Week of May 13, 2012 thru May 19, 2012

China PBOC Cuts Reserve For 3rd Time Amid Economic Worries

BEIJING (MNI) - China's central bank said Saturday it will cut the required reserve ratio by another 50 basis points effective May 18, marking the third move by the government to pump cash into the economy amid widespread concerns about a sharp slowdown in activity.

The cut will lower the reserve ratio for the country's biggest banks to 20%, according to a statement posted by the People's Bank of China. The move will release an estimated CNY400 billion back into the economy.

Expectations for a move on the reserve requirement -- following moves in December and February -- have been building amid signs that the economy's soft patch seen at the start of the year is extending into the second quarter.

US News Events Calendar

--Meetings & Events of Interest to Subscribers



15-May 1230/0830 Treasury Secretary Tim Geithner speaks at the Peterson Foundation 3rd Annual Fiscal Summit, in Washington.

15-May 1330/0930 Federal Reserve Gov. Elizabeth Duke speaks to the National Association of Realtors in Washington, and will take questions from the audience.

16-May 1545/1145 World Bank Pres. Robert Zoellick speaks at the Economic Club of Washington.

16-May 1630/1230 St.

Greek PASOK Leader Fails To Form Coalition, To Return Mandate

ATHENS (MNI) - Greece's socialist PASOK leader and former finance minister, Evangelos Venizelos, was unsuccessful Friday in his negotiations to form a coalition government and will surrender his mandate Saturday morning.

President Karolos Papoulias has called a meeting of all parties for this weekend in a final attempt to convince them to form a coalition or national unity government, with the participation of as many parties as possible. If Papoulias fails, he will announce new elections, most likely June 10 or June 17.

Earlier Friday, Venizelos had a second meeting with the main far-left opposition party leader, Alexis Tsipras, but there was no agreement. After the meeting the two leaders attacked each other for not really seeking a fruitful outcome.

FXWRAP: Dlr Steady, Mkt Quiet As Greek Standoff Continues

NEW YORK, May 11 (MNI) - The dollar was trading near unchanged vs the euro and the yen in afternoon dealings Friday after meandering in tight ranges, awaiting further developments on the Greek political scene while watching U.S. stocks nurse modest gains.

Euro-dollar was changing hands at $1.2925 in afternoon dealings Friday, the euro in the upper reaches of a very modest $1.2916/1.2958 U.S. hours range after beginning the day at $1.2933.

Dollar-yen meantime was trading at Y79.87 as it held close to its early Y79.3 level after traversing an even skimpier Y79.72/80.00 range during U.S. trading.

Afternoon flows were at a modest pace, the euro lifted by a slight improvement in risk-appetites that was driven by the rosier tone of U.S.

US Debt Offering, Auction Calendar for Tsy and Agency Issues

May 11

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

NY Fed: To Take Bids On Select Maiden Lane III Paper

NEW YORK (MNI) - The New York Federal Reserve Bank announced Friday it will accept bids from select dealers on more Maiden Lane III assets next week.

In a statement on its website, the NY Fed said, "In light of improving market conditions, Maiden Lane III LLC's investment objective was revised in April 2012 to allow for the exploration of sales of the assets held in the portfolio.

US Swaptions: Slow OTC Gain, Listed Vol Leads Ahead Weekend

CHICAGO, May 11 (MNI) - Over-the-counter swaption volatility opened steady Friday despite wider spreads and increasing signs of trouble from financial shares not to mention the potential for European headline risk over the weekend.

Reality Check: Apr US Trucking Up Modestly, Transpo Execs Say

NEW YORK, May 11 (MNI) - U.S. trucking demand rose modestly in April as automotive-related and industrial goods hauling took the lead, but slowing economic growth is evident, according to logistics executives at the center of the supply p

Talk From The Trenches: Focus Now On Whales and Cockroaches

NEW YORK, May 11 (MNI) - The financial markets spent a lot of time Friday talking about JP Morgan's loss of $2 billion in a synthetic credit portfolio.

Credit Default Swaps: Financials Underperform, 5Y JPM 3Mo Wide

CHICAGO, May 11 (MNI) - Credit default swaps on U.S. banks badly underperformed Friday after news late Thursday that JPMorgan incurred $2.0 billion in mark-to-market losses in its synthetic portfolio.