The Confederation of British Industry's distribute trade retail sales index declined to a reading of -26 in April, after rising to a reading of 1 in March. The CBI's index of retail sales also fell from March's -2 level to a score of -3.

Speaking in front of the Treasury Committee on Tuesday, Bank of England Governor Mervyn King said that the BOE faces "major challenges" and that while keeping inflation at 2% will not be straightforward, the BOE must do what it can to ensure that inflation slows to target levels. King also suggested that inflation would reach levels of 3% or more over the next 12 months and that consumption would slow in the coming months, adding that the BOE will face a challenge in balancing inflation and growth risks. The BOE Governor, surprised on how wages had reacted so little to rising inflation, said that he didn't expect this lack of reaction to continue for much longer.

In an interview with Market News International on Tuesday, European Central Bank Governing Council member Nout Wellink emphasized that the German consumer price index coming in lower than expected on Monday was no reason for the ECB to change its policy on inflation, adding that the readings were more or less expected. Wellink stated that he was satisfied with current ECB policy and that it would help stabilize prices.

On Tuesday, the Bank of England announced that monthly M4 money supply growth was unchanged from its preliminary estimate of 0.8% for March. Annually, the Bank of England stated that money supply had grown 11.9%, down from the preliminary estimate of 12.0%.

According to data from the Bank of England on Tuesday, net consumer credit for March was £1.2 billion, marginally above forecasts for £1.1 billion but below the previous month's downwardly revised £2.3 billion level. Prior to revisions, net consumer credit was £2.4 billion. The Bank of England also saw £6.9 billion in net lending on mortgages, short of the expected £7.2 billion level. The previous month's £7.4 billion net lending on housing was revised down to £7.3 billion.

UK mortgage approvals fell to 64,000 in March, the lowest level since December 1992, following February's revised figure of 72,000. Economists had expected a reading of 66,000. The previous month's reading had been revised down from 73,000.

According to data from the National Institute for Statistics and Economic Studies (INSEE), French consumer confidence fell to -37 in April following the previous month's reading of -36.

The Belgium consumer price index rose 0.23% on a monthly basis in April, following the previous month's reading of 0.73%, according to data released Tuesday by Statistics Belgium.

According to Istat, Italian producer prices rose 0.8% month-over-month in March, higher than the expected 0.5% rise but lower than the previous month's increase of 0.9%. February's reading was revised up from 0.7%.

On Tuesday, the National Institute of Statistics announced that EU harmonized Spanish CPI rose 4.2% annually in April, according to preliminary estimates. This is below the consensus forecast of 4.4%. HICP in Spain had risen 4.6% in March. The National Institute of Statistics also released data on Spanish retail sales' levels in March and announced that they had fallen 8.7% on a yearly basis. This decrease is greater than the expected fall of 2.6% and the previous month's rise of 0.5%.

On Tuesday, the National Institute of Economic Research reported that Swedish consumer confidence fell to 0.8 in April, down from March's reading of 2.5. Noting that this number falls below the historic average, the Institute stated in a press release that the figure reflects a more pessimistic outlook in consumer sentiment. On the other hand, manufacturing confidence in Sweden remained unchanged in April at 3.0. March's figure had been revised up from 2.0.

According to data from the Conference Board, Australia's leading indicators index declined 0.2% month-over-month in February compared to January's downwardly revised 0.5% decline. Prior to revisions, the index fell 0.3%.

Speaking in an interview with Fox Business news on Monday evening, U.S. Treasury Secretary Henry Paulson said he did not believe that a second fiscal stimulus package was necessary and that the tax rebates mailed out yesterday would make a real difference to GDP. He said the current economic situation in the United States was nothing like the stagflationary era of the 1970's.

The Malaysian Central Bank held its benchmark interest rate unchanged at 3.50%. The move had been unanimously expected.

The Slovakian Central Bank also held its main interest rate unchanged at 4.25%, as expected.

The U.S. dollar is up nearly one cent against the euro to 1.5573, but is down nearly two cents against the pound sterling to 1.9742.

AU Conference Board Leading Index FEB -0.2% vs. Prior: -0.3% Revised: -0.5%

AU NAB Business Confidence 1Q -4 vs. Prior: 6

UK M4 Money Supply (M/M) March Final +0.8% vs. Prior: +0.8%

UK M4 Money Supply (Y/Y) March Final 11.9% vs. Prior: +12.0%

UK M4 Sterling Lending (BP) March Final £17.4B vs. Prior: £17.7B

UK Net Consumer Credit March £1.2B vs. Exp: £1.1B Revised: £2.3B Prior: £2.4B

UK Net Lending Sec. on Dwellings March £6.9B vs. Exp: £7.2B Revised: £7.3B Prior: £7.4B

UK Mortgage Approvals March 64K vs. Exp: 66K Revised: 72K Prior: 73K

UK BOE Governor Mervyn King to testify in Parliament

UK CBI April Distributive Trades Report at -9 Level

By Erik Kevin Franco, This email address is being protected from spam bots, you need Javascript enabled to view it with contributions from Todd Wailoo, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it