American International Group Inc. fell the most in the Dow Jones Industrial Average, losing 5.6%. The Securities and Exchange Commission is examining how the world's largest insurer accounted for credit-default swaps, including those backed by subprime mortgages, the Wall Street Journal reported.

Concho Resources Inc. jumped 17%. The oil and natural-gas company operating in four U.S. states agreed to buy assets in Texas and New Mexico from privately held Henry Petroleum for $565 million in cash to expand in the Permian Basin.

National City Corp. fell 6.6%, the lowest price in 22 years. Ohio's largest bank entered into a confidential ``memorandum of understanding'' with the Office of the Comptroller of the Currency that effectively puts its banking operations on probation, the Wall Street Journal said.

National Semiconductor Corp. gained the most in the Standard & Poor's 500 Index, climbing 7%. The maker of chips for devices such as Apple's iPhone reported a smaller-than-expected drop in fourth-quarter profit.

Network Equipment Technologies Inc. plunged 17%. The maker of communication equipment said it doesn't expect quarterly sales to meet analyst estimates because of fewer-than-expected government orders.

Vassili Serebriakov, senior analyst at financial markets research group 4Cast says "The dollar is retreating across the board and a re-test of May lows against the euro now could be in the cards as early as next week."

- ECB should not cut rates to aid liquidity.
- EU housing market is vastly differnt from the US.

Trading at $137.39, up $9.47 and change. New record high is $137.70 seen a short while ago. Note that the NYMEX contract has a $10 fluctuation limit, which, if reached, results in a 5 minute trading halt, after which, the trading limit is expanded by $10 with that procedure then repeated for each $10 price move.

The indices continue to trade near their lows for the session as buyers have found little incentive to step up to this point.

The rate hike comments delivered Thursday by European Central Bank President Jean-Claude Trichet were a "strong signal" to markets and the general public that the current inflation picture is not "acceptable". The message, he added, "seems to have been well understood."
Weber also said he expected eurozone HICP to stay above the 2% price stability threshold "far into 2009." Global growth, he said, will moderate but remain "resilient." Eurozone growth remains "on solid fundamentals." The slowdown should hit its trough by the end of the year, he said.

The dollar fell to a one-week low against the euro after a government report showed the U.S. unemployment rate increased the most in more than two decades, adding to evidence the economy may not be rebounding.
The decline pushed the currency to its biggest two-day drop since March on speculation the Federal Reserve may refrain from raising borrowing costs this year. The dollar fell yesterday as European Central Bank President Jean-Claude Trichet said a July increase in the main refinancing rate, now twice the U.S. benchmark, is ``possible.'' Crude oil surged for a second day. The U.S. currency has fallen 0.9 percent against the euro this week, while gaining 0.1 percent versus the yen. The euro was headed for a weekly increase of 1.1 percent versus the yen.The yuan rose the most in more than three months against the dollar today on speculation China will seek a stronger currency and a narrower trade surplus to help curb inflation. The currency increased 0.3 percent to 6.9231 against the dollar in Shanghai and has risen the same amount for the week.
The dollar extended its decline against the euro after the Radiocor news agency reported that ECB executive board member Lorenzo Bini Smaghi said there's ``broad consensus'' that an interest rate increase may be necessary next month.
U.S. payrolls have shrunk every month this year, dropping 49,000 in May, the Labor Department said today in Washington. The jobless rate increased to 5.5 percent from 5 percent, the biggest jump since February 1986. That compares with an advance to 5.1 percent forecast by economists.
The pound was headed for a 0.7 percent weekly decline against the dollar and a 1.8 percent drop versus euro after the Bank of England kept its key interest rate at 5 percent yesterday.

EUR/USD $1.5750, $1.5400
USD/JPYY105.70, Y104.70
EUR/GBP stg0.7800
AUD/USD $0.9450
Kiwi; $0.7650

"This was decidedly a weak report, showing deterioration in the labor market and suggestive of a weaker economy. The unemployment rate is very important in timing rate cycles, adding credence to our call for the Fed to cut rates another 75bp to 1.25% by early next year.

