- Energy Activity Weaker
- Labor Market Still Weak; Wages Falling Or Flat
- Prices Mostly Flat, Falling
- Some Uptick In Home Sales, Construction
- Credit Conditions Still Tight
- Lending Activity Weak But Stable
- District-By-District Summary

- Some Improvement In Economic Expectations
- No Sign Of Big Boost In Econ Activity This Year
- Manufacturing Declined, Remained Low
- 5 Of 12 Districts See Economic Decline Moderating
- Outlook For Manufacturing Slightly Improved

- US Govt Deficit FY 2009 To Date $991.95 Bln

Home Depot Inc
The world’s largest home-improvement retailer said 2009 profit from continuing operations may decline less than the 7% it had projected in May, or may not decrease at all, after it reduced expenses to counter falling sales.

BP PLC
ING upgraded the oil giant to “buy” from “hold” as it also downgraded BG Group and Portugal's Galp Energia to “sell” from “hold.” ING said it sees large-cap oil companies as defensive against a likely falling equity market in the second half of 2009.


The Procter & Gamble Co
The branded consumer goods conglomerate’s board is expected to approve the appointment of Chief Operating Officer Robert McDonald as the new chief executive to replace A.G. Lafley, The Wall Street Journal reported.

Citigroup Inc
The struggling money center bank said it finalized an agreement with the U.S. government under which the government will exchange up to $25B of Citi preferred securities for interim securities and warrants.

- Europe Recovery Seen "Gradual, Extended"
- Euro Area Inflation To Be Negative For Period
- Inflation Inline With ECB Stability Definition
- Irish Fiscal Position Cause For Serious Concern

- Must Re-examine Golden Parachute, Retirement Packages
- `We Are Not Capping Pay`

The financial sector (-1.1%) has extended its losses and now trades with the worst percentage decline of any major sector in the S&P 500. Since financials carry the second-largest market weighting in the S&P 500, their downturn is acting as a considerable drag on the broader market.
Meanwhile, technology stocks, which are the largest sector by market weight in the S&P 500, are currently down 0.5%.

The yen declined against all of its major counterparts as speculation the global recession is easing encouraged investors to borrow in Japan and buy higher-yielding assets elsewhere.
Australia’s dollar advanced as consumer confidence jumped in June by the most in 22 years and China’s property sales and investment accelerated in the first five months of 2009 from a year earlier. The dollar earlier declined versus the euro on bets Russia will reduce holdings of U.S. Treasuries.
“Investors in Japan are selling the yen to buy some higher-yielding currencies,” said Hidetoshi Yanagihara, senior currency trader at Mizuho Corporate Bank in New York. “Carry trades will last for a while.”
The yen slid 0.3 percent to 137.44 per euro at 11:40 a.m. in New York, from 136.98 yesterday. It declined 0.8 percent to 98.19 per dollar from 97.38. The U.S. currency advanced 0.6 percent to $1.3985 per euro from $1.4065.
The dollar’s gain versus the euro accelerated after the greenback broke $1.4040, a level where traders placed pre-set orders to buy it, according to Brian Dolan, chief currency strategist at FOREX.com, a unit of the online currency trading firm Gain Capital Group in Bedminster, New Jersey. “The long trade is looking tired,” Dolan said. Such a position is a bet the euro will advance.
The U.S. currency earlier declined as much as 0.5 percent versus the euro after the Russian central bank’s first deputy chairman, Alexei Ulyukayev, said in Moscow today that Russia may switch some of its reserves from Treasuries to International Monetary Fund bonds. “We do need to be concerned about a dollar collapse,” Alan Ruskin, head of international currency strategy in North America at RBS Securities Inc. in Stamford, Connecticut, said in an interview on Bloomberg Radio. “We have to take seriously the idea that the U.S. is at the point of currency debasement.”
The Fed’s holdings of Treasuries on behalf of central banks and institutions from China to Norway rose by $68.8 billion, or 3.3 percent, in May, the third most on record, data compiled by Bloomberg show. The Treasury said bidding from foreigners was above average at its $101 billion of note auctions in the week ended May 29. The U.S. dollar, which for the past nine months tended to fall amid better economic data, may “flip” as markets associate an improving outlook with a possible tightening of U.S. monetary policy, Bank of America-Merrill Lynch wrote in a report today.
“With the era of ‘risk on, risk off’ soon to be behind us, the credibility of U.S. fiscal and monetary policy will, in our view, increasingly dictate the outlook for the dollar,” Steven Pearson, a foreign-exchange strategist in London, wrote.

