German hopes of lower rates dashed by Bundesbank
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Your support makes all the difference.THE BUNDESBANK yesterday left interest rates unchanged and disappointed German hopes of an easing in the securities repurchase rate - the key market rate - to calm nervous markets.
But the decision was largely expected after figures earlier in the week showed that M3 money supply growth soared by 20.6 per cent in January, dashing expectations of rapid reductions in rates.
The markets were left in an edgy mood, awaiting today's US employment report for February, which will be watched closely for any indications of inflation pressures and attendant risks of higher US rates.
A survey of business optimism, meanwhile, found that British business confidence is more buoyant than in any other European country.
Optimism over higher sales in the first quarter has risen to its highest point since the the third quarter of 1989, Dun and Bradstreet, the business information firm, said yesterday.
Business confidence in boosting selling prices jumped sharply to the highest level since mid-1991.
Overall, the survey found that worldwide optimism over higher sales remained steady, but hopes of higher profits in the first quarter showed a gentle increase.
Optimism over higher sales and profits in the US edged up slightly but was weaker or only modestly higher in most of Continental Europe, especially Germany and France. The exception was Spain, where optimism rose sharply.
In Japan, confidence over higher sales slumped to its lowest point since 1990. Dun and Bradstreet said domestic demand for consumer and business goods had weakened, while the strong yen had intensified competitive pressure in international markets.
Further confirmation that robust US expansion has carried over into the first quarter came yesterday with a 2.1 per cent gain in factory orders in January, boosted partly by strong demand for new aircraft. It was the sixth monthly rise in succession.
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