On Thursday the bulls controlled the market. Today it is the bears who have command of the trading action, as evidenced by an advance-decline line at the NYSE that favors decliners by a 4-to-1 ratio and nine out of ten economic sectors sporting a loss in excess of 1.0%.

Piersed resistance at $1.9650, the move extending highs to the offers zone of $1.9665/75 ahead of $1.9690/00.

A spike in oil prices has been the biggest weight on the market this morning. Currently, they are up 5.0% at $134.20, but remarkably, they are up 10% from yesterday's low.
A weaker dollar, geopolitical concerns, and Morgan Stanley's view that prices could hit $150 by July 4 are all contributing to the spike. Not surprisingly, the top performers list for the S&P 500 is littered with oil-related industry groups.
The dollar index had been trading higher earlier, but reversed in the wake of an employment report that led many traders to conclude the Fed won't be raising interest rates soon. The pullback has been a source of support for gold prices, too, which are up 2.1% to $893.60/oz.

"There are question marks about how the unemployment rate increase occurred, and whether it might be technical in nature, and therefore likely to be followed by a big drop next month. The household measure of jobs fell 285K while the labor force grew by an unusually high 577K, which typically does not happen in a weak labor market. The result was an 862K increase in the number of people unemployed. It drove the participation rate up from 66.0% to 66.2%. If the participation rate had remained unchanged, the unemployment rate would have 'only' risen to 5.2%."

Price is now up $6.46 on session -- biggest one-day price increase in Nymex history.

S&P futures vs fair value: -8.5. Nasdaq futures vs fair value: -11.2. The futures market has been beaten back on the employment report and is signaling a lower start for stocks when trading begins. Rising oil prices, up 2.7% to $131.40, are acting as another buying deterrent.
AIG: The Securities and Exchange Commission is investigating the insurer American International Group for possibly overstating the value of contracts connected to subprime mortgages, reported The Wall Street Journal. AIG (AIG, Fortune 500)
National City Corp: Its banking unit entered a confidential, probation-like agreement with the Office of the Comptroller of the Currency to work out its financial problems related to bad loans, reported The Wall Street Journal. National City (NCC, Fortune 500)
Bank of America-Countrywide: The Federal Reserve approved Bank of America's proposed $4 billion acquisition of distressed subprime mortgage lender Countrywide Financial.
Lehman Brothers: The investment bank might release its second-quarter earnings a week early, in conjunction with its announced plans to raise capital, reported The New York Post. The investment firm had planned to release earnings on June 16. Lehman

U.S. employers probably lost 50,000 jobs in May after a drop of 20,000 in the prior month.
``Disappointing payrolls data have the potential to knock the dollar lower,'' said Akio Shimizu, chief manager of foreign exchange trading at Mitsubishi UFJ Trust & Banking Corp. in Tokyo, a unit of Japan's second-largest bank. ``A combination of doubts about the economy and a lack of improvement in credit markets are bad for the dollar.''
Above the session high on $1.5610 the rise may extend to $1.5680 and $1.5760. Support is around $1.5530 (38.2% of $1.5820 - $1.5360 decline), then – at $1.5460 (23.6%). Key support comes at yesterday’s lows on $1.5360.

The dollar headed for a weekly loss against the euro on speculation Europe's central bank will keep its interest-rate advantage as the U.S. economy loses jobs.
The currency fell from a four-week high versus the euro yesterday after European Central Bank President Jean-Claude Trichet said a rate increase in July is ``possible.'' A government report will probably show the U.S. lost jobs for a fifth consecutive month. The yen headed for a second weekly decline as stocks rallied, prompting investors to add to holdings of higher-yielding assets funded with Japan's currency.

EUR/USD traded within $1.5570- $1.5615 range. Bids $1.5570, $1.5550, stronger $1.5520. Offers at $1.5625/30.

GBP/USD posted session low at $1.9536 before recovered to $1.9580. Bids $1.9540/30, $1.9500. Offers $1.9600, $1.9620.

