U.S. gold futures turned
higher on Thursday as the dollar dropped, but rising Treasury yields
could dampen the investment appeal of noninterest-bearing gold, traders
said.
- Global Imbalances Still A Key Risk To Outlook
- Rapid C$ Gain Can Erase Improvements If Persists
- Sees US Recovery More Subdued Than Usual
- Unemployment In G7 Likely To Rise Further
- Rate To Stay At 0.25% To End 2Q 2010 If CPI Tame
- Has Considerable Added Flexibilty On Policy
- Fincl System Stabilization Precondition For Recovery
- Emerging Mkts Demand Can Support Commodity Prices
- Issues 2nd Warning In A Week About C$ Spike
Bank Of America Corporation
CEO Ken Lewis is expected to face
scrutiny over the controversial acquisition of Merrill Lynch while
Keefe, Bruyette & Woods upgraded the bank to “outperform” from
“market perform,” and lifted its target price on the stock to $16.50
from $12.
Palm Inc New
The maker of mobile communicating product’s board
appointed Jon Rubinstein chairman and chief executive to succeed Ed
Colligan, who is leaving after 16 years.
Microsoft Corporation
A South Korean court ruled that the
software giant violated antitrust regulations by bundling programs with
its Windows operating system, but it dismissed demands for monetary
compensation from rivals.
General Motors Corp
The
automaker plans to cancel production of the hybrid-electric version of
its Chevrolet Malibu sedan for the 2010 model year due to slow sales
that has led to a backlog of inventory of the vehicles on dealer lots,
The Wall Street Journal reported.
Stocks
are extending their gains after recently making a modest pullback. This
session's advance has taken all three major indices to fresh highs for
2009.
- Confident Of Fed's Ability To Tackle Inflation - Sees Signs Of Economic Stabilization, Not Recovery - Business Activity May Not Have Troughed Yet - Sees Recovery In 2H; Long Period Of Sluggish Growth - US Bank System Is Healing; Confidence Justified - Number Of Problem Banks Likely To Increase - Global Slump, Commercial Mtges Threaten Recovery - Rising Tsys Yields May Signal Market Fears
11.06 18:17
Dow +106.04 at 8845.06, Nasdaq +19.00 at 1872.08, S&P +14.20 at 953.35
The dollar and yen declined against most of their major counterparts after
a gain in U.S. retail sales and a drop in initial jobless claims
encouraged investors to buy higher-yielding assets. The New Zealand and
Australian dollars were the biggest winners versus the greenback and
yen among the most-traded currencies as New Zealand’s Reserve Bank left
the official cash rate unchanged for the first time in a year and
Australia lost fewer jobs than forecast. The pound rose to a six-month
high versus the euro on the prospects for a U.K. economic rebound.
“Risk tolerance is returning,” said Lane Newman, director of currency trading at ING Financial Markets LLC in New York. “The yen is weak.” The dollar declined 0.7 percent to $1.4075 per euro in New York, from $1.3984 yesterday. The euro rose 0.3 percent to 137.60 yen from 137.21. The U.S. currency depreciated 0.4 percent to 97.76 yen from 98.12. Sterling climbed
as much as 0.6 percent to 85.01 pence per euro, the strongest level
since Dec. 2, as Andrew Sentance, a Bank of England policy maker, said
in a speech yesterday in Aberdeen, Scotland, that the recession in the
U.K. may be “bottoming out.” The pound rose for a fourth day against
the dollar, appreciating 1.1 percent to $1.6542.
11.06 17:50
Dow +58.80 at 8797.82, Nasdaq +9.40 at 1862.48, S&P +8.32 at 947.47
- China External Imbalances Fueled US Housing Bubble - Strong Recovery Unlikely, Unemployment To Persist - Maintaining Value Of US Dollar In US, China Interest - Should Take Steps To Limit Need For Future Bailouts - Global Currency Far From Reality Currently - Inflation Pressures Unlikely For Some Time - Years Of Large Fiscal Deficits Ahead For US - No Current Alternate To US Dollar As World Currency - Mark To Market Accounting Rules Added To Instability
Oil prices extended a three-day rally to a nearly eight-month
high over $72 a barrel on Thursday on rising hopes the economic
recession had bottomed out, spelling a recovery in ailing world energy demand. The International Energy Agency
said Thursday it revised its outlook for global oil demand higher for
the first time since August, two days after the U.S. government's
energy forecaster did the same. "These revisions do not necessarily
imply the beginnings of a global economic recovery, and may only signal
the bottoming out of the recession," the Paris-based adviser to 28
industrialized nations said. Meanwhile, U.S. data showing an increase
in retail sales in May and a slowdown in weekly jobless claims
reinforced perceptions that the deterioration of the world's top
economy was easing. U.S. crude rose $1.33 to $72.65 a barrel , the highest price since Octob
Following
a recent pullback, stocks are making an upward move. The majro indices
remain a bit off of their session highs, though.
