ECB inflation-fighting powers remain intact

Since institutional memories are short, it is time to remind readers that it was the threat, and subsequent reality, of China overheating in the spring and summer of 2011 (when record high food prices sent the entire North African region in a state of coordinated revolt and gradually moved far east)

BRUSSELS — Inflation in the eurozone has fallen to a three-year low and unemployment hit a new record, cementing expectations of an interest rate cut by the European Central Bank later this week. Inflation tumbled to 1.2% in April, the lowest level since February 2010 and the biggest monthly drop in more than four years, the EU’s statistics office Eurostat said on Tuesday, reflecting an economy mired in recession.

Matteo Radaelli submits: Financial markets pushed higher with both the Euro exchange rate (above 1.36 versus the U.S. Dollar) and the Government bond yields (German 10year yields now close to 3.2%) since the end of ECB President Jean-Claude Trichet's January 13th press conference, which followed the monthly ECB monetary policy meeting.

(LOS ANGELES) — Toyota Motor Corp. said Wednesday it has reached a settlement worth more than $1 billion in a case involving hundreds of lawsuits over acceleration problems in its vehicles. The company said in a statement that the deal will resolve cases involving motorists who said the value of their vehicles was adversely affected by previous recalls stemming from sudden acceleration problems. Lawyer Steve Berman, a plaintiffs’ attorney, said the settlement is the largest settlement in U.S. history involving automobile defects.

(LOS ANGELES) — Toyota Motor Corp. said Wednesday it has reached a settlement worth more than $1 billion in a case involving hundreds of lawsuits over acceleration problems in its vehicles. The company said in a statement that the deal will resolve cases involving motorists who said the value of their vehicles was adversely affected by previous recalls stemming from sudden acceleration problems. Lawyer Steve Berman, a plaintiffs’ attorney, said the settlement is the largest settlement in U.S. history involving automobile defects.

Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.The GDP-weighted PMI (my calculation) of the Eurozone is pointing to a significant drop in the year-on-year GDP growth to between 1.0% and 1.5% in the third quarter from my estimated 2.3% to 2.5% in the second quarter.

HERE'S the big economic news out of Europe today:Factory-gate prices in the euro region jumped 6.7 percent from a year earlier, the fastest since September 2008, after a 6.6 percent gain in February, the European Union’s statistics office in Luxembourg said today. Economists had projected a March increase of 6.6 percent, according to the median of 13 estimates in a Bloomberg news survey. In the month, prices advanced 0.7 percent.

Michele Lenza, Lucrezia Reichlin, 24 June 2011Should central banks use the headline measure of inflation or the core measure to track medium-term inflationary pressures? Lorenzo Bini Smaghi, board member of the ECB, recently argued in favour of using headline inflation. This provoked strong opposition from Paul Krugman, amongst others. This column assesses the two sides of the debate.Full Article: Debating core inflation