Financial News

Latvia: GDP dropped to unexpectedly low level
Today the Latvian Statistics Office announced the preliminary estimates of GDP growth. Over the first quarter of 2008, economic growth was 3.6% y/y compared to the same period in 2007, well below our expectation of 4.4% y/y and consensus forecast of 5.1% y/y. We have downgraded our growth forecast to 2.5% y/y for 2008 and 2% y/y for 2009. However, It looks that the even more pessimistic IMF scenario of a massive slowdown in the Latvian economy in the next couple of years is quite reasonable.

Norway: Inflation is rearing its ugly head
Norwegian core inflation rose to 2.4% in April from 2.1% in March. We and consensus had expected a reading of 2.3%. Norges Bank had only expected a reading of 2.2% in April. The headline was lower than expected at 3.1%. The reason was a drop in electricity prices – that does not matter much for the central bank.

Euroland: Further tightening of credit
Overview: ECB's lending survey showed further tightening of credit standards across the board. Credit is being tightened for enterprises, housing and consumers. Demand is weakening for all sectors and paints a picture of falling credit availability and a weakening of investment activity and consumer demand. The hous-ing downturn continues as well.

Estonia: Consumer prices have accelerated again
Statistics Estonia has released its consumer price inflation (CPI) figures for April. Despite the significant slowdown in domestic demand, inflation in Estonia reached the unexpectedly high level of 11.4% y/y (1.0% m/m), well above ours and the consensus forecast of 10.5% y/y (0.2% y/y). The main reasons for such high inflation were an increase in housing costs (by 17.4% y/y) mainly due to the rise in the prices of heat energy and a jump in food prices (17.6% y/y).

Estonia: Entering the low-growth environment
? Growth slowed significantly in Q4 07 and we expect it to slow further. We downgrade our GDP growth forecast to 2.5% y/y for 2008 and to 3% y/y for 2009. ? The slowdown is broadly based, but the main driver is a significant slowdown in domestic demand, as the property market cools further. In 2007, the number of real estate transactions declined to the 2004 level and prices dropped by 10-15% y/y. ? Estonia's inflation rate fell back slightly in March to 10.9% y/y from 11.3% y/y in February.

Latvia: Economy is starting to stall
? Growth slowed significantly in Q4 to 8.0 % y/y compared to almost 11% y/y in Q3 07. We downgrade our expectation for growth to around 2-3% y/y for 2008 and some 2% y/y for 2009. ? The main driver of the slowdown is domestic demand; the retail trade dropped significantly and property market has cooled further. ? Over the current and coming years growth should mainly be stimulated by exports. But taking into account the huge uncertainties regarding the global outlook and the current Latvian

Lithuania: Slowdown has already started
? Lithuanian growth slowed significantly to 6.4% y/y in Q1 08 from 8.0% y/y in Q4 07. We expect GDP growth to slow further - to 5% y/y in 2008 and to 4% y/y in 2009, which is linked to negative changes in the global environment, tightening credit conditions and continuing tensions in the labour market. However, we do not rule out some quarters of negative GDP growth, as seems likely in other Baltic States. ? Continuing tensions in the labour market suggest any further growth in employment

Slovakia: Euro adoption accepted, but...
The European Central Bank (ECB) has just released its convergence report on the assessment of the economic and legal convergence of 10 EU member states, including Slovakia. The report confirms Slovakia’s bid to become the 16th member of the Euro currency area as of January 2009, as Slovakia fulfilled the socalled Maastricht criteria in the reference year, 2007. However, the report, which on several issues is highly critical, indicates that it has not been an easy decision, and we are pretty

Bank Lending Practices Survey (May, 2008)
? In 2Q08, an increasing number of financial institutions tightened lending standards for C&I loans. The majority of respondents increased spreads on the loan rates over their cost of funds. ? Four main reasons to tight credit supply: less favorable economic outlook, worsening of industry-specific problems, reduce tolerance for risk and decreased liquidity in the secondary market for these loans. In addition, one out of three institutions had concerns about their bank?s current or expected

