• The USD is trading higher supported by skepticism about the Greek aid plan, the EU/IMF agree to €110bln aid package for Greece in return for Greek pledge to adopt austerity measures, the aid pact will help Greece avoid a near-term debt default but there remains uncertainty about sovereign debt risk in peripheral European nations and more bailouts may be needed, there is also concern that some of the EU nations may not support the Greek aid package and skepticism that Greece will deliver on austerity measures, a vote on EU approval of the Greek aid plan is expected on May 7th, GBP trades lower pressured by UK election uncertainty, AUD trades mixed initially pressured by report that Australia plans to impose a large new tax on mining companies and in reaction to report that China has increased its bank reserve ratio, AUD downside limited by RBA rate hike speculation as Australian swap rates rise to an eight-month high, JPY trades lower pressured by expectation of firmer opening for US equities, Forex volume light due to holidays in Japan and the UK
• Focus turns to today's release of US personal income, consumption, construction spending and ISM manufacturing index
• China's April PMI rose to 55.7 from 55.1 last month, China raised its reserve requirement for banks by 50bps, this is the third reserve ratio hike from China this year
• Australia's Q1 house price index rose 4.8%, April TD-MI inflation gauge rose by 0.4%, Australia to raise tax on mining companies by 40%, Australian swap rates rise to an eight month high increasing the risk of an RBA rate hike at Tuesday's policy meeting, AUD higher
• EU April final manufacturing PMI at 57.6,EUR lower
• Swiss April PMI rose to 65.9 from 65.5 last month, CHF lower
• BOJ semi annual report sees end of price declines in 2011/12,JPY lower
• CFTC commitment of traders for last week confirmed that speculators raised their net short positions versus the EUR by 25%
• US equity markets set to open higher, European equities 0.25% lower, Nikkei closed for holiday

Upcoming Events

• US-Monday, March personal income will be released expected at 0.3% along with March consumption expected at 0.6%, March construction spending expected at -0.6% compared -1.3% and April ISM expected unchanged at 59.6
• CAN-Monday, no major Canadian economic data is due for release today

Download Report(s):

File	Description	File size
100503_US_Morning_Notes.pdf		81 Kb