The New York Times reported the brewer Anheuser-Busch Companies, Inc is now in talks for a friendly deal with InBev after previously resisting the Belgian brewer's $46 billion, or $65-a-share, takeover offer.

Citigroup, Inc said it reached a deal to sell its German retail operations to France's Credit Mutuel for $7.7 billion, in an effort to shore up its balance sheet.

General Electric Company reported earnings of 54 cents per share that met expectations and revenue of $46.9B that beat expectations and said it will sell its consumer finance arm in Japan to Shinsei Bank for $5.4B.

Mastercard Inc will replace Ace Ltd. in the Standard & Poor's 500 Index, in a move that will trigger buying by index fund managers.

The co-developer of an experimental drug for skin cancer Medarex Inc predicted 2008 sales as high as $52M, exceeding analysts’ expectations.

The casino operator Wynn Resorts Ltd may up its $1.2B buyback as much as $500M more of its shares.

USD/CAD holds C$1.0090 area. Earlier dollar losses under C$1.0100 flushed out model and momentum stops for lows around C$1.0070, drawing blood in the process. Dollar bids tipped around C$1.0050.

EUR/USD retreats, holding around $1.5884, much below earlier highs on $1.5946. Bidson$1.5850, whileoffersat$1.5950.

Tetsuro Sawano, senior strategist at Mitsubishi UFJ Securities: “The growing number of economic data now suggest that the Japanese economy is slipping into a recession or it has entered a mild recession already. The Bank of Japan may need to wait until around summer 2009 before it can confirm the length and the depth of a recession in Japan and resume interest rate adjustments.”

The dollar dropped to within a cent of the all-time low against the euro on concern the U.S. government may be forced to take over mortgage lenders Fannie Mae and Freddie Mac. Fannie and Freddie fell to the lowest level in more than 17 years.

EUR/USD: $1.5900, $1.5735
USD/JPY: Y106.50, Y105.85, Y107.00, Y107.10, Y107.50
GBP/USD: $1.9900
Kiwi: $0.7630

Mitul Kotecha at Calyon: “It may well be quite an intense debate at the BoE. But the bottom line is that given, on the one hand weak growth and on the other increasing inflation pressures.”

EUR/USD holds near $1.5900, below earlier highs at $1.5949. Residual supply seen at $1.5950, euro deemed a buy on dips but some trailing stops sub $1.5850 if seen.

USD/JPY fell to the lows Y105.62 zone before rebounding to current Y106.08. Dollar bids eyed at Y105.50, more at Y105.00.

Geoffrey Yu, currency strategist at UBS: “We expect the ECB to deliver a second rate hike this year, probably in September. Our economists believe that the ECB made it very clear that inflation expectations and wage rounds are a risk for inflation, and that it wants to counter these effects.”

Stocks slumped Friday, dragged down by surging oil prices and worries that the government will have to take over beleaguered mortgage finance companies Fannie Mae and Freddie Mac.

Stocks managed gains at the end of a volatile session Thursday, as bullish comments from Intel's CEO offset higher oil prices and more worries about the banking and auto sectors. But the worries took center stage again Friday, as oil prices hit a new record and Fannie and Freddie plunged anew.
In the news: The government-sponsored mortgage backers Fannie and Freddie plunged again at the end of a brutal week dictated by growing fears about their ability to raise capital and stay afloat. Fannie shares fell 41% and Freddie shares fell 45%.
Lehman Brothers also continued to slump, losing another 17%, amid continued uncertainty about the brokerage's solvency since it reported a nearly $3 billion second-quarter loss last month.
General Electric said it earned 54 cents per share, as expected, after earning 53 cents a year earlier. GE shares rose nearly 1%.
Oil prices hit new record: U.S. light crude oil for August delivery gained $5.35 to $147 a barrel after hitting a trading record of $147.27 earlier.

EUR/USD contained between the $1.5910/20 range, a level that BOA says is a good profit-take level on euro longs. Option barrier strike and presumed related interest at $1.5950.

Francisco Solar, senior dealer at Easy Forex: “When oil prices rise, it adds to this inflationary pressure that we've been hearing from the ECB, so of course the euro should rally on the back of that. High oil prices tends to stem any economic growth the we might have from the US, so the US dollar should get sold off.”

Sue Trinh, currency strategist at RBC Capital Markets: “US dollar is weaker right across the board - financial worries are still very real and the US dollar remains sensitive to financial market developments.”

Economist Steve Wood of Insight Economics says consumer sentiment remains depressed: "Households have become quite worried about the economy over the past 18 months. Spreading job losses, high energy prices, the meltdown in the housing market, tighter credit standards, and stock market volatility are contributing to this anxiety. Michigan sentiment index is mired at recessionary levels."

