TRICHET AND WEBER CLASH OVER BONDS STRATEGY - This weekend European Central Bank president Jean-Claude Trichet had a harsh rebuke for Germany's Bundesbank President Axel Weber over the ECB's policy of buying up government bonds and keeping interest rates low. Axel Weber is also the man many tip to succeed Mr Trichet when he steps down next year. Mr Weber said the central bank should not wait too long before calling a halt to its government bond buying programme and raising interest rates. In Italy, yesterday Mr Trichet said he disagreed. 'There is only one there is one Governing Council, only one monetary policy decision, and one president, who is also the porte-parole (spokesman) of the Governing Council,' Mr Trichet stated.
Ciaran O'Hagan, a bond strategist with Société Générale, says the ECB's policy of buying government bonds is actually very important for Ireland. He says the central bank supported Irish government bonds when we needed it.
Meanwhile, US Federal Reserve Chairman Ben Bernanke has opened the way to a new round of quantitative easing in the US. Mr O'Hagan says that Mr Bernanke's remarks are very important. He points out that when the Fed buys US bonds, bonds worldwide are also boosted, including riskier ones like Irish bonds. The Fed is holding its next meeting on November 3 and we should get more details on the next expected round of quanitative easing. The US Treasury has been buying about $30 bullion of US bonds every month, but Mr O'Hagan says he can not see Europe following the US lead.
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MORNING BRIEFS - A study of broadband in 72 countries ranks Ireland in 13th overall place across a basket of measures, up one notch on last year. The research was carried out by the Siad Business School at Oxford University for Cisco Systems. It found Ireland was a country whose network is 'meeting the needs of today's applications. But we were not amongst 14 countries who are 'ready for the applications of tomorrow'.
*** A US health care company is to create 250 new jobs in Ballina in Co Mayo later today. Hollister Ireland will announce details of a €65m expansion to its existing plant in the town later this morning. The company already employs over 300 people in Ballina. The company has been in Ballina since 1976 and its plant here specialises in continence care products.
*** A survey by the Small Firms Association has found that confidence among its members picked up in the third quarter of this year. While 50% of 636 companies participating in the SFA's autumn business survey described the business environment as 'poor' or 'very poor', this was down from 59% from three months earlier. The number of firms rating business conditions 'good' or 'very good' rose from 13% in the second quarter to 19%. Services and manufacturing companies were generally more positive than firms in the distribution business. But the SFA said access to credit remained an issue, with 21% of firms saying that the cost of working capital had increased.
*** A plan by mining companies BHP Billiton and Rio Tinto to share each others mines and transport facilities in Western Australia has come to nothing 16 months after it was first announced. Regulators had opposed plans to establish the €83 billion joint venture on competition grounds. They were worried about the effect on the price of iron ore in the market - iron ore is the key raw material in steel production. The two companies had looked forward to annual cost savings of more than €7 billion through the sharing of infrastructure and personnel.
*** On the currency markets, the euro is worth $1.3857 US cents and 87.16 pence sterling.
