LONDON (MNI) – The economic outlook has deteriorated but employment
intentions suggest job creation is going to be pretty mucus flat over
the next six months although investment intentions have weakened,
according to the latest Bank of England Agents’ report.

The report, published alongside the July BOE Monetary Policy
Committee minutes, also showed that while the BOE’s plans for credit
easing will be welcomed by small companies, they will be of little
interest to larger ones.

“Small firms were still often struggling to secure loans … In
contrast, larger businesses often had favourable access to credit, but
frequently had little appetite to borrow,” the report said.

Investment intentions “had softened a little but remained positive,
and there was a general sense of stepping back from expansion plans.”

With companies shelving whatever plans they had to expand “private
sector employers did not expect much change in staff numbers over the
next six months.”

The agents’ scores showed manufacturing employment intentions still
just in positive territory, unchanged at 0.2 in June, while total
services pointed to contraction at -0.2, slightly better than the -0.3
seen in May.

Investment intentions fell to 1.0 in June for manufacturing from
1.4 in May and held steady at 0.8 for services.

–London newsroom: 4420 7862 7491 e-mail: drobinson@marketnews.com

[TOPICS: M$$BE$]

Great trick, learnt it from a magician I met a coupla years back.

Usual; end of the world occurs in next 15/20 mnutes you won’t read about it on Forexlive.

–BOE MPC Voted 7-2 at July meeting for extra stg50bn QE
–BOE MPC Dale, Broadbent voted for unchanged QE at July meet

LONDON (MNI) – With UK growth possibly flatlining for the whole of
this year, and the economy taking a turn for the worse, Bank of England
Monetary Policy Committee members were united at their July meeting on
the need for more stimulus.

They split, however, over whether further quantitative easing was
needed in addition to the credit easing and liquidity insurance measures
the BOE had recently unveiled. The minutes showed seven members voted
for an extra Stg50 billion of QE and two, Chief Economist Spencer Dale
and Ben Broadbent, dissented, voting for unchanged policy.

For most MPC members the case for further QE was compelling and the
minutes showed they debated the merits of an extra Stg50 billion or
Stg75 billion.

The BOE had activated in Extended Term Collateral Repo facility to
provide liquidity insurance and plans to provide banks with cheap
funding if they boosted lending, the Funding for Lending Scheme, were
well advanced when the MPC met on July 4 and 5.

The debated hinged on how much more, if any, stimulus was needed in
addition to these schemes.

For the majority – “On balance, and in light of the potential
stimulus provided by the other recent and prospective policy
initiatives, these members judged that an additional Stg50 billion of
asset purchases was appropriate at this meeting,” the minutes said.

Dale and Broadbent, however, took the view that the balance of
risks around the inflation outlook had shifted less than their
colleagues thought since the May Inflation Report and enough stimulus
was on the way.

“They expected the policy initiatives announced during the month to
have a sufficiently large impact on the supply of credit and on economic
activity that no further stimulus was warranted at this meeting,” the
minutes said.

The July minutes highlighted the deterioration in the UK’s economic
outlook.

“It now seemed possible that output would be roughly flat over 2012
as a whole,” they said.

Back in May the MPC’s implied forecast was for 0.7% growth this
year.

The minutes also showed the MPC has not ruled out a cut in Bank
Rate from its current. They said the case against it was unchanged at
the July meeting but the FLS could alter things.

“The impact of the FLS and other policy initiatives might, in time,
alter the Committee’s assessment of the effectiveness of such a Rate
cut,” they said.

-London newsroom: Tel: +44 207 862 7491; e-mail:drobinson@marketnews.com

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

-June Claimant Count Unemployment +6,100 m/m; Rate 4.9%
-May Average Weekly Earnings total pay +1.5% vs 1.4% in Apr
-Mar-May ILO Unemployment -65,000; Rate 8.1%
-May Claimant Count revised to +6,900 from +8,100

LONDON (MNI) – The level of claimant count unemployment rose for
the second consecutive month in June, although a change to the benefits
system is likely to have exaggerated the increase, figures released by
National Statistics showed Wednesday.

