OUTLOOK Highlights of US economic data to be released this week

WASHINGTON (Thomson Financial) - A synopsis of US economic indicators to be released this week, with forecasts provided by Thomson's IFR Markets.
MONDAY DECEMBER 17
The US current account deficit is expected to decrease to 184.4 bln usd in quarter three from 190.8 in quarter four. Economists from Bank of America said, "The decline in the trade value of the dollar, slowing domestic demand and forward economic momentum among our major trading partners continues to bring about an improvement in the current account balance."
The December Empire State manufacturing survey, which measures industrial conditions in the New York region, is expected to drop to 22.6 from 27.4 in November. Joseph Brusuelas from IDEAglobal said, "The sharp increase in the cost of energy and commodities should weigh heavily on the outlook of firms heading into the final month of the year."
The December NAHB Homebuilders sentiment survey is expected to be 19, the same as in November when it was a record low.
TUESDAY DECEMBER 18
The November US Housing starts are expected to drop to annual rate of 1.178 mln from 1.229 mln in October. "Unlike September and October, which were driven largely by volatility in multi-family starts, we think the bulk of the decline should come from single family starts," said economists from Credit Suisse. They noted that single family permits, a leading indicator for single family starts, had plummeted in October to their lowest level since November 1991. US building permits overall are expected to drop in November to an annual rate of 1.145 mln from 1.178 mln in October.
THURSDAY DECEMBER 20
The final GDP in the third quarter is projected to be unrevised from its previous estimate of 4.9 pct. Brusuelas said the projected Q3 growth is likely "inventory inspired." In the preliminary estimate of third quarter GDP, released November 29, inventories contributed nearly 1 percentage point to the 4.9 pct growth.
Brusuelas added: "Under normal circumstances, market players would be rejoicing with holiday cheer about possible momentum going into the New Year. However, the impending inventory correction and credit inspired reduction in fixed business investment will make the release of this market data an event that is decisively in the market's rearview mirror."
The final GDP Price index in the third quarter is also projected to be unrevised at 0.9 pct.
The number of people filing first time claims for unemployment insurance in the week ending December 15 is expected to increase to 335,000 from 333,000 in the previous week. The number of individuals who continued to receive unemployment insurance in the week ending December 8 is expected to drop to 2.60 mln from 2.64 mln in the previous week.
The Philadelphia Fed's index of manufacturing conditions in the district is projected to be 6.4 in December, following an 8.2 level in November.
FRIDAY DECEMBER 21
Personal income in November is expected to increase by 0.5 pct after increasing 0.2 pct in October. Personal consumption in November is also expected to increase by 0.6 pct, three times the rate it rose in October.
However, economists from BNP Paribas said the projected increase is "illusory as nearly all of the gain in the goods portion is due to the sharp increase in gasoline prices and therefore gasoline sales. Excluding gasoline sales, total goods sales are seen as lacklustre in November as they were in October."
The core PCE price index in November is expected to increase by an annual rate of 2.0 pct, slightly above the 1.9 pct increase in October. Robert Brusca from FAO Economics said that given the Core CPI figure released December 14 by the Labor Department, "you have to figure that pressure passes on to the PCE core." Core CPI, which rose in November by 0.3 pct, was moderate in comparison to the 0.8 pct increase in headline CPI but still out of the comfort zone of many economists.
Given risks to inflation, the Federal Reserve is "probably fairly content" with their lower than expected quarter point cut to the discount rate earlier this week.
The University of Michigan consumer sentiment index in December is projected at a level of 74.8, slightly above November's 74.5 level. "Outside of energy, consumers have been struggling with continued housing weakness, financial market uncertainty and tighter credit, which should keep confidence low," said economists from Lehman Brothers.