USD/JPY remained within the bounds of Y106.20-Y105.90. Offers Y106.30/50, Y106.60/70.

Today’s focus is on Payrolls data due at 12:30 GMT. U.S. employers probably lost 60,000 jobs in May after a drop of 20,000 in the prior month, according to the median forecast of 79 economists surveyed by Bloomberg News.
``Disappointing payrolls data have the potential to knock the dollar lower,'' said Akio Shimizu, chief manager of foreign exchange trading at Mitsubishi UFJ Trust & Banking Corp. in Tokyo, a unit of Japan's second-largest bank. ``A combination of doubts about the economy and a lack of improvement in credit markets are bad for the dollar.''

Recovery off lows at $1.9536 failed above $1.9570. Cable offers remain in place to $1.9600, with interim interest now seen between $1.9580/85. Bids $1.9538, with interest extending toward $1.9530.

EUR/USD $1.5600, $1.5500, $1.5700
UUSD/JPY Y106.00
AUD/USD $0.9550, $0.9465, $0.9450

The dollar headed for a weekly loss against the euro on speculation Europe's central bank will keep its interest-rate advantage as the U.S. economy loses jobs.
The currency fell from a four-week high versus the euro yesterday after European Central Bank President Jean-Claude Trichet said a rate increase in July is ``possible.'' A government report will probably show the U.S. lost jobs for a fifth consecutive month. The yen headed for a second weekly decline as stocks rallied, prompting investors to add to holdings of higher-yielding assets funded with Japan's currency.
Barclays Capital and Citigroup Global Markets Inc. both predicted the euro may advance further in research published after Trichet's speech. The ECB kept its main refinancing rate at a six-year high of 4 percent yesterday, unchanged since last June. The Federal Reserve has cut its target seven times since mid-September to 2 percent to stave off a recession.
``Trichet went a step further than Bernanke and signaled that the ECB was much more likely to raise interest rates at its next meeting than markets had previously thought,'' currency analysts led by London-based David Woo at Barclays Capital wrote in a research note yesterday. ``The euro may be undervalued by as much as 1.5 percent against the dollar.''
U.S. employers probably lost 60,000 jobs in May after a drop of 20,000 in the prior month, according to the median forecast of 79 economists surveyed by Bloomberg News. The Labor Department's report is due at 1230GMT.
``Disappointing payrolls data have the potential to knock the dollar lower,'' said Akio Shimizu, chief manager of foreign exchange trading at Mitsubishi UFJ Trust & Banking Corp. in Tokyo, a unit of Japan's second-largest bank. ``A combination of doubts about the economy and a lack of improvement in credit markets are bad for the dollar.''

- May unemployment 6.1% vs April 6.1%

WTI Nymex crude oil is trading just below $130.00 level, following the sharp $6.0 rally on Thursday as dollar came under pressure in the wake of hawkish comments from ECB President Jean-Claude Trichet who put markets on heightened alert for a July rate hike. Crude oil prices are also bid on reports that Nigerian oil workers have threatened to strike. WTI Nymex crude oil is at $129.35, up $1.56.

Resistance 3: Y107.40

Resistance 2: Y106.70
Resistance 1: Y106.20
Current price: Y106.15
Support 1: Y105.50

Support 2: Y104.80

Support 3: Y104.20

Comments: Dollar remaines near trend line from July 2007 at Y106.20. A break above will open the way to Y106.70 and Y107.40. Strong support comes at Y105.50 (Thursday’s low), then - Y104.80 and Y104.20.

Resistance 3: Chf1.0580
Resistance 2: Chf1.0520
Resistance 1: Chf1.0440
Current price: Chf1.0392

Support 1: Chf1.0370
Support 2: Chf1.0280

Support 3: Chf1.0220

Comments: Dollar is under pressure having tested support at Chf1.0370 (50% of Chf1.1100 - Chf1.9640 decline). Break under this level will widen losses to Chf1.0280 and then – May lows on Chf1.0220. Resistanbce comes at 50% Fibo level of yesterday’s fall on Chf1.0440. Above there is a room for a rise to Thursday’s high on Chf1.0520.

