American International Group Inc
The struggling insurer has entered into an agreement to sell 100% of its shares in its consumer finance operations in Argentina.

Barclays PLC
Abu Dhabi's International Petroleum Investment Co. said it's going to sell 1.3B shares in the bank, worth around 4.1B pounds ($6.7B).18.26-2.24 / -10.93%

Citigroup Inc
The bank will not pay tens of millions of dollars of severance payments to a number of key executives in an effort to avoid a possible public backlash stemming from the $50B of taxpayer-funded capital the bank has received, The Wall Street Journal reported.

Morgan Stanley
The investment bank has priced a public offering of approximately 80.2M shares of common stock at $27.44 per share for total gross proceeds of approximately $2.2B. China Investment Corporation has agreed to purchase 44.7M shares of common stock at the public offering price.

Among the other banks announcing capital raising plans today, MS said earlier it will raise $2.2 bn via a new equity offering. Japan's Mitsubishi-UFJ and China Investment Corp, current shareholders, will be among the major buyers of the new offering.

ExxonMobil (+0.79) is providing support to the S&P 500. However, weakness in oil and gas exploration companies (-1.2%) and oil and gas equipment companies (-1.0%) is curtailing the integrated energy giant's influence.
Energy stocks, as a group, have pared their losses to trade just below the unchanged mark. The rebound comes as oil prices reverse losses to trade with a 0.2% gain. Oil is now trading at $68.70 per barrel.

On a day when US auto sales are being announced, an NY Times report says that a Chinese co. has emerged as the likely buyer of GM's Hummer unit.

Economist Jennifer Lee at BMO says Apr pending home sales at +6.7% was unexpectedly good - it is "the third consecutive rise in this series, a string we have not seen since 2004, or back in the day when existing home sales averaged over 6.5 mln units, compared to the latest reading of just over 4.7 mln units." She says this bodes well for sales ahead.

The dollar dropped to its lowest level against the euro this year on speculation record U.S. borrowing will undermine the greenback, prompting nations to consider alternatives to the world’s main reserve currency.
The 16-nation euro gained for a fourth day versus the dollar as the Russian government said emerging-market leaders may discuss the idea of a supranational currency. The pound strengthened to $1.65 for the first time since October.
“There’s been a lot of talk out of Russia about a new global currency, and that’s contributing toward this latest bout of dollar weakness,” said Henrik Gullberg, a currency strategist at Deutsche Bank AG in London. “These latest comments are just adding to the general dollar weakness we’ve seen recently.”
The U.S. currency pared its decline versus the yen as the National Association of Realtors said pending sales of existing homes climbed 6.7 percent in April. The median forecast of economists was a 0.5 percent gain.
The Dollar Index, which ICE uses to track the currency’s performance against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.5 percent to 78.77.
The euro’s rally against the dollar may be entering its “last stage,” and investors would likely benefit from selling the 16-nation currency against the greenback, UBS AG said.
Europe’s currency is poised to weaken toward $1.30, analysts led by Mansoor Mohi-uddin, Zurich-based chief currency strategist at the world’s second-biggest foreign-exchange trader, wrote in a note to clients yesterday. The analysts reiterated forecasts for the euro to trade at $1.40 in one month’s time and weaken to $1.30 in three months.
“We remain positive on the U.S. dollar and think that the greenback is likely in its final stage of weakness,” the analysts wrote. “Equity and bond flows have the potential to surprise and could lend support to the dollar.”

Economist Jennifer Lee at BMO says Apr pending home sales at +6.7% was unexpectedly good - it is "the third consecutive rise in this series, a string we have not seen since 2004, or back in the day when existing home sales averaged over 6.5 mln units, compared to the latest reading of just over 4.7 mln units." She says this bodes well for sales ahead.

Through $1.6520, extends to $1.6536 before faltering. Rate currently trades around $1.6518. Offers now seen placed to $1.6550 ahead of $1.6600. Support $1.6500.

The major indices started the session in the red, but are now working to pare their initial losses.
Weakness remains considerable among semiconductors (-1.5%) and semiconductor equipment stocks (-3.3%). The groups have come under pressure following pessimistic comments from Applied Materials. According to Reuters, the company's chief executive stated that there will be more failures in the semiconductor equipment sector as the number of customers declines. According to the report, acquisitions in the chip gear sector are also very difficult to conduct, leaving very few avenues for consolidation.

Economists at Mizuho Securities say "the tone of the statistics will do little to settle the ongoing debate between the growth bulls and the bears." They say data will be mixed - with key
employment statistics still disappointing.