Shares of retailers continue to lag, though. In turn, consumer discretionary stocks are also trailing the broader market.
Telecom
stocks have become the front runner in terms of percentage gains. The
sector is now up 2.2% as integrated telcos AT&T (T 24.96, +0.68)
and Verizon (VZ 29.95, +0.42) put together an impressive advance.
Smaller
than expected US retail sales figures put the benchmark indices under
pressure midday, but positivity in the US markets allowed for further
push to bid. Oil and energy stocks are weighing heavily on the
benchmark indices however, despite stronger crude prices today - with
Total SA (FP), BP (BP), and Royal Dutch Shell (RDSA RDSB), still
leading losses. Mining stocks are also continuing to underperforming,
again despite rising metals prices, with BHP Billiton (BLT) and Anglo
American (AAL) hitting the London market hardest. Banks on the other
hand, have remained firm during the day, with BNP Paribas (BNP), HSBC
(HSBA), and Barclays (BARC) strongest. The FTSE-100 is up 38pts (+0.9%), CAC-40 up 21pts (+0.6%), and Xetra-DAX up 57pts (+1.1%).
11.06 16:30
IMF raised its forecast for global growth in 2010 from +1.9% to +2.4%
Gains remain broad-based, but action has become rather choppy. The
Nasdaq 100 (+0.3%) is also up, but it lags the headline indices by a
small margin. Large-cap tech stocks are showing a bit of indirection. Dell
(DELL 13.09, +0.15) is finding support after The Wall Street Journal
indicated that the company is looking for acquisitions to help increase
its growth. Meanwhile, Qualcomm (QCOm 45.92, -0.15) is down a bit
after raising its revenue forecast for the third quarter. The company
expects its top line to range from $2.67 billion to $2.77 billion.
Qualcomm had forecast third quarter revenue would range from $2.4
billion to $2.6 billion. Operating income is also expected to improve.
11.06 15:56
RDQ Economics says inventory data (-1.1% in Apr) suggest "liquidation has slowed at the start of the second quarter" (they est nonautos -$128b in April vs -$143b in Q1). Inventories could add 0.5pt to GDP, they estimate.
The commodity has pivoted around $72/bbl during
the session, with yesterday's EIA inventory data continuing to act as
strong support, after it showed a bullish 4.4m/bls decline in crude
stocks. Traders are now looking to the EIA Natural Gas data at
1430 (GMT) for possible direction, and the Platts Pre-Report
Analyst Survey suggests a 106 to 111Bcf build.
Nymex light sweet crude
is currently up 87 cents at $72.11.
The major indices have extended their early advance, but have pulled back a bit since climbing to gains in excess of 1%. Business
inventories for April declined 1.1%, which is slightly steeper than the
1.0% downturn that was widely expected. Meanwhile, business inventories
for March were downwardly revised to show a 1.3% decline. Shares of retailers still lag the broader market. The group is down 0.3%. Early
movers: Trading up -- STAA +88.6%, JAZZ +32.9%, HGSI +20.7%, GRH
+17.9%, KV.A +17.3%, CHDX +16.8%, SCHS +13.7%, SAY +10.9%, PLXS +10.8%,
TCL +10.2%, LEA +10.2%, SOLR +9.5%, DLM +9.3%; Trading down -- AGEN
-11.2%, LULU -10.8%, NOA -8.9%, MELA -8.4%, UNH -8.1%, ATPG -6.6%, PNFP
-6.6%, EVEP -6.4%
Hits the near term tech target at $1.6505 (touching highs around
$1.6507) and eases back, but underlying tone remains firm, one trader
says. To recap on the tech targeting, you take the distance from base
of wave 1 $1.5803 to tip of wave 3 $1.6475, which equals 675 points,
then 38.2% & 61.8% of that sum added on to wave 4 base at $1.6245
to give minimum and maximum targets at $1.6505 & $1.6665 (note
recent high was $1.6664).
