Northern, WI 5/23/12 (StreetBeat) -- Stocks were lower throughout Asia. The Nikkei fell two percent, Australia and the Hang Seng were both down one and a third percent, while Shanghai decline 0.4%. European indexes are weak this morning, with the Dax down 1.5% and the Footsie off by 1.6%. US stock futures are down about three quarters of a percent as I write.
*The April reading of Japan’s Merchandise Trade Balance was a deficit of Y520 billion. Exports rose a less than forecast 7.9%, but Imports were up eight percent; resulting in a larger than expected trade shortfall.
*The Bank of Japan kept rates, the asset purchase fund and the credit loan program unchanged at their policy meeting overnight, as expected.
*EU leaders are assembling in Brussels. The President of the European Commission, Barroso, urged Greece to fully implement the second bailout plan, maintain all their commitments and he reiterated that the European community will do everything they can to keep Greece in the euro. UK PM Cameron said all that sounds good, but he added that Europe needs contingency plans for a Greek exit. German Deputy Finance Minister Thomas Steffen says Germany will accept outcome of Greece vote, adding that the ESM firewall is “adequate” to avert contagion. German government spokesman, pushing back against expectations, says today’s EU summit is a stepping stone to the June meeting.
*The Netherland biggest housing association, Vestia Groep, is being forced into bankruptcy; said to be because of an adverse unhedged EU20 billion interest rate swap exposure that may cause its bank counterparties to write off their derivative losses.
*Germany’s first ever sale of Zero Coupon 2 Year Schatz was met with strong demand and a record low yield of 0.07%.
*The Bank of England said the vote was unanimous for keeping interest rates steady at their last policy meeting, according to the minutes from that meeting. The vote to keep the bond purchases steady was 8 to 1, but they say the vote was finely balanced for several MPC members as there was a case to expand stimulus at the meeting, the minutes say.
*The April reading of UK Retail Sales was much weaker than forecast, -2.3% on a month on month basis, but expected to be down only 0.8%.
*US mortgage applications were up 3.8% in the week ended May 18, according to the Mortgage Bankers Association.
*The April reading of New Home Sales is due out at 9:00am CDT; it is expected to show an annualized sales rate of 335k or up 2.1% from the month before. Also due out at 9:00am is the March reading of the FHFA House Price Index, forecast to be +0.3% month on month.
*The weekly report on energy inventories is due out at 9:30am CDT. Stocks of Crude Oil are forecast to increase 1.65 million barrels, Gasoline inventories are expected to decline 650k and the estimate for Distillates is -500k.
*The Fed is scheduled to buy Treasuries twice today. They will buy Treasuries that are due to mature between 8/15/22 and 2/15/31; the results of this operation will be reported just after 10:00am CDT. They will also buy Treasuries that are due to mature between 5/31/18 and 5/15/20; these results will be announced just after 1:00am CDT.
*The Treasury plans to sell $35 billion 5 Year Notes today; the auction results will be announced just after noon CDT.
*Minneapolis Fed boss Kocherlakota is set to speak at noon CDT.