"Sales were lifted by warm Memorial Day holiday traffic. Grocery divisions led business at most discount stores. Department stores reported activity in merchandise related to school
graduation, such as women's wear, men's wear, footwear and women's accessories. Our preliminary plan for June is for year-over-year growth of 0.2%."
- Year-over-year: Week (w/e 05/30/09 vs year-ago) 0.1%
- Year-over-year: Month (May 2009 vs May 2008) -0.1%
- Month-over-month: (May 2009 vs April 2009) -0.3%

U.S. stocks were set to open mixed Tuesday as investors displayed caution ahead of the some new economic reports.
At 7:27 a.m. ET, Dow Jones industrial average, S&P 500 and Nasdaq 100 futures were narrowly mixed.

Corrective pullback off highs of $1.6502 seen meeting support between $1.6440/30. Below here and rate has room to slip back toward $1.6415/10, one trader suggests. Resistance seen back at $1.$1.6485 ahead of area around $1.6500.

Oil fell towards $68 a barrelon Tuesday as prices slipped from a sharp rally to a seven-month high in the previous day. Analysts said investors were selling off contracts to lock in profits from Monday's price jump. "There was a huge jump in prices in the past couple of days so we are seeing profit-taking now. There are some technical indices showing the market has been overbought," Andy Sommer, an oil analyst with EGL AG in Switzerland, said.
U.S. crude fell 40 cents to $68.18 a barrel by 11:40 a.m. On Monday, it closed at $68.58 after hitting $68.68, the highest settlement and intraday prices, respectively, since early November last year on back of Wall Street rallies.London Brent crude dipped 34 cents to $67.63.

04:30 Australia RBA meeting announcement 3.00% 3,00% 3,00%
05:45 Switzerland Gross Domestic Product (YoY) (1Q) -0.8% -0,6%
05:45 Switzerland Gross Domestic Product s.a. (QoQ) (1Q) -2.4% -0,3%
08:30 UK Consumer credit (April), bln 0.3 0,2 0,1
08:30 UK M4 money supply (April) final Y/Y 17.4% 17,4% 18,2%
08:30 UK M4 money supply (April) final 0.2% 0,1% 0,3%
09:00 Е16 Unemployment (April) 9.2% 9,1% 8,9%

The dollar and the yen rose against the euro as stocks snapped three days of gains, spurring demand for the currencies as a refuge from the global financial turmoil.
“Equities are pausing for thought, boosting the risk currencies,” said Paul Robson, a foreign-exchange strategist in London at Royal Bank of Scotland Plc. “If U.S. equity markets open higher then the risk trade will be back on.”
The yen strengthened the most in four days against the European currency on speculation Japanese exporters brought home overseas earnings after the European currency reached an eight- week high. .
Europe’s unemployment rate jumped to 9.2% in April, from 8.9 percent the previous month.
European Central Bank President Jean-Claude Trichet said last month the bank would buy 60 billion euros ($85 billion) of covered bonds. The Federal Reserve, Bank of England and Bank of Japan are already purchasing government and corporate bonds in a policy known as quantitative easing, which is intended to keep borrowing costs low. The ECB will keep its benchmark rate unchanged at 1 percent at its June 4 meeting
The euro’s rally against the dollar may be entering its “last stage,” and investors would likely benefit from selling the 16-nation currency against the greenback, UBS AG said.
The euro is set to weaken toward $1.30, analysts led by Mansoor Mohi-uddin, Zurich-based chief currency strategist at the world’s second-biggest foreign-exchange trader, wrote in a note to clients yesterday. The analysts reiterated forecasts for the euro to trade at $1.40 in one month’s time and weaken to $1.30 in three months.
“We remain positive on the U.S. dollar and think that the greenback is likely in its final stage of weakness,” the analysts wrote. “Equity and bond flows have the potential to surprise and could lend support to the dollar.”
Ahead of US session pressure on the dollar renewed.

EUR/USD found the base around $1.4100, before rose up to $1.4280.

Banking stocks are weaker, with Barclays (BARC) in London worst hit, currently down around - 13.0% after Abu Dhabi's International Petroleum Investment Company said it will be offloading 1.3bln shares in the bank. Losses in mining stocks have eased off in line with strength in the metals markets, with Rio Tinto (RIO) and Xstrata (XTA) now outperforming. In Frankfurt, automakers are seeing another day of strong gains, with Volkswagen (VOW) and BMW (BMW) leading the sector.
The FTSE-100 is down 26pts (-0.6%), CAC-40 flat, and Xetra-DAX up 7pts (+0.1%).