Despite oscillating in premarket trading, stocks are sporting solid gains in the first few minutes of trading.
The early, upward move has been broad-based. As such, nine of the 10 major sectors in the S&P 500 are in the green. Utilities
stocks are boasting the best gains of any sector for the second
straight session, however. The utilities sector is up 1.0% as electic
utilities and power trading outfits Constellation Energy (CEG 27.57,
+0.55) and AES (AES 10.25, +0.13) show leadership. Consumer
discretionary stocks make up the only sector to trade in the red; the
sector is down 0.1% as shares of retailers slip 0.6%. The downturn
among retailers comes even though the advance retail sales report for
May showed the first increase in total sales and sales less autos in
three months.
Stocks eased off through midday, not helped by the smaller than
expected US retail sales data. Oil and energy stocks are weighing
heavily on the benchmark indices, despite generally stronger crude
prices today - with Total SA (FP), BP (BP), and Royal Dutch Shell (RDSA
RDSB), hitting hardest. Mining stocks are also underperforming, as
metals prices weaken further in the session, with BHP Billiton (BLT)
and Anglo American (AAL) leading losses. On the positive side, banks
have remained firm during the day, with BNP Paribas (BNP), HSBC (HSBA),
and Barclays (BARC) offering most support.
The FTSE-100 and CAC-40 are currently flat, and the Xetra-DAX is up 18pts (+0.4%).
FTN says 601k jobless claims suggest recovery is imminent. Nomura says
claims suggest Q1 was the peak of job losses. MS says Q2 growth is
tracking -1.5%.
U.S. stocks were set to open higher Thursday, as investors awaited
readings on retail sales and initial jobless claims, and kept an eye on
the Treasury market. May
total retail sales increased 0.5%, while retail sales excluding autos
also increased 0.5%. Total retail sales were expected to increase 0.5%,
while retail sales less autos were expected to increase just 0.2%. Data
for April was revised upward to show a 0.2% decrease in total retail
sales and a 0.2% decrease in retail sales excluding autos. Meanwhile,
initial jobless claims for the week ending June 6 totaled 601,000,
which is down from the prior week's upwardly revised 625,000. The
consensus estimate called for the latest initial claims total to hit
615,000. Continuing claims climbed to a new record high by hitting 6.82
million, which is above the 6.78 million claims that were expected, and
up from the 6.76 million that were registered the previous week.
Overall, the data have failed to inspire premarket participants, such
that stock futures now suggest a flat to modestly lower start to the
session.
U.S. stocks fell slightly Wednesday as Treasury yields and crude prices climbed, igniting inflation worries. Bank
of America (BAC) CEO Ken Lewis is due to testify before lawmakers about
the government's role in ensuring that the bank complete its
controversial merger with Merrill Lynch. The benchmark 10-year
Treasury yield was up to 3.97% from 3.95% late Wednesday. The yield
reached 4% during Wednesday trading for the first time since last fall. Crude prices topped $72 a barrel after the International Energy Agency raised its 2009 outlook for oil demand. World
markets: In Asia, stocks mostly finished higher, although Japan's
Nikkei ticked lower. European shares edged higher in midday trading.
11.06 13:57
Herrmann Forecasting notes a continuing downward trend in jobless claims (601k in Jun 6 week) and says their Q-2009 real GDP estimate remains at -1.27% (SAAR), which is well-above the consensus of -2%.
11.06 13:31
US: May retail sales +0.5%, +0.5% ex autos
11.06 13:30
US: Jobless claims -24k to 601k
11.06 13:18
Currency strategists at UBS write in a note today that they are "looking for an upside surprise in retail sales at 1.1%."