Bank Lending Practices Survey (May, 2008)
? In 2Q08, an increasing number of financial institutions tightened lending standards for C&I loans. The majority of respondents increased spreads on the loan rates over their cost of funds. ? Four main reasons to tight credit supply: less favorable economic outlook, worsening of industry-specific problems, reduce tolerance for risk and decreased liquidity in the secondary market for these loans. In addition, one out of three institutions had concerns about their bank?s current or expected

Turkey: Higher inflation, looser fiscal policy
Last week, the Turkish central bank (TCMB) raised its inflation forecast for 2008 and 2009 significantly and on Friday we received more news that inflation is heading in the wrong direction in Turkey. The Turkish Statistics Institute has published its inflation data: Consumer prices (CPI) grew by 9.7% y/y (+1.7% m/m) in April up from 9.2% y/y in March. This was significantly above the consensus expectation of 9.4% y/y and our expectation of 9.3% y/y. Producer prices (PPI) similarly rose by

US: Not so fast! Payrolls receding more slowly
Overview: The April labour market report proved stronger than generally anticipated. The data revealed a job loss of 20,000 persons in April (consensus: -75,000, DB: -40,000) and a drop in the unemployment rate to 4.95% from 5.08% (consensus and DB: 5.2%). Prior months saw a mild net revision of -8,000 persons. Today’s report is consistent with an economy which has come close to a standstill, but has not slid into a recession.

US: GDP Growth in 1Q08
? Spending on goods fell, but services continued solid ? Non-residential investment deteriorated significantly, signaling a future broad based deterioration ? We maintain our forecast of 1% GDP growth in 2008 GDP growth remained at a sluggish 0.6% in 1Q08. This was 0.4 pp less than our estimate. On a year-over-year basis, real GDP growth was 2.5%, similar to that of 4Q07. Private consumer expenditures (PCE), government spending, net exports and private inventories added to growth. This was

USA: ISM goes sideways
Overview: The ISM manufacturing index was unchanged in April at 48.6. Although contracting moderately, the recent months of data suggest that the manufacturing sector continues to hold up quite well compared to other parts of the economy. Again the survey sent a message of continued significant price pressures in the production pipeline.

US: ISM Monitor
Recent development March's ISM figure showed a modest increase to 48.6 from 48.3 in February. The rise was mainly driven by increases in supplier deliveries and employment. The new orders index dropped to its lowest level since 2001. In April, all the regional surveys, except Philly, showed increases in the inventories, and all regions, except Kansas, showed decreases in employment. In summary, Kansas has shown a large increase, whereas Philly and Richmond have shown signs of weakness,

US: Further slowing in domestic economy
Overview: Following a 0.5% q/q AR increase in Q4, the economy continued to stutter ahead with a soft 0.6% q/q AR expansion in Q1. Although growth remained positive, the details of the advance national accounts report portrayed a much weaker economy.

Sweden: A mixed bag of data
The National Institute for Economic Research has just released the quarterly business confidence and household confidence surveys. In addition, Statistics Sweden (SCB) has published March retail sales data. In essence, it is a mixed bag of data and we do not make much of it – especially in terms of effects on the financial markets.

EU: EC forecasts assume sustainability of low inflation in Slovakia
European Commission published its spring forecasts. It foresees the harmonized inflation on average at 3.8% in 2008 and 3.2% in 2009. The Maastricht limit is seen by the EC at 4.1% and 3.4% in 2008 and 2009, respectively, which means that Slovak inflation will be below the reference limit in both years. Hence, the low inflation is viewed as sustainable in Slovakia in the forecasted horizon in the view of European Commission. Please recall that the EC convergence report (to be published in May

Lithuania: GDP growth slows further
GDP growth in Lithuania slowed to 6.4% y/y in Q1 08 from 8.0% y/y Q4 07, which is somewhat sharper than we had expected given other economic data for Q1. However, it is hardly surprising that GDP growth is losing steam given the excessive growth in recent years and the shocks that have hit the Lithuanian economy over the last year in the form of tighter credit conditions and higher inflation. We have for some time been puzzled by the fact that Lithuanian growth did not mirror the sharp

