• Promises France  is making ‘most serious budget effort in 30 years’
• Budget effort will be ‘justly shared’
• French budget deficit is largely structural and above the eurozone average
• Sees Eur 10 bln of spending cuts in 2013 and confirms a 3% budget deficit target for next year
• Company taxes must not hurt competitiveness
• Wants to maintain French debt credibility
• EU decisions don’t absolve governments of responsibility
• Wants to form  a new council to oversee the French budget which will also include state auditors

LONDON (MNI) – Olympic ticket sales will add around 0.2 percentage
point to Q3 GDP, according to the Office for National Statistics.

The Olympics and Paralympics generated some Stg580 million in
ticket sales, which will add 0.2 percentage point to the quarterly
change in Q3 GDP which was estimated at down -0.5% by NS. The Bank of
England’s August Inflation Report forecast a sharp rise in Q3 GDP, of
around 1%, which factors in the ticket sales.

National Statistics in its briefing note also cast light on the
economic impact of Olympic television rights, saying they would not be
included in GDP measures.

TV and some sponsorship rights are purchased from the International
Olympic Committee, and National Statistics said this would be treated as
a transfer from UK companies to the IOC as an import of services.

The payments related to TV rights will, therefore, show up in the
Balance of Payments data for Q3 but not in GDP.

In the press conference following the BOE’s August Inflation Report
BOE Chief Economist Spencer Dale said they had expected a small positive
effect on growth from the Olympics.

“We expect, if anything, a small positive contribution. The impact
that comes from is not through lots of tourists shopping more, it’s via
the impact of both the ticket sales, which although many of us bought
tickets earlier in the year they actually count in terms of GDP in Q3,
and also the TV rights to the Olympic Committee are also counted in Q3,”
Dale said.

–London newsroom: +44 207 862 7491; email: drobinson@marketnews.com

[TOPICS: M$BDS$,M$B$$$,MABDS$]

–Q2 Construction New Orders +0.2% q/q; +11.1% y/y

LONDON (MNI) – Construction new orders posted a small rise on the
second quarter, but were up strongly on the year, according to figures
released by National Statistics Friday.

Construction new orders rose 0.2% on the quarter and were up 11.1%
on the year. The large annual rise was partly due to weakness in Q2 2011
where there were large drops in public housing orders and public other
orders.

The new orders data contrast with data on construction output which
showed output fell 3.9% on the quarter in Q2 and were down 9.5% on the
year.

National Statistics said that the large difference between the
annual rate in orders and output could be due to a number of factors.
First, repair and maintenance had a big effect on output. Second, some
orders were not carried through to output. And third, there was a lag
between orders and output.

–London bureau: 0044 20 7862 7491; email: puglow@marketnews.com

[TOPICS: M$B$$$,MABDS$]

• The removal of the tail risk to euro will be beneficial for Ireland
• ECB measures are complex and reservations some people have are understandable and not surprising
• Does not expect any ECB activity on Ireland today
• There are sequencing issues regarding Irish bank debt deal
• Asked if Bundesbank will come to love new ECB programme, Honohan says thinks they will
• A lot of differences between new programme and short term nature of SMP. ECB now aiming for something different

• ECB shouldn’t directly finance EU governments
• Shouldn’t do monetary financing
• ECB can intervene in order to make Monetary policy work
• Will give a ‘very concrete’ banking union proposal on Sept 12

Bloomberg reporting

2013 inflation  to fall to 3.2% in August from +3.7 in May (lowest since Feb 2010)

2014 to fall to +2.8% from +3.4 in May, 2017 inflation to fall to +3.1% from +3.6%  in May,

August public satisfaction index with BOE falls to +6  from +11 in May (lowest recorded)

Demonstrably stronger than Reuter’s forecasts of +2.0% for manufacturing output and +1.5% for industrial production.

Manufacturing output strongest rise since July 2002.

Industrial production strongest rise since February 1987.

