Week of May 20, 2012 thru May 26, 2012

ECB Mersch: Crisis Shows That Everything Is About Confidence


ISTANBUL (MNI) - The ongoing financial crisis makes clear that confidence is the key driver of market behavior, European Central Bank Governing Council member Yves Mersch said Thursday.

Mersch, who heads the Luxembourg Central Bank, told a conference here that "everything is about confidence and confidence means you have to live up to what you have promised. If you leave yourself, if you leave your fate to the markets, you might see markets" under- or overreacting.

This is seen in the context of the current crisis, when markets initially paid little heed to sovereign risk, "and suddenly when they woke up to this risk they started overpricing," he noted.

China Appliance Subsidies To Boost Consumption CNY450 Bln


BEIJING (MNI) - Chinese government subsidies to boost purchases of energy-saving home appliances and other items will boost consumption by CNY450 billion, a senior official with the country's economic planning agency said in comments published Thursday.

The estimate of Zhao Jiarong, a deputy-secretary general of the National Development and Reform Commission, comes after the government said Wednesday that it will earmark CNY36.3 billion to encourage purchases of energy-saving home appliances, lighting, cars and other equipment.

"Expand energy-saving consumption can stabilize growth, expand domestic demand and also promote structural adjustment," the official Xinhua News Agency quoted Zhao as saying.

ASIA FX: US Dollar Mixed, Euro Slips Back Toward Session Lows


SINGAPORE, May 17 (MNI) - The U.S. dollar continued with a mixed bias through the Asian afternoon Thursday, while the euro pulled back from morning highs as uncertainty continued about Greece and its place in the eurozone.

Dealers said the euro received a lift from some early bouts of short-covering as market players resigned themselves to another period of waiting while Greece's political deadlock continued to head toward new elections on June 17.

"The political cliffhanger in Greece is still weighing on investors' mood," commented analysts at Unicredit Bank.

INSIGHT: BOJ Set To Buy More 3-Year JGBs at Next Operation


TOKYO (MNI) - The Bank of Japan's inability to buy a full allotment of 2-year government bonds this week -- the first undersubscription since the inception of the bank's outright financial asset purchase fund in October 2010 -- will likely prompt the BOJ to buy more 3-year JGBs at its next operation, MNI understands.

Germany Data: MNI Survey Of Econ Data Fcasts May 14th to 18th


PPI - April %mom %yoy

Median Forecast 0.3 2.7 High forecast 0.5 3.2 Low forecast 0.0 2.3 Previous period 0.6 3.3 - Number of responses 9 7 - 4Cast 0.4 2.7 BNP Paribas 0.4 2.7 Capital Economics 0.1 2.4 Citi 0.5 2.8 DZ Bank 0.4 3.2 LBBW 0.2 n/a Natixis 0.0 2.3 Sumitomo Mitsui 0.2 2.4 UBS 0.3 n/a

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US Debt Auction Calendar for Treasury and Agency Issues


May 16

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

US Treasury Maturing Issues Calendar


May 16

Source: U.S. Treasury Auctions; Monthly Public Debt Statement Amounts in billions of U.S.

Japan Mar Output Revised Up To +1.3% M/M From +1.0%


TOKYO (MNI) - Japanese industrial production rose a revised 1.3% in March from the previous month, faster than the preliminary reading of a 1.0% growth, data from the Ministry of Economy, Trade and Industry showed on Thursday.

March industrial output posted the first monthly rise in two months, led by the auto industry, following a 1.6% fall in February.

Last month, METI's survey of firms showed that production is expected to increase 1.0% m/m in April, but it is projected to drop 4.1% in May.

Compared with the year earlier level, production in March rose 14.2%, revised up from the preliminary reading of +13.9%.

Other details from the latest data:

-- Shipments: Mar revised +0.5% m/m (preliminary -0.1%) vs. Feb +0.3%.

RealtyTrac: US Apr Foreclosure Activity Lowest Since Jul'07


WASHINGTON (MNI) - The following is the text of the RealtyTrac April report on U.S. foreclosure activity published Thursday:

RealtyTrac (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report for April 2012, which shows foreclosure filings - default notices, scheduled auctions and bank repossessions - were reported on 188,780 U.S. properties in April, the lowest monthly total since July 2007.

April foreclosure activity decreased 5 percent from the previous month and was down 14 percent from April 2011. One in every 698 U.S. housing units had a foreclosure filing during the month.

ASIA FX: Euro Stages Mild Recovery on Early Short-Covering


SINGAPORE, May 17 (MNI) - The U.S. dollar witnessed a mixed morning in Asia Thursday, as the euro staged a mild recovery against a backdrop of a flat stock market performance, despite the continued uncertainty about Greece and its place in the eurozone.

Dealers said the euro received a lift from some early bouts of short-covering as market players resigned themselves to another period of waiting while Greece's political deadlock continued to head toward new elections on June 17.

"The political cliffhanger in Greece is still weighing on investors' mood," commented analysts at Unicredit Bank.