Extending the lows as the greenback slides across the board, with traders noting a sell dollar-yen recommendation from a major US name adding weight. Bids in the Y95.70 area now cleared. Next area of demand noted into Y95.25/20б ahead of Y96.10/00 with stops below, and further demand at Y95.70.
Offers eyed into the Asian high at Y96.65, becoming stronger from Y96.80 into Y97.00 (200-dma).

The dollar and the yen rose against the euro as stocks snapped three days of gains, spurring demand for the currencies as a refuge from the global financial turmoil.
“Equities are pausing for thought, boosting the risk currencies,” said Paul Robson, a foreign-exchange strategist in London at Royal Bank of Scotland Plc. “If U.S. equity markets open higher then the risk trade will be back on.”
The yen strengthened the most in four days against the European currency on speculation Japanese exporters brought home overseas earnings after the European currency reached an eight- week high. .
Europe’s unemployment rate jumped to 9.2% in April, from 8.9 percent the previous month.
European Central Bank President Jean-Claude Trichet said last month the bank would buy 60 billion euros ($85 billion) of covered bonds. The Federal Reserve, Bank of England and Bank of Japan are already purchasing government and corporate bonds in a policy known as quantitative easing, which is intended to keep borrowing costs low. The ECB will keep its benchmark rate unchanged at 1 percent at its June 4 meeting
The euro’s rally against the dollar may be entering its “last stage,” and investors would likely benefit from selling the 16-nation currency against the greenback, UBS AG said.
The euro is set to weaken toward $1.30, analysts led by Mansoor Mohi-uddin, Zurich-based chief currency strategist at the world’s second-biggest foreign-exchange trader, wrote in a note to clients yesterday. The analysts reiterated forecasts for the euro to trade at $1.40 in one month’s time and weaken to $1.30 in three months.
“We remain positive on the U.S. dollar and think that the greenback is likely in its final stage of weakness,” the analysts wrote. “Equity and bond flows have the potential to surprise and could lend support to the dollar.”

Recovery off traded lows around $1.6325 seen meeting resistance/offers placed toward $1.6380. Above here and rate can extend toward $1.6410/15. Support remains at $1.6325 with stops below. Further demand then noted at $1.6300 ahead of $1.6250.

The FTSE-100 has started the day lower Tuesday, seeing profit taking after yesterday's rally, and currently down 51pts (-1.1%)

Resistance 3:Y97.80
Resistance 2:Y97.20
Resistance 1:Y96.80
Current price: Y96.25
Support 1: Y96.00
Support 2: Y95.40
Support 3: Y94.40
COMMENTS: Rate holds near yesterday’s highs after the recent rally. Resistance is near yesterday’s highs on Y96.80, then – at Y97.20 (May 28 high) and Y97.80. Strong support comes at Y96.00/10 (session low and 38.2% of Y94.40 - Y96.80 move). Below correction may widen to Y95.40 and then – to Y94.40 (Monday’s low).

Уровень сопротивления 3: Chf1.0960
Уровень сопротивления 2:Chf1.0860
Уровень сопротивления 1:Chf1.0740
Текущая цена: Chf 1.0722
Уровень поддержки 1: Chf1.0610
Уровень поддержки 2: Chf1.0530
Уровень поддержки 3: Chf1.0370

Комментарии: Доллар остается в диапазоне. Ближайшим уровнем сопротивления является область сессионных максимумов на Chf1.0740, выше – Chf1.0860 (пятничный максимум). Не менее сильным уровнем сопротивления является Chf1.0960 (область максимума 28 мая, минимумов 13 и 20 мая). Сильная канальная линию поддержки от 22 апреля проходит сегодня на Chf1.0610. Пробитие данного уровня откроет дорогу на Chf1.0530 (минимум 31 декабря прошлого года). Далее снижение вероятно к Chf1.0370.

Resistance 3:$1.6800
Resistance 2:$1.6660
Resistance 1:$1.6500
Current price: $1.6391
Support 1: $1.6160
Support 2: $1.5850
Support 3: $1.5600
COMMENTS: The sterling looks optimistic with resistance comes at $1.6500. Stronger level is near $1.6660 and then – at $1.6800 (50,0% Fibo of $2.0130-$1.3520 decline). Support is near session lows on $1.6160. Below losses may widen to $1.5850 (yesterday’s low), then – to $1.5600.

