Consumer Confidence (April, Tuesday 9.50 am)

Forecast: 106.0 Consensus: 105.0 Prior: 107.2

So far this month, consumers??™ confidence was eroded by higher gasoline prices. Prices at the pump averaged $2.8 per gallon, 9% higher than the level of March. However, the negative effect of gasoline cost on consumer attitudes would be partially offset by robust conditions in the labor market. For instance, employers added 180,000 new jobs to the non-farm payroll in March while the unemployment rate contracted to 4.4%, the lowest in five months.

Existing Home Sales (March, Tuesday, 10.00 am) & New HomeSales (March, Wednesday, 10.00 am)

Forecast: 6.58M, 855K Consensus: 6.50M, 885K Prior: 6.69M,848K

Moving to the spring buying season, sales of previously owned homes probably fell while sales of new homes were virtually unaltered. Though recent indicators pointed to the stabilization of the housing market, the tightening of mortgage lending standards -caused to a large extent by the sub-prime crisishas raised the number of cancellations and reduced the pace of sales as the NAHB Confidence Index Report noted. These events have hurt the confidence of buyers and builders clouding the prospects for the housing market.

Durable Goods Orders & Excl Trans. (Mar., Wednesday 8.30 am)

Forecast: 2.4, 0.5% Consensus: 2.5, 1.1% Prior: 2.5, -0.1%

Manufacturing durable goods orders probably rose in March boosted by orders of civilian aircraft. We expect total orders to expand by 2.4% in March from 2.5% in February. Year-over-year, however, orders probably declined 3.5% from no change in the previous month. Excluding transportation, we expect orders to increase by 0.5%; not enough to offset two previous months of losses. Orders excluding transportation probably fell 1.9% from the level of a year earlier. Overall, orders??™ performance suggests that industry output is moderating. Indeed, industrial production??™s growth has been moderating since last September, slowing steadily from a year-over-year rate of 6% to 2.3% in March.

Gross Domestic Product (Adv., Q107, Friday 8.30 am)

Forecast: 1.3% Consensus: 2.0% Prior: 2.5%

We expect GDP to increase by a seasonally adjusted annual rate of 1.3% in Q106 from 2.5% in the previous quarter. This is equivalent to a 2.1% yearover- year increase from 3.1% in Q406. Consistent with our base scenario, GDP growth in Q107 was characterized by a moderation of non-residential investment, a further adjustment in residential investment and a gradual deceleration of consumer spending. These forces will be partially offset by a robust expansion of exports. PCE probably increased by 3.8% year-over-year from 4.2% in the previous quarter. We continue to expect a moderating trend due to further employment moderation, the lagged effects of higher interest rates and a lower increase in housing wealth. From the investment side, residential investment probably declined by 20.8% SAAR, 17.7% below the level of a year earlier. Meanwhile, nonresidential investment moderated from the strong growth of previous quarters; however, it is likely to continue on a solid footing supported by strong balance sheets. Finally, boosted by a robust economic growth abroad, net exports likely added to overall GDP growth. We foresee net exports contributing positively to economic growth from Q107 onwards.