Dollar and yen rebound as the month starts on risk aversion after China announced to hike bank reserve ratios for the third time this year to curb lending. Effective on May 10, the RRR (reserve requirement ratio) will be raised to 17% for large banks and 15% for small and medium sized banks. The move is expected to drain out about CNY 300b in liquidly from the banking system. Also, Australian government proposed a new 40 percent tax on the booming profits of resource companies. Asians stocks, except Japan and China which are on holiday, are generally lower. Dollar and yen are lifted by risk aversion.

Euro is also generally lower in spite of the finalization of the EUR 110b Greece bailout deal over the weekend. Markets are concerned that EU might struggle to get parliamentary approvals from its members for the loan. EU leaders will meet on May 7 to discuss the timeline of the approvals while German will also debate the plan on the same day. EU Chairman Jean-Claude Juncker, EU Commissioner Olli Rehn, ECB President Jean-Claude Trichet and Greek finance minister George Papaconstantinou announced on Sunday evening that , together with the IMF, a package of 110B euro will be provided to Greece for its funding needs over the next 3 years. More in Greece's Bailout Concluded. Short-term Relieved But Long-term Remained Uncertain.

On the data front, Australian house price index rose more than expected by 4.8% qoq in Q1. Swiss SVME PMI Eurozone PMI manufacturing is expected to finalize at 57.5 in April. From US, personal income and spending are expected to grow 0.3% and 0.6% in March respectively. Core PCE is expected to be unchanged at 1.3%. ISM manufacturing index is expected to rise further to 59.8 in April. Construction spending is expected to drop -0.5% mom in March.