Better than median forecasts -0.2% q/q, -0.2% y/y.

We kinda knew the data was going to be better than expected though after the earlier release of better than expected German data.

Ughhh

Demonstrably weaker than Reuter’s median forecast of 19.0. Down sharply from 23.4 in April.

ZEW says

• Greek, French elections contributed to ZEW index drop, as they increased uncertainty about euro zone

BERLIN (MNI) – Germany’s main opposition party, the center-left
SPD, doubts that the EU fiscal compact will still be ratified in Germany
before the summer break, SPD parliamentary leader Frank-Walter
Steinmeier said Tuesday.

Chancellor Angela Merkel’s center-right coalition government needs
the support of the opposition to ratify the fiscal compact given that it
involves changes to the German constitution which require a two-thirds
majority in both houses of parliament.

Steinmeier said that the initial date to pass the fiscal compact
together with the European Stability Mechanism (ESM) on May 25 in the
German parliament was already off the table. “The government has
underestimated the need for negotiations,” the SPD parliamentary leader
said.

There still is a broad need for talks on the fiscal compact both
with the opposition parliamentary groups in the lower house, the
Bundestag, as well as with the regional states in the upper house, the
Bundesrat, Steinmeier said. He called it “very, very ambitious” for the
government to assume it could push the fiscal compact through parliament
still before the summer break.

Together with SPD party leader Sigmar Gabriel and former finance
minister Peer Steinbrueck, Steinmeier reaffirmed the SPD’s demand that
along with the fiscal compact there needs to be an European growth pact
to counter the debt crisis.

Gabriel claimed that Merkel had already accepted the necessity of
such a growth pact, the question was now how that pact would look like.
“I’m quite optimistic,” he said, noting that the chancellor was aware
that France would not ratify the fiscal compact without an additional
growth chapter.

The new French President Francois Hollande is to meet Merkel this
afternoon in Berlin. A joint press conference is scheduled for around
17:45 GMT.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$X$$$,MGX$$$,M$$CR$,M$G$$$]

Not happy then……

–Mar Global Goods Trade Deficit Stg8.564bn vs Stg8.59bn Feb
–Mar Total Trade Deficit Stg2.739bn vs Stg2.948bn Feb

LONDON (MNI) – The UK’s trade in goods deficit remained broadly
stable in March, with exports to non-EU countries hitting a record
level, figures released by National Statistics showed Tuesday.

The headline figures mask an improvement in the underlying deficit
with the shortfall excluding oil and erratics narrowing as exports
outstripped imports. The Q1 EU deficit, however, hit a record wide and
renewed turmoil in the Eurozone is expected to hit exports over the
coming months.

The overall goods trade balance narrowed slightly to Stg8.564
billion in March from Stg8.59 billion in February, a little higher than
the median forecast of Stg8.4 billion.

The value of exports rose 5.8% on the month to hit a record level
of Stg26.362 billion, while imports were up 4.2% to Stg34.926 billion.
The volume of exports also hit a record high in March, a significant
recovery from the lows seen in 2009 following the financial crisis.

The main reason behind the surge in exports came from non-EU trade,
where the value of exports rose 12.1% on the month, compared to a 4%
rise in imports. Part of this was due to a large rise in auto exports,
following a large fall in February. Non-EU export volumes also hit a
record high in March.

Overall, the non-EU trade gap narrowed to Stg4.109 billion from
Stg4.871 billion.

Exports to EU countries were up just 0.1% on the month, while
imports rose 4.4%, causing the shortfall with EU countries to widen to
Stg4.455 billion from Stg3.719 billion.

The underlying picture on EU trade is less encouraging, with the
deficit rising to Stg12.3 billion in the first quarter, from Stg11.1
billion in Q4, hitting an all time high.

This pushed up the overall Q1 goods trade deficit to Stg25 billion,
the highest since Q3 2011.

A large rise in oil imports of 17% on the month drove the oil
deficit up to Stg1.277 billion from Stg0.589 billion in the previous
month, masking an improvement in the underlying goods trade data.

Excluding oil and erratic items, narrowed to Stg7.261 billion in
March from Stg7.777 billion in February.

The total trade deficit, which includes services, narrowed to
Stg2.739 billion in March from Stg2.948 billion February, slightly below
the median of Stg2.9 billion.

–London newsroom: 44 20 7862 7491; email: puglow@marketnews.com

[TOPICS: M$BDS$,M$B$$$,MT$$$$,MABDS$]

Expected -£8.4 bln, non EU -£4.7 bln

March non EU trade balance -£4.109 bln from revised -£ 4.871 in Feb

Marginally worse than expected with a small slip in cable,  back to 1.6075

Q4  2011 unrevised -0.7% q/q, -0.4% y/y

Letting the side down after the better German data, with  a 3rd consecutive quarterly decline

– See Separate Table For Details

TOKYO (MNI) – Combined sales at Japanese department stores in April
are forecast to show a solid gain year-on-year following +14.1% in March
and in sharp contrast to a 1.5% fall in April 2011, which was caused by
earthquake disaster, a survey of major store chains by MNI showed.

