2008-06-05 EU News Highlights

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France’s Unemployment Rate Drops to 7.5%, Insee Says

Scary low rate for the ECB.

German 2008 Tax Revenue to Grow More Than Expected

Fuel for the hawks, Germany’s unemployment is too low for them as well.

ECB May Keep Benchmark Rate at Six-Year High

For sure. And there will be discussion of hikes.

Spain April Industrial Production Contracts on Euro’s Advance

The ECB wants this kind of slack, but still not enough for them.

OECD Official Urges Fed, ECB to Put Rates on Hold

Yes, as they sure aren’t going to cut as Bernanke originally hoped.

They never bit on his bait to start an international race to the bottom with rate cuts/inflation.

The Fed thought the rising euro and the loss of demand to the US, as US exports rose, would cause the ECB to blink and cut rates.

Instead, the falling dollar and ripping US inflation has caused the Fed to start talking about hikes.

In the mainstream paradigm, the ECB was right in not cutting while the Fed is coming under fire for cutting aggressively into a triple negative supply shock, letting inflation expectations start to elevate, and risking a much larger slowdown bringing inflation down from much higher levels.

European Bonds Fall on Speculation ECB to Highlight Inflation


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