Cable sits at 1.5970.   Well-documented barrier option interest lined up at psychological 1.6000. As a result, it’s not a major surprise to be hearing that there are ‘decent’ sell orders gathered up at 1.5990/00.

UK DATA: Jul manufacturing output +3.2% m/m; -0.5% y/y
-Jul industrial production +2.9% m/m; -0.8% y/y
————————————————————————
Manufacturing bounced back sharply in July following the Jubilee
led downturn in June, a sign that GDP is set to bounce back in Q3. The
data, which were far stronger than forecast, puts trend growth in
manufacturing back in positive territory, suggesting the sector is
faring better than many had thought. Given the erratic data over the
Jubilee period, however, we need to see a couple more months of data to
gain a better picture of the state of the sector. Manufacturing output
rose 3.2% on the month in July, the strongest rise since July 2002 and
was down 0.5% on the year. This was way above the median forecast for a
gain of 1.8% on the month and decline of 2.5% on the year. Output in
June was depressed by the Queen’s Jubilee celebrations with the two Bank
holidays during the month cutting the number of working days.

-Aug Producer Output Prices +0.5% m/m; +2.2% y/y
-Aug Core Producer Output Prices +0.1% m/m; +1.2% y/y
-Aug Input Prices +2.0% m/m; +1.4% y/y

LONDON (MNI) – Output price inflation edged up in August for the
first time in six months, boosted by petrol and chemicals, figures
released by National Statistics showed Friday.

The data could mark a turning point for inflation. Having fallen
sharply since September 2011 these latest figures could be a signal that
we’ve already reached the low point for this year. With input prices
rising strongly in July, this will also feed through to output price
inflation in the coming months, with potential consequences for
inflation at the consumer level.

Output prices rose 0.5% on the month and were up 2.2% on the year,
an increase from the annual rate of 1.8% recorded in July. This was the
largest jump in inflation between months since January 2011 and the
first increase since February 2012.

The latest increase was above the median forecast for a rise of
0.1% on the month and 1.3% on the year.

Input prices rose 2.0% on the month and by 1.4% on the year, above
the median for a 1.6% monthly rise and 1.1% increase on the year.

The main upward impact was crude oil, with prices up sharply on the
month.

–London bureau: 0044 20 7862 7491; email: puglow@marketnews.com

[TOPICS: M$B$$$,MABDS$]

-Jul manufacturing output +3.2% m/m; -0.5% y/y
-Jul industrial production +2.9% m/m; -0.8% y/y

LONDON (MNI) – Manufacturing bounced back sharply in July following
the Jubilee led downturn in June, a sign that GDP is set to bounce back
in the third quarter.

The data, which were far stronger than forecast, put trend growth
in manufacturing back in positive territory, suggesting the sector is
faring better than many had thought. Given the erratic data over the
Jubilee period, however, we need to see a couple more months of data to
gain a better picture of the state of the sector.

Manufacturing output rose 3.2% on the month in July, the strongest
rise since July 2002 and was down 0.5% on the year. This was way above
the median forecast for a gain of 1.8% on the month and decline of 2.5%
on the year.

Output in June was depressed by the Queen’s Jubilee celebrations
with the two Bank holidays during the month, cutting the number of
working days.

In the three months to July, manufacturing output was up 0.2%
compared with the previous three months, the strongest since July 2011.

The wider measure of industrial production rose 2.9% on the month
and was down 0.8% on the year, compared with the median for an increase
of 1.7% on the month and fall of 3% on the year.

The large bounceback in production in July, points to a good start
to the quarter for GDP growth which is forecast to bounceback from a
decline of 0.5% on the quarter in Q2.

-London newsroom 4420 7862 7491 email: puglow@marketnews.com

[TOPICS: MT$$$$,M$B$$$,MABDS$]

–BOE/GfK NOP Survey: Aug Yr Ahead Inflation Expectations 3.2% Vs 3.7%
–Two-Year Ahead Expectations Fall To 2.8% Vs 3.4% In May
–Aug Longer-Term Inflation Expectations 3.1% Vs 3.6% In May
–Satisfaction With BOE On Inflation Drops To Survey Series Low

LONDON (MNI) – Public inflation expectations seem to be dropping
back, with year-ahead expectations easing to 3.2% in August from 3.7% in
May, according to the latest Bank of England/GfK NOP Inflation Attitudes
survey.

