Domestic Unemployment Will Stay

Major European PMI Manufacturing data misses expectations; German IFO Business Confidence falls for the first time in 7 months Economic Data (RU) Russia Gold & Forex Reserve w/e May 18th: $514.3B v $518.8B prior (DE) Germany Q1 Final GDP Q/Q: 0.5% v 0.5%e; Y/Y: 1.7% v 1.7%e; GDP WDA Y/Y: 1.2% v 1.2%e (DE) Germany Q1 Private Consumption: 0.4% v 0.2%e; Government Spending: 0.2% v 0.3%e; Domestic Demand: -0.3% v 0.0%e; Capital Investment: -1.1% v -0.3%e; Construction Investment: -1.3% v -0.4%e; Exports: 1.7% v 0.9%e; Imports: 0.0% v 0.3%e (CH) Swiss Apr Trade Balance (CHG): 1.3B v 1.9Be; Real Exports M/M: -0.9% v +0.2%e; Real Imports M/M: 2.6% v 5.9% prior (FI) Finland Apr PPI M/M: -0.1% v +0.4% prior; Y/Y: 1.4% v 1.4% prior (FI) Finland Apr Preliminary Retail Sales Volume Y/Y: -2.0% v ...

Euro hits fresh 2012 lows ahead of informal summit; More reports of an ECB contingency plan in the works Economic Data (GR) Greece Mar Current Account: -€2.1B v €1.1B prior (NL) Netherlands Mar Consumer Spending Y/Y: % v -1.3% prior (SE) Sweden Apr Unemployment Rate: % v 7.8%e (EU) Euro Zone Apr Current Account: +€7.5B v -€5.6B prior; Current Account Seasonally Adj: +€7.5B v -€1.2B prior (IT) Italy May Consumer Confidence: 86.5 v 89.5e (lowest reading on record after series began in 1996)) (ZA) South Africa Apr CPI (all items) M/M: 0.4% v 0.5%e; Y/Y: % v 6.2%e (TW) Taiwan Apr Industrial Production Y/Y: -2.3% v -1.7%e; Commercial Sales Y/Y: -2.4% v -0.9% prior (UK) Apr Retail Sales Ex Auto Fuel M/M: -1.0% v -0.7%e; Y/Y: -0.3% v +0.7%e (UK) Apr Retail Sales with Auto Fuel M/M: -0.8% ...

Canada's Economy Turns the Hiring Machine Back on -58,200 jobs created in April 2012, beating the consensus forecast for a 10,000 increase. - Unemployment rate inched up to 7.3% from 7.2% in March as the labour force grew by 72,500. -April marked the second monthly increase in employment and boosted the tally of job gains so far this year to 140,000 or an average monthly gain of 35,000 jobs. This result beat the 29,000 average monthly increase recorded in early 2011 and far exceeds the 8,000 per month pace recorded in the next eight months of that year. This stepped up pace of job creation is more consistent with an economy that grew at an above-potential 2.5% rate last year and is on track to grow at a 1.8% pace in the first quarter of 2012. The weaker performance in first- ...

(Reuters) - Foreign investment in the United States is ebbing and beefing it up is critical for economic growth as each job at a foreign company's U.S. unit supports three others, the Organization for International Investment said on Thursday. A complex U.S. tax code and increasing global competition are curbing business development here by foreign companies. That trend is worrisome because foreign firms generally pay salaries to U.S. workers that exceed the industry average. This type of foreign investment, in turn, drives up employment and consumer spending. "The global investment pie around the world has been getting larger, but our slice of that pie has been getting smaller as well as the share of GDP that foreign investment in the U.S. represents," Nancy McLernon, president and ...

U.S. Review Modest Growth on a Broadening Base - The underlying tone of the recent economic reports remains consistent with modest economic growth. Consumer spending ended the first quarter on a solid note and spending is now on track to grow at a 2 percent pace in the second quarter. - Reports from the regional manufacturing surveys showed some weakness but the National ISM report came in stronger than expected. The nonmanufacturing survey, however, came in below expectations. - Nonfarm employment rose by 115,000 jobs in April and the unemployment rate fell 0.1 percent to 8.1 percent. Modest Growth on a Broadening Base This week's ISM report came in better than expected, rising 1.4 points to 54.8 in April, which greatly relieves fears built up from the weaker factory orders ...

The Week Ahead Highlights When will volatility pick up Digesting payrolls Will there be more QE for the UK? Data Watch When will volatility pick up? Volatility in US Treasuries is at its lowest level since 2007, so too is volatility in the FX options market for short-term EURUSD products and the Vix has fallen sharply since peaking in autumn 2011. Yet Europe's sovereign stresses remain as strong as ever, Spain and Italy are struggling to sell their sovereign debt to anyone bar their domestic banking sectors and election risks are enormous as Greece and France go to the polls on Sunday. So why is volatility so low? The answer lies with central banks and fairly tight FX ranges. When central banks come in and pledge that interest rates will remain extremely low until 2014, ...

Fundamental Analysis EUR "The grim unemployment figures for March will likely encourage talk about a long overdue ‘growth pact’ for the euro zone" - Martin van Vliet, an economist at ING Group Euro area unemployment rose to the highest level since 1997 in March and manufacturing contracted in April, adding to signs the economy is still far from out of the woods. USD "Employment growth is slowing" - David Sloan, an economist at 4Cast Inc. The number of Americans, who have found a job in the private sector fell to 119,000 in April from a revised 201,000 in March, the ADP Employer Services said on Wednesday. GBP " points to clear, decent construction expansion in April" - Howard Archer, chief UK economist at IHS Global Insight U.K. construction sector expanded slower in April, compared ...

Sunrise Market Commentary - Fixed Income: German yields set record lows - Depressing April PMI's and unemployment data in the EMU set the tone for a risk off session. Core bonds surged higher and the German Bund future reached a new record high. In the US session, US equities rebounded and triggered profit taking in US treasuries. German bonds stayed near the highs however. - Currencies: Awful EMU PMI data hit the euro - The focus in currency trading shifted from the US to Europe. On Tuesday, EUR/USD declined due to dollar strength in the wake of the ISM release. On Wednesday, an awful set of EMU data triggered a next selling wave. EUR/GBP continues to set new lows, too. We doubt that the Draghi press conference will be able to change the course of events The Sunrise ...

China shares slump under banks, Aussie and Kiwi weaken; China PMI declines Economic Data (CN) CHINA APR NON-MANUFACTURING PMI: 56.1 V 58.0 PRIOR (NZ) NEW ZEALAND Q1 UNEMPLOYMENT RATE: 6.7% V 6.3%E (5-quarter high); EMPLOYMENT CHANGE Q/Q: 0.4% V 0.3%E; Y/Y: 0.9% V 0.9%E; PARTICIPATION RATE Q/Q: 68.8% V 68.3%E (2nd highest on record and 3-year high) (AU) AUSTRALIA APR AIG PERFORMANCE OF SERVICE INDEX: 39.6 V 47.0 PRIOR (3-year low; 3rd month of contraction) (UK) UK APR LLOYDS BUSINESS BAROMETER: 26 V 31 PRIOR (AU) AUSTRALIA APR VFACTS NEW AUTO SALES M/M: +7.6% (KR) South Korea Apr Foreign Exchange Reserves: $316.8B v $316.0B prior Markets Snapshot (as of 04:30GMT) Nikkei225 +0.3% S&P/ASX -0.1% Kospi -0.3% Taiwan Taiex -0.2% Singapore Straits Times Index unchanged Shanghai Composite -0.4% ...