Stripping out this benefit effect on the claimant count suggests a
better labour market picture than expected, although the figures could
also be flattered by extra hiring for the Olympics. Overall, the trend
in the claimant count looks to be broadly flat.

The claimant count rose 6,100 on the month between May and June
with the rate steady at 4.9%, in line with the median forecast. Claims
by men fell 1,900 on the month, while women rose 8,000. National
Statistics said the increase in the number of women claiming Job Seekers
Allowance (JSA) in June was likely to have been affected by a change in
the eligibility rules for Lone Parent Income Support which would have
led to more claiming JSA.

There was also a downward revision to the initially reported May
rise of 8,100 to 6,900.

The ILO unemployment data, which lag the claimant count, showed
another large fall of 65,000 in the three months to May compared with
the previous three month period, but these decreases look set to slow in
line with the claimant count data over the next few months. The
unemployment rate eased to 8.1% from 8.3% previously.

There was good news on employment with the level rising 181,000 in
the latest three months. National Statistics said there was some limited
evidence that the Olympics had boosted employment numbers.

Pay growth remained very subdued with Average Weekly Earnings
growth ticking up to just 1.5% in the three months to May compared with
a year earlier, from 1.4% in April. This was in line with the 1.5%
median forecast.

Regular average weekly earnings, which exclude bonus payments,
remained steady at 1.8%, a little below the 1.9% median forecast.

-London bureau: 00 44 207 862 7491 e:mail: puglow@marketnews.com

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

UK DATA: Jun Claimant Count Unemployment +6,100 m/m; Rate 4.9%
-June Claimant Count Unemployment +6,100 m/m; Rate 4.9%
-May Average Weekly Earnings total pay +1.5% vs 1.4% in Apr
-Mar-May ILO Unemployment -65,000; Rate 8.1%
-May Claimant Count revised to +6,900 from +8,100
————————————————————————
The level of claimant count unemployment rose for the second
consecutive month in June, although a change to the benefits system is
likely to have exaggerated the increase. Stripping out this benefit
effect on the claimant count suggests a better labour market picture
than expected, although the figures could also be flattered by extra
hiring for the Olympics. Overall, the trend in the claimant count looks
to be broadly flat. The ILO measure of unemployment fell sharply while
employment was up a very healthy 181,000 — again this may have got an
Olympics boost. Earnings growth remained very subdued.

• Dale and Broadbent opposed increase
• Voted 9-0 to keep interest rates at 0.5%
• MPC members who supported more QE discussed 75 bln increase as well as 50 bln
• Key question for MPC was how big a boost to growth would come from funding for lending and ECTR schemes
• Potential stimulus from new schemes helped tip MPC towards 50 bln QE and not 75 bln
• Dale and Broadbent concerned fall in inflation “very largely” due to temporary effect from lower oil prices
• Near-term outlook for GDP weaker, survey indicators had deteriorated since June
• “Very substantial risks” remain from euro zone, increasing signs this is hurting UK growth

Pretty much in line with median forecast of +5,000.   Unemployment rate 4.9%, as expected.

Ilo jobless -65,000 in 3 months to May, rate down to 8.1%, better than median forecast of 8.2%.

Up from 8.72% in April

Highest since April 1994.

1994, seems like only yesterday.  It was my first Spring living in the USA.  It was like living in antarctica, feet of snow still lying on the ground brrrrrrr

Spain to introduce legislation to prevent banks mis-selling preferred stock to retail investors.

Changes won’t have a retroactive effect.

Now there’s a shock!!

The idiom ‘closing the barn door after the horse has bolted’ comes to mind.

C’mon, we got all the time in the world!!

PARIS (MNI) – Moving toward a Eurozone banking union is a key
element in overcoming the debt crisis, European Central Bank Governing
Council member Christian Noyer said on Wednesday.

A banking union needs to be established “very quickly,” said Noyer,
who heads the Bank of France, in a radio interview.

“We need to have centralized banking supervision. We need to have
the capacity to collectively take action on all banks in the Eurozone,”
he said.