--UK Apr Net Mortgage Lending Stg973Mln Vs Stg640Mln March
--BOE Apr M4 Ex-Other Financial Corporations 0.1% m/m; 2.4% y/y
--BOE Apr M4 Ex-OFCS y/y Rate Lowest On Record
--BOE: UK Apr Net Consumer Credit Stg314mln Vs Stg52Mln March

Resistance 3: $1.4600
Resistance 2: $1.4360
Resistance 1: $1.4280
Current price: $1.4117
Support 1: $1.4100
Support 2: $1.4050
Support 3: $1.4000
COMMENTS: Euro holds within the narrow range with the main resistance remains near channel line from Apr 28 (today at $1.4280). Above the rise may extend to $1.4360 (Dec 29 high) and then – to $1.4600 (61,8% of $1,6030-$1,2330 decline). Support comes near session lows on $1.4100. Below losses may widen to $1.4050 (May 22 high) and $1.4000.

The yen strengthened the most in four days against the euro on speculation Japanese exporters brought home overseas earnings after the European currency reached an eight-week high.
The euro weakened against the dollar before a report today that may show the European jobless rate climbed to a four-year high, giving the central bank more reason to cut interest rates.
The New Zealand dollar fell for the first time in four days against the U.S. currency on speculation its recent gains were too rapid after it surged last month by the most in 24 years.
The pound fell for the first time in three days against the dollar after reaching a seven-month high of $1.6497 yesterday.

EUR/USD initially consolidated within the $1.4130/80 range before declined to $1.4100.

EUR/USD: $1.3900, $1.4200
USD/JPY: Y96.25, Y95.00, Y98.00
GBP/USD: $1.6250
AUS/USD: $0.8070, $0.8140, $0.7900

Majors close
Nikkei +155.25 +1.63% 9,677.75
Topix +14.73 +1,6% 912,52
FTSE +88.25 +2.00% 4,506.19
CAC +101.84 +3.11% 3,379.49
Dax +201.74 +4.08% 5,142.56
Dow +221.11 +2.60% 8,721.44
NASDAQ +54.35 +3.06% 1,828.68
S&P +23.73 +2.58% 942.87
10yr Note +2.5000 +0.722% 3.715%
NYMEX Crude Oil +2.27 +3.42% 68.58
Gold -0.30 -0.03% 980.00


European stocks rallied, pushing the Dow Jones Stoxx 600 Index to the biggest gain in almost two months, as speculation grew that the worst of the global recession is over.

BHP Billiton Ltd., the world’s largest mining company, jumped 5.3 percent as Chinese manufacturing expanded for a third month and base metals climbed. Total SA rose for the fourth time in five days as crude surged to a seven-month high. Daimler AG surged 8.4 percent as Bank of America Corp. added the shares to its “Europe 1” list.
UBS AG strategists reversed their preference for U.S. stocks over European equities for the first time since 2007, saying American shares look relatively expensive as the earnings gap between the two regions narrows. The Zurich-based bank reduced its recommendation on U.S. shares to “underweight” and raised Europe to “overweight” in a report dated May 29.
General Motors Corp., the world’s largest automaker for 77 years, filed for bankruptcy protection yesterday. The U.S. plans to convert much of its $50 billion of loans to a 60 percent stake in the new entity.

Stocks rallied Monday, sending the Dow Jones industrial average near the breakeven point for the year, as better-than-expected readings on manufacturing activity raised hopes that a global economic recovery is brewing.

Japan's benchmark stock indices ended Tuesday's session higher across the board, although late profit-taking saw them finish shy of their best levels. The Nikkei 225 was higher by 26.56 points, or 0.27%, to stand at 9704.31. The broader-based TOPIX was 1.04 points higher at 913.56. The Nikkei ended above the 9,700 level for the first time in eight months.

Data released
07:45 Italy PMI (May) 41.1 39.2 37.2
07:50 France PMI (May) 43.3 43.1 40.1
07:55 Germany PMI (May) seasonally adjusted 39.6 39.1 35.4
08:00 EU(16) PMI (May) 40.7 40.5 36.8
08:30 UK CIPS manufacturing index (May) 45.4 44.2 43.1 (42.9)
12:30 USA Personal income (April) 0.5% -0.2% -0.2 (-0.3)%
12:30 USA Personal spending (April) -0.1% -0.2% -0.3 (-0.2)%
12:30 USA PCE price index ex food, energy (April) 0.3% 0.1% 0.2%
12:30 USA PCE price index ex food, energy (April) Y/Y 1.9% 1.8% 1.8%
14:00 USA ISM Mfg business index (May) 42.8 41.8 40.1
14:00 USA Construction spending (April) 0.8% -0.9% 0.4 (0.3)%