US: GDP Growth in 1Q08
? Q108 GDP growth could surprise to the upside, mostly due to inventory accumulation and solid net exports ? However, private consumption is likely to expand at its slowest pace since 1991, while NRI will continue to decelerate ? We maintain our scenario of sluggish economic growth in 1H08 and a slow recovery thereafter We expect GDP growth in 1Q08 to be 1% on a quarterly annualized basis ? stronger than in 4Q07 and higher than average consensus. Our forecast primarily reflects a rebound in

Foreign Trade
This report shows the cumualted foreign trade data related to a selected group of products.

Japan: Out of deflation - we raise our inflation forecast
Although CPI excl. fresh food in March was in line with expectations, increasing core inflation and the preliminary April CPI figures for Tokyo both indicate that inflation in Japan is increasing faster than expected. Hence we have increased our inflation forecast.

Euroland: IFO spurs doubts on German strength
Overview: The German IFO index disappointed in April and fell stronger than expected. The decline was broadly based across sectors and reflected lower expectations as well as assessment of current condi-tions. We have been puzzled about its strength in the past few months, but we may now start to see the slowdown in growth feeding through to IFO. The decline was not a total surprise as markets got a warning from the steep decline in Belgium business confidence yesterday.

Euroland: Weak Belgium confidence – will ifo follow?
What’s new? There was mixed data today with Euroland PMI weaker for manufacturing, but the German PMI was still quite strong with a robust improvement in the Service sector. Belgium business confidence data was also released today, and surprised strongly to the downside strengthening the case for a slowdown in Euroland manufacturing. The Belgium business confidence index fell from 1.2 to -7.9 (consensus 0.5). As can be seen in the chart below, the correlation between Belgium confidence and ifo

Euroland PMI: Manufacturing weakens further
Overview: Composite PMI was broadly unchanged but manufacturing was much weaker than expected driven by a big decline in new orders. This suggests that the strong euro and weaker export market growth are starting to weigh on growth. PMI continues to point to below-trend GDP growth rates at around 1%- 1.25%.

Japan: Exports slowing but will still boost GDP growth in Q1
According to March trade figures, export growth in Japan is slowing although not yet alarmingly as robust exports to Asia have largely compensated for weaker exports to the US in Q1 08. The Japanese trade surplus is declining rapidlyt as higher energy and commodity prices have boosted import growth significantly.

Poland: First signs of a slowdown?
Poland’s Central Statistical Office (GUS) released the retail sales and unemployment figures for March today. The retail sales numbers disappointed by growing 15.7% y/y – lower than the consensus expectation of 21.4% y/y and our expectation of 20.5% y/y. Unemployment was 11.1% in March – a bit below the consensus and our expectation of 11.3% y/y.

Japan: Revisions show resilient industrial production
Besides the usual revisions of preliminary industrial production figures based on additional new information, the weights used in calculating the volume of industrial production and shipments last week were changed to 2005 weights from 2000 weights. The revised industrial production figures show a very different picture of industrial production in early 2008, compared to the preliminary release based on old 2000 weights. According to the revised figures, industrial production and shipments of

US: Consumer Prices Rise In Line With Expectations
Consumer prices rose 0.3 percent and prices excluding food and energy items rose 0.2 percent. Both gains were in line with expectations and possibly even a little better than that. The core CPI was actually rounded up to 0.2 percent and the change over the past three months has fallen back to a 2.0 percent annual rate.

US: Housing Starts Resumed Downward Trend in March
Housing starts fell to a new cycle low of 947k with considerable drops in both single and multi-family products. Single family starts are now down to 680k, a level not seen since early 1991. Permits also continued to move down falling almost 60k units. We think there is further room for declines into at least early summer.

US: Industrial Production - Down in the First Quarter
Industrial production in March rose 0.3 percent after a sharp drop of 0.7 percent in February. For the first quarter, industrial production fell with weakness in motor vehicles, machinery and utilities. The data are consistent with our recession call. Capacity utilization was up in March but below the fourth quarter average.