Singapore non-oil exports fall for first time in 7 months in November - UPDATE

SINGAPORE (Thomson Financial) - Singapore's non-oil domestic exports fell for the first time in seven months in November as
shipments of both electronics and pharmaceuticals dropped, the government said Monday.
Non-oil domestic exports dropped 3.4 percent to 14.6 billion Singapore dollars last month from a
year earlier. International Enterprise Singapore said.
The decline was unexpected. Economists polled by Thomson Financial were looking at growth of between 1.6 and 4.5 percent. The last time exports dropped was in April when they were down 0.4 percent.
The poor data for November may mean that full-year growth may come in below the
government's forecast range of 4-6 percent, said Song Seng Wun, regional economist at CIMB-GK.
For the 11 months to November, exports have grown by an average 2.9 percent.
But the overall economy is still on track to grow by a strong 8 percent, said Song.
"The 8 percent is still intact mainly because of contribution from services and domestically oriented economic activities," he said.
Exports of electronics, which made up nearly 41 percent of the total, dropped for the tenth consecutive month. Shipments fell 8.2 percent to 5.96 billion dollars as exports of integrated
circuits, telecommunications equipment, and PC parts remained slow.
Non-electronics shipments inched up a marginal 0.2 percent to 8.66 billion dollars. A 21 percent decline in pharmaceutical exports offset an increase in shipments of specialized machinery, nonmonetary gold, electrical machinery and primary chemicals.
Seasonally adjusted, non-oil domestic exports were down 6.0 percent in November from the
previous month compared to a 0.5 percent decline in October.
Shipments to EU countries and Indonesia fell during the month, while those bound for the US, China, Malaysia and Hong Kong grew.
Exports to the EU fell 32 percent and those bound for Indonesia, were down 6.8 percent, falling for the seventh straight month.
Shipments to the US rose 0.5 percent, those to China increased 0.6 percent, those to Malaysia expanded 1.2 percent, and those to Hong Kong grew 11 percent.

Qatar To Shun Dollar Delink Amid IMF Inflation Concerns - QNA

DUBAI (Zawya Dow Jones)--Qatar will keep its peg to the U.S. dollar, the Gulf state's central bank governor Sheikh Abdullah bin Saud Al Thani said in a statement to the official Qatar News Agency. The comment came after the International Monetary Fund said a delink from the weakening dollar would be one way for the Persian Gulf emirate to fight inflation. "The peg to the U.S. dollar would be kept to serve the interest of the Qatari economy and to maintain financial and monetary stability," Al Thani said Sunday. In November, the Qatar's riyal hit a five-year high as investors bet that Gulf Cooperation Council central banks would delink or revalue against the greenback. "The dollar's decline in the past two years compared to other major currencies does not change the fundamentals that support the riyal's peg to the dollar," Sheikh Abdullah said. He added Qatar's annual inflation rose to between 12-13% in the past two years mainly due to "local considerations resulting from economic growth and it does not justify a change of exchange rate strategy." The IMF said Friday although its economic outlook for Qatar was bright due to high oil prices, the Persian Gulf state was at risk from inflation. "A few directors suggested that consideration be given to moving to a more flexible exchange rate regime to help curb inflationary pressures," the IMF said in a statement. Inflation levels in the Persian Gulf state are nearing a record high of 15%.

Malaysia sees 2007 budget deficit narrowing to 3.2 percent of GDP - UPDATE

KUALA LUMPUR (Thomson Financial) - Malaysia's budget deficit will narrow to 3.2 percent of gross domestic product this year from 3.3 percent in 2006, Second Finance Minister Nor Mohamed Yakcop said Monday.
The deficit is expected to fall even though the government has stepped up development spending before the next general election, which is widely expected to be held early next year.
The government has pledged to spend up to 200 billion ringgit under the Ninth Malaysia Plan, its five-year development blueprint which runs through 2010.
Nor Mohamed said the budget deficit will narrow further to 3.1 percent of GDP in 2008.
"We have given a commitment to reduce the budget deficit since the deficit hit a high of 5.5 percent in 2000 due to the extra spending following the Asian financial crisis," Nor Mohamed said.
The economy is expected to remain resilient despite volatile external conditions such as high oil prices because the domestic economy has diversified, the minister said.
"Even in terms of exports, we have diversified away from reliance on one or two countries by increasing our exports to other countries," Nor Mohamed said.
"We are quite resilient in meeting the challenges of the international economy."
The US is Malaysia's largest trading partner.
On the inflation outlook, Nor Mohamed said government will continue to contain inflation and ensure that the inflation rate remains benign.
The inflation rate will stay between 2.0 percent and 2.5 percent next year, the minister said recently.
(1 US dollar = 3.32 ringgit)

