Economists at ML say the trade data, along with some other revisions to the monthly data (especially nonresidential construction), take the new 'bean count' on the Q1 GDP revision to +1% at an annual rate. "This is sure to embolden the calls that we dodged the recession bullet."

American International Group, Inc - The world’s largest insurer by assets reported a record quarterly $7.8B loss after the market close Thursday and announced it would raise more capital.
Activision Inc - The company, which will be the largest video game maker after a merger with a Vivendi SA unit, reported earnings that beat analysts' estimates on sales of the music play-along game "Guitar Hero."
Moneygram Intl Inc - The money-transfer company reported a first-quarter loss of $4.40 a share, compared with profit of 35 cents a share the previous year, on the plunging value of the company's investments.
Medicis Pharmaceutical Corp - The maker of the world's top-selling wrinkle filler said first-quarter profit more than doubled on strong sales of its prescription acne drugs.
Mylan Laboratories Inc - The largest U.S. maker of generic pharmaceuticals said its first-quarter loss widened on costs tied to the $6.9B purchase of Merck KGaA's generics division.
Priceline Com Inc - The Internet travel agency said annual profit may reach as high as $5.65 a share, topping analysts’ forecasts, and first-quarter revenue rose 34% on strong international sales.

After trading sideways for some time, the stock market has stepped a bit lower. The Dow Jones Industrial Average is now down more than 1.0% this session. Four of the major economic sectors are trading with a loss of 1.0% or more. Participants are selling small-and large-cap names alike. The S&P 100 is down 0.9% and the Russell 2000 is down a less severe 0.2%.

``The pound will be under attack,'' Neil Jones, head of European hedge-fund sales at Mizuho Capital Markets in London, said in a Bloomberg Television interview today. The U.K. currency may decline to $1.9250, he said, without giving a timeframe.

The dollar pared its loss versus the euro after a Commerce Department report showed the U.S. trade deficit narrowed more than forecast in March as imports dropped by the most in more than six years.

The euro rose against the dollar today on speculation the ECB will keep its benchmark rate at a six-year high of 4 percent in coming months to curb price pressures.
Inflation in Europe will stay high ``for a rather protracted period,'' Trichet said at a press conference yesterday following the ECB's decision to keep its main refinancing rate at 4 percent.
Futures on the Chicago Board of Trade show a 78 percent chance the Fed will hold its target lending rate at 2 percent at its next meeting on June 25, down from an 82 percent chance yesterday. The balance of bets is for a cut of a quarter- percentage point.

The yen rose against the euro, heading for its biggest weekly gain in three months, as renewed concern credit-market losses are spreading hurt stocks and spurred investors to sell higher-yielding assets.
Japan's currency rose to a three-week high versus the dollar after American International Group Inc. said it needs $12.5 billion to offset subprime writedowns following two straight quarterly losses. The euro extended its advance from an eight-week low against the dollar a day after European Central Bank President Jean-Claude Trichet cited the risk of inflation.
Japan's currency has gained 2 percent against the euro and 2.2 percent against the dollar this week. The euro has increased 6 percent against the dollar this year and 0.1 percent for the week. It has dropped 3.3 percent against the U.S. currency since reaching a record high of $1.6019 on April 22.
The pound fell against the euro, headed for its first weekly decline in a month, on speculation signs the economy is faltering will prompt the Bank of England to resume cutting interest rates.
Britain's currency also fell this week, and gilts surged, as reports showed manufacturing production unexpectedly contracted and consumer confidence declined to the weakest level in at least four years. The data prompted futures traders to add to bets borrowing costs will fall this year.

Stocks remain largely unchanged from previous levels. Sellers continue to hold the market in check as declining stocks outnumber the advancing issues on the NYSE.The telecom sector (+0.1%) has made its way into positive ground. The sector had opened lower, but Sprint Nextel (S 9.86, +0.88) is providing leadership.

