Market Economics | Interest Rate Strategy - BNP PARIBAS ...

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Economic Calendar: 7 - 14 May (cont) GMT Local Previous Forecast Consensus Thu 13/05 23:50 08:50 Japan Current Account (nsa) : Mar JPY1471bn JPY2020bn n/a 23:50 08:50 M2 y/y : Apr 2.6% 2.7% n/a (12/05) 01:30 11:30 Australia Unemployment Rate : Apr 5.3% 5.2% n/a 01:30 11:30 Employment Change : Apr 19.6k 29.7k n/a 08:00 10:00 Eurozone ECB Monthly Bulletin 08:30 09:30 UK Trade Balance : Mar GBP-6.2bn GBP-6.5bn n/a 08:30 09:30 Non-EU Trade Balance : Mar GBP-3.3bn GBP-3.5bn n/a 08:30 09:30 DCLG UK House Prices y/y : Mar 12:30 08:30 US Import Prices m/m : Apr 0.7% 0.8% 0.8% 12:30 08:30 Import Prices Ex Petroleum m/m : Apr -0.2% 0.1% n/a 12:30 08:30 Initial Claims 444k 430k 436k 13:00 09:00 Fed’s Kohn Speaks on Monetary Policy in Ottawa 17:00 13:00 Fed’s Kocherlakota Speaks in Winsconsin Fri 14/05 07:00 09:00 Spain CPI m/m : Apr 1.1% 1.1% n/a 07:00 09:00 CPI y/y : Apr 1.6% 1.5% n/a 08:00 10:00 Eurozone ECB’s Constancio Speaks at Conference in Lisbon 08:00 10:00 Italy CPI (Final) m/m : Apr 0.4% (p) 0.4% n/a 08:00 10:00 CPI (Final) y/y : Apr 1.5% (p) 1.5% n/a 08:00 10:00 HICP (Final) m/m : Apr 0.9% (p) 0.9% n/a 08:00 10:00 HICP (Final) y/y : Apr 1.6% (p) 1.6% n/a 12:30 08:30 US Retail Sales m/m : Apr 1.9% -0.1% 0.3% 12:30 08:30 Retail Sales Ex-Autos m/m : Apr 0.9% 0.2% 0.5% 13:15 09:15 Industrial Production m/m : Apr 0.1% 0.8% 0.6% 13:15 09:15 Capacity Utilisation Rate : Apr 73.2% 74.0% 73.7% 13:55 09:55 Michigan Sentiment (Prel) : May 72.2 71.0 73.5 14:00 10:00 Business Inventories : Mar 0.5% 0.3% 0.4% During 17-18 Eurozone Finance Ministers Meet Week Release dates and forecasts as at c.o.b. prior to the date of publication: See Daily Economic Spotlight for any revision Source: BNP Paribas Market Economics 7 May 2010 Market Mover 70 www.GlobalMarkets.bnpparibas.com
Key Data Preview Chart 1: US Payrolls on the Upswing Source: Reuters EcoWin Pro Apr (f) Mar Feb Jan Payroll Jobs k 165 162 -14 14 Unemployment Rate % 9.7 9.7 9.7 9.7 Key Point: Nonfarm payrolls will pretty much match the March pace with a 165k gain; the unemployment rate should hold at 9.7%. BNP Paribas Forecast: Payrolls to Stay Positive US: Labour Report (April) Release Date: Friday 7 May We forecast a gain of 165k jobs in nonfarm payrolls in April after a 162k increase in March. The tone of the report will be a little less positive than March as the composition of hiring will be more tilted to temporary Census workers who we look to account for 110k jobs after a 48k gain a month prior. Meanwhile, private sector hiring is expected to stay positive, but to fall back somewhat from the March pace (this was boosted by weather-related swings). Private sector hiring is expected to add 70k after a 123k gain in March. The construction sector should see job losses resume after a recovery from February weather disruptions last month. The manufacturing sector should continue to add to nonfarm payrolls, as should the private service sector led by temporary hiring. Meanwhile, state and local governments are expected to continue to weigh on overall job growth as governments grapple with the ongoing budget crisis. The lack of downward momentum in initial jobless claims highlights that hiring is picking up gradually. We expect job growth will keep pace with labour force gains and for the unemployment rate to hold steady at 9.7%. Hours worked should post a robust gain, leading to an improvement in disposable income for consumers while average hourly earnings are expected to remain soft. Chart 2: Canadian Employment Source: Reuters EcoWin