May 22nd, 2008

CNY: Fell to multi-year lows at 6.9450; 3.7% in the last month
Fed statement: no longer appropriate for the statement to emphasize the downside risks to growth; members concerned about upside risks to inflation and commodity prices
- Fed on hold at 2%
Fed cut growth forecast for '08 to 0.3-1.2%, from 1.3-2%


Singapore
Moody's reported negative outlook on Sing REITs from weak property sentiment and tight liquidity conditions; a SGD negative
April CPI expected at 7.6% in Apr, up from 6.7% in March, SGD NEER would be allowed to hold in the upper end of the band
GDP expected at 7.2% y.y; full year prediction is 5.8%, top end of 4-6% govt forecast

South Africa
Eskom placed on review by Moodys, utility has been in the spotlight; Moody's concern being the allotted request on 06Jun will be much less than 53% hike that was requested
Moody's ignored the 5yr dilution plan regarding the original 53% tariff hike, which would improve stability perception
Credit downgrade would definitely trigger a selloff in the ZAR
Mboweni speech
- monetary policy facing the "strongest challenge" since inflation targeting adopted in 2000
- bank may need to take "further steps" to curb price growth
- forecasts will be outside target 3-6% range
- big issue now is wage demand and unit cost of labor
- FM Trevor Manuel in solidarity with Mboweni that cb shouldnt readjust band to allow more flexibility
- "but on the other hand, we talk and talk and talk, barking and barking all the time. A bit of biting is necessary"

Vietnam
Dong fell after cb set a reference rate of 16,037 from 16,029
PM Nguyen Tan Dung said nation needs to foxus on IR policy in fighting inflation
Economy expanded 7.4% in Q1, last year was 8.5% for the year, fastest since 1996
Inflation is 21.4% in April, fastest since 1992
Govtcalled for cb to closely monitor credit supply, specifically for securities trading and property investment
- last year credit growth was 50%, targeting 30%
- state bank said last month might widen from 1% to 2% but no target date