U.S. inventories falling by more-than-expected last week and the Department of Energy (DOE) raising its forecast for global demand. The U.S. Energy Information Administration (EIA) -- the statistical arm of the DOE -- said on Wednesday U.S. crude stocks fell by 4.4 million barrels last week, against analysts expectations for a minimal 400,000 barrel draw.
The crude stock drawdown in the world's largest energy consumer added to a sense weak demand was bottoming after the EIA raised its 2009 demand forecast for the first time since September on Tuesday.
U.S. light crude for July delivery rose to a high of $71.79 a barrel before pulling back slightly to trade at $70.91. London Brent crude gained 95 cents to $70.57 a barrel.

Stocks seesawed Wednesday morning after Chrysler and Fiat made their deal official, Home Depot said full-year earnings may beat expectations and commodity prices jumped.
U.S. light crude oil prices climbed as high as $71.65 a barrel, rising along with the price of oil, gold and other commodities. Commodity prices have been rallying lately, due to the weak dollar and bets that the economic recovery will drive demand for so-called hard assets.
The rise in commodity prices gave a boost to the underlying stocks, such as Dow components Exxon Mobil and Chevron. But weakness in technology shares dragged on the market. Transportation stocks - sensitive to higher fuel costs - slumped as well.
Concerns that rising borrowing costs could derail a tentative economic recovery have dragged on sentiment over the last few sessions. On Wednesday, the ten-year note yield again surged to a 7-month high.
Chrysler: Italian automaker Fiat has closed a deal to buy the good assets of the bankrupt automaker, after the Supreme Court cleared the way for the deal late Tuesday.
Fiat will take a 20% stake in the company to start with, but that holding can increase to 35% if the company reaches certain goals. The new company -- called the Chrysler Group -- will be majority owned by the United Auto Workers union. The U.S. and Canadian governments will also own small stakes.
Chrysler is expected to start operating immediately.
Home improvement retailer Home Depot said it now expects full-year earnings in a range of flat to down 7%, versus its earlier guidance for a decline of 7%. Shares gained 1%.
The government announced that the trade balance showed a deficit of $29.2 billion in April, just slightly more than the forecast from consensus of economist opinion. The deficit was influenced by higher oil prices.

Eases lower again for trade around $1.3962 area as reported demand interest succumbs to the pressure of noted stop interest and as tech support at $1.3975 cracks slightly. Below here, 21d ma at $1.3918 looms into view with bids below there at $1.3900.

European equity bourses are set to close higher Wednesday, having eased off a little during the afternoon, and with the Xetra-DAX outperforming. Oil and energy stocks are still strong, helped
after crude prices rally following the bullish US EIA inventor data - Total SA (FP) and Royal Dutch Shell (RDSA RDSB) leading. Mining stocks are also holding firm despite metals prices easing of highs during the session, with Rio Tinto (RIO) and BHP Billiton (BLT) in London,
outperforming. Banks are also seeing relatively positive trade, with HSBC (HSBA) and BNP Paribas (BNP) offering the most support to the benchmark indices. The FTSE +34.79 (+0.79%) at 4,439.58, CAC +18.31 (+0.56%) at 3,315.04, Dax +49.83 (+1.00%) at 5,047.69.

The Nasdaq has fallen into negative territory, so the major indices now trade in mixed fashion after starting the session with solid gains. The Nasdaq's weakness comes as Apple (-2.28) goes on the backslide.
Treasuries are also under pressure, taking the benchmark 10-year Note down 4 ticks. Weakness among Treasuries during recent weeks has taken the yield on the 10-year Note from roughly 3.15% at the start of May to the more recent 3.88%. Treasury yields and prices are inversely related.

He says "pace of contraction is diminishing," and calls for H2 expansion. Cites resilient consumer and monetary policy. Labor mkt to continue to weaken, however; warns of
inflation risk (risk of deflation was overstated) tho "stable expectations are likely to anchor inflation." FOMC will need "to shrink our balance sheet and tighten policy soon enough when the recovery emerges to prevent rising inflation" and not wait too long.