The Japan Department Stores Association will release April data at
1430 JST (0530 GMT) on Friday, May 18.

In early April last year, many department stores were forced to
shorten their business hours due to power shortages during the Fukushima
nuclear meltdown, and consumers reduced their spending out of respect
for victims of the earthquake and tsunami.

Six of the seven department store chains surveyed reported
year-over-year sales increases in April while the remaining one group
reported a drop.

Spokesmen at some chains also said lingering strong demand for
jewelry and other luxury goods supported April sales, defying the old
theory that spending on luxury goods tends to increase only when the
Nikkei stock average stays above Y10,000 (it’s been below the level
since early April).

Keio’s sales of jewelry and other luxury goods surged 18.7% y/y in
April, compared with its overall sales increase for the month of +5.7%.

“It is possible” that consumers are shifting their funds from
financial assets to luxury items as high returns cannot be expected from
financial assets these days, a Keio spokesman said.

A spokesman at Takashimaya said, “Brighter prospects are now seen in
corporate sales and profits,” which may prompt consumers to buy high-end
goods. He added that there is pent-up demand among consumers who were
hesitant to spend last year in the aftermath of the disaster.

Meanwhile, only two of the seven department store chains surveyed
said their sales showed y/y rises in early May, while the remaining five
said their sales were more or less unchanged.

Tornadoes caused serious damage to many buildings, vehicles and
farms in areas just northeast of Tokyo at the end of Japan’s Golden Week
holidays, which were also ruined by heavy rainfalls and landslides in
some regions.

skodama@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4838 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$]

• Timetable for ESM passage ‘unrealistic’
• Party will need to decide whether backs fiscal pact depending on what growth measures added

Reuters reporting.

Good show.

Euro gives a little sigh of relief and back up at 1.2865.

Pretty much in line with the median forecasts I had at -0.3%, -1.1% respectively.

EUR/USD sits at 1.2855 having recently hit the heights of 1.2865 where apparently an ACB stepped in and sold.

It’s all go!!!  Everything seems to happen in sloooooooow motion during the European session these days.

– See Separate Tables for Details

TOKYO (MNI) – Economists have revised up their medium-term
inflation forecasts on easing deflationary pressures as the economy is
set for a gradual recovery, the latest monthly survey by the Japan
Center for Economic Research released on Tuesday showed.

The association polled 40 economists and research institutions from
April 26 to May 8 for its ESP Forecast Survey, and 40 answered on the
growth and inflation outlook and 38 on the BOJ’s monetary policy stance.

The previous survey was conducted from March 29 to April 5.

Economists expect Japan will move out of years of price drops
following news that national CPI rose 0.2% on the year in March, showing
the highest gain since +0.2% in September 2011.

The survey showed that the average forecast for core CPI (excluding
perishables) in fiscal 2012 was put at +0.09%, up from -0.01% in the
previous survey. It would be the first annual increase in four years
since +1.2% in fiscal 2008.

Also, economists on average expect consumer prices to show a 0.20%
rise in fiscal 2013, revised up from +0.13% last month.

In the near term, economists expect GDP for the January-March
quarter of 2012 to post an annualized gain of a real 3.20%, an upward
revision from their previous average forecast for a 2.48% rise.

But the average GDP forecast for the April-June quarter was revised
down to +2.19% from +2.29% in the previous survey.

For the whole of fiscal 2011 that ended on March 31, economists on
average now forecast real GDP would show -0.19% y/y, revised up slightly
from -0.21% forecast in the previous survey.

Economists on average project a 2.15% rise in real GDP in fiscal
2012, revised up from +2.07% foreseen in the previous survey, while they
expect a 1.52% rise in fiscal 2013, revised down from their previous
forecast of +1.54%.

The survey also showed that 23 economists predict a further credit
easing by the Bank of Japan in coming months, mostly in July, up from 20
last month.

Meanwhile, 15 economists expect the BOJ to start unwinding its
monetary easing in about a year ahead, down from 17 in the previous
survey.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4833 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$,MMJBJ$]

Just etched a day’s high of 1.0011, but looks a bit laboured up here at the moment with the move tracking a stuttering EUR/USD rally following the improved German GDP numbers.

Offers stretch up to 1.0020 with talk of stops now through 1.0030 ahead of larger offers around 1.0050, but we may well see some gravitation around parity as there is a large option expiry today at the level for around AUD300 mio, with  some talk the size could be up to AUD 1 bio.  

We’re presently sitting at 1.0005

TOKYO (MNI) – The Bank of Japan said on Tuesday that it will
release on July 11 a revised corporate goods price index for May and
preliminary CGPI data for June under the new 2010 base year.

