Monday, April 5, 2010

         IMF draft document raises '10 eco growth - says now will grow 4.1% in '10, up 0.2% from prior forecast.  US economy now seen growing 3% vs. prior +2.7% according to the draft.  IMF officially to release Apr 21.  Reuters. 
         Bunch of stories out of China – the most notable headline is that the White House will delay the release of the Apr 15 FX report, a move that should allay concerns that China would be labeled a currency manipulator.  Also out of China - 1) the country won't raise rates for "the short term" according to a report in the Wen Wei Po newspaper; the article cited Liang Meng, a researcher at the PBOC. 2) a top advisor to the PBOC said Beijing may adjust its policy of pegging its currency to the dollar provided a visit this month by Chinese President Hu Jintao to Washington goes smoothly; 3) The chairman of China Construction Bank, the country's second largest by assets, has warned of the perils of rapid growth; 4) A Chinese central bank adviser said Beijing could ease pressure over the yuan by buying more from recession-hit U.S. states

         In Japan, the BoJ will consider raising its economy assessment at its meeting this week, Finance Minister Kan said on Saturday that Japan cannot yet embark on an exist strategy from stimulus measures, and Former Japanese Finance Minister Kaoru Yosano said he'll form a new political group, a blow to the opposition Liberal Democratic Party (a new poll out today shows support for the current Japanese PM fell to a new low). 
         UK polls – Conservatives widen their lead over Brown's Labor party; a YouGov poll for the Sunday Times put Cameron's lead at 10pts over Labor; a Sunday Express poll had the lead at 11 points.  It is looking like May 6 will be the most likely date for the election.  Bloomberg 
         Greek deputy PM says Portugal may be next victim; the debt problems seen in Greece are likely to spread further in the euro zone and Portugal could be the next victim – Reuters 
         Fed rate outlook – while many are concerned about rising inflation due to very easy monetary policy, according to the WSJ, "an influential band of policy makers is fretting over the opposite: that the already-low rate of inflation is slowing further".  Yellen and Dudley fret about falling inflation and excesses capacity in the economy (note that Yellen is widely expected to take over for Kohn as the Fed's vice chair).  WSJ    
         Labor Report Takeaways - From M. Feroli – "The headline increase in nonfarm employment, 162,000, was close to expectations, but revisions to past months and increases in the average workweek were the most convincing pieces of evidence since the recovery began that firms are feeling the need to increase the overall amount of labor hired."
         Global bank tax – UK's Gordon Brown says world's large economies were close to agreeing on a global bank levy.  Brown played down expectations that a deal could be struck by the G20 meeting in June.  He said Britain, France and Germany were now broadly agreed on the need for a levy, and he hoped the US would come on board.  FT 
         Semi sales fall short in Feb - On Saturday, April 3, the SIA announced February monthly sales of $20.8 billion or a MoM decrease of 4.9%, below the average February MoM increase of 4.0% and below our estimate of a 3.0% MoM increase or $23.0 billion (C Danely)
         AAPL – iPad roundup – Piper estimates the co sold 600-700K iPads on Sat, nearly double some forecasts (Piper raised its '10 unit sales forecast from 2.8MM to 5.5MM); iSuppli forecasts the company will sell 7.1MM devices in the first year w/sales tripling to 20.1MM by '12.  According to the WSJ, the iPad had a strong debut, but there weren't any shortages as few stores sold out of the device.  WSJ.   
         Fund Flows - Last week mutual fund flow data showed less aggressive inflows into risky asset classes compared with the prior few weeks, based on data from the funds which report weekly. It is possible that flows were affected by quarter end effects combined with the 3-day weekend. HG bonds had $600mm of inflows on the week, down from about $1.2B each of the prior 3 weeks and the second lowest weekly figure this year. HY funds had $300mm of inflows, also about ½ the rate of the prior 3 weeks. Equities had $1.1B of inflows, down from an average of $3.7B the first 3 weeks of March. 

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