Japan October leading index revised down to 18.2 from initial estimate of 20.0

TOKYO (Thomson Financial) - Japan's index of leading economic indicators for October has been revised down to 18.2 from the initial estimate of 20.0, according to government data released Monday.
In September, the index hit zero for the first time since December 1997.
The index of leading economic indicators stayed below the boom-and-bust line of 50 for the second straight month because of unstable financial markets, worry about profit margins and a decline in consumer confidence.
In June and July, the index was above 50 for the first time since June 2006.
A reading above 50 indicates economic expansion over the next 3-6 months, while a reading below 50 suggests contraction.
The leading index is based on 12 indicators, of which data for 11 were available for the revision, with two pointing to expansion and nine pointing to contraction.
The coincident index, which measures the current state of the economy, was revised up to 70.0 from the initial estimate of 66.7.
The coincident index is composed of 11 indicators, of which 10 were available for the revision, with seven pointing to expansion and three pointing to contraction.
The lagging index was revised down to 60.0 from the preliminary reading of 75.0.
This index is made up of six indicators, of which data for five were used in the latest figure, with three pointing to expansion and two to contraction.
(1 US dollar = 113.15 yen)

Forex - Dollar dips vs euro, yen on view appreciation may have been too quick

HONG KONG (Thomson Financial) - The US dollar slipped against the euro and the yen in afternoon trade in Asia on Monday as
investors deemed the greenback's appreciation last week as excessive, prompting them to take
profit.
"While I have expected the dollar to appreciate, I was a bit surprised that it moved too quickly,"
said Mark Wan, chief analyst at Hang Seng Investment Services Ltd. "The dollar's weakness is just a technical correction."
At 1.00 pm (0500 GMT), the euro was trading at 1.4440 dollars, up from 1.4413 in Sydney this morning and from 1.4430 in late New York trade Friday. The dollar extended its gains versus the euro this morning after rising 1.5 percent on Friday.
The dollar was quoted at 113.03 yen, down from 113.275 this morning and from 113.28 on Friday. The dollar rose nearly 1 percent versus the Japanese currency on Friday.
But the dollar's decline should be short-lived and will probably edge higher against major
currencies towards the end of the year, Wan said.
"By the end of this month, the dollar can get stronger against the euro and will move past the 1.43 level because the US economy is not as bad as it seems. The decision of the US, Europe and other central banks to infuse liquidity into the system will support the dollar," Wan said.
The Federal Reserve last week joined the European Central Bank, the Bank of England, Swiss National Bank and Bank of Canada in easing the global credit crunch by engaging in currency swaps and expanding the range of collaterals they would accept to back up loans.
The dollar rose against major currencies Friday after the inflation rate in the US accelerated in November to the highest in more than two years, raising speculation that the Federal Reserve may no longer reduce its key interest rates as earlier anticipated.
"The dollar is benefiting from the paring back of expectations of a more aggressive Fed rate cuts," said David Mann, currency strategist at Standard Chartered Bank. "But it was just a temporary bounce, as the Fed will continue cutting interest rates."
Standard Chartered predicts the Fed will lower rates further by 50 basis points in the first half of 2008. And unlike Hang Seng, StanChart is betting on a weaker dollar at least until the end of this
month.
"This is not yet the beginning of the dollar's recovery that we are anticipating. Overall, the trend is for a weaker dollar over the short term," Mann said.
Consumer price data released Friday showed US inflation rose to a two-year high of 0.8 percent in November, an ominous reading at a time when the economy is slowing.
The Asian Development Bank is forecasting US growth of 2.2 percent this year and 1.9 percent in 2008, less than the 2.9 percent expansion posted in 2006.
The Fed has lowered its federal funds rate target by one percentage point this year, including the quarter-point reduction announced last week.
Hong Kong 1.00 pm (0500 GMT)
US dollar
113.03 yen
1.1518 sfr
Euro
1.4440 usd
163.23 yen
1.6636 sfr
0.7150 stg
Sterling
2.0192 usd
228.23 yen
2.3259 sfr
Australian dollar
0.8618 usd
0.4268 stg
97.44 yen
New Zealand dollar
0.7615 usd

OPEC MEETING Qatar does not see any need for more OPEC oil UPDATE

ABU DHABI (Thomson Financial) - Qatar's oil minister Abdullah Hamad al-Attiyah said he does not see any need for more OPEC oil as he arrived in Abu Dhabi for the cartel's meeting tomorrow.
Asked by reporters if OPEC will increase production, he said: "If there is a need (to increase production), but I don't see that there is any need."
Al-Attiyah also said: "The International Energy Agency (is) forecasting that there will be lower demand so we have to believe that," adding that he was not "feeling there is panic for extra supply."
Qatar oil production currently stands at 803,000 bpd, according to the OPEC website.
"I think now we are thinking about the number (quota) we agreed last Vienna meeting. So far this is what we believe should be the level."
He also affirmed that he is happy with current output levels, saying, "this is my opinion."
At the Vienna OPEC meeting, the cartel agreed to raise output by 500,000 bpd, beginning Nov 1.
Asked by reporters about the current price of oil, he said" "I never comment about oil prices, this is a market force."
"I talk about demand and supply. This is the most important thing we are thinking about," he added.

