The July 4 Independence Day holiday in the US falls on a Saturday this year but will be observed with market and Federal holidays on Friday July 3 when stocks, bonds and futures markets will be closed. Ahead of that holiday, markets will observe normal trading sessions on Thursday July 2, the day that the US payrolls report will be released.

Ball Corporation said it will buy Anheuser-Busch InBev's U.S. beverage-can-manufacturing assets for $577M.

Gannett Co Inc will cut more than 1,000 jobs at its U.S. Community Publishing division, The Wall Street Journal reported.

General Mills Inc said strong cereal sales help drive quarterly net profit to $1.07 per share, double the profit for the year-ago period and estimated fiscal 2010 earnings at $4.20 to $4.25 a share.

Wal-Mart Stores Inctold the White House that it supports requiring employers to provide health insurance to workers.

Sealy Corp swung to a net loss of $5.2M, or 6 cents a share, from profit of $12M, or 13 cents a share, in the year-earlier quarter.

EUR/USD continues to retreats after printing daily highs on $1.4202. Rate currently holds at $1.4155.

Citi calls for -400k jobs Thurs and "today's ADP report (-473,000 private job losses) also suggests downside risk." Report is due to come on Thursday as on Friday US markets will be closed in observance of the Independence Day.

EUR/USD printed highs on the spike was $1.4202 as the euro pierced a barrier strike level and eroded layered supply to $1.4200 as traders reacted to the latest iteration of China's quest for a new reserve currency. Pair has retreated to $1.4170 as dollar remains pressured. Supply said layered to $1.4220 with stops above there.

Stocks continue to trade with strength, but the U.S. dollar is stuck in a fit of weakness. The greenback is currently down almost 0.9% against a basket of major foreign currencies. Its situation hasn't been helped by news from Reuters that China has asked to debate proposals for a new global reserve currency at next week's Group of Eight summit.

The yen declined to a two-week low against the euro as China’s manufacturing expanded in June for a fourth month, increasing demand for higher-yielding assets on bets the global recession is easing.

EUR/USD spikes to fresh highs for the day around $1.4200 area as traders react to the latest headline calls for a new reserve currency. Euro currently holds near $1.4172.

After a recent pullback, stocks have climbed to fresh session highs. Commodities are also showing strength. After trading near session highs this morning, crude has pulled back following the inventory data. Crude is 1.5% at $71.00 per barrel. Inventory data just released shows a draw of 3.66 million versus the consesus of a draw of 2.0 million. Natural gas spiked into positive territory near the open and remains above the flat line. Natural gas is trading 0.8% higher at $3.86. Precious metals began trending higher premarket and extended gains at the open. Gold is 1.5% higher at $941.10 per ounce, while silver is trading 1.7% higher at $13.83 per ounce.

Economists at Morgan Stanley say ISM was better than expected, as "the composite index (44.8 v. 42.8) rose to its best level since last August, pointing to some further moderation in the pace of decline in manufacturing activity. Just about all of the upside in the latest month was tied to significant gains in the production and employment components."

Stocks have pulled back in the wake of the latest batch of economic data. Still, the major indices are sporting solid gains. The ISM Manufacturing Index for June came in at 44.8, which is slightly below the 44.9 that was expected. The reading for May came in at 42.8. Construction spending for May decreased 0.9% month-over-month. It was expected to slip 0.6%. Spending in April was revised lower to reflect a 0.6% increase. Pending home sales in May increased 0.1% month-over-month. They were expected to be flat after spiking the month before. April pending home sales were revised higher to reflect a 7.1% monthly increase.
Early Movers: Trading up -- OSK +28.7%, PARD +16.8%, LNN +14.5%, CYNO +8.5%, STZ +7.5%, SNX +7.4%, CBL +6.7%, EDC +6.3%, BLL +6.1%, TRW +5.8%, MVL +5.7%; Trading down: BEAT -40.4%, FRPT -36%, SPAR -23.1%, SKBI -22.6%, MYGN -22.2%, IMMR -19%, ACOR -9.5%, SPPI -8.4%, AIG -7.3%

Led by energy (+1.5%), consumer staples (+1.3%), and basic materials (+1.2%), the stock market is up markedly with broad-based gains. The early advance by the energy sector comes as oil prices climb 2.3% to $71.50 per barrel ahead of the latest weekly inventory announcement Meanwhile, consumer staples stocks are following shares of General Mills higher. The company posted this morning better-than-expected quarterly earnings and an upbeat forecast. Those accomplishments followed the company's decision to hike its dividend. As for materials stocks, the sector has benefitted from rising commodity prices amid a weaker U.S. dollar. As such, the CRB Commodity Index is up 1.0% and the Dollar Index is down 0.7%.