Stocks have climbed off their opening lows, but the Dow Jones Industrial Average remains nearly 100 points lower. Though not as severe as earlier, the tone remains generally pessimistic as declining stocks on the NYSE outnumber advancers by almost 6-to-1.
The preliminary July Consumer Sentiment Survey from the University of Michigan came in at 56.6, which is better than the 55.5 economists forecast and just above the previous 56.4 reading.

EUR/USD: $1.5780, $1.5810
USD/JPY: Y106.65, Y106.35, Y107.65, Y108.00
EUR/JPY: Y169.80
USD/CHF: Chf1.0400
AUS/USD: $0.9580, $0.9675
EUR/GBP: stg0.8000

Stock futures continue to indicate a downside open for the week's final trading session (S&P futures vs fair value: -16.5, Nasdaq futures vs fair value: -22.0).
The Wall Street Journal has reported InBev is now offering to acquire Anheuser-Busch for $70 per share, topping its initial bid of $65 per share.
Oil has climbed above $146 per barrel in early electronic trading.
The May trade balance totaled a $59.8 billion deficit. Economists expected a trading deficit of $62.5 billion. The June import price index climbed 2.6% month-over-month, which is even with the increase registered in May and more than the 2.0% increase economists were expecting. Year-over-year, the June import price index showed 20.5% increase, though economists were expecting an 18.6% increase and the May index showed an 18.8% increase.

The dollar headed for a weekly loss against the euro on speculation U.S. consumer confidence fell to a 28-year low, giving the Federal Reserve less reason to raise interest rates this year.
`Confidence in the U.S. economy remains very weak,'' Greg Gibbs, a currency strategist at ABN Amro Holding NV in Sydney, wrote in a research note today. ``The appearance of ongoing stress in the financial sector is keeping the U.S. dollar weak against a number of currencies.''
The Reuters/University of Michigan preliminary index of consumer sentiment may have fallen to 55.5 in July, from 56.4 in June, according to the median forecast of economists.
The U.S. currency traded near a 25-year low versus the Australian dollar after Treasury Secretary Henry Paulson told lawmakers yesterday financial markets will take ``additional time'' to stabilize. The dollar's declines were limited by speculation of the U.S. government won't allow Fannie Mae and Freddie Mac, the two largest buyers of U.S. home loans, to fail.
``The nervousness about the U.S. financial sector has caused to destabilize the dollar,'' said Jeremy Stretch, a senior currency strategist in London at Rabobank International, the third-largest Dutch bank. ``This has helped euro bulls to get back the ascendancy.''
Crude oil rose for a third day, extending its largest one- day gain for more than a month yesterday. Crude for August delivery rose as much as 1.8 percent, to $144.15 a barrel on the New York Mercantile Exchange. Yesterday, it soared 4.1 percent to $141.65 a barrel, the biggest one-day increase since June 6.
The euro-dollar exchange rate and oil have moved in the same direction 90 percent of the time during the past year, according to calculations based on the correlation of their value changes.
The yen headed for its ninth weekly loss against the euro, its longest losing streak in more than a year, trading within 0.2 percent of a record low, on speculation the interest-rate differential will widen, decreasing the appeal of yen- denominated assets.

EUR/USD Bids $1.5790, with model stops between $1.5780/70. Offers remain in place to $1.5830, stronger toward a reported option barrier at $1.5850.
GBP/USD rose from $1.7850 to $1.9820. Bids $1.9750
USD/JPY fell from Y107.30 to Y106.60. Bids Y106.50. Offers Y107.30, Y107.50/75.

US data starts at 12:30 GMT with International trade (May). Also today Michigan sentiment index (July) preliminary will be published at 14: 00 GMT.

The dollar headed for a weekly loss against the euro on speculation U.S. consumer confidence fell to a 28-year low, giving the Federal Reserve less reason to raise interest rates this year.
The U.S. currency traded near a 25-year low versus the Australian dollar after Treasury Secretary Henry Paulson told lawmakers yesterday financial markets will take ``additional time'' to stabilize. The dollar's declines were limited by speculation of the U.S. government won't allow Fannie Mae and Freddie Mac, the two largest buyers of U.S. home loans, to fail.
``The nervousness about the U.S. financial sector has caused to destabilize the dollar,'' said Jeremy Stretch, a senior currency strategist in London at Rabobank International, the third-largest Dutch bank. ``This has helped euro bulls to get back the ascendancy.''
Crude oil rose for a third day, extending its largest one- day gain for more than a month yesterday. Crude for August delivery rose as much as 1.8 percent, to $144.15 a barrel on the New York Mercantile Exchange. Yesterday, it soared 4.1 percent to $141.65 a barrel, the biggest one-day increase since June 6.
The euro-dollar exchange rate and oil have moved in the same direction 90 percent of the time during the past year, according to calculations based on the correlation of their value changes.
The yen headed for its ninth weekly loss against the euro, its longest losing streak in more than a year, trading within 0.2 percent of a record low, on speculation the interest-rate differential will widen, decreasing the appeal of yen- denominated assets.

