Stiri financiare

Best Buy Co Inc
The largest U.S. electronics chain reported that its first-quarter profit fell 15%, hurt by lower demand for video games, digital cameras and other consumer electronics. Revenue rose 12% to $10.1B as the company added 185 net new stores in the past 12 months.

General Motors Corp
The automaker has signed a tentative deal to sell its Saab unit to a consortium led by Swedish sports carmaker Koenigsegg Automotive. No price was given. Koenigsegg is a tiny luxury carmaker which produces only a dozen custom-made models a year.

Research in Motion Limited
The maker of the BlackBerry smart phone unveiled a new model that operates globally, competing with Apple’s latest iPhone. The Tour 9630, which uses so-called 3G technology, will be sold in the U.S. through Verizon Wireless and Sprint Nextel Corp.

Amgen Inc
The world’s largest biotechnology company was boosted to “outperform” from “market perform” by Sanford C. Bernstein & Co.

CBO budget puts the 2010 fed deficit at -$1.4T

- ECB's policy stance is appropriate
- June ZEW could mean stronger confidence than assumed
- Are in a process of disinflation, not deflation

Industry news: Barclays says its board approved the sale of Barclays Global Investors to US Blackrock. Deal is subject to shareholder approval and a meeting will be held early August for that purpose

He says pro-stability policies could hurt growth. Fin'l conditions are improving but "panic's hasty retreat should not be confused with robust recovery." Demand remains weak, growth may
be slow for several yrs. Govt should return to sustainable budgets and Fed should not compromise price stability. Natural rate of unemployment may trend higher and asset prices show more dispersion than in past. Fed "must keep an eye on risks as conditions evolve."

Dow -70.28 at 8541.85, Nasdaq -9.87 at 1806.51, S&P -7.09 at 916.63

The dollar fell from a three-week high versus the euro as a report showed U.S. builders broke ground in May on more houses than economists forecast, boosting demand for higher-yielding assets such as stocks.
The greenback dropped versus the euro on reduced demand for safety as the U.S. Commerce Department reported a 17 percent increase in housing starts to an annual rate of 532,000 last month from a revised 454,000 pace in April. The median forecast of economists was for an increase to 485,000 from a previously reported 458,000.
The pound rose from a one-week low against the dollar after a report showed U.K. inflation slowed in May less than economists predicted, making it more likely the Bank of England will raise interest rates early next year.
The yen posted its biggest intraday increase versus the dollar in two weeks after the Bank of Japan raised its view of the nation’s economy for a second month and left the target overnight lending rate at 0.1 percent.
The euro gained versus the dollar as the ZEW Center for European Economic Research in Mannheim, Germany, said its index of investor and analyst expectations, designed to predict developments six months ahead, increased this month to 44.8, the highest level since May 2006. The median forecast of economists was for a reading of 35.

The oil and energy sector has continued to outperform for most of the day, helped by gains being made in the crude market. These stocks eased off a little during the afternoon however, with BG Group (BG.) now weighing on the FTSE, although Total SA (FP) and E.ON AG (EOAN) are holding firm. Defensive stocks have also seen some positive trading during the day, with Vodafone (VOD), Deutsche Bourse (DB1), and GlaxoSmithKline (GSK) offering good support to the benchmark indices, and with Tesco (TSCO) leading after announcing this morning that Q1 sales increased by 4.3%. On the other side, mining stocks have been the key losers during the session, and despite strength in the metals markets in the afternoon, remained weak in later trade. FTSE +2.56 (+0.06%) at 4,328.57, CAC -5.63 (-0.17%) at 3,213.95, Dax +0.78 (+0.02%) at 4,890.72.

