Money Ireland

The number of contracts to purchase US second-hand house unexpectedly rose in July, signalling the market may be starting to stabilize after a plunge in the aftermath of the expiration of a homebuyer tax credit last April. US retailers in August reported a back-to-school bounce but at the expense of big discounts and new weekly jobless benefit claims fell 6,000 last week.

The European Central Bank (ECB) as expected kept its benchmark interest rate on hold at 1.0%, at a meeting of the governing council in Frankfurt, today. The ECB president, Jean-Claude Trichet, will address a press conference and he is expected confirm the continuation of emergency funding for Eurozone banks into 2011.

GDP (gross domestic product) increased by 1.0% in both the Eurozone (EA16) and the EU27 during the second quarter of 2010, compared with the previous quarter, according to the latest estimates released by Eurostat, the statistics office of the European Union. In the first quarter of 2010, growth rates were +0.3% in both zones.  First quarter growth was revised up. Growth outpaced US and Japan.

Markets news on stocks, currencies and commodities;  ECB expected to keep emergency bank support measures in place into 2011; Total Produce reports 5.5% rise in H1 2010 pre-tax profits.

Principal news stories from the Irish Independent, Irish Times, Irish Examiner, Financial Times and New York Times.

Irish pension funds face a return to funding difficulties according to Hewitt Associates, the global pensions consultants, on Wednesday. Meanwhile, in New York, Standard & Poor’s reported that in August, twenty-three of the 25 developed markets declined in August, with both Greece and Ireland posting double-digit declines.

The Commission for Energy Regulation (CER) on Wednesday confirmed a 4.9% hike in electricity prices as disconnections in 2010 surged to 10,678 customers.

The IMF (International Monetary Fund) on Wednesday published three staff papers on the issue of public debt and the conclusion of a paper on default in advanced countries is that it is unnecessary, undesirable, and unlikely.

The volume of Irish retail sales (i.e. excluding price effects) decreased by 0.1% in July 2010 when compared with July 2009 and there was a monthly decrease of 0.2%. The motor trade was the only main category which showed year-on-year value increases.

The Irish Live Register total increased from 452,500 in July to 455,000 in August, an increase of 2,500 and a new all-time record for the third straight month.

Data on Irish mortgage arrears show 36,438 households were in arrears for more than 90 days in June 2010.

Markets news on stocks, currencies and commodities; Global foreign exchange daily turnover jumps 20% to $4trn – - London remains top fx centre; German retail sales dipped in July.

The Markit Final Eurozone Manufacturing PMI (Purchasing Managers’ Index) fell to a six-month low of 55.1 in August, down from 56.7 in July, but above the earlier flash estimate of 55.0. Although the PMI signalled a slight loss of growth momentum, the rate of expansion remained robust and faster than the survey average. Business conditions in the manufacturing sector have now improved in each of the past eleven months. Germany and France led the growth while rate of contraction in Greece grew sharper.

Irish manufacturing growth eased further in August while operating conditions continued to strengthen during the month, the rate of improvement eased further. This was despite faster new business growth in August. Output increased, but at a weaker pace, while the rate of job cuts accelerated.

Principal news stories from the Irish Independent, Irish Times, Irish Examiner, Financial Times and New York Times.

China’s manufacturing PMI (Purchasing Managers’ Index) hit three-month high in August, as both output and new business returned to growth. Meanwhile, Indian manufacturing sector expanded for 17th successive month.

The US economic forecast for the second-half of 2010 was revised down on Tuesday by economists at US investment bank Morgan Stanley. Also on Tuesday, bank lending was reported to have fallen in the second quarter (Q2) and this year, US agriculture exports will be the second-highest ever.

SEPA, the Single Euro Payments Area, may become operational in 2012 and will enable customers to make cashless euro payments to anyone located anywhere in Europe, using a single payment account and a single set of payment instruments.

Principal news stories from the Irish Independent, Irish Times, Irish Examiner, Financial Times and New York Times.

Irish Life & Permanent today reported what it termed a significant improvement in its financial performance for the first half of this year [H1 2010] with a loss of  €10m compared with €51million over the same period in 2009, after  a rebound in the life and pensions business.

Food group Kerry today reported a pre-tax profit of €162.3m for the first six months of this year (HI 2010), up from €115.4m in the same period last year  –  a 41% increase. It has also raised its forecast for the full year.

Japan today reported that industrial production and retail sales recovered in July but manufacturing PMI (Purchasing Managers’ Index) hit a fourteen-month low in August, as new orders fell and output growth slowed.

Building materials and DIY group Grafton has returned to the black in H1 2010 and forecast further improvement in the second half following spending cuts.

Dr. Peter Morici: Americans may be dissatisfied with the economy but don’t look for Republicans to sweep control of the House and Senate. Voters have good reason to be disenamored with both parties.

The State-owned Anglo Irish Bank is expected today to report a huge loss for the first half (H1) of 2010  –  even bigger than the six-month deficit of €4.1bn reported last year.