Extends rally to $1.5824, but seen meeting resistance from reported offers placed between $1.5825/30. Crude futures continue to trade higher in morning trade Friday, continuing to rally above the $140.00 level. The front-month Nymex WTI contract was last at $145.54.

Resistance 3: Y109.40
Resistance 2: Y108.60
Resistance 1: Y107.80
Current price: Y107.20
Support 1: Y106.70
Support 2: Y106.20
Support 3: Y105.00
Comments: Dollar consolidates. Support is around Y106.70, then – at Y106.20 (Tuesday’s lows). Stronger level is around Y105.00 (June 30 high). Strong resistance is around Y107.80. Above there is a chance of testing June 16 highs on Y108.60 and then - Y109.40.

Resistance 3: Chf1.0490
Resistance 2: Chf1.0400
Resistance 1: Chf1.0350
Current price: Chf1.0270
Support 1: Chf1.0250
Support 2: Chf1.0220
Support 3: Chf1.0160
Comments: Techs on dollar hasn’t changed. Strong resistance zone is near Tuesday’s highs on Chf1.0350. Above the rise may extend to Chf1.0400. Strong resistance is around Chf1.0490 (June 23). Support comes at Chf1.0250 ( yesterday’s low). Further losses may bring the rate down to Chf1.0220 (this week's low).

Resistance 3: $2.0000
Resistance 2: $1.9940
Resistance 1: $1.9840
Current price: $1.9760
Support 1: $1.9710
Support 2: $1.9670
Support 3: $1.9580
Comments: Resistance comes at yesterday’s high on $1.9800 and $1.9840 with further level at $1.9940. Stronger resistance is around psychological level on $2.0000, tested July 01. Support is near $1.9710. Break under will accelerate the decline to $1.9670 and then – to $1.9580.

Resistance 3:$1.6020
Resistance 2: $1.5900
Resistance 1: $1.5800
Current price: $1.5795
Support 1: $1.5600
Support 2: $1.5530
Support 3: $1.5470
Comments: Techs on euro hasn’t changed. Minor resistance comes at $1.5800, stronger one at $1.5900/05 (03 July high). Break higher will point to life-time high on $1.6020. Strong support is around $1.5600 (50% of $1.5300 - $1.5905 rise). Below correction may extend to $1.5530 and then – to 23 June lows at $1.5470.

The dollar headed for a weekly loss against the euro on speculation U.S. consumer confidence fell to a 28-year low, giving the Federal Reserve less reason to raise interest rates this year.
The U.S. currency traded near a 25-year low versus the Australian dollar after Treasury Secretary Henry Paulson told lawmakers yesterday financial markets will take ``additional time'' to stabilize. The dollar's declines were limited by speculation of a government takeover of one or both of Fannie Mae and Freddie Mac, the two largest buyers of U.S. home loans.
``The dollar is vulnerable,'' said Toru Umemoto, chief currency strategist in Tokyo at Barclays Capital Inc., a unit of the U.K.'s third-biggest bank. ``The markets cannot dispel concerns over the U.S. financial sector and its negative impact on the economy.'' The dollar may fall to $1.60 per euro in a month, Umemoto said.

EUR/USD traded within $1.5799/65.

GBP/USD was bounded in $1.9790/50.

USD/JPY rose from Y106.70 to Y107.30.

EUR/USD: $1.5780, $1.5810
USD/JPY: Y106.65, Y106.35, Y107.65, Y108.00
EUR/JPY: Y169.80
USD/CHF: Chf1.0400
AUS/USD: $0.9580, $0.9675

1.Non-OPEC supply in 2009 seen up 640 kb/d

2.Global oil supply this June up 285 kb/d m/m to 86.5 mb/d

3.June OPEC crude output up 350 kb/d to 32.4 mb/d

The S&P Sep contract was last 0.60 points higher at 1255.10, with the Sep Nasdaq contract up 6.00 points at 1850.25.