EUR/USD $1.4200, $1.4000, $1.3980
USD/JPY Y97.50, Y97.80, Y97.90, Y98.00
EUR/JPY stg0.8575
USD/CAD C$1.1175

Stock futures have drifted lower from earlier levels, but continue to point to an upward start for the session (S&P futures +7.20, Nasdaq futures +8.30).
Shares of Home Depot are up more than 2% to $24.89 per share in premarket trading. The company has won support after stating that it now expects earnings per share from continuing operations to be flat to down 7% year-over-year. The company had forecast a drop of 7%. On an adjusted basis, Home Depot expects earnings from continuing operations to decline by 20% to 26%. The company had previously forecast a drop of 26%. The new outlook for adjusted earnings calculates to the approximate range of $1.31 to 1.42 per share, which is generally in-line with the current consensus estimate of $1.40 per share.
Oil futures prices are also pushing higher ahead of pit trading. Oil prices registered fresh 2009 highs of $71.65 per barrel in electronic trading earlier this morning, but are currently trading at $71.20 per barrel, up 1.8% from the close of pit trading Tuesday. The upward move in oil prices has shares of oil and gas equipment and services outfits like Haliburton and National-Oilwell Varco trading markedly higher in premarket action. Integrated outfits like Exxon Mobil, Chevron , and Hess are also garnering support ahead of the opening bell.

Has orbited Y98.00 area since the start of the US session though barely mustering a Y97.80/98.05 range during that time as the pair remains relatively becalmed. European hours trade saw a push higher for trade to Y98.12 area but pair stalled out ahead of supply at Y98.20, the yen slightly defensive on risk considerations following gains in overseas bourses. Bids back at Y97.50 area, light stops below.

Finds support around $1.6425 (38.2% $1.6352/1.6472), after touching a react high around $1.6472 following Russian cenbank comments on its reserves. A break below $1.6420 to open a deeper move toward $1.6410/00 ahead of $1.6380. Offers remain in place to $1.6475.

00:30 Australia Westpac Consumer Confidence (Jun) 12.7% -4.3%
01:30 Australia Home Loans 0.9% 4.9%
06:00 Germany Wholesale Price Index (MoM) (May) -0.1% 0.1%
06:00 Germany Consumer Price Index (YoY) (May) 0.0% 0.7%
06:00 Germany Consumer Price Index (MoM) (May) 0.0% 0.7%
08:30 UK Total Trade Balance (Apr) -£3.0B -2.5B
08:30 UK Manufacturing Production (YoY) (Apr) -12.7% -12.9%
08:30 UK Manufacturing Production (MoM) (Apr) 0.2% -0.1%
08:30 UK Industrial Production (YoY) (Apr) -12.3% -12.4%
08:30 UK Industrial Production (MoM) (Apr) 0.3% -0.6%
08:30 UK Goods Trade Balance (Apr) -£7.0B -£6.6B
11:00 USA MBA Mortgage Applications (Jun 5) -7.2% -16.2%

The dollar and the yen weakened against higher-yielding currencies on speculation the global recession is easing, spurring demand for riskier assets.
The dollar dropped for a second day versus the euro as investors sold Treasury securities in favor of higher-yielding assets.
“There have been flows out of the U.S. Treasury market and the dollar has entered a possible long-term decline,” said Neil Mellor, a currency strategist in London at Bank of New York Mellon Corp., the world’s largest custodian of financial assets. “There are concerns about the fiscal deficit and where the dollar lies in the world.”
The Dow Jones Stoxx 600 Index of European shares rose 1.6 percent, the biggest gain since June 1, while the MSCI World Index added 1.2 percent, approaching the highest since November. The Reuters/Jefferies CRB Index of commodity prices added 2.5 percent yesterday to the highest level since Nov. 11. Crude oil climbed as high as $71.65 a barrel today, the most since Nov. 4.
Losses in the dollar and the yen were tempered on speculation the Federal Reserve’s so-called Beige Book report today may signal much of the world’s biggest economy remains mired in recession.
“Labor market conditions were weak and reports of layoffs, reductions in work hours, temporary factory shutdowns, branch closures and hiring freezes remained widespread,” the Fed said in its previous regional business survey released April 15.
The U.S. data and economic reports from China may set the tone for the currency market, said Masahide Tanaka, senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s second-largest bank.
“If the data turn out to be unsatisfactory, the euphoria may be called into question and inflows into higher-yielding currencies may take a breather,” Tanaka said.
A U.S. report tomorrow may show retail sales increased in May for the first time in three months. Sales probably climbed 0.5 percent, after falling 0.4 percent in April.