U.S. stocks fell, sending the market to its first weekly drop in a month, on concern that record crude oil prices will reduce profits at refiners and lower copper and gold prices will hurt mining companies.The Standard & Poor's 500 Index sank 7.38, or 0.5 percent, to 1,390.3 at 11:08 a.m. in New York, giving it a 1.7 percent decline this week. The Dow Jones Industrial Average slid 88.66, or 0.7 percent, to 12,778.12, led by a 7 percent drop in American International Group Inc. The Nasdaq Composite Index lost 2.15, or 0.1 percent, to 2,449.09. More than four stocks fell for every three that rose on the New York Stock Exchange.Energy companies in the S&P 500 contributed the most to the retreat even as crude surged to a record above $126 a barrel. Producers of raw materials retreated 1.9 percent as a group, led by Freeport-McMoRan Copper & Gold Inc. and Nucor Corp.
Valero Energy Corp., the biggest U.S. refiner, tumbled to an almost three-year low after Goldman Sachs Group Inc. said it may face reductions in profit estimates. Dril-Quip Inc., which makes equipment for offshore oil and gas production, retreated after profit missed estimates by 10 percent. Financial shares pared earlier declines, led by Citigroup Inc. after the largest U.S. bank said it plans to sell $400 billion in assets. Financial shares dropped 0.2 percent, paring a decline of as much as 1.3 percent. Citigroup added 14 cents to $24.44 on plans to ``wind down'' about $400 billion of assets as part of a program to return to profitability. The bank announced the wind- down today in a presentation posted on the company's Web site. The New York-based company, which lost $5.1 billion in the first quarter, has recorded more than $40 billion of credit losses and writedowns since the subprime mortgage market collapsed last year.
Mylan Inc. fell 9.8 percent to $11.23. The largest U.S. maker of generic medicines reported a wider first-quarter loss on costs tied to the $6.9 billion purchase of Merck KGaA's generics division in October.
McDonald's Corp. fell 42 cents to $59.35. Goldman Sachs Group Inc. removed the world's largest restaurant company from its ``conviction buy list'' and added Burger King Holdings Inc.

FTSE 100 -58.80 -0.94% 6,212.00

CAC 40 -96.97 -1.92% 4,958.61

Xetra Dax -75.77 -1.07% 6,996.13

Economimsts at BOA say The smaller-than-expected trade deficit will add about 0.5% to estimated GDP growth in 1Q 2008, pushing it up to an estimated 1.2% when other revisions are considered.

Economists at Citi say the real trade deficit in goods shrank at a $22.7B annualized pace in 1Q 2008, potentially adding 0.8% to Q1 GDP. Excluding other data, this should result in an upward revision to Q1 growth in excess of 0.5%.

Stocks looked set for a sharp decline at Friday's open as AIG's big loss raised credit jitters and soaring oil prices fanned inflation concerns.

Insurer AIG reported a quarterly $7.8 billion loss after the market close Thursday. Shares of the Dow component tumbled 7.4%.

Surging oil prices also kept investors wary about inflation. Crude futures broke the $125 mark for the first time early Friday to hit yet another record trading high of $125.12.

The Commerce Department said the March gap came in at $58.2 billion, down from a revised $61.7 billion in February. Economists had forecast the gap would fall to $61.3 billion. U.S. exports for the month fell 1.7% to $148.5 billion from February's $151.1 billion. But imports also fell, dropping 2.9% to $206.7 billion from $212.8 billion in the previous month.

Companies to watch include electronics and defense company Harris Corp. The Wall Street Journal reported the firm has started exploring its strategic options, and could eventually decide to sell itself.

Citigroup is also in focus, with CEO Vikram Pandit due to to reveal his strategy for reviving the troubled firm at the company's investor day today.

EUR/USD $1.5350, $1.5550
USD/JPY Y102.35, Y102.05, Y104.05, Y105.90, Y106.00
GBP/USD $1.9690
AUD/USD $0.9450, $0.9475, $0.9510
USD/CAD C$1.0100

Mark Wan, chief analyst at Hang Seng Investment Services Ltd: “The currency market is pushing up the dollar and shares the view that the U.S. economy is getting better.”