Resistance 3: $1.9850
Resistance 2: $1.9740
Resistance 1: $1.9600
Current price: $1.9543
Support 1: $1.9530
Support 2: $1.9460
Support 3: $1.9350

Comments: Cable set stable after yesterday’s rally. The pare tested Thursday’s high at $1.9590/00 overnight (strong resistance). Rise above will open the way to Tuesday’s high at $1.9740 and then – to May highs on $1.9850. Support is around $1.9530 with stronger one – at $1.9460 (yesterday’s low). Key support remains around May 15 low at $1.9350.

Resistance 3:$1.5760
Resistance 2: $1.5680
Resistance 1: $1.5610Current price: $1.5581

Support 1: $1.5330
Support 2: $1.5460
Support 3: $1.5360

Comments: Euro challenges session high on $1.5610. Above the rise may extend to $1.5680 and $1.5760. Support is around $1.5530 (38.2% of $1.5820 - $1.5360 decline), then – at $1.5460 (23.6%). Key support comes at yesterday’s lows on $1.5360.

--Average Germany 2008 HICP 3.0%; 2009 2.2%; upside risks
--Germany inflation over 3% most of 2008, could be back to 2% in 2009
--Germany economic outlook improved since Dec; inflation picture worse
--Global growth in 2008 to be moderate; pick-up in 2009 on U.S. recovery

EUR/GBP stretches recovery rally to stg0.7981. Offers now seen placed between stg0.7985/95 (stg0.7986 76.4% stg0.8034/0.7833), with stops placed above stg0.8000.

USD/CAD contained within a tight range of C$1.0163/85, printed earlier high on C$1.0196. Rate currently holds between C$1.0180/85. Offers seen placed to C$1.0200, with stronger interest remaining in place between C$1.0220/25. A break above this level to open a move on toward C$1.0245/50 ahead of C$1.0275/80. Bids remain in place toward C$1.0160, more between C$1.0145/40 with stops below.

EUR
Bids: $1.5575/70, $1.5550, $1.5520
Offers: $1.5620/30

JPY
Bids: Y105.80/50, Y106.30/50
Offers: Y106.50, Y106.50/70

GBP
Bids: $1.9550/45, $1.9530
Offers: $1.9600

AUSSIE
Bids: $0.9580/75
Offers: $0.9630/50

The dollar headed for a weekly loss against the euro on speculation Europe's central bank will keep its interest-rate advantage as the U.S. economy loses jobs.
The currency fell from a four-week high versus the euro yesterday after European Central Bank President Jean-Claude Trichet said a rate increase in July is ``possible.'' A government report will probably show the U.S. lost jobs for a fifth consecutive month. The yen headed for a second weekly decline as stocks rallied, prompting investors to add to holdings of higher-yielding assets funded with Japan's currency.
The dollar has lost 11% against the euro since the central bank started lowering the fed funds target from 5.25% on Sept. 18.

EUR/USD tested $1.5570 before it reached $1.5615.
GBP/USD weakens, holding around $1.9560/$1.9600.
USD/JPY fell from Y106.20 to Y105.19.

Today’s focus is on Payrolls data at 12:30 GMT. Analysts predict employment fell 60K in May with unemployment rate rose to 5.1% from 5.0% month earlier.

Japanese stock indices ended the day higher: the benchmark Nikkei 225 was higher by 148.32 points, or 1.03%, at 14489.44. The broader-based TOPIX was higher by 3.66 points at 1428.11.

