(RTTNews) - Wednesday, the news flow gained momentum in Europe with several nations releasing many statistical reports. Data showed that the German business confidence deteriorated to a three year low in September, while the French business sentiment weakened further. In other news, some Scandinavian central banks struck swap deals with their U.S. counterpart to ensure funds to boost dollar liquidity in domestic money markets.

Eurozone

The Eurozone current account deficit narrowed to EUR1.7 billion in July on working day and seasonally adjusted basis, the European Central Bank said in a report. The deficit for June was revised to EUR6.1 billion.

The German business confidence deteriorated to a three year low in September as firms were dissatisfied with their current business situation, results of a survey revealed. A monthly survey from the Munich-based Ifo research institute showed that the business sentiment fell for the fourth straight month to 92.9 in September from 94.8 in August. The indicator stood below the expected reading of 94.1 and was the lowest since May 2005. Further, the expectations index showed a reading of 86.5 for September. The index stayed below August’s 87 and 87.3 anticipated by economists.

Germany’s Federal Statistical Office announced that value of orders received in the building industry increased 3% year-over-year in July, bettering the 1.6% rise recorded in June.

The French business sentiment deteriorated further in September as business leaders showed increased pessimism regarding order book levels, general and personal production outlook. A monthly business survey published by the statistical office INSEE showed that the business confidence index eased to 92 in September from 97 in July, revised from the 98 initially reported. The indicator stood eight points below its long-term average and smaller than the expected reading of 97. The current figure also marked the lowest reading since mid 2003. There was no report for the holiday month of August.

The Statistical Office of the Republic of Slovenia said the consumer confidence indicator increased 8 percentage points month-on-month in September to reach its highest level since August 2007. The improvement was largely due to more optimism on household financial situation over the next 12 months. In a preliminary report, the statistical agency said the number of tourists’ arrivals increased 5% year-on-year to 392 120 in August. Meanwhile, the number of overnight stays rose 2%.

The Research Institute of the Finnish Economy slashed its 2009 gross domestic product growth forecast for the Finland. At the same time, the think-tank kept its 2008 growth outlook unchanged. According to the institute’s latest forecast, the Finnish economy is expected to grow 1.8% in 2009, down from an earlier forecast of 3% growth. At the same time, the think-tank maintained its 2008 growth outlook almost unchanged at 2.8%. For 2010, ETLA forecasts 2.5% growth. ETLA forecast Finnish inflation to reach 4% this year and easing to 2.4% in 2009.

The Statistics Austria said total industrial production decreased a working day adjusted 0.4% year-on-year in July, slower than the 1.1% decline recorded in June. In the manufacturing sector, production rose working day adjusted 0.7% annually and decreased 0.6% month-on-month in July.

A report released by the Spanish Statistical Office, INE showed that the number of overnight stays declined 0.6% year-on-year to 37.9 million in August. Meanwhile, the number of travelers fell 0.71%.

The Italian retail sales recorded an unexpected recovery in July as sales of food products recorded notable increase. The statistical office ISTAT said in a report that Italian retail sales increased 2.1% year-on-year in July, reversing a 3.4% decline in June. Meanwhile, the consensus forecast was for a 0.8% fall.

Results of the business confidence survey carried out by the research institute, ISAE showed that the nation’s business confidence indicator fell to 82.7 in September from 83.3 in August. Economists had expected the index to log a reading of 83.3. The September reading is the lowest October 2001.

Rest of Europe

UK retailers reported decline in sales volume in September and expects the hard times to continue in October. At the same time, supermarkets enjoyed robust sales growth, the latest Distributive Trades Survey conducted by the Confederation of British Industry showed. The balance of retailers recording a contraction in sales volume stood at minus 27%, but improved from the record low of minus 46% registered in August.

The volume of retail sales in Hungary declined year-on-year in July, a report by the Hungarian Statistical Office said. Retail sales volume fell a calendar-adjusted 1.8% in July compared with a 1.9% decline in June. Economists were looking for a 1.3% decline.

The Statistics Denmark announced that the consumer confidence indicator rose to minus 11.1 points in September from minus 12.2 points recorded in August. Economists were looking for a reading of minus 13.3 for September.

Sweden’s economic tendency indicator, which measures business and consumer confidence in the economy, rose marginally to 86.0 in September from 85.6 in August, results of the latest economic tendency survey released by the National Institute of Economic Research, or NIER, showed. According to the NIER, the indicator has fallen substantially since March 2008 and the situation in the Swedish economy remains much weaker than normal.

Further, the survey found that confidence in the Swedish manufacturing sector continued to decrease in September. The corresponding indicator fell to minus 14 from minus 12 in August. In July, the indicator logged minus 11. The September reading was in line with the consensus forecast. On the other hand, the consumer confidence index rose to minus 14.4 from minus 16.5, while economists were expecting the index to fell to minus 17.

The Bulgarian National Bank revealed in a report that gross external debt stood at EUR32.67 billion, or 99.5% of GDP in July. The debt increased 13.2% from the end of 2007. The rise in foreign debt was mainly driven by the increase in bank liabilities.

The Statistics Iceland announced that the Consumer Price Index or CPI rose 14% year-on-year in September, smaller than the 14.5% rise recorded in August, which was its fastest pace since June 1990. Economists had expected for an increase of 14.2%. This was the first decline in the annual inflation rate since January. In a research note, economists at Landsbanki had said the 12-month inflation rate peaked in August, and will ease rapidly once the impact from the close of summer sales is past and the ISK has reversed its recent downward swing.

The Turkish statistical office, Turkstat said the Production Workers Index rose 0.6% year-on-year and stood at 85.8 in the second quarter from 86.2 recorded in the first quarter. In the first quarter, the number of production workers was up 1.7%. A year-ago, the index was up 2%.

Norway’s unemployment rate remained unchanged in July from April, a report by Statistics Norway said. The unemployment rate for July, calculated from the average of the three months from June to August was 2.4%. In April, the corresponding rate was the same.

In central bank news, the Swedish central bank and the U.S. Federal Reserve agreed on a US$10 billion swap facility in order to improve liquidity conditions in global financial markets. The swap facility will expire on January 30, 2009.

The Fed also agreed a credit line providing the Norges Bank with access to US dollar funding of up to US$5 billion against collateral in Norwegian kroner. The Fed also concluded similar swap deals with the Reserve Bank of Australia worth US$10 billion and with Danmarks Nationalbank worth US$5 billion. On September 18, the Fed and other leading global central banks had announced joint liquidity boosting measures to smooth liquidity in financial markets. Together, these swap agreements provide access to liquidity facilities totaling US$277 billion.

The Norwegian Central Bank or the Norges Bank retained the base rate at 5.75% for the second month in a row, citing slowing economic growth and above-target inflation. In June, the central bank had raised the key policy rate from 5.5%. In a statement accompanying the monetary policy decision, the central bank said there is an unusually high degree of uncertainty linked to the turbulence in financial markets and there are clear signs that economic growth is slowing. It is difficult to determine how long this pressure will last and effects on inflation and activity in the Norwegian economy, the central bank governor Jan Qvigstad said.

The Norges Bank also announced that it has taken a series of measures to curb the swings in the Norwegian money market amid the global financial turmoil.

Elsewhere, the National Bank of Poland maintained the reference rate at 6%. The decision was in line with economists’ expectation. In June, the central bank had hiked interest rates by 25 basis points.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved

Posted in Categories: Australia, Economy, Eurozone, Forex, Releases, Stocks, UK, USA.

Subscribe by RSS Subscribe by Email  Email This Post To A Friend