Week of May 29, 2011 thru June 4, 2011

Canadas New Gov't Commits To Balancing Budget,Spend Cutbacks

--Parliament Re-Opens W/Promise To Establish Nat'l Securities Regulator

By Courtney Tower

OTTAWA (MNI) - Canada's Conservative government, with its new-found
majority in Parliament, committed Friday to eliminating federal deficits
by 2014, a year earlier than planned.

A new session of Parliament following the May 2 election heard the
traditional opening speech, cast in broad-bush terms with few details.
But the government said it will hit the economic ground running with the
first order of business being introduction Monday of a budget focused on

Fed's Rosengren:Prime Money Mkt Funds 'Still Pose A Problem'

By Steven K. Beckner

(MNI) - Boston Federal Reserve Bank President Eric Rosengren issued
an unusually strong warning Friday about the vulnerability of some money
market funds to unexpected credit shocks -- especially those with large
exposure to European bank debt.

Rosengren said it is "particularly prudent" to address money market
fund vulnerabilities "now" because they could be "impacted should there
be unexpected international financial problems emanating from Europe."
He was not specific about what he thinks should be done, but mentioned

FXWRAP: Dollar Decked By Dismal Data, Euro Gains On Greece

By Dennis Pettit

NEW YORK, June 3 (MNI) - The dollar suffered a severe bruising
Friday as a one-two punch of disappointing U.S. economic data was
followed by upbeat news on Greece.

This sent the greenback skidding lower on all fronts, but
especially vs. the euro.

Euro-dollar changed hands at $1.4620 in afternoon dealings Friday,
the euro in the upper reaches of the day's $1.4450/1.4640 range seen in
U.S. hours after it began the day around $1.4488.

Dollar-yen meantime changed hands around Y80.30 in afternoon

Fed's Tarullo: Systemically Important Banks Face Hard Limits

--Confident On Bank Cap Convergence Agreement Between 'Now And The Fall'

By Brai Odion-Esene

WASHINGTON (MNI) - With the banking industry reported to be girding
for another attempt to quash Dodd-Frank limits, the Federal Reserve
governor with the banking industry portfolio Friday piled on the
warnings as never before, that the Fed is determined that big won't be
allowed to be bad.

Gov. Daniel Tarullo, in a speech at the Peter G. Petersen Institute
for International Economics, offered his preemptive blast aimed squarely
at the banking industry's lobbyists.

Eurozone Data: MNI Survey Of Economic Data Forecasts

April April
PPI retail sales
m/m y/y m/m y/y
Median fcst* 0.8 6.6 0.4 -0.3
High forecast 1.1 7.0 1.0 0.0
Low forecast 0.5 6.3 0.0 -0.5
Previous 0.7 6.7 -1.0 -1.7
Responses 7 6 8 4
4Cast 0.8 6.5 0.5 na

Brazil FinMin:New IMF Head Must Support 'Less Orthodox Pol'

--Brazil Growing Sustainably; Inflation to Drop in Next Two Months

By Daniel Horch

SAO PAULO (MNI) - Brazil Finance Minister Guido Mantega said Friday
the next International Monetary Fund Managing Director should support
"less orthodox policies" such as capital controls, countercyclical
fiscal policies, and "more flexible credit lines."

Mantega's comments came during a conference call with the foreign
press following the publication of GDP data earlier Friday, which showed
Brazil's economy grew 1.3% in the first quarter, giving an annualized
rate of approximately 5.5%.

US Labor Secty: Debt Ceiling, Budget Need To Get Resolved

By Ian McKendry

WASHINGTON (MNI) - Labor Secretary Hilda Solis Friday stressed
the need for Capitol Hill to come to an agreement on raising the nations
debt ceiling and agreeing on a budget.

"I would hope the sooner that they can come to an agreement on
things like that, that there will be more confidence and businesses will
decide to make their plans and hire up more people," Solis said on a
conference call with reporters Friday.

Solis's comments came on the heels of new data released Friday by

Next Wk/US: Beige Bk, Trade, Import Prices, Cons Cred, JOLTS

By Theresa Sheehan

PRINCETON (SMRA) - The week ahead has a fairly sparse economic data
calendar, and most of the coming major reports will not be released
until the June 13 week. As a result, the most important piece of
information about the economic is likely to be the Fed's compilation of
anecdotal evidence about conditions in the 12 District Bank regions, the
so-called Beige Book.

This will also be a busy week for central bank rate announcements,
as well as one in which the public engagement calendar for the Fed is
reasonably full.

Economic Data

Brazil CB Pres:GDP Grwth Pace More Compatible With Equilibrium

--1.3% Q/Q Growth Confirms Expectation of 25 bp Rate Hike On June 8

By Daniel Horch

SAO PAULO (MNI) - Brazil Central Bank President Alexandre Tombini
said Friday the economy is now growing sustainably and at a level "more
compatible" with equilibrium, confirming market expectations of a 25
basis point hike in the Selic when the Copom meets June 8.

Brazil's first quarter GDP, released Friday morning, grew 1.3%
compared to the previous quarter (an annualized rate of over 5%) and
4.2% compared to the same quarter in 2010.

Text: WH's Goolsbee: Should Not Read Too Much Into One Report

WASHINGTON (MNI) - The following is a statement by Council of
Economic Advisers Chairman Austan Goolsbee on the U.S. employment
situation in May:

Today's employment report shows that private sector payrolls
increased by 83,000 in May and the unemployment rate ticked up to 9.1
percent. There are always bumps on the road to recovery, but the overall
trajectory of the economy has improved dramatically over the past two

While the private sector has added more than 2.1 million jobs over
the past 15 months, the unemployment rate is unacceptably high and