It makes the interest-rate differential argument even more compelling: you’re owning dollars
Posted in General on 02. Oct, 2010
“It makes the interest-rate differential argument even more compelling: you’re owning dollars and you’re going to get the better interest rate.”The Fed’s benchmark interest rate has been at a four-decade low of 1 per cent for almost a year, and is half the figure of European Central Bank’s key rate.Eighteen of the 75 econo-mists polled about yesterday’s data had predicted jobs gains of 200,000 or greater.Robert Lynch, a currency strategist at BNP Paribas in New York, said: “The report raises the risk for an earlier Fed tightening and, to the extent that that leads to higher rates, it’s positive for the dollar. The market is definitely moving closer to thinking about a June increase than it was before.”Some economists moved forward expectations for a rate boost after the report. Job creation exceeded the highest forecast in a survey of economists by Bloomberg News, and compared with the 170,000 median estimate.”This certainly pushes things forward for the Fed”, Jan Faller, who manages international debt at Deutsche Asset Management in New York, said. The Dollar surged against the yen, euro and 13 other major currencies yesterday after the US economy created more jobs than economists predicted, bolstering speculation that the Federal Reserve will raise its key interest rate next month.
It jumped more than a cent against the euro within a minute of the Labour Department report which showed the economy added 288,000 jobs in April. The company operates 350 schools in Australia, Europe and Minneapolis in the US.Its shares closed the day up 2.5p at 110p.. Parents pay up to £25 for a three-hour lesson, and pay to see their children perform.The new schools in Manhattan and Brooklyn Heights, due to open from September, are its first franchise agreements in the US.
The appetite for fame spurred by television programmes such as Pop Idol and Fame Academy enabled it to open 477 schools and attract more than 28,000 students. Anyone can come to a Stagecoach school and learn singing, dancing and acting, all in the same place.”The company has cashed in on the demise of performing arts education in the mainstream curriculum in the UK by setting up Saturday and after-school classes for children aged between 4 and 16. “In the short term it is good news for consumers,” admits Mr Webster “But it will self-correct. Fares are clearly going to be keenly priced, particularly when there is oversupply in the market.
But a lot of this capacity will just disappear because the carriers which are operating it can’t sustain themselves. Prices will undoubtedly increase once the size of the market gets back in balance with demand.”Mr Webster is the first to acknowledge the debt that easyJet owes Stelios. It is a complicated animal but it works on the basic principle that the later you book the more you pay.Right now, passengers seem to be getting great deals, no matter how late they book. To the outside world, Stelios remains the public face of easyJet even though he no longer has any direct involvement in the airline, having relinquished the chairmanship two years ago.But Mr Webster has always been the brains behind the operation. It is his patented customer-yield management system, which he brought with him from Air New Zealand eight years ago, which makes easyJet tick. If we ignore that and start depleting shareholders’ funds we will get some pretty clear signals from investors,” he says.One of those is a certain Stelios Haji-Ioannou, the founder of easyJet, who, together with his brother and sister, still owns 42 per cent of the shares. We will never run a campaign with another airline’s name in it.”The banter aside, Mr Webster also recognises that the two low-cost airlines have a mutual self-interest in not going head to head “Ryanair and easyJet will find a way of co-existing.
The important thing to recognise is that both of us are disciplined by the capital markets. “Every time Michael runs an advertisement with our name in it, he is promoting easyJet We are not going to get into that again We learnt our lesson when we tried to hammer BA. Exactly the same thing is going to happen here.”This weekend he is on a mission to reassure the world that easyJet will not be one of the casualties as he embarks on an investor roadshow taking in the UK, Europe and the US. He reckons that only two low-cost carriers – perhaps three at a push – will survive long-term in Europe.One will be easyJet and another will be Ryanair, a business that he admires despite the incessant verbal abuse that he gets from its chief executive, Michael O’Leary.”Our style is to keep our heads down and do what’s best for the business,” says Mr Webster. “We felt we had a good first half; we met our expectations so we certainly weren’t anticipating the reaction the market gave back to us. One can only assume their expectations were much higher than ours.”So, is the no-frills airline model in danger of going bust? “A lot of our low-cost imitators won’t survive,” says Mr Webster bluntly. “There are 55 airlines across Europe now who believe they can be low-cost carriers.