The big question is whether Greenspan expects the economy to slow sufficiently on its own to avoid an acceleration of inflation or whether he believes the Fed must raise rates to slow it down. [04] German business confidence slumps...strengthing rate cut argumentGerman business sentiment worsened sharply in June after two months of improvement, according to a closely watched monthly index of the manufacturing, construction and wholesale and retail sectors, the German financial news agency VWD reported Thursday.According to the Ifo Institute for economic research, there was a sharp decline in confidence among western German businesses last month. The economic climate index slid nearly two points to 90.4. In eastern Germany, the Ifo business climate index also fell in June to 101.3 from 103.0 in May. The June report on Germany's business climate was much weaker than many market players and analysts had expected. 'It is the strongest evidence yet to support our long-held view that the economic recovery will disappoint and that interest rates will be cut again, ' said Julian Jessop, an economist at Nikko Europe in London. And the Bundesbank has reinforced those rate cut hopes by noting in its monthly report that inflation is under control. However it also added that it sees signs of an economic recovery later in the year. [05] TWA jumbo jetliner crashes en route to ParisA Paris-bound TWA jumbo jetliner with 217 passengers and 17 crew members on board has exploded in midair and crashed into the Atlantic near New York City. TWA Flight 800 had just left John F. Kennedy Airport bound for Charles de Gaulle Airport in Paris when it went down off the coast of Long Island just after midnight.[06] Deutsche bank's stock surges amid acquisition talksChase Manhattan Bank said Thursday that it is in talks to sell Chase Manhattan Trust & Banking Co., a Japanese trust banking unit in the Chase Group, to Deutsche Bank. Chase Manhattan Trust & Banking Co. and Deutsche Bank are due to submit an application for approval of the transaction to Japan's Ministry of Finance, and expect to make an announcement once a definitive agreement is reached, Chase said. In frankfurt floor trade Deutsche bank AG was one of the heaviest traded stocks. At 11:10 GMT it was up 1.67 at 74.53.[07] UK Exchequer to freeze public sector payThe Chancellor of the Exchequer Kenneth Clarke is to impose a freeze on public sector pay for the fourth year as he tries to cut up to 5 billion pounds from existing spending plans. The UK Times newspaper says 5 million public sector workers face having pay increases pegged by the Government. Clarke is set to warn ministers that they face one of the toughest pre- election spending rounds on record.[08] Talks resume on US/UK open skies agreementTalks on a transatlantic open skies agreement between United States and British governments will resume today in London.A deal liberalising the airroutes between the two countries has proved elusive. However the planned alliance between British Airways and American Airlines - which hinges on a bilateral agreement - has raised the stakes. From the European Business News (EBN) Server at http://www.ebn.co.uk/European Business News (EBN) Directory - Previous Article - Next Article |
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