US: Consumer Prices (March 2008)
? Headline CPI rose 0.3% in March, boosted by a 1.9% increase in energy prices ? Core consumer prices rose 0.2%; a 0.2% increase in prices of core services was partially compensated by a 0.1% decline in core commodities ? Although CPI figures came in line with expectations, upward pressures intensified

US: Elevated headline, softer core inflation
Overview: The March inflation numbers have sprung no major surprises. Headline inflation posted a 0.35% m/m reading, keeping the annual inflation rate unchanged at an elevated rate of 4.0%. Core inflation was a bit on the soft side, rising by 0.15% m/m, implying that the annual inflation rate rose slightly to 2.4% from 2.3% in February.

China: GDP growth slows less than expected
GDP growth in Q1 08 slowed less than expected to 10.6% y/y in Q1 08 (consensus: 10.4% y/y, DB: 10.3%) from 11.2% y/y in Q4 07 (see chart 1). However, growth in industrial production, fixed asset investment and retail sales accelerated sharply in March on the back of weak February activity due to the harsh winter storms closing much of southern China down in early February. Some of the strength in the March numbers can be explained by a catch-up on the extraordinarily weak February.

Poland: Inflation and wage growth ease a bit
The Polish Statistical Office has published consumer price inflation (CPI) and wage growth numbers for inflation for March. Polish inflation eased to 4.1% y/y in March from 4.2% y/y. This was a bit lower than the consensus expectation and our expectation of 4.2% y/y. Wage growth eased to 10.2% y/y from 12.8%y/y – below our expectation of 10.8% y/y and the consensus expectation of 11.1%. Similarly, employment growth surprised a bit on the low side, growing 5.8% y/y – a bit below our expectation

US: Retail Sales - Surprise Rise in March
Retail sales rose 0.2 percent in March, above the consensus expectations for flat sales. Excluding motor vehicles and gas, sales were unchanged. Retail sales were mixed with motor vehicles, food, gasoline stations and sporting goods posting gains. Discretionary sales continue to lead declines. First quarter consumer spending will be slow.

USA: another soft retail sales report
Overview: The March retail sales report was weak and added little to the current picture of US consumers being under pressure. Total retail sales posted a minor gain of 0.2% m/m, while sales excluding autos rose by 0.1% m/m.

Sweden: Inflation surprise tough for short bonds
Swedish inflation in March did not follow the pattern of Denmark and Norway, but rather surprised on the upside: both CPI and CPIX turned out 0.2 percentage points above monthly expected changes. Looking at the data, it is clear that part of the explanation has to do with the usual inflation drivers, ie, commodityrelated prices on food and energy. Food price increases were clearly higher than expected, and may possibly continue to surprise on the upside in the short term. This also risks

Hungary: CPI inflation slowed to 6.7% y/y in March
Consumer prices rose 0.6% m/m in March. The 12-month inflation rate slowed to 6.7% (from 6.9% published for February). The y/y figure proved to be slightly lower than my estimation of 6.9% and was in line with the market consensus. The positive surpise came from food prices, rising by just 0.4% m/m in March. Thus, the main drivers of the March inflation were prices of fuel and clothes, rising by 3.3% m/m and 2.8% m/m, respectively. The latter is due to the usual seasonality in Hungary. Prices

Slovakia: March inflation
1. CPI inflation reached 0.3% m/m in March, putting the annual growth to 4.2% up from 4.0% in February. That matched our forecasts and was a notch above the market consensus at 4.1%. 2. The structure of inflation was broadly in line with our expectations – the main driver were heat prices (which increased by 1.3% m/m as of March) and food prices, which rose by 0.3% m/m, a bit more than we assumed. Imputed rents increased in line with our forecast by 0.7% m/m. 3. The food prices continue to

