European Economics Preview:

Oil: Galp negotiates strategic alliance with Sonangol and Petrobras. 18/05/10 00:05. The agreement between the three companies should be signed tomorrow in Lisbon, and anticipates a further shareholding in Galp. Galp is preparing to sign tomorrow an agreement for strategic partnership with Petrobras and Sonangol to develop joint business. This agreement promises to be the prelude to the future framework of the Portuguese company shareholder and which should involve the entry of Brazilians in equal "rights and duties" with the Angolans today indirect shareholders of Galp by Amorim Energia.
The terms of this agreement - which will be signed along with the other, between Galp and Petrobras for the area of biofuels - walk to be discussed for months among the three companies and it has already been approved by the company's management, headed by Manuel Ferreira de Oliveira. Official source of Galp declined to make any comments, but the Economic Daily knows that in time, came to be admitted the possibility, even in this Agreement, to announce any future exchange of assets between the three oil companies. The agreement comes as part of the Luso-Brazilian summit, held on Wednesday in Lisbon, and last weekend, in Luanda, was assumed the presence of Manuel Vicente, President of Sonangol, the Portuguese capital. The entry of Petrobras in the capital of Galp - revealed first-hand by the Economic Daily - is already a given. It only remains to know when and what percentage. But for that, you have to overcome the constraints imposed by the shareholders' agreement that now governs relations between the shareholders of Galp. And another factor: the front of Angola, Sonangol and by Isabel dos Santos, requires moving from an indirect shareholder - by Amorim Energia, the company headed by businessman Americo Amorim, of which it owns 45% of the capital - the direct shareholder, as Petrobras itself. But for the entry of Petrobras and Sonangol to become a reality will need to remove another obstacle: the Italian ENI, who own 33.34% of Galp, will have to leave.

European Economics Preview: Germany's ZEW Economic Sentiment Forecast To Fall. Monday May 17, 2010 23:07:00. Economic sentiment data from Germany along with inflation data from the eurozone and the U.K. are due on Tuesday, headlining a busy day for European economic news. Also today, European finance ministers are meeting in Brussels, where new rules to regulate hedge fund industries will be voted on. All times in ET. The euro continues to languish at a 4-year low against the U.S. dollar, as traders see risk to global growth from the sovereign debt crisis that is threatening the very survival of the European Monetary Union. Monday's calendar was very light and was devoid of any market moving first-tier economic report. Economic data released yesterday were bordering on the negative, with French retail sales declining, while manufacturing employment decreased in Germany. Also, U.K. Chancellor George Osborne set June 22 as the date for the coalition government's emergency Budget meeting. At 3:00 am, Hungary's Central Statistical Office is scheduled to release wage data for March. Year-on-year, wages are forecast to rise 1.6%, faster than the 0.9% increase in the previous month. Trade data for March is due from the Italian statistical office ISTAT at 4:00 am. A total trade deficit of EUR 2.33 billion was recorded in February. Simultaneously, trade data for April is due from the Norwegian statistical office. A trade surplus of NOK 29 billion was recorded in March. Elsewhere, Statistics Austria is slated to release consumer price inflation figures for April. Consumer prices had risen 1.1% on an annual basis in March. At 4:30 am, the U.K.'s Office for National Statistics is set to release consumer price inflation report for April. The consumer price index is tipped to rise by 0.4% on a monthly basis and by 3.5% on a yearly basis. Final inflation data is also due from the eurozone statistical agency Eurostat at 5:00 am. The month-on-month euro area inflation rate for April is expected to be revised down to 0.4% from 0.9%, while the annual inflation rate is expected to be revised up to 1.5% from 1.4%.
Trade data for the 16-nation euro bloc is also due from the statistical office at the same time. A seasonally adjusted trade surplus of EUR 4.4 billion is seen in March, up from the EUR 3.3 billion surplus in the prior month. In the meantime, the Centre for European Economic Research or ZEW is expected to release the results of its economic sentiment survey for Germany. The economic sentiment indicator for Germany is seen at 47 in May, down from 53 in the previous month. The current conditions index is expected to rise to -33 from -39.2. Meanwhile, the economic sentiment indicator for the eurozone is seen at 38 in May, down from 46 in April.

Asian Stocks Enter Correction on European Growth Concern. May 18, 2010. Asian stocks fell, with the MSCI Asia Pacific Index set for a so-called correction on speculation European efforts to curb government debt will curtail growth. Korea Zinc Co., the world’s No. 2 zinc smelter, lost 6.2 percent in Seoul. Cnooc Ltd., China’s largest offshore oil explorer, sank 1.6 percent in Hong Kong. Macarthur Coal Ltd. plunged 16 percent in Sydney after rejecting a takeover offer. Hynix Semiconductor Inc. slumped 3.6 percent in Seoul after MoneyToday reported that investors didn’t buy all of the chipmaker’s $500 million of convertible bonds. The MSCI Asia Pacific Index fell 0.3 percent to 116.30 as of 3:58 p.m. in Tokyo, with more than five stocks dropping for every four that rose. The index has lost 9.9 percent from its high for the year on April 15 as Europe’s debt crisis and concern China will quell inflation eroded confidence in a global economic recovery. A decline of 10 percent or more is the level some analysts use to define a correction. “There’s a combination of factors that are weighing on the market and driving it to a correction,” saidShane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, which oversees about $90 billion. “The question then becomes -- is it a correction or is it the start of a new bear market?” Japan’s Topix index sank 0.7 percent as a report by the nation’s Trade Ministry showed demand for services fell for a second month in March. The Nikkei 225 Stock Average advanced 0.1 percent.