EUR/USD traded within $1.4140-$1.4060 range.

Rate pullsback to $1.4075/70 area (76.4% $1.4051/1.4145) before snapping back to $1.4095. Bids remain in this $1.4075/70 area, stronger toward $1.4050. Sell interest seen placed between $1.4150/60, with further interest noted close behind at $1.4170/75.

EUR/USD $1.4200, $1.4000, $1.3980
USD/JPY Y97.50, Y97.80, Y97.90, Y98.00
EUR/JPY stg0.8575
USD/CAD C$1.1175

The dollar and the yen weakened against higher-yielding currencies on speculation the global recession is easing, spurring demand for riskier assets.
The dollar dropped for a second day versus the euro as investors sold Treasury securities in favor of higher-yielding assets.
“There have been flows out of the U.S. Treasury market and the dollar has entered a possible long-term decline,” said Neil Mellor, a currency strategist in London at Bank of New York Mellon Corp., the world’s largest custodian of financial assets. “There are concerns about the fiscal deficit and where the dollar lies in the world.”
The Dow Jones Stoxx 600 Index of European shares rose 1.6 percent, the biggest gain since June 1, while the MSCI World Index added 1.2 percent, approaching the highest since November. The Reuters/Jefferies CRB Index of commodity prices added 2.5 percent yesterday to the highest level since Nov. 11. Crude oil climbed as high as $71.65 a barrel today, the most since Nov. 4.
Losses in the dollar and the yen were tempered on speculation the Federal Reserve’s so-called Beige Book report today may signal much of the world’s biggest economy remains mired in recession.
“Labor market conditions were weak and reports of layoffs, reductions in work hours, temporary factory shutdowns, branch closures and hiring freezes remained widespread,” the Fed said in its previous regional business survey released April 15.
The U.S. data and economic reports from China may set the tone for the currency market, said Masahide Tanaka, senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s second-largest bank.
“If the data turn out to be unsatisfactory, the euphoria may be called into question and inflows into higher-yielding currencies may take a breather,” Tanaka said.
A U.S. report tomorrow may show retail sales increased in May for the first time in three months. Sales probably climbed 0.5 percent, after falling 0.4 percent in April.

-- ING place BP (BP.) Buy v Hold, tgt 565p v 523p
-- ING place BG Group (BG.) Sell v Hold, tgt 1050p 1150p
-- ING target Royal Dutch Shell B (RDSB) 1733p v 1750p
-- ING place Henkel (HEN) Buy v Hold, tgt E26.00 v E19.50
-- Jefferies place Weir Group (WEIR) Hold v Buy, tgt 600p v 440p
-- JPM target Credit Suisse (CSGN) CHF60 v CHF50
-- JPM target UBS (UBSN) CHF17 v CHF16
-- JPM place Deutsche Bank (DBK) Neutral v U/weight, tgt E56 v E38
-- MS place 3i Group (III) O/weight v E/weight, tgt 314p v 234p
-- UBS place Close Brothers (CBG) Neutral, target 700p

Resistance 3: Y100.70
Resistance 2: Y99.70
Resistance 1: Y98.80
Current price: Y97.80
Support 1: Y97.10
Support 2: Y96.50
Support 3: Y95.50
COMMENTS: Dollar’s techs hasn’t changed much with support is around session lows on Y97.10, then – at Y96.50 (Friday’s lows). Further target comes at Y95.50 (Jun 03 lows). Break above Y98.80 (50% of Y110.65 - Y87.10 decline) opens the way to Y99.70 (May 07 high). Key resistance is near Apr 10-12 highs on Y100.70.

