May 19th, 2008

US Consumer confidence much weaker than expected on Friday at 59.5 vs. 62.0 mktexp
Housing starts were up 8.2%, biggest month on month in 2 years
Goldman raised oil forecast to $141bb from $107 in 2H08 citing supply constraints

Hong Kong
Q1 GDP rose 7.1%, bot mktexp of 6.0%; govt said full year should be at higher end of 4-5% forecast
Forecast headline inflation at 3.4% for '08

Singapore
April NoDX huge surprise at 5.4% vs. 1.6% mktexp
- electronics and pharmaceuticals were down, but was petrochemical companies that saved the day
- despite emphasis on trade with US, was down 17% with US, but up 19% with China, now 2nd largest partner
- EU which is largest partner actually had first pickup in demand
Q1 GDP data oand April CPI on Friday 23May; good numbers should resume downward trend
- looking for 6.9% Q1 GDP (down from 7.2%) and looking for 7.2% CPI from food/energy
Main thing is despite strong SGD appreciation, did not affect Sing trade figures

South Africa
Lack of domestic data keeps international markets in focus; strong commodities sentiment will push towards 7.3900
Next week will bring Q1 GDP, CPIX, credit and trade data; should be ZAR negative
sell at 7.40 with a stop at 7.29 and 2-3 week target of 7.75
Still expecting 12Jun will see a 50bp hike
Eskom decision released on 06June, very close to MPC decision; friday NERSA begins the hearings on Eskom
- pressure from government, unions, and political parties => energy summit with NEDLAC ( National economic development & labor council) => utility agreeing to phase increases over 5 years in lieu of 52% increase
- will change one-time inflationary expectations, but create expectations of rising prices over extended time; less short-term, more long-term
Mboweni speech on monetary policy conference on Thursday
Report that Mathews Phosa, treasurer-general of ANC, reportedly asked Mbeki to resign and call early elections
100day MA = 7.5960; 7.4580 lower end of bollinger; 7.4540 0.0% fibonaci

Thailand
BoT Chief Economist Sripayak said CB wouldnt adopt policies to hurt economy, but stable rates effectively would be monetary easing
PM Samak said cabinet reshuffling would affect no more than 3 positions
Meeting on Wed; expect rates unchanged
- in Q1 the core reading at low end of 1.5-2.5% band; headline at 6.2% in April
Think 32.25 should provide strong support with political uncertainty and growth prospects

Vietnam
2001 to 2005 real GDP averaged 7.5%, got aims for 8.5% in '06 to '10
In '08 we may see growth to 5% yet inflation has jumped from 6.8% a year ago to 19.4% from credit/money growth and int'l prices
Dong wil appreciate in '08 as 1) need to reduce inflation 2) VND desire to promote foreign investment desite inflow of USD
US is only 5th largest investor in Vietnam, the Ministry of Planning and investment would like to increase the role
Tighter policy
- price controls on 'strategic products' like coal, steel
- reserve requirement raised to 11% from 10% before in Feb
- 30Jan rates raised at 100-150bp to 7.5%
- bank lending growth capped at 30% in '08 from 40% in '07
GS: State bank will rely on high IR and credit control to reduce domestic overheating, while maintaining fixed exchange rate with moderate downward crawl in '08 - '09
- hiked rates from 8.75% to 12%; commercial banks cannot offer savers rates above 150% of the bast rate
- discount rate at 11% from 6% and refinancing rate at 13% from 6%

Iceland
- Sweden, Norway, and Denmark each guaranteeing swaps up to 500mio EUR per for EUR/ISK swap
22May rate decision