BSP official says inflation likely to peak this quarter INFLATION will likely peak this quarter, breaching 5% in some months due to mounting oil prices and base effects, but full-year result will still come in within the 3-5% target, a central bank official said.“It will peak this quarter,” Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo told reporters on Friday. “It could be a base effect... or because of the increase in petroleum prices.” Asked whether the rise in consumer prices would go beyond the 3-5% target for this year, Mr. Guinigundo said: “It is difficult to rule that out...” He added, however, that “the year-wide average inflation for 2011 and 2012 will likely be within the 3-5% inflation target.” “[O]ur inflation expectation for 2011 lies closer to the mid-point, but still in the upper band,” Mr. Guinigundo said. Inflation actually hit 5.2% in June using a new data series that uses 2006 as a base year. Using the previous series which uses 2000 prices, inflation hit 4.6%, the highest in 26 months. Government statisticians will issue two sets of data up to the end of the year. The results prompted central bank officials to say that further monetary tightening should not be ruled out, a view Mr. Guinigundo reiterated. “The broad indication it is very difficult to rule out further shocks and therefore potential for tigthening, because the upward risks are still dominant,” he said. Manila one of the cheapest cities to live in PRICE HIKES notwithstanding, Manila remains one of the cheapest cities to live in, according to an economic research group. Manila is among the 10 cities with the lowest cost of living, the Economist Intelligence Unit (EIU) said, out of the 140 cities included in its“Worldwide Cost of Living 2011” report released last month. Manila is tied with Dhaka, Bangladesh for 124th place (62 cost of living index points), up from last year’s 128th place (56 points). The EIU used New York as the base city with index set at 100 points. The in-house research unit of the Economist analyzes the point-of-sale prices of 160 products and services for the biennial report, which is published in June and December. In the latest round, Tokyo in Japan was found to be the most expensive city to live in (161 points), followed by Oslo, Norway; Osaka and Kobe, Japan; Paris, France; Zurich, Switzerland; Sydney and Melbourne in Australia; Frankfurt, Germany; Geneva, Switzerland; and Singapore. Karachi in Pakistan, meanwhile, is the cheapest city, “with a cost of living level at less than one-half of that of New York and one-third of that of Tokyo,” the report said. Joining Karachi, Manila and Dhaka in the list of cheapest cities were Panama City, Panama; Algiers, Algeria; Jeddah, Saudi Arabia; New Delhi, India; Tehran, Iran; Mumbai, India; and Tunis, Tunisia. “There are two major reasons why a city’s cost-of-living index will change over time: exchange rate movement and price movement,” the EIU said. “Since a common currency is required in making a comparative calculation, all local prices are converted into US dollars, which emphasizes the role of currency movement. If, for example, a currency strengthens or inflation pushes up the price of goods, the relative cost of living in that country will also rise,” the research group explained. The EIU gave a 25% weight to the category shopping basket, 19.5% to transport, 18% to recreation and entertainment, and 13% to clothing. The remaining percentage was divided among alcoholic beverages, household supplies, personal care, tobacco, utilities and domestic help. Asked to comment on the EIU report, National Competitiveness Council co-chairman Guillermo M. Luz said, “The survey results will help the government in attracting more people to relocate and live here in Manila... and I believe that aside from enjoying a cheaper cost of living, they [expatriates] enjoy the quality of life our country offers.” “Manila has been a good-value-for-money city,” Mr. Luz added. University of Asia and the Pacific economist Victor A. Abola said, “Compared with other Southeast Asian cities, Manila offers cheaper household help or services for expatriates and cheaper food items.” “Inflation rates were seen inching up for the past months, but not exceptionally high, which could be one of the reasons for a slightly higher cost of living in Manila,” he added. -- Daniel Anne Nepomuceno-Rodriguez |
Earnings take center stage NEW YORK (CNNMoney) -- After spending two months focused largely on the state of the U.S. economy, investors will get a chance to turn their eyes back to Corporate America this week.Several key companies will report their results for the second quarter this week, with investors getting profit reports from Dow members Alcoa (AA, Fortune 500) on Monday followed by JPMorgan Chase (JPM, Fortune 500) on Thursday. Citigroup (C,Fortune 500) and Google (GOOG, Fortune 500), among others, are also on tap to release their latest sales and earnings. "This is where we can get down to the fundamentals of this market and finally see how companies are actually doing in this economy," said Jack Ablin, chief investment officer at Harris Private Bank. While only a dozen or so of the S&P 500 components are reporting this week, Alcoa, Google and JPMorgan are among the biggest names in their respective industries and tend to be good, broad indicators of how companies are expected to perform, Ablin said. Expectations for this quarter's profits