The sharper-than-expected PPI decline will undoubtedly raise the stress level of Federal Reserve officials at the next policy meeting since it tells us price trends are moving dangerously in the wrong direction, ... The only consolation, however, is that this report was dominated by energy price declines. Outside of the food and energy price components, price trends appear to be stabilizing.
The manufacturing sector has turned the corner and improved, but it is not likely to push the economy to a level of growth that will make policy makers nervous or financial markets nervous about higher interest rates. It's steady growth, which is better than rapid growth that would likely be snuffed out by the Federal Reserve.
The presumed chancellor did not elaborate on foreign policy, but indicated she would strengthen relations with the United States, which have been strained over German opposition to the Iraq war. That doesn't mean we have to agree on every issue, ... But there needs to be a good trustful relationship.