Stock market fixing:
Nikkei 225 -94.45 -0.7% 14,341.12
Topix -6.02 -0.4% 1,424.45
FTSE 100+25.20+0.42%5,995.30
CAC 40-8.01-0.16%4,907.06
Xetra Dax-23.60-0.34%6,941.83
DOW +213.97+1.73%12,604.45
NASDAQ+46.80+1.87%2,549.94
S&P 500 +26.76+1.94%1,403.96
10yr Note+0.8500+0.216%4.025%
NYMEX Crude Oil+5.49+4.49%127.79
Gold-8.30-0.94%875.50

Japan's stocks fell after Lehman Brothers Holdings Inc. cut its rating on the nation's banking industry and falling prices for oil and metals dragged down commodity-related shares.
Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. led banks lower. Mitsui & Co., which gets more than half its profit from commodities, declined to a three-week low. Softbank Corp., the nation's fastest-growing wireless carrier, soared the most in two months on its agreement to sell Apple Inc.'s iPhone handset in Japan.
Mizuho, the most actively traded stock by value on the exchange's main board, slipped 3.7%, the biggest decline since May 21. Chuo Mitsui Trust Holdings Inc. sank 2.9%, and market leader Mitsubishi UFJ lost 2.9%. Banks accounted for more than half of the Topix's decline.
Mitsui tumbled 4.3%, the lowest since May 14. Larger rival Mitsubishi Corp., which has a stake in the world's largest copper and zinc mine, fell 3%. Inpex Holdings Inc., the nation's biggest oil explorer, tumbled 3.1%.

European stocks fell for a second day after European Central Bank President Jean-Claude Trichet said policy makers may raise interest rates as early as next month to contain inflation.
Credit Agricole SA slumped to a five-year low after new shares were priced below its initial stock offering. Anglo American Plc led a retreat among mining companies as copper, lead and zinc prices declined in London.
The ECB kept its key interest rate on hold at a six-year high to fight inflation even as the economy cools. The Bank of England earlier also left rates unchanged.
Credit Agricole tumbled 8%. France's third-largest bank dropped to its lowest since April 2003, after saying yesterday it will sell shares at 10.6 euros each, a 37% discount on the previous day's close.
Anglo American fell 2.9% and BHP, the world's largest mining company, slipped 1.2%.
Vodafone Group Plc climbed after Verizon Wireless agreed to buy Alltel Corp. for $28.1 billion in cash and debt. Verizon Wireless is jointly owned by Verizon Communications Inc. and Vodafone, which climbed 3.8%.

A big drop in weekly jobless claims and surprisingly strong May sales from Wal-Mart Stores were among the main factors lifting stocks on Wall Street Thursday.
Brown-Forman Corp. climbed the most in four months. The maker of Jack Daniel's whiskey said fourth-quarter profit rose 48%, more than analysts estimated, on an increase in overseas sales.
Comtech Telecommunications Corp. rose after it said third-quarter sales jumped 16% to $138.1 million, beating the $129.2 million average estimate of six analysts surveyed.
Martek Biosciences Corp. fell the most since Sept. 7. The maker of nutritional oils for foods and baby formula said fiscal third-quarter net income will be lower because of production timing and ordering patterns of several large customers.
Nucor Corp. climbed the most since April 16. The largest U.S.-based steelmaker by market value boosted its second-quarter profit forecast amid rising demand for the metal and record prices.

The euro rose the most in two weeks against the dollar and gained versus the yen and the British pound after European Central Bank President Jean-Claude Trichet said an interest-rate increase in July is ``possible.''
The rally snapped three days of declines against the U.S. currency as Trichet said policy makers are in a state of ``heightened alertness'' over inflation.
The yen dropped to a three-month low versus the dollar and fell the most against the euro since March as an advance in stocks encouraged investors to buy higher-yielding assets funded in Japan.
The ECB kept its main refinancing rate at six-year high of 4%, where it has been since last June. The Federal Reserve has cut its target seven times since September, to 2%, to stave off a recession.
The pound fell for a second day against the euro after the Bank of England kept its key interest rate at 5%.

EUR/USD printed low on $1.5360 before rising to $1.5540 amid Trichet’s comments. Later rate refreshed session highs around $1.5600.
GBP/USD declined from $1.9460 before rebounding to $1.9595/00.
USD/JPY printed high on Y106.40 before retreating to $105.50.