Pro Apr (f) Mar Feb Jan Unemployment rate % 8.2 8.2 8.2 8.3 Payroll jobs (k) 20.0 17.9 20.9 43.0 BNP Paribas Forecast: Upward Momentum Canada: Labour Report (April) Release Date: Friday 7 May We expect Canadian employment to increase by 20.0k in April, marking the fourth consecutive monthly rise. While the labour market remains on a healthy rebound, the pace of improvement has eased slightly compared to the beginning of the year, pointing to some moderation in economic growth. Indeed, hours worked slipped 0.4% in March, following a three-month run of gains that saw backto-back 0.2% rises in January and February and a 0.6% jump in December. Earnings growth should also remain subdued in April, supportive of our expectations for non-threatening underlying inflation. We forecast the unemployment rate to remain unchanged at 8.2% as the expected monthly gain in employment should largely offset an increase in the labour force. Key Point: Canadian employment should increase further in April, but wage gains are set to remain subdued. Market Economics 7 May 2010 Market Mover 71 www.GlobalMarkets.bnpparibas.com
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Market Economics | Interest Rate St
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UK: all eyes on the election US: re
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Event response The ECB is being ove
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Eurozone Periphery: Compare and Con
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over 20% in Q1) and, last but not l
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Market Stress Charts • Signs of s
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Chart 7: Greek Bank CDS* 900 Greece
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• The plan also contains a number
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Germany: Downs and Ups • The impa
Page 19 and 20: Retail sales data from month to mon
Page 21 and 22: On inflation, the statement was als
Page 23 and 24: quarterly average of 2.7% in the fi
Page 25 and 26: US Credit: Still the Recovery’s B
Page 27 and 28: Japan: Rising Chance of Sales Tax H
Page 29 and 30: BNP Paribas Surprise Indicator •
Page 31 and 32: UK headline After surprising to the
Page 33 and 34: US: Supply Could Affect Swap Spread
Page 35 and 36: steep curve is typically associated
Page 37 and 38: decline. We continue to maintain ou
Page 39 and 40: Chart 12: 90-119 Day Dlq for FRE 90
Page 41 and 42: the gamma sector for some time now.
Page 43 and 44: EUR: Limited Nervousness at ECB Ten
Page 45 and 46: with the big redemption (EUR 17.7bn
Page 47 and 48: measures are not promptly taken to
Page 49 and 50: Table 1: BNP Paribas' Inflation For
Page 51 and 52: Table 3: BNP Paribas' Inflation For
Page 53 and 54: Table 1: BNP Paribas Carry Analysis
Page 55 and 56: What’s the call? It is relatively
Page 57 and 58: Update on FIN SEN and FIN SUB 5/10y
Page 59 and 60: Germany 10y: Within MT falling wedg
Page 61 and 62: Judging Currencies by Liquidity •
Page 63 and 64: type of regulation would reduce mon
Page 65 and 66: Euro Dives • The euro is collapsi
Page 67 and 68: Currency Spot Trade Recommendations
Page 69: Economic Calendar: 7 - 14 May (cont
Page 73 and 74: Key Data Preview Chart 5: UK Manufa
Page 75 and 76: Key Data Preview Chart 9: French GD
Page 77 and 78: Key Data Preview Chart 13: US Indus
Page 79 and 80: Treasury and SAS Issuance Calendar
Page 81 and 82: Central Bank Watch Interest Rate EU
Page 83 and 84: FX Forecasts* USD Bloc Q2 '10 Q3 '1
Page 85: RESEARCH DISCLAIMERS: IMPORTANT DIS
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