Resistance 3: Chf1.0980
Resistance 2: Chf1.0880
Resistance 1:Chf1.0800
Current price: Chf 1.0758
Support 1: Chf1.0720
Support 2: Chf1.0660
Support 3: Chf1.0580
COMMENTS: Dollar weakens Wednesday, heading for the minor support at Chf1.0720. Stronger level comes at Chf1.0660 (hourly lows consolidation zone on Jun 04-05). Next band of support is near Chf1.0580/90 (Jun 02 lows). Resistance comes at session highs on Chf1.0800. Further upside target is on Chf1.0880. Monday’s highs are the key resistance at Chf1.0980.

- Some areas of economy starting to turn up slightly
- Some ares of retail doing reasonably well
- Manufacturing orders starting to come back
- Unsure whether restocking will turn up in demand
- Still lot of concern looking beyond this pick up
- Very encouraging if pick up sustained until Autumn
- Companies keener short time/low pay vs job cuts

Resistance 3:$1.6660
Resistance 2:$1.6490
Resistance 1: $1.6430
Current price: $1.6370
Support 1: $1.6280
Support 2: $1.6180
Support 3: $1.5980

COMMENTS: Sterling tested a minor resistance at $1.6430 with a break above will target $1.6500 and then - Jun 03 highs on $1.6660. Support comes at $1.6280 (session low), then – at $1.6180. Stronger support is around Tuesday’s lows on $1.5980.

Resistance 3:$1.4430
Resistance 2:$1.4330
Resistance 1:$1.4130
Current price: $1.4123
Support 1:$1.4000
Support 2: $1.3940
Support 3: $1.3860
COMMENTS: After yesterday’s rally euro consolidated a bit overnight before resumes the recovery. Resistance comes at $1.4130, ahead of $1.4270 and stronger one– at Jun 03 highs on $1.4330. Key resistance is around Dec 17 highs on $1.4430. Support comes at $1.4000, then - on $1.3940. Strong level comes at channel line from Apr 28 on $1.3860.

--Apr Industrial Production +0.3% m/m; -12.3% y/y

The dollar and the yen weakened against higher-yielding currencies on speculation the global recession is easing, spurring demand for riskier assets.
The New Zealand dollar and Australian dollar gained as stocks rose after a gauge of raw-materials prices climbed to a seven-month high. Australia’s currency also advanced after an industry report showed consumer confidence rose the most in 22 years.
Losses in the dollar and the yen were tempered on speculation the Federal Reserve’s so-called Beige Book report today may signal much of the world’s biggest economy remains mired in recession.
A U.S. report tomorrow may show retail sales increased in May for the first time in three months. Sales climbed 0.5%, after falling 0.4% in April, according to a survey of economists.

EUR/USD held within the narrow $1.4040/90 range before it broke above the upper level and printed high on $1.4125/30.

Japan's benchmark stock indices ended Wednesday's session higher across the board, as the weaker yen helped push stocks to eight-month closing highs. The rally left the benchmark Nikkei 225 just shy of the psychologically important 10,000 level. The Nikkei 225 was higher by 204.67 points, or 2.07%, to stand at 9991.49. The broader-based TOPIX was 18.77 points higher at 937.01.

Majors close
Nikkei -78.81 -0.8% 9,786.82
Topix -8.65 -0.9% 918.24
FTSE -0.43 -0.01% 4,404.79
CAC +7.07 +0.21% 3,296.73
Dax -6.86 -0.14% 4,997.86
Dow -1.43 -0.02% 8,763.06
NASDAQ +17.73 +0.96% 1,860.13
S&P +3.28 +0.35% 942.43
10yr Note -0.3100 -0.080% 3.858%
NYMEX Crude Oil +1.92 +2.82% 70.01
Gold +2.20 +0.23% 954.70

Japanese stocks fell for the first time in three days, led by financial companies after a newspaper said Nipponkoa Insurance Co.’s planned merger faced opposition and on mounting concern a recent equity rally went too far.
Nipponkoa dropped 4.6% , while proposed consolidation partner Sompo Japan Insurance Inc. lost 3.1%. Mitsubishi UFJ Financial Group Inc. slid 3.1% amid speculation banks will have to sell more shares to bolster capital.
Softbank Corp., the domestic distributor of Apple Inc.’s iPhone, added 2.2% after saying it will sell a new model of the handset.
Japanese Finance Minister Kaoru Yosano said higher stock prices are an indication that a recession in the world’s second- largest economy may be abating.
Softbank, Japan’s No. 3 mobile-phone carrier, rose 2.2%. The company said today it will start offering the new model of the iPhone on June 26, which Apple said can run applications twice as fast as the current version.

