Week of May 22, 2011 thru May 28, 2011

US Rep Ryan: Need 'Serious Downpayment' On Deficit

--House Budget Committee Chairman: Debt Hike Must Be Leveraged
--Hammers Democrats For "Mediscare Campaign'
--Higher Revenues Should Be Driven By Economic Growth
--Hill Must Show Markets 'Getting Our Spending Under Control'

By John Shaw

WASHINGTON (MNI) - House Budget Committee Chairman Paul Ryan
Wednesday said the coming vote in Congress on debt ceiling legislation
should be used to secure a "serious downpayment" on long-term deficit
reduction.

Speaking at a budget conference hosted by the Pete Peterson

Canada Update: BMO Posts Q2 Profit Of C$800 Million

--Retransmitting, 7% Increase Vs Same Quarter A Year Ago Not Q1

By Akhil Shah

OTTAWA (MNI) - Bank of Montreal, the first major Canadian lender to
announce second quarter earnings, Wednesday reported a C$800 million
profit, an increase of 7% vs. the same quarter a year ago.

BMO reported second quarter earnings per share of C$1.34 compared
to C$1.26 from the same period a year ago. Revenue grew to C$3.22
billion an increase of 6%.

The rise in profits was a result of fewer defaults and more
loan payments, thereby lowering loan loss provisions. Provisions for

US's Reid, McConnell Resume Skirmishes On Ryan, Obama Budgets

--Senate Majority Leader Reid: Ryan Budget is Plan to 'Kill Medicare'
--Senate Minority Leader McConnell: Dems Have 'Abdicated' Budget Duty
--Ex-President Clinton: 'Still Believe' Will Be Bipartisan Budget Deal

By John Shaw

WASHINGTON (MNI) - Senate Majority Leader Harry Reid and Minority
Leader McConnell began Wednesday by exchanging verbal jabs on fiscal
policy, with Reid continuing to scorch the House Republican's 2012
fiscal year budget and McConnell ridiculing Senate Democrats for failing
to offer their own budget alternative.

Canada Update: BMO Posts Q2 Profit Of C$800 Million

By Akhil Shah

OTTAWA (MNI) - Bank of Montreal, the first major Canadian lender to
announce second quarter earnings, Wednesday reported a C$800 million
profit, an increase of 7% vs the previous quarter.

BMO reported second quarter earnings per share of C$1.34 compared
to C$1.26 from the same period a year ago. Revenue grew to C$3.22
billion an increase of 6%.

The rise in profits was a result of fewer defaults and more
loan payments, thereby lowering loan loss provisions. Provisions for
credit losses fell to C$145 million from C$249 million, the bank said.

ECB's Draghi: Must Keep EMU Inflation Expectations Anchored

BERLIN (MNI) - European Central Bank Governing Council member Mario
Draghi on Wednesday once again stressed the central bank's determination
to keep inflation expectations well anchored in the Eurozone.

"Monetary policy will take into account any fresh inflationary
tensions stemming from the increasing price of commodities and oil," the
governor of the Bank of Italy said at conference here.

"In all events, second-round effects via wages are to be avoided in
order to preserve the stability of medium-term inflation expectations,"

UPDATE: BOE Sentance: Commodities Could Rise Further

-- Adds Comments From Q&A

LONDON - Outgoing Bank of England Monetary Policy Committee
member Andrew Sentance has said that the MPC cannot ignore rises in
commodity prices and warned that last week's correction in crude prices
was probably just a blip on an upward trend.

In his last speech as an external member of the MPC, Sentance told
an audience in Jersey that high commodity prices could feed into wage

US Apr Bldg Permits Revised Up To -1.9% To 563K Unit Rate

--April Permits Originally Reported -4.0% To 551K Unit Rate

WASHINGTON (MNI) - The number of U.S. building permits issued in
April was revised up to a decrease of 1.9% to a 563,000 unit annual
rate, the Commerce Department's Bureau of the Census said Wednesday.

Permits issued were originally reported down 4.0% to a 551,000
unit rate.

MNI Forecast Competition for Durable Goods Orders Tallied

NEW YORK (MNI) - The 3.6% decrease in April durable goods orders
reported by the Commerce Department Wednesday differed from the average
of forecasts in the ongoing three-month MNI Forecast Competition for a
flat reading, by 3.6 points.

Forecast contest participants had delivered their estimates of the
durables change by 10:30 ET Tuesday.

The next statistic to be estimated is that for next week's report
on April manufacturing ISM on Wednesday. The deadline for those
forecasts is noon next Tuesday.

BOE Sentance: Commodities Could Rise Further, Hike Overdue

LONDON - Outgoing Bank of England Monetary Policy Committee
member Andrew Sentance has said that the MPC cannot ignore rises in
commodity prices and warned that last week's correction in crude prices
was probably just a blip on an upward trend.

In his last speech as an external member of the MPC, Sentance told
an audience in Jersey that high commodity prices could feed into wage

France's Lagarde Launches Candidacy for IMF Helm

PARIS (MNI) - French Finance Minister Christine Lagarde on
Wednesday threw her hat into the ring to succeed Dominique Strauss-Kahn
as managing director of the International Monetary Fund, pledging to
pursue his reforms to give emerging countries greater weight in the
Fund.

While benefitting from the support of French officials and a
growing number of European governments, Lagarde underscored repeatedly
that she was not the candidate of France or Europe and that her origins
should be neither a "plus" nor a "handicap" for her candidacy.