He urged policy-makers to “proceed with determination and through
to the end” in implementing all the reforms decided by EU leaders,
including national budget rules that will ensure that deficits will
continue to decline.

Regarding the Libor rate-fixing scandal, Noyer said, “I was
evidentially shocked at what has happened.” He said he knew of no
evidence that French banks had either participated in or were unwitting
victims of the rate-fixing. Noyer said such behavior, if proven in
court, should be criminally punished.

–Paris newsroom, +331 4271 5540; jduffy@marketnews.com

[TOPICS: M$$CR$,M$X$$$,M$$EC$,M$F$$$,M$B$$$]

• Italy 10 year govt bond yield off 8 bps at 5.97%

EUR/USD sits at 1.2282 in yet another moribund European trading session.

That’s a grand total of  6 pips firmer from the 1.2276 which greeted me around three and a half hours ago.

Caaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaack!!

LONDON ((MNI) – The Bank Of England said Wednesday it was offering
an unlimited supply of U.S. dollars in both 7-day and 84-day operations.

The settlement date on the 7-day op was July 19 maturing July 26
2012. The Bank said the repo would be at a fixed-rate, with the rate to
be set at 0.67%.

The settlement date on the 84-day op was July 19 maturing October 11
2012. The Bank said the repo would be at a fixed-rate, with the rate to
be set at 0.66%.

–London Bureau; Tel: +442076341655; email: ukeditorial@marketnews.com

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

Speaking in parliament

• Spain has lowest sales tax take in EU
• Spain cuts aimed at boosting growth
• Effect of Spain’s cuts won’t be immediate
• Lack of funding is forcing Spain to cut spending
• Spain has trade surplus with EU for first time

Bloomberg reporting.

PARIS (MNI) – France can look forward to a pick-up in growth next
year, provided investors and consumers are convinced that deficit
targets will be hit, ECB Governing Council member Christian Noyer said
Wednesday.

“The most important thing, from my viewpoint of course, is that the
government take a very, very clear line on the pursuit of the reduction
of the deficit,” the governor of the Bank of France said in a radio
interview.

“That’s what the markets awaited, that’s what permitted interest
rates to remain low in France, to go even lower,” he said. “That’s what
gave us international confidence.”

Under such conditions, after the soft patch during the elections
this spring, there should be a “gradual recovery” starting in the second
half of this year, which could allow the domestic economy to surpass the
IMF’s latest forecast for growth next year of only 0.8%, Noyer argued.

“Today I think that 1% [growth] should be attainable – at least 1%
or more,” he said. “Provided we remain on a very clear strategy of
deficit reduction aimed at hitting the targeted deficits” of 4.5% of GDP
this year and 3.0% next year.

However, if households and investors are not convinced, “the
savings rate will rise, there will be less consumption, less investment,
less growth,” he warned.

At the same time, structural reforms must be pursued to overcome
the “problem of competitiveness in France,” the central banker said. One
way to reduce labor costs would be to lighten the burden of social
payroll charges that employers pay, he said. “We must find other
resources” to finance social spending.

–Paris newsroom, +33142715540; email: ssandelius@marketnews.com

[TOPICS: M$$EC$,M$$CR$,M$F$$$,MGX$$$,MT$$$$]

The German Finance Minister has told the daily Rheinische Post “There is absolutely no reason to speculate, beyond this (bank aid) application, about a comprehensive aid program for Spain.”

Unwittingly it seems the 1.2370 topside parameter I picked for the latest poll is kinda funky.  Funky in as much as important (nay “key”) resistance lies just ahead of said level at 1.2365.

Well that’s according to a forex strategist at UBS.

Anyone else out there see 1.2365 as “key” And if not 1.2365, then what is key resistance in your eyes?

• Our scenario is a gradual economic recovery in 2H
• 1% growth is reachable with deficit reduction strategy
• France has a competitiveness problem
• French govt should reduce labor cost
• Not concerned about Europe situation
• All euro zone countries must set up budget rules
• Appaled by LIBOR fixing scandal

Dow Jones reporting.

Oh dear (The Sequel) 

Oh dear