European stocks advanced, led by technology shares, after Texas Instruments Inc. increased its second-quarter forecast and Nobel Prize-winning economist Paul Krugman predicted the American recession will end by September.
Nokia Oyj rose 3.7% as Texas Instruments, whose earnings are a barometer of demand for a wide variety of electronics, projected revenue and profit that beat analysts’ estimates. TomTom NV, Europe’s largest maker of car-navigation equipment, surged 18% after signing a deal with Apple Inc. Arcandor AG plunged 48% after the German retailer filed for insolvency.
Barclays Plc added 2.2% after a person with knowledge of the negotiations said BlackRock Inc. may buy the Barclays Global Investors unit for $12 billion to $13 billion in cash and stock.
BlackRock, which may announce the deal as soon as tomorrow, would pay half the purchase price in cash and the rest in stock leaving the London-based lender with a 20% stake in the combined company.
BP Plc led energy shares higher as crude climbed for the first time in three days on optimism demand is set to recover. Europe’s second-largest oil company increased 0.9%, while Galp Energia SGPS SA, Portugal’s biggest, added 1.5%.

The Wall Street overcame a rocky start to trend higher throughout afternoon trading. Though the close was anticlimactic, stocks were still able to log solid gains and reclaim nearly all of the prior session's losses.

Data released
05:00 Japan Leading indicators composite index (April) preliminary 76.5 77.3 76.3
05:00 Japan Coincident indicators composite index (April) preliminary 85.8 - 85.1
06:00 Germany Trade balance (April) unadjusted, bln 9.4 9.3 11.3
06:00 Germany Current account (April) unadjusted, bln 5.8 10.0 11.0 (10.2)
10:00 Germany Industrial production (April) adjusted -1.9% 0.3% 0.3 (0.0)%
10:00 Germany Industrial production (April) adjusted Y/Y -21.6% -20.5% -20.0 (-20.4)%
12:55 USA Redbook (06.06)
14:00 USA Wholesale inventories (April) -1.4% -1.0% -1.8 (-1.6)%
23:50 Japan Machinery orders core (April) adjusted -5.4% -0.7% -1.3%
23:50 Japan Machinery orders core (April) unadjusted Y/Y -32.8% -29.5% -22.2%
23:50 Japan Corporate goods price index (CGPI) (May) domestic -0.4% -0.3% -0.6 (-0.4)%
23:50 Japan Corporate goods price index (CGPI) (May) domestic Y/Y -5.4% -5.1% -4.0 (-3.8)%

The dollar fell against the euro for the first time in three days as speculation the global recession may be ending damped demand for the U.S. currency as a refuge.
The pound advanced versus the dollar as Britain’s political turmoil eased and house prices showed signs of stabilizing last month.
Goldman Sachs Group Inc. recommended that its clients buy the euro versus the dollar, citing a recovery in global growth expectations and a “broader pickup” in demand for higher- yielding assets. The 16-nation euro will rise to $1.45, said Goldman Sachs in a research note, saying the Federal Reserve will refrain from raising the target rate for overnight lending between banks “for a considerable period of time” in response to a slow recovery.

EUR/USD printed lows on $1.3848 before recovered to $1.3960. Back to the overnight lows was short-lived. Traders bought the euro at lows and spurred it up to $1.4100. But the rate failed to break above the figure.

Resistance 3: Y100.70
Resistance 2: Y99.70
Resistance 1: Y98.80
Current price: Y97.70
Support 1: Y97.10
Support 2: Y96.50
Support 3: Y95.50
COMMENTS: Dollar’s techs hasn’t changed much with support is around session lows on Y97.10, then – at Y96.50 (Friday’s lows). Further target comes at Y95.50 (Jun 03 lows). Break above Y98.80 (50% of Y110.65 - Y87.10 decline) opens the way to Y99.70 (May 07 high). Key resistance is near Apr 10-12 highs on Y100.70.