Today’s focus is on Payrolls data at 12:30 GMT. Analysts predict employment fell 60K in May with unemployment rate rose to 5.1% from 5.0% month earlier.

Resistance 3: Y107.40
Resistance 2: Y106.70
Resistance 1: Y106.20
Current price: Y106.04
Support 1: Y105.50
Support 2: Y104.80
Support 3: Y104.20
Comments: Dollar probes trend line from July 2007 at Y106.20 with a break above will open the way to Y106.70 and Y107.40. Strong support comes at Y105.50 (Thursday’s low), then - Y104.80 and Y104.20.

Resistance 3: Chf1.0580
Resistance 2: Chf1.0520
Resistance 1: Chf1.0440
Current price: Chf1.0379
Support 1: Chf1.0370
Support 2: Chf1.0280
Support 3: Chf1.0220
Comments: Dollar is under pressure after testing support at Chf1.0370 (50% of Chf1.1100 - Chf1.9640 decline). Break under this level will widen losses to Chf1.0280 and then – May lows on Chf1.0220. Resistanbce comes at 50% Fibo level of yesterday’s fall on Chf1.0440. Above there is a room for a rise to Thursday’s high on Chf1.0520.

Resistance 3: $1.9850
Resistance 2: $1.9740
Resistance 1: $1.9600
Current price: $1.9572
Support 1: $1.9530
Support 2: $1.9460
Support 3: $1.9350
Comments: Cable set stable after yesterday’s rally, testing Thursday’s high at $1.9590/00 overnight (strong resistance). Rise above will open the way to Tuesday’s high at $1.9740 and then – to May highs on $1.9850. Support is around $1.9530 with stronger – on $1.9460 (yesterday’s low). Key support is around May 15 low at $1.9350.

Resistance 3:$1.5760
Resistance 2: $1.5680
Resistance 1: $1.5610
Current price: $1.5588
Support 1: $1.5330
Support 2: $1.5460
Support 3: $1.5360
Comments: Euro challenges session high on $1.5610. Above the rise may extend to $1.5680 and $1.5760. Support is around $1.5530 (38.2% of $1.5820 - $1.5360 decline), then – at $1.5460 (23.6%). Key support comes at yesterday’s lows on $1.5360.

High Low Close
EUR/USD 1.5598 1.5362 1.5581
USD/JPY 106.41 105.19 105.94
GBP/USD 1.9594 1.9460 1.9575
USD/CHF 1.0522 1.0353 1.0389

EUR/JPY 165.23 162.23 165.08
EUR/GBP 0.7963 0.7884 0.7957
GBP/JPY 207.52 205.50 207.41
GBP/CHF 2.0493 2.0270 2.0337

Change % Change Last
Nikkei 225 -94.45 -0.7% 14,341.12
Topix -6.02 -0.4% 1,424.45
FTSE 100 +25.20 +0.42% 5,995.30
CAC 40 -8.01 -0.16% 4,907.06
Xetra Dax -23.60 -0.34% 6,941.83
DOW +213.97 +1.73% 12,604.45
NASDAQ +46.80 +1.87% 2,549.94
S&P 500 +26.76 +1.94% 1,403.96
10yr Note +0.8500 +0.216% 4.025%
NYMEX Crude Oil +5.49 +4.49% 127.79
Gold -8.30 -0.94% 875.50

10:00 Germany Industrial production (April) adjusted 0.1% -0.5%
10:00 Germany Industrial production (April) adjusted Y/Y 6.1% 4.7%
10:00 Germany Industrial production (April) unadjusted Y/Y - -4.6%
11:00 Canada Employment (May) - +19.2K
11:00 Canada Unemployment rate (May) - 6.1%
12:30 USA Nonfarm payrolls (May) -55K -20K
12:30 USA Unemployment rate (May) 5.1% 5.0%
12:30 USA Average hourly earnings (May) 0.2% 0.1%
12:30 USA Average workweek (May) 33.8 33.7
14:00 USA Wholesale inventories (April) 0.5% -0.1%
19:00 USA Consumer credit (April), bln +7.2 +15.3