The dollar fell sharply on Monday, tumbling to its lowest so far this year against a basket of currencies and the euro as optimism that the global economy is on the road to recovery.
The commodity-related and higher risk Australian and New Zealand dollars performed particularly well, hitting 8-month highs against their U.S counterpart as oil prices jumped to a 7-month peak and European shares soared.
News that China's manufacturing sector continued to expand modestly lent further credence to the notion that the global economy is on the mend and dented the U.S. currency. Though the official purchasing managers' index dipped to 53.1 in May from 53.5 in April, this was the third month in a row that the reading has been above the 50 level that separates expansion from contraction.
The final euro zone PMI manufacturing index beat expectations meanwhile, rising to a seven-month high of 40.7 in May, up from the provisional estimate of 40.5. The UK manufacturing PMI also showed the slowest contraction in the sector in a year

EUR/USD declined to $1.4140 from $1.4240 after the news from China before recovered to $1.4220/30.

Resistance 3:Y97.80
Resistance 2:Y97.20
Resistance 1:Y96.80
Current price: Y96.25
Support 1: Y96.00
Support 2: Y95.40
Support 3: Y94.40
COMMENTS: Rate holds near yesterday’s highs after the recent rally. Resistance is near yesterday’s highs on Y96.80, then – at Y97.20 (May 28 high) and Y97.80. Strong support comes at Y96.00/10 (session low and 38.2% of Y94.40 - Y96.80 move). Below correction may widen to Y95.40 and then – to Y94.40 (Monday’s low).

Resistance 3:Chf1.0960
Resistance 2:Chf1.0860
Resistance 1:Chf1.0740
Current price: Chf 1.0717
Support 1:Chf1.0610
Support 2:Chf1.0530
Support 3:Chf1.0370
СOMMENTS: Techs on dollar remains unchanged. Resistance comes at session highs on Chf1.0740, then – Chf1.0860 (Friday’s high). Neat band of strong resistance is at Chf1.0960 (May 28 high, May 13 and 20 lows). Key channel support line from Apr 22 comes at Chf1.0610. Break under opens the way to Chf1.0530 (Dec 31’2008 low). Further decline may widen to Chf1.0370.

Resistance 3:$1.6800
Resistance 2:$1.6660
Resistance 1:$1.6500
Current price: $1.6371
Support 1: $1.6160
Support 2: $1.5850
Support 3: $1.5600
COMMENTS: The sterling looks optimistic with resistance comes at $1.6500. Stronger level is near $1.6660 and then – at $1.6800 (50,0% Fibo of $2.0130-$1.3520 decline). Support is near session lows on $1.6160. Below losses may widen to $1.5850 (yesterday’s low), then – to $1.5600.

Resistance 3: $1.4600
Resistance 2: $1.4360
Resistance 1: $1.4280
Current price: $1.4137
Support 1: $1.4100
Support 2: $1.4050
Support 3: $1.4000
COMMENTS: Euro holds within the narrow range with the main resistance remains near channel line from Apr 28 (today at $1.4280). Above the rise may extend to $1.4360 (Dec 29 high) and then – to $1.4600 (61,8% of $1,6030-$1,2330 decline). Support comes near session lows on $1.4100. Below losses may widen to $1.4050 (May 22 high) and $1.4000.

High Low Close
EUR/USD 1.4242 1.4097 1.4155
GBP/USD 1.6492 1.6159 1.6437
USD/JPY 96.79 94.45 96.60
USD/CHF 1.0722 1.0619 1.0700

EUR/JPY 134.24 131.68 134.06
EUR/GBP 0.8738 0.8601 0.8609
GBP/JPY 159.15 153.50 158.84
GBP/CHF 1.7615 1.7262 1.7597


Change % Change Last
Nikkei +155.25 +1.63% 9,677.75
Topix +14.73 +1,6% 912,52
FTSE +88.25 +2.00% 4,506.19
CAC +101.84 +3.11% 3,379.49
Dax +201.74 +4.08% 5,142.56
Dow +221.11 +2.60% 8,721.44
NASDAQ +54.35 +3.06% 1,828.68
S&P +23.73 +2.58% 942.87
10yr Note +2.5000 +0.722% 3.715%
NYMEX Crude Oil +2.27 +3.42% 68.58
Gold -0.30 -0.03% 980.00

04:30 Australia RBA meeting announcement 3.00% 3.00%
06:45 France PPI (April) -0.2% -0.4%
06:45 France PPI (April)Y/Y -6.4% -5.5%
08:30 UK M4 money supply (April) final 0.1% 0.1%
08:30 UK M4 money supply (April) final Y/Y 17.4% 17.4%
08:30 UK Consumer credit (April), bln 0.2 0.1
09:00 EU(16) Unemployment (April) 9.1% 8.9%
12:55 USA Redbook (30.05)