Resistance 3: Chf1.0980
Resistance 2: Chf1.0880
Resistance 1:Chf1.0800
Current price: Chf 1.0758
Support 1: Chf1.0720
Support 2: Chf1.0660
Support 3: Chf1.0580
COMMENTS: Dollar weakens Wednesday, heading for the minor support at Chf1.0720. Stronger level comes at Chf1.0660 (hourly lows consolidation zone on Jun 04-05). Next band of support is near Chf1.0580/90 (Jun 02 lows). Resistance comes at session highs on Chf1.0800. Further upside target is on Chf1.0880. Monday’s highs are the key resistance at Chf1.0980.

Resistance 3:$1.6660
Resistance 2:$1.6580
Resistance 1: $1.6420
Current price: $1.6410
Support 1: $1.6280
Support 2: $1.6180
Support 3: $1.5980
COMMENTS: Sterling holds close to minor resistance at $1.6420 with a break above will target $1.6580 and then - Jun 03 highs on $1.6660. Support comes at $1.6280 (session low), then – at $1.6180. Stronger support is around Tuesday’s lows on $1.5980.

Resistance 3:$1.4430
Resistance 2:$1.4330
Resistance 1:$1.4130
Current price: $1.4103
Support 1:$1.4000
Support 2: $1.3940
Support 3: $1.3860
COMMENTS: After yesterday’s rally euro consolidated a bit overnight before resumes the recovery. Resistance comes at $1.4130, stronger – at Jun 03 highs on $1.4330. Key resistance is around Dec 17 highs on $1.4430. Support comes at $1.4000, then - on $1.3940. Strong level comes at channel line from Apr 28 on $1.3860.

-Economic depression will probably be avoided
-ECB interest rates are "appropriate"
-Low inflation allows low interest rates
-Magnitude of financial crisis is diminishing
-Consumer, business confidence stable in many countries
-Financial system recovering, not in full health yet

High Low Close
EUR/USD 1.4097 1.3850 1.4062
GBP/USD 1.6357 1.5983 1.6301
USD/JPY 98.54 97.24 97.39
USD/CHF 1.0952 1.0761 1.0784

EUR/JPY 137.31 135.69 136.96
EUR/GBP 0.8671 0.8594 0.8625
GBP/JPY 159.16 156.62 158.77
GBP/CHF 1.7631 1.7493 1.7583

Change % Change Last
Nikkei -78.81 -0.8% 9,786.82
Topix -8.65 -0.9% 918.24
FTSE -0.43 -0.01% 4,404.79
CAC +7.07 +0.21% 3,296.73
Dax -6.86 -0.14% 4,997.86
Dow -1.43 -0.02% 8,763.06
NASDAQ +17.73 +0.96% 1,860.13
S&P +3.28 +0.35% 942.43
10yr Note -0.3100 -0.080% 3.858%
NYMEX Crude Oil +1.92 +2.82% 70.01
Gold +2.20 +0.23% 954.70

06:00 Germany CPI (May) final -0.1% 0.0%
06:00 Germany CPI (May) final Y/Y 0.0% 0.7%
06:00 Germany HICP (May) final Y/Y -0.1% 0.7%
06:45 France Industrial production (April) 0.1% -1.4%
06:45 France Industrial production (April) Y/Y -16.8% -16.1%
08:00 Italy Industrial production (April) adjusted 0.7% -4.6%
08:00 Italy Industrial production (April) Y/Y adjusted -24.4% -23.8%
08:30 UK Trade in goods (April), bln -6.4 -6.6
08:30 UK Non-EU trade (April), bln -3.5 -3.3
08:30 UK Industrial production (April) -0.1% -0.6%
08:30 UK Industrial production (April) Y/Y -12.4% -12.4%
08:30 UK Manufacturing output (April) 0.1% -0.1%
08:30 UK Manufacturing output (Aprilh) Y/Y -12.6% -12.9%
08:00 Italy GDP (Q1) final -2.4% -2.4%
08:00 Italy GDP (Q1) final Y/Y -5.9% -5.9%
12:30 USA International trade (April), bln -28.7 -27.6
12:30 USA Export (April), bln - 123.6
12:30 USA Import (April), bln - 152.2
18:00 USA Federal budget (May), bln -175.0 -20.9
18:00 USA Fed Beige book
20:00 New Zealand RBNZ meeting announcement 2.25% 2.50%
23:50 Japan Real GDP (Q1) revised -4.0% -4.0%
23:50 Japan Real GDP (Q1) revised Y/Y -14.9% -15.2%