At 350.2 million barrels, U.S. crude oil inventories are above the upper boundary of the average range for this time of year. Total motor gasoline inventories increased by 2.3 million barrels last week, and are in the lower half of the average range. Both finished gasoline inventories and gasoline blending components increased last week. Distillate fuel inventories increased by 2.9 million barrels, and are above the upper boundary of the average range for this time of year. Propane/propylene inventories increased by 3.7 million barrels last week and are above the
upper limit of the average range. Total commercial petroleum inventories increased by 4.4 million barrels last week, and are above the upper limit of the average range for this time of year.

Spot gold is consolidating gains around $938/40 this afternoon, rallying after the US ADP report weakened the dollar. Resistance is now seen near the 21-day moving average at $942.16, with the level seen as pivotal to any upside movements. July futures on COMEX are on a maximum level of today's session - $940.00 for ounce.

- US Construction Spending -0.9% In May; Consensus -1.0%
- US ISM Jun Inventories Index 30.8 Vs May 32.9
- US Pending Home Sales Index +0.1% To 90.7 In May - NAR
- US ISM Jun Manufacturing PMI 44.8 Vs May 42.8

with rate slipping back in line with euro-dollar as euro-sterling holds steady around stg0.8568. Support seen back at $1.6505/00, a break to allow for a deeper move toward $1.6480.

U.S. stocks were set to open the third quarter with gains Wednesday as investors awaited reports on employment, manufacturing and home sales. The Dow Jones industrial average, S&P 500 and Nasdaq-100 futures were higher. Futures measure current index values against the perceived future performance.

following a large drop in crude inventories in the United States, the world's top energy consumer, and output disruptions from militant attacks in Nigeria.
Weekly oil data from a U.S. industry group released late on Tuesday helped oil prices to reverse the day's loss, which had been fueled by weak U.S. consumer confidence. Data from the American Petroleum Institute showed on Tuesday a 6.8 million barrel decline in U.S. crude inventories, larger than analysts' forecast for a drawdown of 2 million barrels.
"Maybe we have already seen the peaks in the stock levels and we could start entering a phase where we see a slow reduction (in stock levels)," Olivier Jakob with Petromatrix said.
U.S. crude futures were trading up $1.25 to $71.14 a barrel, having risen to as high as $71.28. London Brent crude rose $1.28 to $70.58.

Sources remind that govt could be -50k on Census firings, and this could depress total payrolls.

00:00 Canada National Day
06:00 Germany Retail Sales (MoM) 0.4% -0.1% 0.5%
06:00 Germany Retail Sales (YoY) -2.9% -0.3%
07:45 Italy PMI (June) 42.7 41.1
07:50 France PMI (June) 45.9 45.5 43.3
07:55 Germany PMI (June) seasonally adjusted 40,9 40.5 39.6
08:00 Е16 PMI (June) 42,6 42.4 40.7
08:30 UK CIPS manufacturing index (June) 47.0 45.4

