From Eur 158 bln in 2011

• Sees exports rising 6% in 2012 in nominal terms  from 2011 and imports up 7%
• Europe losing importance as an export market, whilst Asia gains

Versus -8.2 in March, demonstrably weaker than Reuter’s median forecast of -8.1.

Tomorrow, during binet? meeting.

The meeting is to discuss Q1 economic performance apparently.

Chinese shares meanwhile reversed early losses, the Shanghai composite index ending up +0.9% on the day.

Maybe a good dollop of stimulatory measures will help lift general risk appetite, which is pretty poor at the moment.

EUR/USD up at 1.3087 from session low 1.3073. Sovereign buyer noted circa 1.3080.

Yield 1.276% (from 1.347%),

Improved yield but take up in the middle of expectations

Article in today’s Daily Telegraph

Ooh err.. could mean £1.60 a litre for petrol by the year end!

• If Spanish economy worsens, banks need more capital
• Sees more bank mergers in Spain in coming months

• Should not guide policy on short-term market moves
• No change to BOJ stance as aiming for 1% inflation
• See greater chance of Japan economy resuming gradual recovery due to reduced risk from Europe debt crisis
• Will examine economy, price outlook especially carefully at April 27 meeting
• Hard to set clear-cut timetable on when Japan will see 1% inflation
• See investors slight shift away from risk due to U.S. job data, debt problems of Spain, Italy
• Must focus on direction of price moves rather than trying to achieve target abruptly, quickly
• Must not link policy directly to market moves, which are affected by various factors
• Should not target 2% inflation in Japan just because overseas central banks do so

• Spain has made progress on reforms, adjustments
• Current account has adjusted quickly
• Current account may be balanced by year-end
• Spain exports growing more than other EU nations
• Spain has progressed in bank sector restructuring
• Spanish banks made 112 bln euros provisions 2007-2011

• VAT tax hike would hurt growth

And there’s the conundrum.  Take action to cut the budget deficit whilst at the same time trying to stimulate growth.  Good luck with that one!!

Meanwhile the Spanish/German 10 year govt bond yield continues to widen, presently out to 416 bps from early 402.

EUR/USD down at 1.3080.

–Adds 1Q Results For Industry Profits, Construction And Wholesaling,

PARIS (MNI) – French economic activity picked up somewhat in March
but is likely to stagnate in the near term, the Bank of France said
Tuesday, citing the results of its monthly business survey.

The central bank estimated that GDP was flat in 1Q, confirming its
previous forecasts. Last month, the national statistics Institute Insee
also projected no growth in 1Q.

The central bank’s latest survey indicated that industry output
“improved” in March. Solid gains were reported for high-tech goods,
heavy transport equipment, chemicals, pharmaceuticals, and wood and
printing. After five months of decline, capacity utilization edged up
0.1 point to 78.5% — still well below average.

The central bank’s sector climate indicator, based on the latest
three months’ results, was unchanged in March at february’s 28-month low
of 95. Most analysts had expected a modest recovery.

Order books were close to normal levels and finished goods stocks
slightly above target. Firms’ outlook for overall production in April
fell five points to +1, which the central bank interpreted as a signal
for stable activity in the short term. There was little overall change
in orders.

Other leading indicators for industry give conflicting signals. The
factory PMI plunged to a three-year low of 46.7, with output (45.6) and
new orders (43.4) contracting sharply. While Insee’s manufacturing
survey also flagged a steeper decline in recent output, firms’
assessment of order books, especially for exports, recovered and their
near-term output jumped to a six-month high.

France’s services sector regained some steam in March, with a boost
from transport and engineering, the central bank said, adding that
hiring accelerated and prices rose very slightly.

The outlook for services activity also fell five points to zero,
signalling “stable” activity ahead. The services climate indicator was
unchanged on the month at 93.

France’s services PMI edged up 0.1 point in March to 50.1, with new
orders practically flat (50.2). Insee’s sector survey signaled a pick-up
in recent activity in March, but providers remained pessimistic about
near-term prospects.

The quarterly supplement to the central bank’s survey showed that
industry investment recovered slightly in 1Q from the two-year low in 4Q
and is expect to continue higher in 2Q. Firms’ cash positions stabilized
close to long-term averages. Profit margins narrowed slightly and gross
operating profits declined.

In construction, growth slowed in 1Q after a pick-up in 4Q and is
seen roughly steady in 2Q. Order books remained at satisfactory levels.
The central bank’s sentiment index slipped one point to 96.

In wholesaling, purchases and turnover were little changed in real
terms in 1Q. Sales are expected to stagnate in 2Q. Order books were
unchanged and inventories appeared to have increased. The sector
sentiment index dropped four points to 94.

–Paris newsroom +331 4271 5540; e-mail: ssandelius@marketnews.com

[TOPICS: M$F$$$,M$X$$$,M$$EC$,MT$$$$,MGX$$$]

China’s Foreign Ministry calls for calm, restraint to prevent worsening of tensions on Korean peninsula.

Russia’s Foreign Ministry says North Korea’s planned rocket launch shows disregard for U.N. resolutions.

S.Korea says North Korea’s rocket launch will deepen its international isolation

Reuters reporting.

Dutch state treasury agency re-opens 5 year 2.50% January 2017 DSL today.

Target amount 2.5-3.5 bln euros.

Result due around 08:20 GMT.

From early 109 bps ahead of todays bond auctions.

Austrian federal financing agency plans to tap 3.20% February 2017 RAGB and 3.40% November 2022 RAGB bonds.

Combined target amount 1.32 bln euros.

Results due around 09: 15 GMT.

1.3000 or 1.3200? We’re presently at 1.3103.

Reasoning for choice would be nice, but as usual not obligatory.

FRANCE DATA: Feb industry output +0.3% m/m; Jan +0.2% m/m (+0.3%)
– Below expected; MNI analysts survey median forecast +0.4% m/m
– Jan-Feb industry output -0.3% vs 4Q average; 4Q -1.0% q/q
– Feb mfg output -1.2% m/m after Jan -0.1% m/m (+0.2%)
– See MNI MainWire for details

Compared to median forecasts +0.3%, -1.5% respectively.

Meanwhile the Bank of France confirms estimate for flat Q1 GDP growth.

In early trade from the 125 bps I jotted down first thing.

Italian/German 10 year govt bond yield spread widens out to 381 bps from 371.

Spanish/German 10 year govt bond yield spread widens out to 409 bps from 402

Euro zone sovereign/bank concerns remain very much to the fore.  EUR/USD has slipped back to 1.3115 from the 1.3130 which greeted me when I sat down. If it wasn’t for ongoing speculation the Federal Reserve may go for QE3 later this year, then EUR/USD would most probably be through the psychological 1.3000 level by now.

GERMANY DATA: February sa trade surpl +E13.6bn; January rev
+E15.1bn(+E14.2bn)
– Germany February nsa trade surplus +E14.7bn; January rev +E13.2bn
(+E13.1bn)
– Germany February nsa c/a surplus +E11.1bn; January rev +E9.5bn
(+E8.0bn)
– See MNI MainWire for details

In line with Reuter’s median forecast.

Down from 15.1 bln in January.

Seasonally adjusted exports +1.6% m/m, imports +3.9% m/m.