Two-year and longer-term inflation expectations also dipped.
Two-year inflation expectations fell to 2.8% from 3.4% in May.

The survey should assuage any anxieties the hawks on the
Monetary Policy Committee may have had that inflation expectations are
becoming dislodged, something that was a more serious concern when
inflation was pushed higher by energy and commodity prices through the
course of 2011 and early 2012.

That said, it was always highly moot how far rising expectations
could actually fuel higher inflation, given moribund wage pressures.

Satisfaction among the public with the way the BOE is setting rates
to control inflation – fell to its lowest level since the survey started
(1999) – +6%, compared with +11 in May – despite the fall in perceived
rates of actual inflation and lower expectations for inflation further
out.

The survey provides no clues as to why satisfaction with the BOE
has fallen. It could be a reflection of growing public inflation
fatigue or maybe the result of a wider sense of malaise over the
continuing weakness of the economy?

Public perceptions of the current rate of inflation fell to a
median of 4.1% from 4.7% in May.

Data for this survey was collected between August 9-14.

–London newsroom: 4420 7 862 7492; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,M$$BE$,MABPR$,MT$$$$]

UK DATA: Aug Producer Output Prices +0.5% m/m; +2.2% y/y
-Aug Core Producer Output Prices +0.1% m/m; +1.2% y/y
-Aug Input Prices +2% m/m; +1.4% y/y
————————————————————————
Output price inflation edged up in August for the first time in six
months, boosted by petrol and chemicals, figures released by National
Statistics showed Friday. The data could mark a turning point for
inflation. Having fallen sharply since September 2011 these latest
figures could be a signal that we’ve already reached the low point for
this year. With input prices rising strongly in July, this will also
feed through to output price inflation in the coming months, with
potential consequences for inflation at the consumer level. Output
prices rose 0.5% on the month and were up 2.2% on the year, an increase
from the annual rate of 1.8% recorded in July. This was the largest jump
in inflation between months since January 2011.

Above expectations of +1.9% y/y

Core producer output prices  +0.1% m/m, +1.2 % y/y (in line with y/y expectations). Input prices +2.0% m/m +1.4% y/y (exp+1.2 %  y/y)

The US investment bank is targeting 1.3000 for EUR/USD, on the back of Draghi’s plan and subsequent lower periphery bond yields.

The bank is looking for pullbacks to be shallow, while seeing a break above 1.2750 opening the door to 1.3000.

It has to be said, their recent EUR/JPY recommendation is doing OK.

Pulled higher by the EUR/USD rally, taking out the 1.5950 barrier, tripping some buy stops  to fresh highs of 1.5977 (last seen back in mid May). Offers lie ahead of the next barrier at 1.6000.

 Above here there is likely to be more buy stops with fibonacci tech resistance then coming in around  1.6060/65 from the 76.4% retracement of the April 30 highs to lows of June 1.

GBP/USD’s sitting around 1.5970

• Conditionality is key element in bond program
• Inflation expectations are anchored
• Inflation will fall below 2% next year

What a party pooper

FRANKFURT (MNI) – Following is the text issued by the Economic and
Monetary Affairs Committee of EU Parliament to explain its decision to
defer the hearing of European Central Bank Governing Council member Yves
Mersch, candidate for the ECB Executive Board:

“A decision has been taken to postpone the hearing, scheduled for
Monday, of ECB Executive Board candidate Yves Mersch.

Explaining the decision Sharon Bowles (ALDE, UK), Chair of the
Economic and Monetary Affairs Committee said: ‘On Thursday a decision
was taken by the coordinators of the Economic and Monetary Affairs
Committee to postpone the hearing of Yves Mersch, candidate for a post
on the ECB’s executive board, after it became evident that no female
candidate had been considered for the position before the official
Council recommendation was made.

