Week of April 15, 2012 thru April 21, 2012

IMF's Lagarde Welcomes China Move to Widen FX Trading Band


WASHINGTON (MNI) - International Monetary Fund Managing Director Christine Lagarde Saturday welcomed China's announcement that it would widen the daily trading band of the renminbi against the U.S. dollar in the inter-bank foreign exchange market to 1.0% from 0.5%.

"I would like to welcome this important step by the People's Bank of China to increase the flexibility of their currency. This underlines China's commitment to rebalance its economy toward domestic consumption and allow market forces to play a greater role in determining the level of the exchange rate."

The People's Bank of China made the announcement early Saturday.

China Widens Yuan Trading Band To 1%; Vows 2-Way Flexibility


BEIJING (MNI) - The People's Bank of China said Saturday it will increase the yuan's daily trading band against the U.S. dollar to 1% from 0.5%.

The move, which has been long-anticipated, comes after senior government officials have said that the yuan is nearing its equilibrium level and have pledged to boost the currency's two-way flexibility.

"To promote yuan price discovery and increase two-way yuan flexibility, the PBOC has decided to widen the trading band starting April 16," the central bank said in a short statement.

US News Events Calendar


--Meetings & Events of Interest to Subscribers

DATE GMT / EST EVENT

-------------------------------------------------------------------------

16-Apr 1400/1000 U.S. Chamber of Commerce publishes its First Quarter Small Business Outlook Survey

16-Apr 1630/1230 Cleveland Federal Reserve Bank Pres. Sandra Pianalto speaks about "Communication -- a Key to Value-Added Supervision" at a "Day with the Commissioner" event in Lexington, Ky. She will answer questions from the audience.

16-Apr 1930/1530 St. Louis Federal Reserve Bank Pres.

US News Events Calendar


--Meetings & Events of Interest to Subscribers

DATE GMT / EST EVENT

-------------------------------------------------------------------------

16-Apr 1400/1000 U.S. Chamber of Commerce publishes its First Quarter Small Business Outlook Survey

16-Apr 1630/1230 Cleveland Federal Reserve Bank Pres. Sandra Pianalto speaks about "Communication -- a Key to Value-Added Supervision" at a "Day with the Commissioner" event in Lexington, Ky. She will answer questions from the audience.

16-Apr 1930/1530 St. Louis Federal Reserve Bank Pres.

US Tsy Delays FX Rpt to Congress Til After Next US-China Meet


WASHINGTON (MNI) - The following statement was issued by the Treasury Department late Friday:

TREASURY DEPARTMENT STATEMENT REGARDING DECISION TO DELAY SEMI-ANNUAL REPORT TO CONGRESS ON INTERNATIONAL ECONOMIC AND EXCHANGE RATE POLICIES

Treasury today announced that it will delay publication of the semi-annual Report to Congress on International Economic and Exchange Rate Policies of our major trading partners so that progress may be assessed following several upcoming international meetings: the G-20 Finance Ministers and Central Bank Governors Meeting April 19-20; the spring meetings of the International Monetary Fund (IMF) and World Bank April 20-21; and the upcoming U.S.-China Strategic and Economic Dialogue.

TheFXSpot: Friday 13th Unlucky For Eurozone;Next Wk Data Eyed


NEW YORK, April 13 (MNI) - A black cat walked across the eurozone's path Friday the 13th, as evidenced by the record high insurance costs of 500 basis points-plus for Spanish credit default swaps and a German DAX close below the psychological 6600 level.

Bernanke Q&A: Still Need To Watch Shadow Banking Problems


NEW YORK (MNI) - Federal Reserve Board Chairman Ben Bernanke Friday noted that there is still a need to watch potential problems from the shadow banking system and to take such potential problems "seriously."

Bernanke answered questions after a speech at a conference on "Rethinking Finance" hosted by the Russell Sage Foundation and the Century Foundation. Bernanke's prepared remarks were titled "Some Reflections on the Crisis and the Policy Response" and did not deal with current economic conditions or monetary policy.

Bernanke was asked what would the Fed do if it had to combat another asset price bubble.

US Debt Offering, Auction Calendar for Tsy and Agency Issues


April 13

Source: U.S. Treasury, Fannie Mae, Freddie Mac Amounts in billions of U.S.

Bernanke: Crisis and Fed Responses Not as Novel As Appeared


NEW YORK (MNI) - Federal Reserve Chairman Ben Bernanke Friday said the financial crisis and the Fed responses to it were not as novel as they might appear, and instead were fundamentally a "classic" panic and central bank reaction described in the history books.

Bernanke, speaking to the Russell Sage Foundation and The Century Foundation, stuck to his interpretation of the complicated history of the 2007-2009 crisis and how it was handled, and did not address the current state of the economy or monetary policy alternatives.

Yet his message was forward looking, that regulators must keep examining the vulnerabilities of the financial system, a process well along but far from completed.

US Swaptions: Less Directional, Vega Up On FI Bull Flattener


CHICAGO, April 13 (MNI) - Over-the-counter swaption volatility was less directional Friday, mixed with near-end gamma lagging slightly firmer in longer expirys.