Chinese Non-manufacturing PMI (Apr) M/M 56.1 (Prev. 58.0) (Sources)
The PBOC may cut their RRR for banks in order to support the real economy as April new loans may have fallen by around 30%, according to unidentified sources. (Oriental Morning Post)
An IMF China representative has said China will not have a hard landing in the short term. The official added that China's domestic consumption is more robust than originally thought and the concern is the next 5-10 years when the economy is rebalanced. (Sources)
Market holiday in Japan – Constitution Day
T-notes finished in positive territory yesterday although off their best levels. Safe-haven flows were initially bolstered by a series of weaker EU economic releases and a miss from the ADP employment change figure. The benchmark 10y note future weakened slightly since the Treasury announcement of floating rate notes in their quarterly refunding statement and a large amount of corporate issuance pushing down the 10y note in rate-lock flows. At the pit close, t-notes settled at 132.06, up 7 ticks. Finally, the DJIA finished down 0.08% at 13268.57, the S&P 500 finished down 0.25% at 1402.31 and the Nasdaq 100 finished up 0.29% at 2734.77. T-notes were trading in minor positive territory up 1+ tick at 132.07+, little price action was observed overnight due to the lack of market moving news flow. Last price taken at 0639BST. (RANsquawk)
Fed's Lacker said it would be quite hard to justify additional monetary stimulus without a dramatic deterioration in current economic conditions, adding that in his opinion there has been no inflation pressure. (Sources) The FOMC voter also said that it would be difficult to temporarily adopt a higher inflation target and then try to bring it down, and reiterated that ultra-low interest rates through 2014 are not an unconditional promise.
The EU have failed to reach a final deal on new capital rules after more than twelve hours of discussions, according to two EU sources. The EU will return to discuss a deal at the next meeting of EU finance ministers in mid-May. (Sources)
Britain's relationship with Brussels erupted last night as UK Chancellor Osborne refused to defend watered down EU bank rules that would make him "look like an idiot". (FT-More) When British demands to toughen up the text were rejected, Osborne accused the European Commission of offering concessions to French and German banks that breached the global agreement. The row came after nine hours of talks that showed tentative progress towards a deal. However, talks faltered as Poland, Britain, Germany and Italy raised fundamental reservations.
Officials close to the outgoing Greek premier Papademos have leaked a 'to-do list' for the yet-to-be-elected new Greek leader that contains 70 separate structural measures already agreed with the EU and the IMF. (FT-More) The list includes far-reaching reforms of the pension, justice and education systems, to be legislated together with a contentious new package of EUR 11.5bln in spending cuts due to be approved in June by the new parliament.
Spain is sounding out a group of investment banks to value the amount of provisions it needs to create a 'bad bank'. According to sources with knowledge of the talks, Credit Suisse, Goldman Sachs and UBS are included in the discussions. (Cinco Dias)
Australian AiG Performance of Services Index (Apr) M/M 39.6 (Prev. 47.0) (Sources)
New Zealand Unemployment Rate (Q1) Q/Q 6.7% vs. Exp. 6.3% (Prev. 6.3%, Rev. 6.4%)
New Zealand Employment Change (Q1) Q/Q 0.4% vs. Exp. 0.3% (Prev. 0.1%, Rev. 0.2%)
New Zealand Employment Change (Q1) Y/Y 0.9% vs. Exp. 0.9% (Prev. 1.6%) (Sources)
WTI crude futures were in minor negative territory trading at USD 105.16 heading into the European session, after coming under pressure overnight following weaker Chinese non-manufacturing PMI. Last price taken at 0635BST. (RANsquawk)
Iraq's crude oil exports in April rose by 8.2% from the previous month to 2.5MBPD, compared with 2.3MBPD in March, according to data from the State Oil Marketing Organization. (Sources)
EIA said US crude oil stocks are now at their highest levels since September 1990. (Sources)
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