Week of 5/12/2008 thru 5/16/2008
Monday, May 12, 2008 Economic 2:00pm April Budget Statement (last $177.7B) Events 9:15amFed's Evans speaks about US economic outlook in Illinois. 7:15pm Fed'sLockhart speaks at financial markets conference. AFSA Finance IndustryInvestor's Conference. IEEE Photovoltaic Specialists Conference.International Financial Services Association Trade Conference.SourceMedia CTST Conference. UBS Global Financial Services Conference.Trades Ex-dividend: NE $0.04, ED $0.585, CFC $0.15, FO $0.42. Earnings

Sharp rise in import and consumer prices will have been mainly due to energy in April
High gasoline prices will contribute to decline in consumer sentiment, but support retail sales The first two May manufacturing surveys are likely to show ongoing contraction Industrial production could have declined in April, given the drop in working hours Housing starts and building permits are expected to have fallen further in April The Congressional Budget Office (CBO) estimates that the usual April budget surplus will have reached $160bn this year , a good $17bn less than last year.

German GDP is expected to have soared in Q1
EMU and French GDP are likely to have grown robustly in Q1 EMU industrial production is expected to have decreased slightly in March HICP inflation in the euro area will probably be confirmed at 3.3% yoy for April German GDP will probably have increased by at least 0.7% quarter-on-quarter in Q1 2008. Output in the producing sector and retail sales alone indicate a growth rate of even more than 1%. On 15 May, Destatis (the German Federal Statistical Office) is publishing a ?flash release? on

May 2008

ECB set to keep refi rate unchanged
German industrial new orders will probably have remained more or less unchanged in March Output in the German producing sector is likely to have decreased in March German industrial new orders might only have stabilized in March , as the correlated climate indicators sent mixed signals. However, the February figure could be revised upwards. Output in the German producing sector will probably have dropped in March , particularly because construction activities declined. French industrial

ISM non-manufacturing index is likely to have fallen in April
Trade deficit could have remained on a higher level in March, partly due to higher import prices The ISM non-manufacturing index plummeted to 44.6 at the beginning of the year, but recovered to 49.6 in March. However, given restrictive seasonal adjustment factors, the sharp deterioration in consumer confidence and the fact that the housing market correction has spread to other sectors, we forecast that the ISM nonmanufacturing index will have declined to about 48.5 in April , indicating that

Week of 5/5/2008 thru 5/9/2008
Monday, May 05, 2008 Economic 10:00am April ISM Non-Manufacturing Composite (last 49.6) Events 8:30pm Fed Chairman Bernanke speaks on mortgage foreclosures .FDA joint meeting of Anesthetic & Life Support Drugs AdvisoryCommittee and the Drug Safety & Risk Management Advisory Committee.YUM Analyst/Investor Conference. Credit Suisse OTC Conference. DeutscheBank Health Care Conference. JP Morgan Energy Symposium. PostilionBanking Conference. S&P Bank Sector Hot Topics Seminar.

May 2008 Calendar - Update
May 2008 Calendar

05 May - 09 May 2008
The Weekly Overview shows significant economic events during the Week 05 May ? 09 May 2008

Consumer confidence is likely to have declined noticeably again in April
Q1 GDP could have decreased slightly for the first time since 2001 FOMC is likely to slow the pace of interest rate cuts PCE core deflator will probably only have gone up moderately in March ISM manufacturing index could have plunged to a four-year low in April Non-farm payrolls could have fallen by about 80k again in April Since peaking in July 2007, the Conference Board?s consumer confidence has already fallen by about 50 points to 64.5, but it is unlikely to have bottomed out yet: we

German retail sales might have stabilized in March
CPI inflation in Germany is likely to have decelerated to 2.8 % yoy in April The flash estimate for April could show EMU inflation slowing slightly to 3.5 % yoy EMU industrial confidence and economic sentiment will probably have deteriorated in April German adjusted unemployment could have risen slightly in April As from Monday, the German Länder are expected to start publishing regional CPI data for April. Subsequently, the preliminary results for national German CPI in April will be

