Greece, China, US Unemployment

  • The scent of optimism is being gently wafted over financial markets by the opening of Germany's chequebook. The terms under which Greece receives aid (if they need it) have a larger than expected EUR45bn total package, though the Euro Area interest rates are above those normally levied by the IMF.
  • The support of the Euro Area should allow Greece to auction bills tomorrow. Greece will also go ahead as planned with their US bond issue. Assuming bills can be rolled, the next key event is a bond maturing in mid May.
  • China reported a large trade deficit in March, with imports (specifically oil, copper and cars) the driver. The Commerce Ministry has leapt on this as a reason not to change the currency rate - though we think that there will be a gradual move this year.
  • Following better than expected employment figures (in particular hours worked) our US team have revised up their Q1 and Q2 GDP estimates. This raises the annual forecast for 2010 to 3.3% (was 3.0%). The public sector continues to drag, with the private sector growing 4%. 
Source UBS

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