Michael Sacchitello from Stone & McCarthy says on S&P500: “Hourly charts increases the risk of 1382 being tested by Friday. If this level fails, the case for a new wave lower would certainly gain weight.”

Dollar rose after stronger-than-expected trade balance data. EUR/USD refreshed lows around $1.5430, while GBP/USD holds at $1.9470 and USD/JPY rebounds to Y102.90.

The following data were issued
06:00GermanyWholesale prices (April) 0.6% - 1.6%

06:00GermanyWholesale prices (April) Y/Y 6.9% - 7.1%

06:45FranceIndustrial production (March) -0.8% -0.3% 0.5 (0.3)%

06:45FranceIndustrial production (March) Y/Y 1.0% - 2.0%

11:00CanadaEmployment (April) +19.2K - +14.6K

11:00CanadaUnemployment rate (April) 6.1% 6.1% 6.0%

The yen rose against the euro, headed for its biggest weekly gain in three months, as concern credit- market losses are spreading hurt stocks and spurred investors to sell higher-yielding assets funded in Japanese currency.
The yen was also set for the first five-day advance in a month versus the dollar after American International Group Inc. said it needs $12.5 billion to offset subprime-related writedowns following two straight quarterly losses.
The euro rose, extending yesterday's rebound from an eight-week low against the U.S. currency, after European Central Bank President Jean-Claude Trichet said inflation remains the bank's priority.
The pound headed for a third weekly loss against the dollar on speculation the Bank of England will add to three interest- rate cuts since December.
The euro rose against the dollar on speculation the ECB will keep its benchmark rate at a six-year high in coming months to curb price pressures.

EUR/USD opened in early Europe at $1.5437. Later rate printed an eventual high of $1.5489, before retreating to $1.5433/60. Bids $1.5460/50, $1.5415/05, $1.5380. Offers $1.5490, $1.5500/10-30.
GBP/USD opened early Europe at $1.9558. Rate traded to a low of $1.9497 before profit take demand emerged to take it back to $1.9550/55 before settling between $1.9530/50. Cable bids $1.9480-50. Offers $1.9570, $1.9590/00.
USD/JPY fell to Y102.70. Dollar-yen bids Y102.85/50, Y102.20/00. Offers Y103.40/50, Y103.90/00.

At 12:30 GMT International trade report is schedule to release. Analysys predict deficit narrowed to $61,0 bln versus -$62,3 bln month earlier.

EUR/USD $1.5350, $1.5550
USD/JPY Y102.35, Y102.05, Y104.05, Y105.90, Y106.00
GBP/USD $1.9690
AUD/USD $0.9450, $0.9475, $0.9510
USD/CAD C$1.0100

Currency strategists at UBS reinstate a short euro-dollar position at current levels, $1.5455, with a stop at $1.5712. They cite risk that surging oil prices will pose further risk to eurozone growth and will damp already fragile consumer sentiment further.

GBP/USD extended losses to $1.9480, where rate ran into reported demand interest placed between $1.9485/80. Cable recovers back to current $1.9500.

The dollar fell broadly on Friday as sagging stock markets and a jump in oil prices to a record high weighed on the U.S. currency, while fading risk demand boosted the low-yielding yen.
The euro added to gains made the previous session after ECB President Jean-Claude Trichet said on Thursday that inflation remained his top concern, suggesting the bank may not cut interest rates soon.
The euro recovered after falling to a two-month trough below $1.53 as some investors expected Trichet to temper his tough talk on inflation and focus on signs of slowing euro zone growth.
Sterling was little changed, having fallen to a two-month low after the Bank of England kept interest rates on hold at 5 percent on Thursday.

Gary Bigg, an economist at BOA says with automobile manufacturers announcing production cutbacks, financial services firms scaling back and construction employment at risk due to high inventories, "we expect to see initial and continuing claims at elevated levels in the months ahead."