The dollar and the yen declined against higher-yielding currencies as speculation the global recession is easing prompted investors to buy riskier assets. The New Zealand and Australian dollars gained
the most of the 16 major currencies after New Zealand’s central bank
left interest rates unchanged for the first time in a year and
Australia reported a smaller-than-expected drop in jobs. The New
Zealand dollar strengthened the most in almost two weeks versus the
greenback after the central bank said the country’s worst recession in
at least three decades may be nearing the end. Benchmark interest
rates are 3% in Australia and 2.5% in New Zealand, compared with 0.1%
in Japan and as low as zero in the U.S., attracting investors to the
South Pacific nations’ higher-yielding assets. The pound strengthened
against the euro and the U.S. dollar after Bank of England policy maker
Andrew Sentance said the U.K. recession may be “bottoming out” and the
National Institute of Economic and Social Research said it’s “very
possible” the economy will stop contracting in the second quarter.
EUR/USD
opened around $1.4052. Downside pressure continued into early Europe,
dragging the euro down to $1.3975. Rate recovered above $1.4000. Offers
ahead of $1.4050 capped move around $1.4048 with rate settling back
below $1.4000.
GBP/USD opened at $1.6428. Cable dropped back to
$1.6365, as it tracked early pressure on euro-dollar, but move
cushioned as euro-sterling continued to see real money sales. Break
below the Asia base at stg0.8542 squeezed rate to stg0.8533, with cable
breaking back above $1.6400.
USD/JPY opened around Y97.80. Dollar-yen remained below Y98.00 through the European morning, but later recovered to Y98.29.
U.S. retail sales will be released at 12:30 GMT and probably increased in May for the first time in three months, according to the median forecast of economists. The
dollar fell 6.6% versus the euro in May, the biggest monthly drop this
year, on speculation the quadrupling of the U.S. budget deficit and the
Fed’s increase of the money supply will undermine the role of the
greenback as the world’s reserve currency.
EUR/GBP tested option barrier at stg0.8500, with traders remind support around stg0.8495 (61.8% stg0.7690/0.9800). Currently rate back up to stg0.8512.
The Australian dollar advanced on Thursday as improving risk
appetite boosted demand for high-yielding assets. Analysts said
increasing confidence that the global slowdown might be stabilising had
prompted investors to sell the US dollar to fund the purchase of
higher-yielding and commodity-linked currencies. Analysts said that
the improvement in sentiment had been prompted by leaked Chinese
economic data that revealed a better than expected 8.9% rise in
industrial production in May, and also by confirmation from the US
Treasury that 10 banks have been approved to repay a total of $68bn in
funds from the troubled asset relied programme. The dollar had fallen 0.7% against the Australian dollar and 0.6% against the New Zealand dollar. The
US dollar also dropped 0.4% against the pound, which benefited as
figures showed UK industrial production recorded its first rise in 14
months in April. Sterling also rose to a fresh high for the year against the euro, up 0.7% against the single currency.
EUR/GBP extends lows for the year to stg0.8510, with traders noting UK clearer demand placed at this level. Earlier reports placed bids at stg0.8510, more toward stg0.8500 with stops below, which if triggered to allow for a deeper move toward stg0.8480.
The FTSE-100 is trading slightly higher Thursday, not far from session highs, and currently up 14pts (+0.3%). Oil stocks are weighing heavily on the index, despite strength seen in crude during the session - with BP and Royal Dutch Shell underperforming. On the positive side, defensive stocks are generally holding strong, with GlaxoSmithKline and Vodafone offering good support. Banks are also making significant gains, with Barclays and the Royal Bank of Scotland leading the sector. Elsewhere in Europe, the CAC-40 flat, and the Xetra-DAX is up 27pts (+0.5%).
11.06 11:06
WTI Nymex crude is extending highs well past the $72/bbl level, topping at $72.28, the highest level since October last year.
Resistance 3: Y99.60 Resistance 2: Y98.90 Resistance 1: Y98.20 Current price: Y97.76 Support 1: Y97.70 Support 2: Y97.10 Support 3: Y96.60 COMMENTS: Yen holds rangebound. Support is near session low on Y97.70, further - on Y97.10 (yesterday's low). The further purpose becomes Y96.60 (area of June 5 low and 2 high). Fastening above Y98.20 (area of consolidation of hour lows June 8 and session high) may open road to Y98.90 (high of June). Above the important level is the area of maxima of May on Y99.60/80.
