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Financial markets continue to hold up well

Tuesday, May 8, 2012 4:13 AM GMT

Good Morning ,

- Financial markets continue to hold up well, despite Antonis Samaras failed
to form a government in Greece and the order was given now to the Syriza
party (vowed to cancel bailout terms). Australia posted the biggest trade
deficit in almost 2 1/2 years.

- Stocks: Nikkei +0.67 %, Hang Seng +0.07 %, Shanghai Composite -0.52 %,
Dow Jones -0.23 %, S+P500 +0.04 %

- Greek political leaders will meet for a second day today in a bid to form a
government, with the mandate for the task being handed to the second-biggest
party after New Democracy leader Antonis Samaras said he failed to forge
agreement after an election that raised questions about the country's euro
membership. Samaras gave up his bid after nearly six hours of talks in
Athens yesterday. The attempt to form a government will pass to Alexis
Tsipras, the head of Syriza, the second biggest party, which has vowed to
cancel the bailout terms. Tsipras will see President Karolos Papoulias today
at 2 p.m. Athens time.

- Luxemburg Prime Minister Jean-Claude Juncker said he discussed with French
President-Elect Francois Hollande today "what will work and what won't work"
in policy aimed at taming the debt crisis.

- Germany's Finance Minister Wolfgang Schaeuble "has no doubt" that France will
stick to the agreements reached among all European countries to cut deficits.
* European countries should not reopen negotiations on agreements that have
already been made after each new election
* Europe needs "growth-friendly" policies that reduce deficits
* Schaeuble says without deficit reduction no sustainable growth possible;
growth through structural reforms is not opposed to the agreed fiscal pact

- The world's advanced economies must take steps to cut their huge public debt,
but the right mix of policies will vary by country, International Monetary
Fund Managing Director Christine Lagarde said. "The most important element is
to lay out a credible medium-term plan to lower debt," Lagarde said in
Zurich. "Without such a plan, countries will be forced to make an even bigger
adjustment soon."

- Monetary policy isn't unlimited in power and an unconditional further easing
will only undo what was learnt during the financial crisis, Bundesbank
president Jens Weidmann said in an editorial published on the Financial
Times website late Monday.

- The European Commission is looking to give Spain one more year to reach its
3% deficit target, extending the deadline to 2014 from 2013, reports El Pais
in its Tuesday Internet edition.

- Spain is studying offering government incentives to make bad banks, or
"asset-management companies" as the government prefers to call them, more
attractive to investors and financial entities, reports Cinco Dias in its
Tuesday Internet edition, citing government sources.

- Federal Reserve Bank of Richmond President Jeffrey Lacker said much of U.S.
unemployment results from structural weaknesses like inadequate training that
can't be fixed by additional Fed stimulus.

- Australia's trade deficit widened in March to the biggest in almost 2 1/2
years as a 5 percent rise in imports outpaced export growth in an economy
driven by the mining industry.

- Iran is accepting yuan for some of the crude oil it supplies to China, partly
due to U.S. sanctions aimed at limiting Tehran's nuclear programme, and is
spending the currency on Chinese goods and services, the Financial Times
reported.

- 1600 US IBD/TIPP Economic Optimism May
- 1045 Fed Dudley
- 1545 Fed Lacker
- 1845 Fed Fisher
- 1200 Germany Industrial Production Mar
- 1330 ECB Coeure
- 1430 ECB Draghi
- 1745 BOI Saccomanni
- 1930 Irish CB Honohan
- 1000 Norway Industrial Production Mar
- 1415 Canada Housing Starts Apr

(CET)

Have a good day!

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