• The USD is trading higher as equity markets decline in reaction to news that China's manufacturing sector is slowing and by ongoing concern about sovereign debt risks in Europe, the cost of financing debt continues to rise in Greece, Portugal and Spain, investors are concerned that the Greek bailout will not stop the contagion risk from the Greek fiscal crisis, EUR trades at one year low versus the USD on doubts about the Greek bailout plan, GBP trades lower despite UK election polls which indicate that the Conservative party may win a majority in parliament, GBP was pressured by report of weaker than expected consumer credit and mortgage lending, RBA hiked rates 25bps as expected and issued a mixed policy statement, AUD trades lower as the RBA says interest rates are near average, JPY edged higher supported by today's spike in risk aversion with gains limited by concern about a possible downgrade of Japan's debt rating
• Focus turns to today's release of US factory orders and Pending home sales
• RBA raised rates 25bps to 4.5%, RBA policy statement says that interest rates are near average but notes that inflation pressures are building, AUD lower
• China's manufacturing PMI for April falls to 55.4 compared to 57 in March
• Bloomberg reports that S&P will look to Japan's new budget announcement next month to determine whether a downgrade of Japan's debt rating is warranted, JPY higher
• EU March PPI rose by 0.6%, Greek credit default swap spread widens, German officials say that the bailout does not cover all of Greece's financial needs, Greek protesters challenge Greece austerity deal, EUR lower
• UK April PMI rose to 58 from 57.3 last month, March consumer credit rose by 0.3bln compared to 0.5bln last month, March mortgage approvals rise to 48,901 from 46,882 last month, mortgage lending falls to 0.3bln from 1.8bln last month, last month, GBP lower
• Crude oil price hit an 18 month high Monday, Fitch warns that rising energy costs could hurt corporate credit ratings of companies dependent on oil
• White House Chief Economist Romer says that more fiscal stimulus may be needed to boost private demand and the economy and that supporting the recovery should take priority over fiscal worries
• AP reports that economic stress is down across ¾ of the nations 3,141conties with economic distress lower or unchanged in 38 of the 50 states, AP Stress score was down to 11.5 from 11.8 in February
• US real consumer spending rose by 0.5% to a record high in March as the March savings rate dropped to 2.7% from a peak of 6.4% last May
• NYT poll says more of the public are optimistic about the economy, 41% said the economy is improving up 8 points from April, only15% se the economy worsening
• US equity markets set to open lower, European equities 1.5% lower, Nikkei closed for holiday

Upcoming Events

• US-Tuesday, March factory orders will be released expected -0.1% compared to 0.6% last month along with March Pending Home Sales Index expected at 101.5 compared to 97.6 last month
• CAN-Tuesday, no major Canadian economic is due for release today

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