The yen declined to a two-week low against the euro after a report showed China’s manufacturing expanded for a fourth month, increasing demand for higher- yielding assets amid confidence the global recession is easing.
The yen also fell against the dollar, Swiss franc and the pound as China’s Federation of Logistics and Purchasing said the official Purchasing Managers’ Index rose in June. The Australian dollar gained versus the yen after a report showed the nation’s retail sales climbed for a third month. The euro strengthened against the dollar as every stock market in Europe advanced.
Europe’s Dow Jones Stoxx 600 Index added 1.2%, after gaining 17 percent in the three months through June 30, for its biggest quarterly rally since 1999. Futures on the Standard &Poor’s 500 Index increased 0.7%.
The euro also gained against the dollar as a government report showed retail sales in Germany, Europe’s largest economy, unexpectedly rose for a third month in May, strengthening the case for the European Central Bank to keep interest rates unchanged tomorrow.
The likelihood that the world’s biggest economies won’t start growing anytime soon is keeping central banks from raising borrowing costs.ECB member Axel Weber, who heads the Bundesbank , said last week policy makers have used up their scope to cut rates. The prospect that the benchmark U.S. rate will stay near zero for several years is “not outside the realm of possibility,” Federal Reserve Bank of San Francisco President JanetYellen told reporters yesterday.
The yen also fell after the Bank of Japan’s quarterly Tankan survey showed sentiment among the largest manufacturers rose less than economists expected. The index of sentiment among large makers of electronics, cars and other products climbed to minus 48 in June from minus 58 in March, the central bank said in Tokyo.
The dollar gained for a third day against the yen on speculation a report will show manufacturing in the U.S. shrank in June at the slowest pace in 10 months.
The Institute for Supply Management’s factory index advanced to 44.6, the highest level since August.

EUR/USD posted session high at $1.4085, before eased back to the middle of the day's range. Bids: $1.4035/30, $1.4000, $1.3970, $1.3950, $1.3930/20. Offers: $1.4090/10, $1.4150, $1.4200

Oil and energy stocks are supportive on the back of rising crude prices, with Total SA (FP) and BP (BP.) leading gains. Mining stocks are also seeing similar strength coming from the metals markets, particularly in London, where BHP Billiton (BLT) and Rio Tinto (RIO) are boosting the index. Also in London, Marks & Spencer (MKS) is making good gains after announcing this morning, that UK stores open more than a year, saw revenue for the 13 weeks to June 27 fall just 1.4%, beating analysts estimates. Carrefour (CA) is coming in strong in Paris midday, after saying it expects first-half sales to total about E46bln, with net income reduced by E550mln due to one-off charges.
The FTSE-100 is up 63pts (+1.5%), CAC-40 up 60pts (+1.9%), and Xetra-DAX up 78pts (+1.6%).

EUR/USD $1.4000, $1.4100, $1.3910
USD/JPY Y96.90, Y96.50, Y96.25, Y97.50
AUD/USD $0.8000
USD/CAD C$1.1500

In longer term charts, traders are watching for a potential inverse head-&-shoulders pattern to form, with a break of the neckline at $73.12 needed for further push to the upside.
The Aug09 WTI contract is currently up $1.23 at $71.06.

The yen declined to a two-week low against the euro after a report showed China’s manufacturing expanded for a fourth month, increasing demand for higher- yielding assets amid confidence the global recession is easing.
The yen also fell against the dollar, Swiss franc and the pound as China’s Federation of Logistics and Purchasing said the official Purchasing Managers’ Index rose in June. The Australian dollar gained versus the yen after a report showed the nation’s retail sales climbed for a third month. The euro strengthened against the dollar as every stock market in Europe advanced.
Europe’s Dow Jones Stoxx 600 Index added 1.2%, after gaining 17 percent in the three months through June 30, for its biggest quarterly rally since 1999. Futures on the Standard & Poor’s 500 Index increased 0.7%.

EUR/USD
Bids: $1.4035/30, $1.4000, $1.3970, $1.3950, $1.3930/20
Offers: $1.4090/10, $1.4150, $1.4200

USD/JPY
Bids: Y96.60/55, Y96.00
Offers: Y97.25/30, Y97.20, Y97.10, Y96.99

- 2H 2009 could be more difficult for financing
- Banks need to pass on ECB interest rate cuts.

Resistance 3: Y98.50
Resistance 2: Y97.30
Resistance 1: Y96.90
Current price: Y96.77
Support 1: Y96.50
Support 2: Y96.20
Support 3: Y95.30
COMMENTS: The pair continues to become stronger the third day successively. The rate tests resistance Y96.90 (50,0% FIBO of Y98,90-Y94,90 falling). Above is possible growth to Y97.30 (61,8%). Overcoming of theis level may open road to Y98.50 (area of June 11 and 15 high). The nearest resistance is located in the field of a yesterday's high on Y96.50. Not less important level - on Y96.20 (session low). Overcoming of the last may open road to Y95.30 (yesterday's low).