The committee has raised its concerns on lack of gender balance on
the ECB Board and Governing Council this [sic] for a long time. There is
now not even a single woman sitting on the main board of what is one of
the most powerful and essential institutions in the EU. The symbolic and
practical effects of this absence are not without note.

On the 8th May I wrote to Jean-Claude Juncker requesting that the
Euro Group, of which he is president, consider at least one candidate of
each gender before making a recommendation for the replacement of Mr
Gonzalez Paramo. I also encouraged him to implement a medium-term plan
to facilitate advancement of women to influential positions in the ECB
and national central banks, as well as within finance ministries. It
does seem, as with corporations, that there is a systemic cultural
problem to address.

I have received some verbal assurances that no suitable women could
be located, but no formal reply nor answer concerning the medium-term
plan.

In consequence it is felt that our concerns have not been addressed
in a sufficiently rigorous way and that it is not appropriate to proceed
with the hearing at this point in time.’”

–Frankfurt bureau tel: +49-69-720-142. Email: dbarwick@marketnews.com

[TOPICS: M$X$$$,MT$$$$,M$$EC$,MGX$$$,M$Y$$$,M$$CR$]

Spanish 10 year govt bond yield off 31 bps on day, presently at 5.72%.

Italian 10 year govt bond yield off 20 bps at 5.06%.

Against this backdrop euro seeing decent gains, EUR/USD up at 1.2672 having been as high as 1.2679.

As noted on orderboard, sell orders seen clustered 1.2680/00 ahead of 1.2700 barrier option interest.

With little help from a static USD/JPY.  There’s some offers just above 100.00 which are being currently filled ahead of next point of tech resistance up around 100.50 (July 4 highs).

 100.07 the high so far ( also the July 5 high)

– See Separate Tables For Details Of Individual Forecasts

TOKYO (MNI) – The following are the median forecasts for Japanese
economic data due in the coming week provided by economists surveyed by
MNI.

Core machinery orders, a leading indicator of capital spending, are
expected to confirm the government assessment that they are showing ups
and downs.

The Cabinet Office said last month that core private-sector orders
are projected to fall 1.2% on quarter in July-September, a second
straight quarterly drop after -4.1% in Q2 and +0.9% in Q1.

Economists warned that firms are becoming cautious about
implementing their capex plans amid the European debt crisis and the
slowdown in China, the largest market for Japanese exports.

Producer prices as seen in the domestic corporate goods price index
(CGPI) is forecast to have posted a fifth consecutive year-on-year fall
in August, with the pace of decline slowing from -2.1% in July as
commodity prices are picking up.

The Bank of Japan’s overseas commodity index — composed of 17
items including crude oil, copper, gold, wheat and beef — dropped only
5.7% on year in August, compared with -10.6% in July.

Meanwhile, the current account surplus for July is expected to have
shrunk on year for 17 months in a row, as the trade deficit is seen
continuing due to high imports of energy and slower overseas demand.

Monday, Sept. 10, 0850 JST (2350 GMT Sunday): The Ministry of
Finance releases the July current account balance. Forecast: a surplus
of Y485.6 billion, down 53.9% on year. The trade balance will show a
deficit worth Y439.5 billion, compared with a surplus of Y141.8 billion
in July 2011, and the income balance will be in surplus by Y1.247
trillion, down 0.5% on year.

Wednesday, Sept. 12, 0850 JST (2350 GMT Tuesday): The Cabinet
Office releases July machinery orders. Forecast for core orders, which
exclude volatile demand from electric utilities and for ships: +1.5% on
month, which would be the second gain after +5.6% in June and -14.8% in
May.

Wednesday, Sept. 12, 0850 JST (2350 GMT Tuesday): The Bank of Japan
releases August corporate goods price index (CGPI). Forecast: -1.9% y/y,
a fifth straight y/y drop after -2.1% in July and -1.4% in June.

skodama@marketnews.com
** MNI Tokyo Newsroom: 81-3-6860-4823 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$]