Resistance 3: Chf1.0980 Resistance 2: Chf1.0860 Resistance 1:Chf1.0800 Current price: Chf 1.0795 Support 1: Chf1.0720 Support 2: Chf1.0660 Support 3: Chf1.0580 COMMENTS: Dollar tried to rise, but attempts were capped ahead of the release of Retail sales report. Support remains 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 Chf1.0800. Further upside target is on Chf1.0850 (yesterday's high). Monday’s highs are the key resistance at Chf1.0980.
Resistance 3:$1.6660 Resistance 2:$1.6580 Resistance 1: $1.6490 Current price: $1.6468 Support 1: $1.6340 Support 2: $1.6240 Support 3: $1.6100 COMMENTS: Sterling rises, currently heading to peak on June 01 on $1.6490/95. Neat band of resistance comes at $1.6580 with stronger – at June 03 high on $1.6660. The nearest support - on $1.6340 (earlier resistance, area of session low), further - $1.6240 (yesterday's low). Below the area of Monday's high on $1.6100 is located.
Resistance 3:$1.4330 Resistance 2:$1.4150 Resistance 1:$1.4050 Current price: $1.4024 Support 1:$1.3910 Support 2:$1.3850 Support 3:$1.3780 COMMENTS: The euro holds within the overnight range. Resistance comes at $1.4050. Overcoming of the given mark will open road to $1.4150 (yesterday's high). Stronger level is June 03 high on $1.4330. The nearest support - $1.3910 (yesterday's low), below - $1.3850 (Tuesday's low). The strong level is located on $1.3780 (38,2% FIBO of $1,2880-$ 1,4330).
Data: 01:00 Australia Consumer Inflation Expectation (Jun) 2,8% 01:30 Australia Employment Change (May) -1,7К 01:30 Australia Unemployment Rate (May) 5,7%
The
dollar declined against higher- yielding currencies as speculation the
global recession is easing prompted investors to buy riskier assets. The
New Zealand and Australian dollars gained the most of the 16
most-active currencies after New Zealand’s central bank left interest
rates unchanged for the first time in a year and Australia reported a
smaller-than-expected drop in jobs. The euro rose against the dollar on
speculation European Central Bank officials will signal a reluctance to
cut interest rates, maintaining the currency’s appeal. The Federal
Reserve said yesterday the U.S. recession may be slowing in almost half
of its regions and the outlook at some companies is improving. Five of
12 Fed districts “noted that the downward trend is showing signs of
moderating,” the Fed said in its Beige Book business survey. The
New Zealand dollar strengthened the most in almost two weeks versus the
greenback after the central bank said the country’s worst recession in
at least three decades may be nearing the end. U.S. retail sales
probably increased in May for the first time in three months, according
to the median forecast of economists surveyed by Bloomberg News before
the Commerce Department releases the report today. The Australian
dollar reached the highest level in eight months against the yen after
the statistics bureau said the number of people employed in the nation
fell 1,700 in May from the previous month. The median estimate of
analysts was for a 30,000 decline.
EUR/USD the pair shown high in the field of $1,4050, however in the beginning of the European session renewed decrease
GBP/USD the rate remained within the limits of $1,6340-$ 1,6440
USD/JPY the yen grown up to mark Y97,70 against dollar and continues to remain supported
The ECB publishes its monthly bulletin at 0800GMT, although this is usually a repeat of the press conference statement.
US
data starts at 1230GMT with Retail & Food Sales and the weekly
Jobless Claims. Jobless claims are expected to rise 4,000 to 625,000 in
the June 6 week after three straight declines, while retail sales are
expected to rise 0.6% in May, as industry vehicle sales rose modestly
to a still weak 7.3 million annual pace, but prices fell. Non-auto
retail sales are expected to rise 0.3%. Gasoline prices moved higher in
the month. At 1400GMT, business inventories are expected to
fall 0.8% in April. Factory inventories were already reported down 1.0% on the month.
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. 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. 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.