Resistance 3: Y109.40
Resistance 2: Y108.60
Resistance 1: Y107.80
Current price: Y107.20
Support 1: Y106.70

Support 2: Y106.20
Support 3: Y105.00

Comments: Dollar consolidates. Support is around Y106.70, then – at Y106.20 (Tuesday’s lows). Stronger level is around Y105.00 (June 30 high). Strong resistance is around Y107.80. Above there is a chance of testing June 16 highs on Y108.60 and then - Y109.40.

Resistance 3: Chf1.0490
Resistance 2: Chf1.0400
Resistance 1: Chf1.0350
Current price: Chf1.0266
Support 1: Chf1.0250
Support 2: Chf1.0220
Support 3: Chf1.0160

Comments: Techs on dollar hasn’t changed. Strong resistance zone is near Tuesday’s highs on Chf1.0350. Above the rise may extend to Chf1.0400. Strong resistance is around Chf1.0490 (June 23). Support comes at Chf1.0250 ( yesterday’s low). Further losses may bring the rate down to Chf1.0220 (this week's low).

Resistance 3: $2.0000

Resistance 2: $1.9940

Resistance 1: $1.9840
Current price: $1.9760
Support 1: $1.9710
Support 2: $1.9670

Support 3: $1.9580

Comments: Resistance comes at yesterday’s high on $1.9800 and $1.9840 with further level at $1.9940. Stronger resistance is around psychological level on $2.0000, tested July 01. Support is near $1.9710. Break under will accelerate the decline to $1.9670 and then – to $1.9580.

Nikkei 225 fell 27.52 points, or 0.21%, to 13039.69. TOPIX lost 4.85 points to 1285.91.

Resistance 3:$1.6020
Resistance 2: $1.5900
Resistance 1: $1.5800
Current price: $1.5780
Support 1: $1.5600
Support 2: $1.5530
Support 3: $1.5470

Comments: Techs on euro hasn’t changed. Minor resistance comes at $1.5800, stronger one at $1.5900/05 (03 July high). Break higher will point to life-time high on $1.6020. Strong support is around $1.5600 (50% of $1.5300 - $1.5905 rise). Below correction may extend to $1.5530 and then – to 23 June lows at $1.5470.

FTSE up 15, the DAX up 10, the CAC up 15 and the Eurostoxx 50 up 5.

The benchmark Shanghai Comp ended the morning down 38.83 points at 2,836.61, off a low of 2,833.40 and high of 2,888.29. The Shanghai
A-share Index fell 40.84 points or 1.35 pct to 2,975.29, while the Shenzhen A-share Index was down 16.16 points or 1.77 pct at 896.12. The
FTSE/Xinhua China A 50 Index fell 208.12 points or 1.95 pct to 10,450.83 and the FTSE/Xinhua China A 200 Index was down 138.69 points or 1.67 pct to 8,153.47.

High Low Close
EUR/USD 1.5801 1.5689 1.5783
USD/JPY 107.43 106.69 107.05
GBP/USD 1.9835 1.9712 1.9772
USD/CHF 1.0341 1.0251 1.0276

EUR/JPY 169.06 167.78 168.97
EUR/GBP 0.7986 0.7931 0.7981
GBP/JPY 212 15 211.13 211.68
GBP/CHF 2.0406 2.0278 2.0323


Change % Change Last
Nikkei 225 +15.08 +0.12% 13,067.21
Topix +5.23 +0.4% 1 290.76
FTSE -122.80 -2.22% 5,406.80
DAX -81.46 -1.28% 6,305.00
CAC -108.10 -2.49% 4,231.56
Dow +81.58 +0.73% 11,229.02
NASDAQ +22.96 +1.03% 2,257.85
S&P +8.70 +0.70% 1,253.39
10yr Note -0.2300 -0.060% 3.811%
NYMEX Crude Oil +5.60 +4.12% 141.65
Gold +13.40 +1.44% 942.00

04:30 Japan Industrial output (May) final 2.9% 2.9%
04:30 Japan Industrial output (May) final Y/Y 1.2% 1.2%
06:00 Germany Wholesale prices (June) - 1.4%
06:00 Germany Wholesale prices (June) Y/Y - 8.1%
11:00 Canada Employment (June) - +8.4K
11:00 Canada Unemployment rate (June) - 6.1%
12:30 USA International trade (May), bln -61.8 -60.9
12:30 USA Export (May), bln - 155.6
12:30 USA Import (May), bln - 216.5
12:30 USA Import prices (June) - 2.3%
12:30 USA Export prices (June) - 0.3%
14:00 USA Michigan sentiment index (July) preliminary 55.8 56.4
18:00 USA Federal budget (June), bln 36.0 -165.9