Italy 2008 advertising spending seen up 2.9 pct vs 2.8 pct in 2007 UPDATE

MILAN (Thomson Financial) - Nielsen Media Research said it expects Italian advertising spending to rise 2.9 pct in 2008 compared to an estimated rise of 2.8 pct in 2007.
The research company said it expects advertising revenue for daily newspapers to rise 0.1 pct in 2008, to rise 1.4 pct for magazines, 2.4 pct for television, 3.8 pct for radio, 0.3 pct for billboards, 0.7 pct for cinemas, and 33.1 pct for internet.
The data for dailies and internet do not include local advertising. Including local advertising, the increase is 0.7 pct for newspapers and 33.6 pct for internet, Nielsen said.
The research group calculated that by extending the panel to advertising on satellite television, digital television, free newspapers and research engines, the Italian advertising market will rise an estimated 3.9 pct next year.
In 2007, advertising revenue for daily newspapers is expected to rise 3.5 pct, to rise 2.7 pct for magazines, to increase 0.9 pct for television, to grow 6.2 pct for radio, to increase 0.5 pct for billboards, to drop 9.7 pct for cinemas, and to jump 40.6 pct for internet.
Advertising spending is expected to reach about 8.8 bln eur in 2007.

Lithuania PM: Aiming For Euro By 2010-2011 - AFP

VILNIUS (AFP)--Lithuania could join the euro zone by 2010 or 2011 after reining in inflation, which has proven the key hurdle to entry, Prime Minister Gediminas Kirkilas said Tuesday. "If we apply our fiscal discipline plan scrupulously, we will meet the convergence criteria and I think Lithuania will be able to join the euro zone in the time frame of 2010 to 2011," Kirkilas said in an interview with Lithuanian radio. "Inflation should fall to 6.5% in the middle of next year, and the falling trend should then continue," he said. Lithuania's 12-month inflation rate jumped to 7.6% in October from 7.1% in September and 5.5% in August. Average annual inflation, one of the key indicators for countries wishing to join the euro zone, also continued its steady climb, rising to 5.1% in October from 4.8% the previous month. Lithuania joined the E.U. in 2004, 13 years after winning back its independence from the crumbling Soviet Union. It had planned to switch from its national currency, the litas, to the euro from the beginning of this year. But the bloc's executive body, the European Commission, barred the Baltic state after it failed to meet E.U.-set inflation criteria by one-tenth of a percentage point. Curbing inflation is a key plank of the E.U.'s "convergence" criteria for would-be members of the euro zone, which currently comprises 13 countries. Lithuania's Baltic neighbors Latvia and Estonia have also had to put their euro-zone plans on hold after failing to dampen inflation.

ICSC-UBS Chain Store Sales Down 2.0% In Dec 1 Week

NEW YORK (Dow Jones)--The International Council of Shopping Centers-UBS Retail Chain Store Sales Index fell by 2.0% in the week to Dec. 1 from its level a week before, on a seasonally-adjusted, comparable store basis. This result Tuesday followed a 0.1% decline in the prior week. "With the first full week of holiday shopping completed, retailers once again are seeing mixed results," the ICSC said in a statement. Retailers saw sales increase by 3.1% year-on-year, compared with a rise of 2.5% the prior week, but saw a "hefty" sales decline on a weekly basis, the Council said.

Foreign Exchanges - Continental Forward Rates

LONDON (Thomson Financial) -
Foreign Exchanges - Continental Forward Rates
Euro
1 Month 10.00 - 13.00 dis
2 Months 19.00 - 23.00 dis
3 Months 27.00 - 31.00 dis
6 Months 51.00 - 56.00 dis
12 Months 86.00 - 95.00 dis
Denmark
1 Month 23.00 - 9.00 prm
3 Months 53.00 - 29.00 prm
Norway
1 Month 15.00 - 2.00 prm
3 Months 26.00 - 4.00 prm
Sweden
1 Month 26.00 - 14.00 prm
3 Months 64.00 - 45.00 prm
Japan
1 Month 116.00 - 102.00 prm
3 Months 313.00 - 292.00 prm
Switzerland
1 Month 87.00 - 73.00 prm
3 Months 229.00 - 202.00 prm
Canada
1 Month 34.00 - 24.00 prm
3 Months 83.00 - 63.00 prm