Overnight News Recap: Italian Trade Balance & Cons Conf Decline, ECB Speakers

News Recap | Written by CEP News | Jul 22 08 10:39 GMT |

(CEP News) - Italian consumer confidence declined and the trade deficit widened in what was a relatively quiet overnight for European and Asia-Pacific markets. Some European Central Bankers continued to reiterate the current monetary policy stance in various newspapers, and in Japan supermarket sales slipped further while convenience store sales picked up. According to the Institute for Studies and Economic Analyses (ISAE), Italian consumer confidence fell to 95.8 in July, its lowest level since November 1993. Economists had expected a more modest decline to 99.0 from June's 99.9 level, which had been revised down from 100.0. On Tuesday, the National Institute of Statistics (ISTAT) reported that the Italian non-EU trade deficit fell to €2.328 billion in June from a deficit level of €1.772 billion in May. According to ISTAT, exports to countries outside of the European Union fell to €12.7 billion from May's €12.9 billion, while imports increased to €15.01 billion in June from the previous month's €14.7 billion. On Tuesday, the Swiss Federal Customs Office reported that the trade surplus in June rose to CHF 2.41 billion in nominal terms in June, up from May's CHF 1.87 billion surplus level. The customs office highlighted that exports had increased to CHF 18.51 billion from CHF 17.5 billion in May, while imports grew to CHF 16.09 billion from the previous month's CHF 15.62 billion. According to Statistics Finland, the Finnish unemployment rate slipped to 6.8% in June from May's 8.8% level. In a press release, the statistics agency noted that there were 195,000 unemployed persons in Finland, 14,000 less than one year ago. Meanwhile, the number of employed persons in Finland grew by 49,000 to 2,668,000 over the same period. In an interview with Italian newspaper La Stampa published on Tuesday, European Central Bank Executive Board member Lorenzo Bini Smaghi said the current refinancing level of 4.25% wasn't "exactly restrictive" and suggested that the economic recovery in the euro zone could come after the fourth quarter of 2008, a little later than previously expected. "We've always said that with respect to these forecasts there were risks," Bini Smaghi said to the daily. "The forecasts are based on a hypothesis that won't necessarily happen, such as the return of oil prices to $120 a barrel." The current inflation level is "causing concern" and the European Central Bank must avoid possible second-round effects that could result, ECB Governing Council member Klaus Liebscher said, according to Austrian newspaper Salzburger Nachrichten. "We must do everything to ensure that no second-round effects emerge," Liebscher was quoted as saying. Speaking at the UK Treasury on Tuesday about reforms in the UK banking sector, Bank of England Governor Mervyn King conceded that he would prefer taking time with the changes and get them right than rushing them through with possible mistakes just to have them implemented early next year. "I think a lot (of) detail is still to be discussed," King said. "There's still a lot to play for." Speaking at a conference near Madrid on Tuesday, Spanish finance minister Pedro Solbes acknowledged that Spain may see a budget deficit in 2008 and 2009. "If growth is clearly below 2.3%, it's possible that we could have a small deficit and that's something that concerns me greatly," Solbes said. Turning to the Pacific, the Japanese all-industry activity index advanced 0.4% month-over-month in May, in line with expectations but short of the previous month's 0.8% rise. Japanese convenience store sales also showed optimism with a 4.2% annual gain in June, further than May's 3.7% rise. However, Japanese supermarket sales continued to struggle, declining 0.9% year-over-year in June after contracting 1.1% in May. The National Hurricane Center expects Tropical Storm Dolly to become a hurricane before making landfall between the Mexican and Texas border on Wednesday. JP All Industry Activity Index (M/M) May +0.4% vs. Exp: +0.4% Prior: +0.8% JP Supermarket Sales (Y/Y) June -0.9% vs. Prior: -1.1% JP Convenience Store Sales (Y/Y) June +4.2% vs. Prior: +3.7% IT Consumer Confidence (SA) July 95.8 vs. Exp: 99.0 Revised: 99.9 Prior: 100.0 IT Trade Balance June -€1218.0M vs. Prior: -€1774.0M By Erik Kevin Franco, efranco@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, ngirgis@economicnews.caThis email address is being protected from spam bots, you need Javascript enabled to view it CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News. A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.