Economic Data

- (GE) Germany Jun Current Account: €12.9B v €13.8Be; Trade Balance: €14.1B v €12.0Be; Imports M/M: +1.9% v -2.0%e; Exports M/M: 3.8% v 1.5%e

- (FI) Finland Jun Preliminary Trade Balance: €385M v €160M prior

- (FR) Bank of France July Business Sentiment: 101 v 101e

- (CZ) Czech July CPI M/M: 0.3% v 0.3%e; Y/Y: 1.9% v 1.9%e

- (CZ) Czech July Unemployment Rate: 8.7% v 8.7%e

- (TU) Turkey Jun Industrial Production M/M: -2.1% v 1.7% prior; Y/Y: 10.4% v 15.0% prior; Industrial Production NSA Y/Y: 10.2% v 10.5%e

- (DE) Denmark Jun Current Account (DKK): 8.5B v 6.7B prior; Trade BalANCE Ex-Shipping: 4.8B v 7.5B prior

- (TT) Taiwan Jul Total Trade Balance: $2.2B v $1.4Be; Total Exports Y/Y: 38.5 v 31.0%e; Total Imports Y/Y: 42.7% v 39.7%e

- (EU) Euro Zone Aug Sentix Investor Confidence: 8.5 v 1.6e

- (HU) Hungary's Q1 non performing loan rate 8.3% v 7.8% q/q; Household non performing loan rate 10.1% v 9.3% q/q - regulator

- (GR) Greece Jun Industrial Production Y/Y: -4.5% v -4.7%e

- (HK) Hong Kong July Foreign Currency Reserves: $260.7B v $256.8B prior

Fixed Income:

- (GE) Germany sells € in 6-month BuBills; Avg yield: 0.4774% v 0.4226% prior; bid-to-cover 2.1x v 1.9x prior


SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM


Notes/Observations

- Traders and dealers now set sights on FOMC after Fridays lower-then-expected US payroll data. Dealers ponder if Fed purchases more bonds how would this creates jobs

- Bank of Japan (BOJ) begins a two-day policy meeting. Might discuss the steady rise of JPY and its impact on the economy.

Equities

- As of 5:45am ET Euro Stoxx 50 Index 1.4% at 2,819; DAX Index +1.3% at 6,337; CAC-40 Index +1.5% at 3,771 and FTSE 100 Index +1.4% at 5,405

- Austrian name Andritz [ANDR.AS] opened 2.6% higher after results significantly beat analysts' estimates. The quarter's order intake and backlog also increased and the company reaffirmed its expectations of a flat to slightly higher revenue from 2009 levels. Energy stock, RWE [RWE.GE] opened higher by 1.1% as German press reported over the weekend that country's ruling coalition supported extending average lifespan of the country's nuclear reactors by 14 years. Bourbon [GBB.FR], the French maritime transport group, reported an 11% increase in revenues on a yearly basis. The average utilization rates increased to 81% from 78.1% a quarter ago and the group expected this trend to continue into 2011.

- Among UK names, Morgan Sindall [MGNS.UK] traded down as profit and revenue declined on lower activity. Despite an improvement in forward order book, group expects challenging conditions in the construction sector. Southern Cross Healthcare [SCHE.UK] reported a slight increase in revenue on a yearly basis but the average occupation in its homes decreased to 84% frin 86.9% a year ago. Furthermore, short-term outlook remained challenging as pressure grows to reduce overall public sector spending. BP [BP.UK] was the top performer as its shares raised 2.1% after company confirmed that there was no oil was flowing into the Gulf of Mexico. This was reported by weekend press. Dragon Oil [DGO.UK] reported increasing revenues, profit and average production. Company said it was on track to complete a total of 11 wells during 2010 with target production growth of up to 10%.

Speakers:

- German DIHK Chambers of Commerce Export Outlook for 2010-12 periods: Exports to grow 11% in 2010 and 8% in 2011. It noted that the 2011 exports would come close to 2008 record level of €985B. it noted that imports to rise by 9.5% in 2010 and 9.5% in 2011. The DIHK noted that German exports were benefiting from the positive development on global markets and above all from the rise of emerging markets supported by capital goods, stimulus packages and the relatively weak euro exchange rate

- China Gov' Planner: Getting more confident that 2010 CPI will not exceed 3% target

- Indonesia Fin Min Martowardojo stated that 2010 GDP growth was seen at 5.9% and at 6.3% in 2011. He expressed optimism that 2010 inflation in 2010 will be within the central bank's target range of 4% to 6%

- ECB'S Orphanides: Remains sensitive to banks' liquidity needs

- North Korea has fired artillery shells off of West Coast of its country- South Korean Media

- Currencies: The USD entered the European morning on a defensive footing in the aftermath of last Friday's US payroll report but had yet to establish fresh multi-month lows from Friday's levels. The GBP/USD again failed to break the 1.60 level while the EUR/USD again failed to move above 1.3333. The currency markets were poised to hear from two key central bank over the next 48 hours (FED and BOJ). The Fed seems poised to downgrade its outlook on the US economy and make to ensure policy was not constraining growth. The BOJ might be force to take action following a protracted period of yen strength. The JPY was softer against the major pairs with USD/JPY trading at 85.60 ahead of the NY morning.

In the Papers-Geopolitical:

- Private sector demand in Britain may not be enough to offset the expected public sector cuts according to an article in the Independent. Citing the Chartered Institute of Personnel and Development (CIPD) and KPMG's Labour Market Outlook, approximately 33% of employers intend to reduce its workforce, an increase against the 29% reading in spring. On a quarter-on-quarter basis, the reduction in the workforce is seen at 5.5% against the 3.6% prior.

- The Telegraph's Evans-Pritchard noted that inflation fears related to Russia's grain export ban should not deter the Federal Reserve from expanding its easing measures. Further, Goldman Sach's chief economist for the US Hatzius believes that the Fed will restart its quantitative easing this week.

- The London Telegraph addressed the Bank of England's upcoming quarterly inflation report noting that the central bank is expected to lower its May forecasts for growth to 3.2% in 2011 and 3.4% in 2012. The growth forecasts may be cut in order to take into account the impact of Britain's austerity measures, another possible credit crunch, and risks related to the slowdown in the US and EU.

- Following the rising discontent over Russian government's handling of forest fires, the Wall Street Journal reported widespread criticism over the government preparation and reaction towards the fires in Russia. President Medvedev, Prime Minister Putin, and Moscow Mayor Luzhkov were said to be criticized even as they tried to deflect blame towards local officials.


Looking Ahead

- 7:00 (IR) Ireland July Consumer Confidence: No est v 67.9 prior

- 8:30 (CL) Chile July Trade Balance: $1.1Be v $1.2B prior; Exports: No est v $5.3B prior; Imports: No est v $4.1B prior

- 9:00 (FR) France to sell €8.5B in Bills

- 9:30 (EU) ECB calls for bids in 7-day and 1-month refi operation

- 10:00 (MX) Mexico July Consumer Prices M/M: 0.2%e v 0.0% prior; Y/Y: 3.7%e v 3.7% prior; CPI Core M/M: 0.3%e v 0.1% prior

- 10:00 (MX) Mexico Jun Final Trade Balance: No est v -$340.5M prior