Week of 4/28/2008 thru 5/2/2008
Monday, April 28, 2008 Economic 3:00pm US Treasury Financing Estimates Events 12:30pm US Treasury's Steel speaks at SABEW Conference in Baltimore. 5:30pm Richmond Fed Staffers speak on housing in Baltimore .10:00am American Express Shareholders Meeting. SMi Group SustainableEnergy Conference. Cambridge Healthtech Bio-IT Conference. CalyonMilken Institute Global Conference. Trades Ex-dividend: NE $0.75, TXN$0.10. Earnings Before the Open: ACV, ARLP, ALO, BEAV, BWP, CG , CNA , CORS, COT, DCO,

M3 growth probably slowed down to 10.3% yoy in March
The German ifo business climate is expected to have deteriorated in April The April RBS PMI manufacturing indices for Germany and the EMU could have fallen M3 has been growing at a more leisurely pace for several months now. After having peaked at 12.4% in November, the annual growth rate fell to 11.3% in February, and is likely to have slipped by a further percentage point to 10.3% in March. The narrow monetary aggregate M1, which consists of cash and overnight deposits, is only likely to

Durable goods orders are not likely to have rebounded in March
Existing and new home sales could have continued declining in March UMI?s final April consumer sentiment could remain close to its 26-year low In February, existing home sales had risen for the first time in seven months, perhaps due to lower prices. However, the pending home sales index fell to a cyclical low in February, and as it is regarded as an indicator of future existing home sales, the latter will probably have decreased further in March, from 5.03m to 4.85m. Whereas the

Week of 4/21/2008 thru 4/25/2008
Monday, April 21, 2008 Economic None seen Events 9:30amFed's Evans gives remarks on Smart Money Week. 1:30pm Fed's Krosznerspeaks on community development in Minnesota. 2:30pm Fed's Evans speaksto high school students in Illinois . Deutsche Bank Latin AmericanClient Conference, MAGIC International Conference. Trades Ex-dividend:BBY $0.13, BK $0.24, EOC $0.798, PSD $0.25. Earnings Before the Open: ALDN, AME, AMLN, ACI, BAC , BOH, CNB, LLY, GCI, HAL , HBI, HAS, LEE, MAT, MRK, NVS, QXM, DGX, SAY,

21 April ? 25 April 2008
The Weekly Overview shows significant economic events during the Week 21 April ? 25 April 2008

March retail activity is likely to have remained weak apart from gasoline station sales
Higher energy prices will have raised March inflation data significantly First manufacturing surveys will probably still indicate contraction in April Industrial production and leading indicators are showing ongoing weakness in March Retail sales went down by 0.6% mom in February, mainly due to dropping auto sales and ongoing weakness in sales of building materials and furniture. Sales at gasoline stations fell by 1.0% mom, but due to the rise in gasoline prices, we expect them to have

14 April ? 18 April 2008
The Weekly Overview shows significant economic events during the Week 14 April ? 18 April 2008

Week of 4/14/2008 thru 4/18/2008
Monday, April 14, 2008 Economic 8:30am March Advance Retail Sales (last ?0.6%, ex autos ?0.2%) 10:00am Feb Business Inventories (last 0.8%) Events 3:15pm Fed's Warsh speaks about financial markets in New York. Trades Ex-dividend: EOG $0.12, GGP $0.50, MGRC $0.20, KWR $0.23, TOC $0.318. Earnings Before the Open: ETN, WERN, GWW. After the Close: AMLN , ELS, INFY, JBHT , STLY. Tuesday, April 15, 2008 Economic 8:30am March PPI (last m/m 0.3%, y/y 6.4%, ex food & energy last m/m 0.5%, y/y

German ZEW economic sentiment is not likely to have continued improving in April
EMU industrial production is expected to have increased slightly in February HICP inflation in the euro area will probably be confirmed at 3.5% yoy for March In April, the German ZEW economic sentiment is only likely to have stabilized. This is indicated by several factors. Both the US ISM manufacturing index and the ifo business expectations in the German business sector rose slightly in March. As a result of the increase in short and long-term interest rates, the German yield spread has

Output in the German producing sector will probably have suffered a setback in February
ECB set to keep refi rate unchanged, likely to emphasize inflation risks Output in the German producing sector probably suffered a setback in February , after having soared twice and although most of the correlated indicators improved. For similar reasons, Italian industrial production might have decreased in February , whereas French industrial production could have remained unchanged. The February German trade balance is expected to have decreased slightly in February , whereas the current