European equity bourses are trading lower Friday, with sentiment weighed by AIG results. AIG posted a net $3.09 loss/share. S&P ratings agency cut AIG to AA- from AA and said it may cut its ratings further. Sanofi-Aventis leads drugmakers lower. CAC-40 is 127pts (-2.51%), Xetra-DAX -98pts (-1.39%) and FTSE-100 -94pts (-1.49%).

Resistance 3: Y106.30
Resistance 2: Y105.20
Resistance 1: Y104.50
Current price: Y103.04
Support 1: Y102.80
Support 2: Y102.20
Support 3: Y100.00
Comments: Dollar is under pressure. Support is near today's low on Y102.80, then – at Y102.20 with a break under will widen losses to Apr 10 lows around Y100.00. The nearest resistance is Y104.50. Above there is a room for a rise up to Y105.20, then – to Y106.30.

Resistance 3: Chf1.0730
Resistance 2: Chf1.0670
Resistance 1: Chf1.0520
Current price: Chf1.0419
Support 1: Chf1.0420
Support 2: Chf1.0380
Support 3: Chf1.0330
Comments: Dollar remains under pressure. Support comes near session low on Chf1.0420, then – on Chf1.0380 with stronger – on Apr 30 high on Chf1.0330. Resistance is around Chf1.0520, then – near yesterday’s high on Chf1.0620. Above there is a room for a rise up to Chf1.0670.

Resistance 3: $1.9730
Resistance 2: $1.9620
Resistance 1: $1.9550
Current price: $1.9542
Support 1: $1.9500
Support 2: $1.9450
Support 3: $1.9360
Comments: Cable trades not far from resent lows at $1.9500, with losses possibly extending to $1.9450 and lower- till Feb lows at $1.9360. The nearest resistance is Asian high at $1.9550/60, than comes $1.9620/30, and yesterday's high at $1.9730.

Resistance 3:$1.5590
Resistance 2: $1.5530
Resistance 1: $1.5480
Current price: $1.5472
Support 1: $1.5280
Support 2: $1.5230
Support 3: $1.5140
Comments: Euro rallies, holding a bity below session high (strong resistance) at $1.5480. Above the rate may rise to $1.5530/40 and than to May 6 high at $1.5590. The nearest support is near yesterday's session low on $1.5280. Further sales may widen till $1.5230 and March 5 low at $1.5140.

David Cohenfrom Action Economics: “The next Fed’s move will be a rate hike -- we can't rule out a rate hike in the U.S. by the end of the year.”

The latest client poll from Lehman Brothers.
1. This is the peak: $122 - 10%;
2. $125-$150 - 47%;
3. $150-$175 - 28%;
4. $175-$200 - 12%;
5. $200-$250 - 0%;
6. $250+ - 3%.

EUR/USD $1.5350, $1.5550
USD/JPY Y102.35, Y102.05, Y104.05, Y105.90, Y106.00
GBP/USD $1.9690
AUD/USD $0.9450, $0.9475, $0.9510
USD/CAD C$1.0100

EUR/USD holds near $1.5466 after printinghigh on $1.5482. Offers remain at $1.5480, more between $1.5500/10.

The yen headed for its biggest weekly gain in three months versus the euro as renewed concern about credit-market losses caused stocks to fall and spurred investors to sell higher-yielding assets funded with loans from Japan.
The currency was also set for the first five-day advance in a month versus the dollar as American International Group Inc. said it would raise $12.5 billion to offset subprime-related writedowns. The euro rebounded from an eight-week low versus the U.S. currency after European Central Bank President Jean-Claude Trichet said yesterday inflation remains the bank's top priority.

EUR/USD find support around $1.5400-$1.5390 and rose to $1.5480 till the EU trading began.
GBP/USD held within the $1.9500/60 range.
USD/JPY declined from Y103.95 and printed low on Y103.00.

Canada will release today its employment data. At 12:30 GMT International trade report is schedule to release. Analysys predict deficit narrowed to $61,0 bln versus -$62,3 bln month earlier.

The stronger yen weighed on exporters. Nikkei 225 was down 287.92 points, or 2.06%, at 13655.34. The broader-based TOPIX was down 31.19 points at 1340.79.

