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Markets stayed risk friendly overnight and commodity- and EMG continued to do well

Tuesday, July 3, 2012 3:42 AM GMT

Good Morning ,

- Markets stayed risk friendly overnight and commodity- and EMG continued to
do well vs the USD and JPY. However Aussie retreated from a two-month high
after RBA kept interest rates unchanged and the outlook remains subdued.
USDBRL dropped yesterday for the first time below 2.0000 since end of May.

- Stocks: Nikkei +0.63 %, Hang Seng +1.47 %, Shanghai Composite +0.71 %,
Dow Jones -0.07 %, S+P500 +0.25 %

- Last week's European summit was among the most ambitious in recent times as
it showed there is a clear will for a banking and fiscal union, Prime
Minister Mariano Rajoy today told a meeting of People's Party executives in
Sevilla, southern Spain.

- Italy's central government budget deficit fell by 34 percent in the first
half, the Finance Ministry said in an e-mailed statement. The government had
a deficit of 29.1 billion euro at the end of June, down from 43.9 billion
euro.

- Federal Reserve Bank of San Francisco President John Williams said the U.S.
central bank's ability to pay interest on bank reserves will enable it to
keep inflation in check even after pumping a record amount of stimulus into
the economy.

- The Reserve Bank of Australia announced its decision to leave the cash rate
unchanged at 3.50 percent after its July board meeting. RBA Stevens said on
that the Australian economy grew faster than expected in first part of 2012,
but there were signs of weakening in Europe and slower growth in China.

- Australia Data Recap            Period         Survey       Actual     Prior       Revised
* Building Approvals mom        May             5.0 %       27.3 %   -8.7 %      -7.6 %
* Building Approvals yoy          May           -15.2 %        9.3 %   -24.1 %    -23.0 %

- Japan Data Recap             Period        Survey          Actual       Prior      Revised
* Monetary Base                  June             -               5.9 %        2.4 %        -
* Labor Cash Earnings          May              -              -0.8 %        0.8 %      0.2 %

- China Data Recap                   Period     Survey         Actual     Prior
* Non-manufacturing PMI           June           -              56.7       55.2

- The time is ripe for China to cut banks' reserve requirements as slowing
inflation gives more room for easing to stabilize growth, a state-run
newspaper said. A "timely" reduction by an "appropriate magnitude" can
release liquidity and spur lending, the China Securities Journal, published
by the official Xinhua News Agency, said in a front-page commentary today.
The ratio stands at 20 percent for large banks, a relatively high level, the
newspaper said.

- NZ Data Recap                 Period      Survey    Actual      Prior
* ANZ Commodity Prices      June          -          -2.4 %      -4.2 %

- European leaders probably bought "a little bit of time" in staving off a
euro-area breakup after last week's summit even as the region remains a long
way from stabilization, Harvard University Professor Kenneth Rogoff said.
his country. Greece will struggle to meet its targets and still probably
default, Rogoff said in an interview with Bloomberg Television today.

- 1545 US ISM New York June
- 1600 US Factory Orders May
- 2300 US Total Vehicle Sales June
- 2300 US Total Domestic Vehicle Sales
- 0900 Spain Unemployment June
- 1100 Eurozone PPI May
- 1030 UK Construction PMI June
- 1030 UK Net Consumer Credit May
- 1030 UK Net Lending Sec. on Dwellings May
- 1030 UK Mortgage Approvals May
- 1030 UK M4 May
- 0900 Turkey CPI June

(CET)

Have a good day !

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