EUR/USD
begun session in the field of $1,4070, the pair could show high on
$1,4150. However later the rate decreased and finished the tenders in
the field of $1,3980
GBP/USD
positions of pound in relation to dollar on results of yesterday
practically have not changed: pair the beginning session in the field
of $1,6320, finished it in area $1,6340
USD/JPY yesterday's low of yen against dollar - more than 80 items
The ECB publishes its monthly bulletin at 0800GMT, although this is usually a repeat of the press conference statement. US
data starts at 1230GMT with Retail & Food Sales and the weekly
Jobless Claims. Jobless claims are expected to rise 4,000 to 625,000 in
the June 6 week after three straight declines, while retail sales are
expected to rise 0.6% in May, as industry vehicle sales rose modestly
to a still weak 7.3 million annual pace, but prices fell. Non-auto
retail sales are expected to rise 0.3%. Gasoline prices moved higher in
the month. At 1400GMT, business inventories are expected to fall 0.8% in April. Factory inventories were already reported down 1.0% on the month.
Japan's benchmark stock indices ended session narrowly mixed, although off the day's best levels. The move left the benchmark Nikkei 225 just shy of the psychologically important 10,000 level, although it had breached the level earlier in the session. The Nikkei 225 was lower by 10.16 points, or 0.1%, to stand at 9981.33. However, the broader-based TOPIX was 3.64 points higher at 940.65.
Japanese stocks jumped as gains in oil and metal prices lifted
the profit prospects at resource producers, outweighing a
bigger-than-expected drop in the nation’s machinery orders. Mitsubishi
Corp., which gets more than half its profit from commodities, soared
6.3 percent as crude reached a seven-month high and copper gained the
most in a week. Nippon Yusen K.K. and Mitsui O.S.K. Lines Ltd. climbed
at least 4.4 percent as analysts boosted their ratings. Gains by
financial companies drove stocks higher in the afternoon session.
Kawasaki Heavy Industries Ltd. soared 16 percent after saying it
developed a nickel-hydrogen battery for use in buses. The Nikkei 225
Stock Average leapt 204.67, or 2.1 percent, to 9,991.49 in Tokyo, the
highest since Oct. 7. The broader Topix index rose 18.77, or 2 percent,
to 937.01. Nikkei futures in Osaka briefly touched the 10,000 level in
the afternoon. “Capital spending is still low and the job market is
harsh, but investors are focusing more on the possibility that the
economy is emerging from its worst period,” said Yoshihiro Ito, senior
strategist at Tokyo-based Okasan Asset Management Co., which oversees
about $7.7 billion. “The recovery in the commodity market and ample
liquidity with low interest rates are spurring investor appetite for
risk.” Japan’s machinery orders, which indicate capital
investment in the next three to six months, fell 5.4 percent in April
from the previous month, a government report released this morning
showed. Economists had estimated a 0.6 percent drop from March. Mitsubishi, the nation’s biggest trading company by value, surged 6.3 percent to 1,995 yen. Japan Petroleum Exploration Co. leapt 4.3 percent to 5,600 yen, while metal producer Sumitomo Metal Mining Co. added 6.9 percent. Dowa Holdings Co.,
Japan’s No. 2 zinc smelter, soared 8.8 percent, breaking a four-day
losing streak. The Nikkei newspaper said its metal business may post a
profit in the year to March 2010 as the company cuts costs, though Dowa
is projecting a loss.
European stocks rose for a second day, led by mining and energy shares, as metals and oil climbed amid evidence the recession is easing. BHP Billiton Ltd.,
the world’s biggest mining company climbed 2.6 percent. Inditex SA
jumped to the highest in more than a year after Europe’s largest
clothing retailer reported revenue growth in the early weeks of the
second quarter. “We are still broadly positive about the market and
think it can progress further over the next few months,” said Colin
McLean, managing director of SVM Asset Management in Edinburgh, which
oversees about $1 billion. “Our stance is more towards companies
benefiting from a Chinese recovery as well as metal prices and emerging
markets.” Royal Philips Electronics NV increased 2.6 percent to 13.75
euros after Chief Executive Officer Gerard Kleisterlee said in an
Internet presentation that Europe’s biggest consumer- electronics maker
is in a “good position” to benefit from an economic recovery. Fiat SpA rallied
4.9 percent to 7.79 euros, leading European carmakers higher. Italy’s
largest automaker and partners bought most of Chrysler LLC’s assets,
creating the world’s sixth-biggest carmaker in Chief Executive Officer
Sergio Marchionne’s plan to survive the recession by establishing a
global presence. Fiat will own 20 percent of the newly formed Chrysler
Group LLC, the companies said today. Siemens advanced 1.7
percent to 54.02 euros after Europe’s largest engineering company
confirmed its sales and earnings forecasts for the fiscal year in a
presentation posted on its Web site.