The S&P June contract was last 1.7 points lower at 1390.3, with the Nasdaq June contract slipping 1.5 points to 1964.0.

Resistance 3: Y106.30

Resistance 2: Y105.60
Resistance 1: Y104.90
Current price: Y103.38
Support 1: Y103.40

Support 2: Y103.20

Support 3: Y102.60

Comments: Dollar is under pressure. Support is near today's low on Y103.50/40, then – at Y103.20 with a break under will widen losses to Apr 22-23 lows around Y102.60/70. The nearest resistance is session high at Y104.90. Above there is a room for a rise up to Y104.90, then – to Y105.60.

Resistance 3: Chf1.0730

Resistance 2: Chf1.0670
Resistance 1: Chf1.0620
Current price: Chf1.0477

Support 1: Chf1.0480
Support 2: Chf1.0420

Support 3: Chf1.0330

Comments: Dollar remains under pressure. Strong resistance comes at yesterday's high on Chf1.0620. Above the target comes at Chf1.0670 and Chf1.0730 (Feb 01 high)The nearest support is at Chf1.0480. Below there is a risk of sliding to Friday's low at Chf1.0420 and then – to Apr 30 lows on Chf1.0330.

Resistance 3: $1.9730
Resistance 2: $1.9620
Resistance 1: $1.9550
Current price: $1.9518
Support 1: $1.9500
Support 2: $1.9450
Support 3: $1.9360
Comments: Cable trades not far from resent lows at $1.9500, with losses possibly extending to $1.9450 and lower- till Feb lows at $1.9360. The nearest resistance is asian high at $1.9550/60, then comes yesterday's high $1.9620/30, and $1.9730.

FTSE down 26, the DAX down 39, the CAC down 45 and the Eurostoxx 50 down 35.

The contract was last at $124.38, up 69 cents, just shy of the new high at $124.61 hit early in the electronic session.

Resistance 3:$1.5590
Resistance 2: $1.5530

Resistance 1: $1.5440

Current price: $1.5425

Support 1: $1.5280
Support 2: $1.5230
Support 3: $1.5140

Comments: Euro retains positive mood.The nearest support is near yesterday's session low on $1.5280. Further sales may widen till $1.5230 and March 5 low at $1.5140. Lift above $1.5440 (50% of the resent fall) will open a way to $1.5530/40 and than to May 6 high at $1.5590.

High Low Close
EUR/USD 1.5438, 1.5284, 1.5402
USD/JPY 104.92, 103.40, 103.75
GBP/USD 1.9619, 1.9502, 1.9546
USD/CHF 1.0622, 1.0480, 1.0503

EUR/JPY 161.27, 159.03, 159.81
EUR/GBP 0.7886, 0.7819, 0.7877
GBP/JPY 204.75, 202.36, 202.83
GBP/CHF 2.0720, 2.0501, 2.0530

Change % Change Last
Nikkei 225 -159.22 (-1.1%) 13,943.26
Topix -20.33 (-1.5%) 1,372.95
DAX 30 -4.35 (-0.1%) 7071.90
САС 40 -19.73 (-0.4%) 5055.58
FTSE 100 +9.80 (+0.2%) 6270.80
Dow +52.43 (+0.41%) 12866.78
Nasdaq +12.75 (+0.52%) 2451.24
S&P +5.11 (+0.37%) 1397.68
10YR +1 8/32 3.78% 24/32
OIL NYMEX +0.16 (+0.13%) $123.69

05:00 Japan Leading indicators (March) preliminary - 54.5
05:00 Japan Coincident indicators (March) preliminary - 70.0
06:45 France Industrial production (March) - 0.3%
06:45 France Industrial production (March) Y/Y - 2.0%
11:00 Canada Employment (April) - +14.6K
11:00 Canada Unemployment rate (April) - 6.0%
12:30 USA International trade (March), bln -61.0 -62.3
12:30 USA Export (March), bln - 151.4
12:30 USA Import (March), bln - 213.7