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European leaders will seek to restore market calm this week

Monday, April 30, 2012 5:23 AM GMT

Good Morning,

- The U.S. dollar stayed under pressure on Monday in the wake of disappointing first-quarter U.S economic growth, leaving the yen, sterling and even high-beta currencies like the Australian dollar at multi-week highs.

- Asian stocks rose for a fifth day, the best winning streak in three months, and the won gained as Bank of Communications Ltd. and Samsung Heavy Industries Co. reported better-than-expected earnings. Australia's shares rallied to a nine-month high before a forecast interest-rate cut.

- European leaders will seek to restore market calm this week after Spain was cut by Standard & Poor's and a German-led austerity agenda to resolve the debt crisis came under fire ahead of elections in France and Greece . With Spain's largest unions leading marches involving thousands of protesters in 55 cities yesterday, Prime Minister Mariano Rajoy's government battled to prevent Spain from becoming the next country to seek bailout aid. In France, the final round of presidential elections on May 6 and the prospect of victory for Socialist candidate Francois Hollande steered debate toward whether a focus on budget cuts worsens the crisis.

- German weekly Welt am Sonntag quoted German Finance Minister Schaeuble as saying that fiscal pact will come into force. Adds fiscal compact brings confidence in the long-term stability of the system. - German weekly Welt am Sonntag quoted Eurogroup Chairman Juncker saying that the idea that one could renegotiate the contract completely and scrap substantial elements is a utopia.

- British Prime Minister David Cameron said the euro zone debt crisis was less than halfway through, and raised doubts about the future of the single currency in an interview on Sunday. Cameron said the euro zone crisis was partly to blame for Britain falling back into recession, and insisted that getting the economy moving again was the biggest issue for the government, at a time when the popularity of his Conservative Party had fallen to its lowest level since 2004. "What's happening in the euro zone is a massive tension.. that countries are finding very difficult to adapt to, and that's what we're seeing. So I don't think we're nearly halfway through it," he told the BBC. "I think it's going to be a very long and painful process in the euro zone as they work out do they want a single currency with a single economic policy or are they going to have something quite different," he added. Countries on the periphery of the euro zone are struggling to implement austerity programmes to reduce the size of their budget deficits, and European Central Bank aid to banks at the turn of the year is not proving a lasting solution. Britain faces its own challenge to reduce its budget deficit - which is bigger as a share of the economy than any in the euro zone - and Cameron's party has been suffering ahead of local elections taking place across much of Britain on Thursday.

- Ireland trims growth forecast for this year and next to -0.7% and +2.2%

- Irish Finance Minister warned that a rejection of EU treaty would put IMF funds out of reach. But Ireland is likely to support the new fiscal treaty. For instance, 47% of Irish voters supported the EU treaty, while 35% opposed it, according to the Sunday Business Post/Red C poll. - Australia's private sector credit inched up slightly to 3.4% y/y in March from 3.5% y/y in February. New home sales fell by 9.4% m/m in March from 3.0%mm in February.
- Australia's TD securities inflation edged up slightly to 1.9% y/y in April from 1.8% y/y in March.

- NZ April business confidence rises to 35.8% from 33.8%, own activity outlook edges down to 36.1%

- NZ's trade balance eased to NZD 134mn in March from a revised NZD 202mn in February. Exports reached NZD 4.22bn in march from a revised 3.62bn in February. Imports also increased to NZD 4.08bn in March from a revised NZD 3.41bn the previous month.

- NZ March building consents jumped to a hefty 19.8% mm

- Specs reduce bet in favour of the USD, turn net long GBP in April 24 week.

Today's Figures
08:00 Ger Retail sales mm and yy
09:00 UK Halifax house prices
10:00 EZ Money M3 annual growth and private loans
11:00 EZ Inflation
14:30 CA GDP mm
14:30 CA Producer prices mm and yy
14:30 CA Raw materials prices mm and yy
14:30 US Personal consumption and income
14:30 US PCE price index mm and yy
15:45 US Chicago PMI
(CET)

Have a good start into the week !

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