U.S. stocks fell,
erasing an early gain, as a disappointing auction of 10-year Treasury
notes and a jump in oil prices spurred concern higher interest rates
and accelerating inflation will threaten the economic recovery. Wells Fargo & Co. and Morgan Stanley
lost at least 2.9 percent as yields on 10-year bonds, which influence
interest rates on consumer and corporate loans, jumped to the highest
since October. Continental Airlines Inc. and UAL Corp., parent of
United Airlines, dropped 6 percent as crude topped $71 a barrel. Stocks
extended declines as an auction of 10-year notes drew a yield of 3.99
percent, the highest since August. “We’re in cautious mode,” said Wayne Wilbanks, chief investment officer at Wilbanks Smith & Thomas,
which manages $1.2 billion in Norfolk, Virginia. “There are some
growing fundamental issues with rising oil and rising interest rates.
In a weaker environment that will make an impact.” The Federal Reserve said
the U.S. downturn may be slowing in almost half of its regions, with
the outlook at some companies improving while “stringent” loan
conditions and a “weak” labor market persist. “Economic conditions
remained weak or deteriorated further” from mid-April through May,
while five of 12 Fed districts “noted that the downward trend is
showing signs of moderating,” the Fed said today in its Beige Book
business survey, published two weeks before officials issue their next
monetary policy decision. The yield on the 10-year note rose nine basis points, or 0.09 percentage point, to 3.95 percent and went as high as 3.99 percent, the highest since Oct. 16. Today’s
auction was the second of three sales this week that will raise $65
billion, part of a record U.S. borrowing program to finance economic
recovery measures. The 10-year Treasury yield is a global benchmark for
long-term interest rates, determining borrowing costs for a variety of
debtors including companies, homeowners and other governments. The
note’s yield is a risk-free return which stocks and other investments
need to beat to attract capital.
Resistance 3: Y99.60 Resistance 2: Y98.90 Resistance 1: Y98.20 Current price: Y97.92 Support 1: Y97.70 Support 2: Y97.10 Support 3: Y96.60 COMMENTS:
The yen becomes stronger against dollar. The nearest support is located
in the field of session low on Y97.70, further - on Y97.10 (yesterday's
low). The further purpose becomes Y96.60 (area of June 5 low and 2
high). Fastening above Y98.20 (area of consolidation of hour lows June
8 and session high) may open road to Y98.90 (high of June). Above the
important level is the area of maxima of May on Y99.60/80.
Resistance 3: Chf1.0980 Resistance 2: Chf1.0860 Resistance 1:Chf1.0800 Current price: Chf 1.0760 Support 1: Chf1.0720 Support 2: Chf1.0660 Support 3: Chf1.0580 COMMENTS:
Dollar weakens. 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 Chf1.0800. Further
upside target is on Chf1.0850 (yesterday's high). Monday’s highs are
the key resistance at Chf1.0980.
Resistance 3:$1.6660 Resistance 2:$1.6490 Resistance 1: $1.6430 Current price: $1.6415 Support 1: $1.6340 Support 2: $1.6240 Support 3: $1.6100 COMMENTS:
The sterling has returned the most part of yesterday's losses. The
nearest support is June 04 high on $1.6430 which capture will open road
to peak on June 01 on $1.6490/95 and further - to June 03 high on
$1.6660. The nearest support - on $1.6340 (earlier resistance, area of
session low), further - $1.6240 (yesterday's low). Below the area of
Monday's high on $1.6100 is located.
Resistance 3:$1.4330 Resistance 2:$1.4150 Resistance 1:$1.4050 Current price: $1.4033 Support 1:$1.3910 Support 2:$1.3850 Support 3:$1.3780 COMMENTS:
The euro corrected after yesterday's decrease. The nearest resistance -
$1.4050. Overcoming of the given mark will open road to $1.4150
(yesterday's high). Stronger level is June 03 high on $1.4330. The
nearest support - $1.3910 (yesterday's low), below - $1.3850 (Tuesday's
low). The strong level is located on $1.3780 (38,2% FIBO of $1,2880-$
1,4330).