Prior to that, the BOJ will release on July 4 revisions to the past
figures of the index for a period from January 2010 to April 2012,
reflecting the change in the base year and the data formula that takes
place every five years.

The BOJ has planned to switch the base year for the CGPI to 2010
from 2005 as well as update the basket of goods used for calculating
CGPI and change the weighting of items within the basket.

The bank aims to increase the accuracy of the key producer price
measures by reflecting technological development, a shift to production
overseas and the move toward renewable energy sources.

When the BOJ adopted the 2005 base year for CGPI five years ago,
year-on-year changes in CGPI were lowered by about 0.7 percentage point.

The latest BOJ data showed that Japan’s corporate goods price index
fell 0.2% on year in April, marking the first year-on-year drop in 19
months, reflecting lower prices for nonferrous metals, iron and steel as
well as chemical and related products.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4833 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$,MMJBJ$]

• Has asked ECB to be involved in bank-asset valuation
• No one mentioned requesting bailout aid

Meanwhile Austrian FinMin Fekter

• Spain has taken ‘enormous efforts’
• Spain still has to do ‘its homework’ on banks

FRANCE DATA: 1Q non-farm private payrolls +0.1% q/q, flat y/y
- Above expected; MNI analysts survey median forecast -0.2% q/q
- 10,200 net jobs created in 1Q after -22,600 in 4Q

FRANCE DATA: 1Q monthly salaries +0.9% q/q, +2.2% y/y; 4Q +2.3% y/y
–1Q hourly wages +1.0% q/q, +2.3% y/y; 4Q +2.3% y/y

We’re up at 1.2855 after surprisingly robust German Q1 GDP data. 

I’d have expected a sharper spike higher on that data, but such is the negativity surrounding the single currency at the present time the response has been lacklustre shall we say.

Sean overnight mentioned real money  sell orders clustered up at 1.2875/90, buy stops through 1.2900.

GERMANY DATA: German GDP growth surprised to the upside, rebounding
0.5% on the quarter in 1Q versus a forecasted recovery of 0.2%, the
Federal Statistical Office reported on Tuesday, citing preliminary
figures. In calendar-adjusted terms, economic activity was up 1.2% on
the year. In non-adjusted terms, GDP growth came to +1.7% y/y.
– See MNI MainWire for details

Expected +0.1% q/q and +0.8% y/y, (after -0.2% q/q and +1.5%y/y last)

Above forecasts and giving a small lift to an ailing EUR/USD, rise driven by improved exports and domestic consumption

Q4 2011 GDP confirmed at -0.2% q/q, and +1.5% y/y

– Japan Apr Consumer Confidence Index 40.0 Vs Mar 40.3
– Japan Govt Keeps View: Confidence Continues to Pick Up

TOKYO (MNI) – Japan’s consumer confidence marked the first
month-on-month drop in 12 months in April, slipping from a one-year high
recorded in March, as fewer people believed labor and overall economic
conditions would improve in the coming six months, data released by the
Cabinet Office showed on Tuesday.

The closely watched index stood at 40.0 last month, down slightly
from 40.3 in March, which was the highest reading since February 2011,
when the index was at 41.2.

The Cabinet Office maintained its assessment, saying, “Consumer
confidence continues to pick up.”

In April, three of the four sub-indexes — on overall economic
well-being, labor conditions and the timing of buying durable goods
fell from the previous month while the sub-index on income growth rose.

The latest survey was conducted on March 15, covering 6,720
households, of which 5,034 responded.

In April, the labor conditions sub-index fell 0.4 point to 38.2,
while the sub-index on income growth increased 0.2 point to 39.6.

Meanwhile, the latest survey indicated a further increase in
consumer inflation expectations.

The percentage of people forecasting higher prices in a year’s time
rose to 68.1% of the total on an unadjusted basis in April, up from
65.9% in the previous month.

Meanwhile, the percentage of people expecting lower prices 12
months ahead stood at 5.8% last month, down from 6.7% in the previous
month.

An annual inflation rate below 2% was forecast by 23.4% of those
surveyed in the latest month, down from 23.8% in the previous month.

Inflation in a range of 2% to 5% was forecast by 29.2% of the total
in the latest month versus 27.1% in the previous month.

Inflation at 5% or over was forecast by 15.5% of the total in the
latest month, up from 15.0% in the previous month.

Price drops of less than 2% were seen by 3.2 of the polled in the
latest month, unchanged from the previous month.

Price drops in a range of 2% to 5% were forecast by 1.6% of those
surveyed in the latest month, down from 2.4% in the previous month.

The annual rate of price drops at 5% or over was foreseen by 1.0%
of the total in the latest month, down from 1.1% in the previous month.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4835 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$,MT$$$$]