Reactions to the stress test result for the 19 banks are rather
calm. The Fed determined that 10 US banks must raise a total of $74.6B.
In other words,9 of the biggest banks have enough capital to withstand
a deeper recession. Among the 10 banks that need to raise more capital,
Bank of America Corp. needs by far the most, $33.9 billion. Wells Fargo
& Co. needs $13.7 billion, GMAC LLC $11.5 billion, Citigroup
Inc. $5.5 billion and Morgan Stanley $1.8 billion. They are required to
need to submit a plan to raise capital on June 8 and start execution
before November 9. Markets' focus will now turn to Non-Farm Payroll
from US.

Released in Asia, RBA stated in the quarterly
monetary statement that the Australia's economy will shrink 1.25%in the
12 months through June before seeing a “gradual” recovery to +0.25%
next fiscal year. This represented downward revisions of February's
projections of 0.2% growth this fiscal year and 1.25% the year after.
In BOJ's minutes for April's meeting, policymakers stated they will
'take additional measures to facilitate corporate financing' to help
companies raise funds should economy gets worse. The central bank has
kept interest rate unchanged at 0.1% since December 2008 and has been
buying corporate debts and government bonds to revive the economy.

input PPI is expected to have eased to +0.8% mom in April from +1% a
month ago. On annual basis, strong base effect probably caused a -3.5%
decline following a -0.4% drop in March. Negative base effect should
also have made output PPI moderated to +0.7% mom in April from +2% a
month ago. Core output PPI is expected to have risen to +2.2% yoy
during the month after a +3.3% in March. Sharp fall in new orders
should have continued to depressed production in Germany although less
severely than in previous months. Industrial production probably
plunged -1.3% mom in March after a -2.9% fall in the previous month. On
yearly basis, the gauge should have declined -21.1%.

non-farm payroll is anticipated by economists to have reduced by 620 K
in April following a 663 K drop a month ago. However, it's possible for
upside surprise given the better-than-expected initial jobless claims
readings these few weeks. Also, contraction manufacturing sector has
shown signs of stabilization and this should have helped employment.
That said, unemployment rate should still have gone higher to 8.9% in
April from 8.5% in March while growth in average hourly earnings
probably stayed at +0.2% mom. Wholesale inventories are expected to
have slid -1% in March, compared with -1.5% in February. Canada's
unemployment might have risen to 8.3% in April from 8% a month ago.
Moreover, housing starts probably reduced to 143K in April from 154.7K
in March.