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UK GFK NOP Consumer confidence -21 in May vs -31 in April (forecast -31). Highest reading since December. Biggest monthly rise in GFK UK confidence since May 1993
Japanese core CPI up 0.6% on year (first positive reading since 2008). April retail sales at 4.8% y/y (vs -8% previous month)
ECB President Jean-Claude Trichet said the euro-zone economy was on an increasingly sound footing and signaled that further interest-rate rises, though likely this summer,aren’t imminent.Although Mr. Trichet said he is carefully monitoring “upside risks” to inflation, he stopped short of using coded words, such as “strong vigilance,” that have in the past been used to flag a rise in rates at the next ECB meeting. {http://on.wsj.com/kwsxTA}
FT – Banks in the EU could evade part of the tighter Basel III capital requirements under draft legislation implementing the new globally agreed standards across the 27-member bloc. {http://on.ft.com/kJtr3f}
New low USDCNY fix at 6.4898
EUROPE
The IMF could withhold the next slice of aid to Greece due next month, the head of euro zone FinMin said on Thursday, spooking markets with the possibility of default. Juncker’s spokesman later clarified that if European and IMF inspectors were convinced by new Greek austerity measures, there would be no problem with the June aid tranche
Greece faces 10 years of painful adjustment before it becomes clear whether fiscal and other reforms have worked but a debt restructuring would not be a “magic bullet,” the IMF’s chief economist Blanchard said
The Netherlands said it will not agree to more aid for Greece if the IMF does not give Athens a new tranche of loans, adding to worries over a public IMF-EU dispute over euro zone bailouts.
The G8 leaders raised the alarm about government debts weighing down the world economy but pledged at a meeting in France to find funds to help new Arab democracies. {http://bit.ly/lfThQt}
The euro fell to a record low against the CHF worries that Greece was again teetering on the brink of financial crisis, driving a bid for safe-haven U.S. government bonds. Comments from Eurogroup President Jean-Claude Juncker rattled markets and raised doubts about whether the International Monetary Fund would release Greece’s next round of financial assistance at the end of June
FT – Banks in the EU could evade part of the tighter Basel III capital requirements under draft legislation implementing the new globally agreed standards across the 27-member bloc. {http://on.ft.com/kJtr3f}
WSJ- Many global bond fund managers have so far hung onto their holdings of Spanish debt, hoping that the world’s 12th-largest economy will escape the trauma of some of its neighbors. But questions over politics and hidden debt lead some to fear that the worst is yet to come in the euro zone. One major risk lies in another downturn in Spain’s housing market, which would add to the piles of bad debt on banks’ balance sheets. {http://on.wsj.com/kMQEA7}
UK Chancellor George Osborne has been forced to fend off doubts about his economic strategy from cabinet colleagues worried that growth is so weak, the Independent reports
BOE: High inflation is temporary and can safely be ignored, Adam Posen, a member of the Bank of England’s interest rate-setting committee, argues on Friday in the FT
Ireland will will pay around 25pc more than Portugal for EU rescue loans released next week, the Irish Independent reports. Ireland will pay 6.425pc for its share of the loans compared to Portugal’s 4.96pc, the paper say
US
US PRESS: After months of fighting over spending, taxes and how to rein in the national debt, President Obama and congressional Republicans on Thursday turned the spotlight to the nation’s anemic economic growth and announced competing plans to reduce the cost of doing business for American companies, the Washington Post says
US Commerce Secretary Gary Locke, tapped to be the next U.S. envoy to China, vowed to win more access to Chinese markets, press for a flexible yuan currency and push for more action against counterfeiting of American products.
U.S. Vice President Joe Biden and top lawmakers faced an impasse on taxes and healthcare as they worked on a deal to tame the United States’ debt and increase its borrowing limit
The Bank of Canada will raise interest rates sometime in the third quarter, with forecasters split between whether there will be one or two 25 basis point increases in the period, a Reuters survey showed on Thursday.
ASIA
Japanese core CPI up 0.6% on year (first positive reading since 2008). April retail sales at 4.8% y/y (vs -8% previous month)
MOODY’S CONCLUDES REVIEW OF NEW ZEALAND MAJOR BANKS, RATINGS LOWERED TO AA3 FROM AA2
New low USDCNY fix at 6.4898
BOK’S YANG SAYS MAJOR EXPORT ITEMS RESILIENT TO WON’S GAINS
CHINA: May MNI China Business Sentiment Survey. Overall Conditions Index 61.22 vs Apr 69.28
S.KOREA APRIL CURRENT ACCOUNT S/ADJ $+1.82 BLN VS REVISED $+2.28 BLN IN MARCH – C.BANK
-S.KOREA SHORT-TERM FOREIGN BORROWING DOWN $0.48 BLN IN APRIL VS $6.72 BLN RISE IN MARCH – C.BANK
Thailand: April manufacturing output slumped more than expected (-7.8% y/y)
INDONESIA RUPIAH MAY CONTINUE TO STRENGTHEN, NASUTION SAYS
AUSTRALIA: The Melbourne Institute’s monthly bulletin of economic trends forecasts GDP growth of 2.7% for the 2011 calendar year in the May report, compared to 2.4% forecast in Apri
NZs FinMin English says China may buy bonds (as per story yesterday) but Malaysia, Singapore and HK also interested B
MENA
Group of Eight leaders were to approve billions of dollars in aid on Friday to new Arab democracies with a programme designed to foster change sweeping North Africa and the Middle East
PERU: Right-wing lawmaker Keiko Fujimori may be pulling away from leftist Ollanta Humala 10 days before Peru’s June 5 presidential run-off and a gaffe by a top aide has not hurt her, a poll showed on Thursday
OTHER MARKETS
NIKKEI 9526 (-0.4%), HANGSENG 23127 (+1%), S&P/ASX 4674 (+0.3%), SHANGHAI SE COMPOSITE 2730 (-0.2%), KOPSI 2096 (+0.2%)
TSYS: The yield on the 2Y was last at 0.49%, with the 5Y at 1.73%, the 10Y at 3.06% and the Bond at 4.23%.
OIL: Brent crude at 115.30 (+0.2%), WTI at 100.76 (+0.5%)
Gold trades at $1524 (+0.4%), silver at 37.75 (+1.1%)
COMING UP TODAY( times GMT/ET)
– G8 leaders summit in Deauville, France
– G30 Meeting, in Berne
– Germany May-11 flash HICP
– Italy E1.0-E1.5bln 2.10% Sept 2021 BTPei Tap
0600/0200 UK May-11 Nationwide House Prices
0700/0300 Spain Apr-11 retail sales index
0900/0500 EMU May-11 business climate indicator economic sentiment
0900/0500 ECB Governing Council member Jens Weidmann farewell speech to Bundesbank Vice-President, in Frankfurt
0900/0500 EMU May business climate indicator
0900/0500 EMU May economic sentiment survey
1230/0830 US Apr-11 Personal Income, Expenditures
1230/0830 US Apr-11 PCE Price Index
1355/0955 US May-11 Consumer Sentiment (UM) (f)
1400/1000 US Apr-11 NAR Pending Home Sales
1400/1000 Bank of Mexico monetary policy