Resistance 3:Chf1.1150
Resistance 2:Chf1.1020
Resistance 1:Chf1.0890
Current price: Chf 1.0827
Support 1:Chf1.0820
Support 2:Chf1.0760
Support 3:Chf1.0630
СOMMENTS:The dollar trades in a narrow range. Support is on Chf1.0820 (21-DMA). A break under will open the way to Chf1.0760 and Chf1.0630 (Wednesday’s low). Nearest resistance comes at yesterday’s and today's highs on Chf1.0890. Strong resistance comes near June 24 highs on Chf1.1020 (also 38.2% Fibo of Chf1.1720 - Chf1.0590 decline). Above the bullish momentum strengthens and opens the way to Chf1.1150 (50%).

Resistance 3:$1.6740
Resistance 2:$1.6660
Resistance 1:$1.6490
Current price: $1.6426
Support 1: $1.6380
Support 2: $1.6200
Support 3: $1.6020

COMMENTS: The rate is consolidated after yesterday's fall. The nearest resistance - session high on $1,6490. Further growth is possible to $1.6660 (the resistance tested yesterday, June 3 hugh) and above to $1.6740 (yesterday's high).
Intermediate support is in the field of today's low on $1.6380, further - on $1.6200 (area of session lows of two last weeks). Below there is a level of 23,6 % FIBO of $1,3650-$ 1,6740 growth on $1.6220.

Resistance 3:$1.4270
Resistance 2:$1.4150
Resistance 1:$1.4110
Current price: $1.4065
Support 1:$1.4000
Support 2:$1.3830
Support 3:$1.3780

COMMENTS: The pair tries to rebound. The nearest resistance comes around June 26 high $1.4100/10. Break higher will open the way to $1.4150 (three week high) and further to $1.4240/70 (June 04-05 high).
The nearest support is located in area of a yesterday's and today's low on $1.4000. This level also is area 23,6% FIBO of $1,2880-$ 1,4330 growth and MA(200) for Н1. Successful break lower under $1,4000 will open the way to $1.3830 (area of June 22-23 low). The strong level is located on $1.3780 (38,2 %).

The yen fell toward a two-week low against the euro after a report showed China’s manufacturing expanded for a fourth month, damping demand for the relative safety of Japan’s currency.
China’s Purchasing Managers’ Index rose to a seasonally adjusted 53.2 in June from 53.1 in May, the Federation of Logistics and Purchasing said in Beijing. A reading above 50 indicates an expansion. Asia’s second-biggest economy may keep improving, enabling China to meet its 8 percent growth target this year, central bank Governor Zhou Xiaochuan said this week.
The yen was little changed after the Bank of Japan’s quarterly Tankan survey showed sentiment among the largest manufacturers rose less than expected.
The index of sentiment among large makers of electronics, cars and other products climbed to minus 48 in June from minus 58 in March, the Tankan survey showed. Economists minus 43. A negative number means pessimists still outnumber optimists.

EUR/USD the pair lead the most part of the Asian session within the limits of $1,3990-$ 1,4050

Japan's benchmark stock indices ended Wednesday's session lower, unable to hold gains racked up in the afternoon session, as investors again took profits on a break above the 10,000 level. The Nikkei 225 was lower by 18.51 points, or 0.19%, to stand at 9939.93. The broader-based TOPIX was 1.46 points lower at 928.30. Volume for the Nikkei constituents totalled a preliminary 1.438 bln shares, with 75 issues trading higher, 131 lower and 19 unchanged.

Japanese stocks rose, sending the Topix index to its biggest quarterly gain in more than two decades, after commodity prices climbed and the outlook for steel improved.Japan Petroleum Exploration Co., the nation’s second- biggest oil explorer, climbed 7.2 percent. Nippon Steel Corp., Japan’s largest maker of the alloy, added 3.6 percent after a government report said declines in steel output are expected to slow. Aiful Corp. led consumer lenders higher after Goldman Sachs Group Inc. recommended buying the stock. Fujifilm Holdings Corp. and Nikon Corp. jumped after Mizuho Securities Co. raised their ratings to “strong buy.” “With China’s and India’s economies remaining resilient, some investors believe demand for crude will balloon,” said Kiyoshi Ishigane, a senior strategist at Tokyo-based Mitsubishi UFJ Asset Management Co., which oversees about $52 billion. “Governments are investing in infrastructure globally and a vast amount of alloy is needed.”