The trade deficit is likely to have narrowed in February
Import prices will probably have increased by 2% mom due to a sharp rise in energy prices UMI?s consumer sentiment could deteriorate further in April On 18 March, the FOMC lowered the fed funds rate by 75 basis points to 2.25%. Due to the slowdown in economic growth and the financial crisis, rates have been reduced by a total of 300 basis points within 7 months. But the FOMC minutes might reveal a vigorous discussion amongst members as to whether the rate cuts so far had been too aggressive,

07 April ? 11 April 2008
The Weekly Overview shows significant economic events during the Week 07 April ? 11 April 2008

Week of 4/7/2008 thru 4/11/2008
Monday, April 07, 2008 Economic 3:00pm Feb Consumer Credit (last $6.9B Events 9:30amUS Treasury's Paulson speaks at IADB meeting in Miami. 4:00pm USTreasury's Paulson holding news conference in Miami. 5:30pm Fed'sYellen speaks in Seattle. 5:30pm Fed's Kohn speaks in San Francisco .8:00am FDA Meeting on QT & Arrhythmia. Bio Europe SpringConference, Howard Weil Energy Conference, Independent Petroleum Assoc.of America OGIS New York Conference. Trades Ex-dividend: LNC $0.415, MA$0.15, PGC

April 2008
Click the image below in order to see full size calendar.

April 2008 Calendar - Update
April 2008 Calendar

Both ISM indices will probably show ongoing contraction in March
Deterioration in labour market conditions is likely to have continued in March The Chicago PMI plummeted by seven points to 44.5 in February, well below the expansion threshold. As this indicator is quite volatile, it could have bounced back somewhat, but at 46.5 it would still indicate economic contraction in March. The ISM manufacturing index fell to 48.3 in February, the second reading below 50 in three months. In March, the results of the first two manufacturing indices were not

31 March ? 04 April 2008
The Weekly Overview shows significant economic events during the Week 31 March ? 04 April 2008

Week of 3/31/2008 thru 4/4/2008
Monday, March 31, 2008 Economic 9:45am March Chicago Purchasing Manager Index (last 44.5) 10:00am March NAPM-Milwaukee (last 53) Events 12:00pm Fed's Yellen speaks in San Francisco on foreclosures .Credit Suisse Asian Investment Conference, CTIA Wireless Conference,Terrapinn Asia Power & Energy Congress. Trades Ex-dividend: CMCSA$0.063, UNH $0.03, GES $0.08, VICR $0.15, ALDA $0.15. Earnings Before the Open: RDNT, SGK. After the Close: GIII, FUL, JRT, RMG, UBET. After the close HRC will be

German industrial new orders will probably have rebounded in February
German retail sales might have increased again in February EMU industrial confidence and economic sentiment are likely to have improved in March The German adjusted unemployment rate could have declined slightly to 7.8 % in March M3 growth probably slowed down to 11.4% yoy in February The flash estimate for March is likely to show EMU inflation rising to at 3.4 % yoy German industrial new orders might have rebounded in February , because most of the correlated climate indicators improved.

Week of 3/24/2008 thru 3/28/2008
Monday, March 24, 2008 Economic 10:00am TAF Auction 10:00am Feb Existing Home Sales (last 4.89M, m/m ?0.4%) 11:00am US Treasury's 2- and 5-Year Note Announcement Events Trades Ex-dividend: ALNC $0.24, AGL $0.11, CLFC $0.05, CORS $0.25. Earnings Before the Open: CFSG, SGK, TIF , WAG . After the Close: CHCI, PVH, RDNT, SONC. Tuesday, March 25, 2008 Economic 9:00am Jan S&P/CS Home Price Index (last 184.9), Jan S&P/CS Composite-20 y/y (last -9.1%) 10:00am TAF Auction Results 10:00am Mar