have become more subdued as of late as analysts and investors continue to worry about the health of the economy. The Labor Department reported Friday that employers created only 18,000 jobs in June, far less than what economists had expected. Stocks dropped Friday on the jobs news but still finished the week with gains. While this quarter's results will be closely watched, strategists said the market will be listening even more closely to the outlooks that companies give for the third quarter and remainder of the year. "I'm going to be looking at economic-cyclical companies and particularly commodity-sensitive companies to see if companies have been able to keep productivity and profit margins high, despite higher commodity costs," said Liz Ann Sonders, chief market strategist with Charles Schwab. Sonders said she remains optimistic about how companies did in the second quarter, saying that she believes the signs of an economic slowdown are more tied to the Japanese earthquake and bad weather in the U.S. earlier this year. "The macroeconomic concerns have turned into microeconomic concerns about companies, and I don't think it's really justified," Sonders said. Outside of earnings, investors will have several economic reports to digest this week, including June retail sales figures as well as the closely-watched inflation readings on producer and consumer prices. On the Docket Monday -- Second-quarter earnings reports kick off in earnest after Monday's closing bell with results from Dow component Alcoa. The aluminum company is expected to have earned 32 cents per share. There is no economic data scheduled for release on Monday. Tuesday -- Investors will get the U.S. trade balance figures for May in the morning. Economists surveyed by Briefing.com expect the U.S. posted a $44 billion trade deficit in May, slightly wider than the $43.7 billion deficit for April. Minutes from the Federal Reserve's Federal Open Market Committee meeting from June are also due out in the afternoon. Wednesday -- The Energy Department's weekly oil inventories report comes out in the morning. Fed chairman Ben Bernanke will also begin his semiannual testimony to Congress about monetary policy and the economy on Wednesday. Bernanke will appear before the Committee on Financial Services of the House of Representatives. In earnings, fast food company Yum! Brands (YUM, Fortune 500) as well as hotel chain Marriott (MAR, Fortune 500) will report their earnings after the closing bell. Thursday -- JPMorgan Chase reports its second-quarter results before Thursday's opening bell, with analysts expecting the commercial banking giant to have earned $1.21 a share according to Thomson Reuters. There are several economic reports out Thursday morning. The Labor Department will issue its weekly jobless claims report and its June producer price index report, also known as wholesale inflation. The Commerce Department issues its reports on June retail sales as well. Economists forecast that weekly jobless claims held mostly steady at 419,000 claims, up 1,000 from last week. Retail sales are expected to fall 0.2% for June and the producer price index is expected to fall 0.3%. Bernanke's testimony to Congress continues, with the Fed chairman appearing before the Senate's Committee on Banking, Housing, and Urban Affairs. After the bell, Internet search giant Google will report its quarterly results. Analysts expect that Google earned $7.86 a share. Friday -- The Labor Department releases its June consumer price index data, the nation's most common read of inflation, in the morning. Economists are looking for CPI to fall 0.1% versus the 0.2% rise reported in May. Investors will also get June industrial production figures, the July reading on the University of Michigan consumer sentiment index and the Empire State Manufacturing Index. Citigroup and toy maker Mattel (MAT, Fortune 500) are slated to report their latest quarterly results in the morning as well. |
Crude Oil Falls for a Second Day in New York as U.S. Jobless Rate Climbs Oil declined for a second day in New York as investors bet that rising unemployment in the U.S. indicated that fuel demand may falter in the world’s biggest crude-consuming nation.Futures slipped as much as 0.5 percent after the Labor Department said July 8 that U.S. employers last month added the fewest workers in nine months and the unemployment rate rose to 9.2 percent, the highest this year. A report this week may show U.S. retailers probably stagnated in June. Crude for August delivery fell as much as 47 cents to $95.73 a barrel in electronic trading on the New York Mercantile Exchange, and was at $95.93 at 8:50 a.m. Sydney time. The contract dropped $2.47, or 2.5 percent, to $96.20 on July 8. Prices are 28 percent higher the past year. Brent oil for August settlement declined 56 cents, or 0.5 percent, to $117.77 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $21.92 to U.S. futures. The difference reached a record $22.29 on June 15. U.S. payrolls increased by 18,000 in June, Labor Department data showed July 8. The median estimate in a Bloomberg News survey called for a gain of 105,000. A Commerce Department report on July 14 may show an unchanged reading in purchases in June after a 0.2 percent May decrease, according to the median forecast in a Bloomberg News survey. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
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