European stocks dropped, trimming the biggest quarterly gain this decade for the Dow Jones Stoxx 600 Index, after U.S. consumer confidence unexpectedly declined in June.Daimler AG and Anglo American Plc slid more than 2 percent, leading a retreat by stocks most tied to economic growth after the Conference Board’s index of U.S. sentiment decreased to 49.3 from a revised 54.8 in May. Total SA led energy shares lower as crude oil tumbled from an eighth-month high. KBC Group NV lost 3.7 percent after the European Union announced an investigation into Belgian government guarantees. HSBC Holdings Plc Chairman Stephen Green, speaking at a conference in London today, said the world financial and economic crisis is “far from over” two years after it began.“The markets have been through a huge rollercoaster,” Lucy MacDonald, London-based chief investment officer of global equities at RCM UK Ltd., which oversees about $100 billion, said in a Bloomberg Television interview. “There is less fear than there was six months ago but visibility is still poor.” Daimler, the world’s second-largest maker of luxury cars, lost 2.1 percent to 25.78 euros while rival Volkswagen AG declined 4 percent to 241.14 euros.

U.S. stocks fell, limiting the biggest quarterly advance for the Standard & Poor’s 500 Index since 2003, after consumer confidence unexpectedly slid and delinquencies on the least-risky mortgages more than doubled.Caterpillar Inc., Expedia Inc. and Starbucks Corp. lost at least 4.9 percent after the Conference Board’s sentiment index slumped to 49.3, six points below the average economist forecast. Citigroup Inc. and JPMorgan Chase & Co. dropped as government data showed prime mortgages 60 days or more past due climbed to 2.9 percent in the first quarter from 1.1 percent at the same time last year.Caterpillar, the biggest maker of earth-moving equipment, dropped 4.9 percent to $33.05. Expedia, the Internet travel agency, tumbled 6 percent to $14.96. Citigroup fell 1.7 percent to $2.97. JPMorgan lost 1.3 percent to $34.15. Overall, mortgages 60 days or more past due rose 88 percent from last year, according to data from the Office of the Comptroller of the Currency and the Office of Thrift Supervision. First-time foreclosure filings on the loans rose 22 percent from the fourth quarter, the report said.“My guess would be that home prices are going to level off -- they’re not going to keep falling,” Robert Shiller, an economist at Yale University and co-founder of the home price index that bears his name, told Bloomberg Television. Still, it’s “hard to predict” a speculative market, and “I am not optimistic that we’re going to see any sharp rebound.”

EUR/USD $1.4000, $1.4100, $1.3910
USD/JPY Y96.90, Y96.50, Y96.25, Y97.50
AUD/USD $0.8000
USD/CAD C$1.1500

The dollar gained versus the euro for the first time in four days as a report showed U.S. consumer confidence unexpectedly dropped in June, increasing demand for the safety of the world’s main reserve currency.
The Conference Board’s sentiment index decreased this month to 49.3 from a revised 54.8 in May, the New York-based research group said today. The median forecast of economists was for a gain to 55.3 from a previously reported 54.9 in the prior month.
GBP/USD is falling sharp and fast. The pair dropped below 1.6520 and fell to 1.6426.
The yen rose from a two-week low against the euro and gained versus the dollar on speculation investors reduced bets Japan’s currency will weaken before the Bank of Japan’s quarterly Tankan survey.
In first half of the day euro gained versus the dollar on speculation ECB council member Ewald Nowotny will today signal the central bank will keep interest rates on hold into next year to aid the recovery.