Consumer confidence indicators are likely to deteriorate further in March
Existing and new home sales could have declined again in February, albeit only slightly Durable goods orders could have gone up moderately in February, due to aircraft orders PCE core deflator?s annual rate will probably have decreased to 2% in February Existing home sales fell to a historical low of 4.89m in January, 33% below the peak reached in September 2005. Given that pending home sales, which have a forerun of 1 to 2 months, also remained close to their record low in January, we expect

German retail sales probably have increased again in February
CPI inflation in Germany is likely to have accelerated to 3.0 % yoy in March Both the March German ifo business climate and the April GfK German consumer confidence are expected to have deteriorated In March , the German ifo business climate index might have suffered a setback, after having improved unexpectedly in February. The German ZEW economic sentiment has recovered, but the US ISM manufacturing index and the German yield spread have both deteriorated, with short-term interest rates

17 March ? 21 March 2008
The Weekly Overview shows significant economic events during the Week 17 March ? 21 March 2008

The FOMC is expected to cut the federal funds rate sharply again
NY Empire and Philadelphia Fed index are expected to show further contraction in March Industrial production and leading indicators are both likely to have fallen in February Housing starts and building permits will probably have continued to decline in February The Q4 current account deficit is likely to rise from $178.5bn to about $185bn , in line with the widening of the trade deficit. In addition, the surplus on investment income could have fallen back, after having increased to more than

Week of 3/17/2008 thru 3/21/2008
Monday, March 17, 2008 Economic 8:30am Q4 Current Account Balance (last -$178.5B), Mar Empire Manufacturing (last ?11.7) 9:00am Jan Net Long-term TIC Flows (last $56.5B), Jan Total Net TIC Flows (last $60.4B) 9:15am Feb Industrial Production (last 0.1%), Feb Capacity Utilization (last 81.5%) 1:00pm Mar NAHB Housing Market Index (last 20) Events CowenHealth Care Conference, Credit Suisse Asset Management StrategicCouncil Conference, FirstEnergy Capital Global Energy Conference.Trades

The RBS purchasing managers' index for the EMU manufacturing sector
The March RBS PMI manufacturing index for the EMU could have remained unchanged at best The RBS purchasing managers? index for the EMU manufacturing sector and the Italian consumer confidence might have remained unchanged at best in March . However, the RBS purchasing managers? index for the German manufacturing sector could have improved, as most of the correlated ifo indicators went up recently. French consumer spending is likely to have recovered in February , because French consumer

Trade deficit is likely to have risen to about $60bn in January
Import and consumer price increases will probably have been more moderate in Februar UMI?s preliminary March consumer sentiment could have fallen even lower Wholesale inventories went up sharply by 1.1% mom in December, but we expect a much smaller increase of 0.5% mom in January. However, inventories of non-durable goods might have risen noticeably again due to high oil prices. Total business inventories could have gone up by 0.7% mom in January , as we already know that factory orders jumped

Week of 3/10/2008 thru 3/14/2008
Monday, March 10, 2008 Economic 10:00am Jan Wholesale Inventories (last 1.1%) 11:00am Treasury's 10-Year Note Announcement Events BearSterns Media Conference, Credit Suisse Global Agrochemicals Conference.TXN Mid-Quarter Update (after the close). Trades Ex-dividend: HPQ$0.08, APC $0.09, NWS $0.06, UNP $0.44. Earnings Before the Open: AIMC, BX , XJT, GOK, HITK, HYGS, IGTE, LCUT, LMIA, NOVN, SIX, MTN. After the Close: ASHW, CSR, DWRI, FL , HOV , IPAR, JSDA, MIVA, UWN, FACE, QTWW, RADN, RSCR,

German ZEW economic sentiment is expected to deteriorate in March
EMU industrial production might have rebounded in January HICP inflation in the euro area is likely to be confirmed at 3.2% yoy for February, whereas German inflation will probably be revised upwards In March, German ZEW economic sentiment is expected to decline again. The US ISM manufacturing index and the ifo business expectations in the German business sector have both deteriorated. German short-term interest rates have increased, but long-term interest rates have declined recently. The DAX