EUR/USD the pair established a session low in the field of $1,4150. After unsuccessful testing this level the pair sharply decreased in area $1,3980

Resistance 3: Y98.50
Resistance 2: Y97.30
Resistance 1: Y96.90
Current price: Y96.77
Support 1: Y96.50
Support 2: Y96.20
Support 3: Y95.30
COMMENTS: The pair continues to become stronger the third day successively. The rate tests resistance Y96.90 (50,0% FIBO of Y98,90-Y94,90 falling). Above is possible growth to Y97.30 (61,8%). Overcoming of theis level may open road to Y98.50 (area of June 11 and 15 high). The nearest resistance is located in the field of a yesterday's high on Y96.50. Not less important level - on Y96.20 (session low). Overcoming of the last may open road to Y95.30 (yesterday's low).

Resistance 3:Chf1.1150
Resistance 2:Chf1.1020
Resistance 1:Chf1.0890
Current price: Chf 1.0857
Support 1:Chf1.0840
Support 2:Chf1.0760
Support 3:Chf1.0630
СOMMENTS:The dollar is consolidated in a narrow range. Support is on Chf1.0840 (session low, MA(200) for Н1) with a break under opens the way to Chf1.0760 and Chf1.0630 (Wednesday’s low). Nearest resistance comes at yesterday’s and today's highs on Chf1.0890. Strong resistance comes near June 24 highs on Chf1.1020 (also 38.2% Fibo of Chf1.1720 - Chf1.0590 decline). Above the bullish momentum strengthens and opens the way to Chf1.1150 (50%).

Resistance 3:$1.6740
Resistance 2:$1.6660
Resistance 1:$1.6490
Current price: $1.6406
Support 1: $1.6380
Support 2: $1.6200
Support 3: $1.6020
COMMENTS: The rate is consolidated after yesterday's rally. Intermediate support is in the field of today's low on $1.6380, further - on $1.6200 (area of session lows of two last weeks). Below there is a level of 23,6 % FIBO of $1,3650-$ 1,6740 growth on $1.6220. The nearest resistance - session high on $1,6490. Further growth is possible to $1.6660 (the resistance tested yesterday, June 3 hugh) and above to $1.6740 (yesterday's high).

Resistance 3:$1.4270
Resistance 2:$1.4150
Resistance 1:$1.4060
Current price: $1.4035
Support 1:$1.4000
Support 2:$1.3830
Support 3:$1.3780
COMMENTS: The pair bargains in the field of week's low. The nearest support is located in area of a yesterday's and today's low on $1.4000. This level also is area 23,6% FIBO of $1,2880-$ 1,4330 growth and MA(200) for Н1. Successful overcoming of a mark $1,4000 will open road to $1.3830 (area of June 22-23 low). The strong level is located on $1.3780 (38,2 %). The nearest resistance is located in the field of a session high on $1.4060. Overcoming of the given mark will open road to $1,4150 (three week high) and further to $1.4240/70 (June 04-05 high).

High Low Close
EUR/USD 1.4152 1.3999 1.4034
GBP/USD 1.6743 1.6421 1.6464
USD/JPY 96.50 95.30 96.30
USD/CHF 1.0889 1.0775 1.0858

EUR/JPY 135.93 134.32 135.14
EUR/GBP 0.8534 0.8433 0.8522
GBP/JPY 160.26 158.17 158.54
GBP/CHF 1.8068 1.7851 1.7874

Change % Change Last
Nikkei +174.97 +1.79% 9,958.44
Topix +14.44 +1.55% 929.76
FTSE - 44.82 -1.04% 4,249.21
DAX -76.45 -1.56% 4,808.64
CAC -53.24 -1.67% 3,140.44
Dow -81.85 -0.96% 8,447.53
NASDAQ -9.02 -0.49% 1,835.04
S&P -7.90 -0.85% 919.33
10yr Note +0.2900 +0.083% 3.521%
NYMEX Crude Oil -1.60 -2.24% 69.89
Gold -13.30 -1.41% 927.40

00:00 Canada National Day
07:45 Italy PMI (June) 41.1
07:50 France PMI (June) 45.5 43.3
07:55 Germany PMI (June) seasonally adjusted 40.5 39.6
08:00 Е16 PMI (June) 42.4 40.7
08:30 UK CIPS manufacturing index (June) 45.4
12:15 USA ADP employment (June) -365K -532K
14:00 USA ISM Mfg business index (June) 43.9 42.8
14:00 USA Construction spending (May) -0.4% 0.8%