ECB, Weber: "EMU econ still far from a significant recovery"

Housing starts jumped 17% to the annual rate of 532,000 in May, from a revised 454,000 the prior month. That's much higher than the 485,000 forecast by a consensus of economists.
Building permits, an important signal for upcoming housing activity, rose 4% to the annual rate of 518,000 in May, from April's rate of 498,000. This was higher than the rate of 508,000 expected.
The Producer Price Index (PPI), a measure of prices at the wholesale level, edged up 0.2% in May, compared to an increase of 0.3% in April. This is the less than the 0.6% that was expected by consensus.
The core PPI, excluding food and energy prices, slipped 0.1% in May, compared to its 0.1% increase the prior month. Сonsensus had expected it to edge up 0.1%.
On the negative side, industrial production decreased a greater-than-expected 1.1% in May, with capacity utilization plunging to 68.3%, the lowest level since record keeping began in 1967.
The European arm of General Motors (GMGMQ) said it has reached a deal to sell Saab to Sweden's Koenigsegg. The deal had been widely expected.
Stocks in Asia fell sharply, with Japan's Nikkei losing nearly 3%. European markets are set to close lower Tuesday, having lacked clear direction during the day, and sliding in late trade.
The price of oil jumped $1.53 per barrel to $72.15.

Mizuho says this was the "first clear sign of a bottoming in the housing market" as regions rose across the board.

Dow +16.25 at 8628.38, Nasdaq +10.96 at 1827.05, S&P +2.72 at 926.44

Nomura sees "convincing evidence" of a bottom in housing

After moving higher the stock market is surrendering some of its gains, sending the Dow back to the unchanged mark.
Losses have intensified among retailers, which are now down 1.0%. Telecom stocks (-0.4%) are also now in the red, as are consumer staples stocks (-0.4%), consumer discretionary stocks (-0.4%), and financial stocks (-0.2%).
Early movers: Trading up -- LZB +25%, HAFC +15%, ALVR +12.7%, TEL +11.3%, KV.A +11.2%, CDII +10.9%, AEZS +10.4%, SOAP +9.6%; Trading down -- FCEL -15.7%, MMR -10.6%, AHT -10.4%, AGO -10%, HAR -7.8%

HFE economist Ian Shepherdson says +17% May housing starts included a 3rd gain in single-family (of +7.5%) and this is a rebound. But he says inventory overhang "means any recovery in building will be very muted."

Stocks gyrated in the first few minutes of trading, which threatened to reverse the stock market's initial gains. The major indices have since secured their footing and now trade with fair gains.
The early, upward move is generally broad-based, but shares of retailers are lagging the broader market by trading 0.5% lower. However, their decline hasn't entirely undercut the consumer discretionary sector, which is actually up 0.2%. The advance by the consumer discretionary sector comes with help from homebuilding stocks (+3.8%), which are benefitting from news that housing starts and building permits for May increased more than expected from previous lows.

A weaker dollar was leading direction for most of the day, and escalating worries in Iran, following news that the worlds number four oil producer will no longer be allowing foreign media to cover 'unauthorized' rallies, helped give the commodity the extra push it needed to break back through $72/bbl. The WTI Nymex front contract is currently up $1.62 at $72.24.

- Need exit from expansionary policies for for price stability
- Premature to implement exit but not plan for it.

EUR/USD $1.3900, $1.3830, $1.4000/10, $1.4050, $1.4135, $1.4150
USD/JPY Y97.15, Y97.30, Y97.65, Y97.95, Y98.00, Y95.50
AUD/USD $0.7835, $0.8020
USD/CAD C$1.1250, C$1.1285, C$1.1200, C$1.1100

U.S. stocks were expected to open slightly higher Tuesday, as investors showed little reaction to unexpectedly strong reports on the housing market..

The Producer Price Index for May showed a 0.2% increase, which fell short of the 0.6% increase that was widely expected, and marked a decline from the 0.3% increase registered in April. Excluding food and energy, the PPI decreased just 0.1%. The core data was expected to increase a modest 0.1% after increasing 0.1% in April. Annualized housing starts for May totaled 532,000, which was higher than the 485,000 starts that were expected. Housing starts for April were revised modestly lower to reflect an annualized rate of 454,000. Meanwhile, building permits for May climbed to a rate of 518,000 after reaching 498,000 in April. Stock futures continue pointing higher.
World markets: Stocks in Asia fell sharply, with Japan's Nikkei losing nearly 3%. European markets were higher in midday trading.
Oil and money: The price of oil jumped $1.70 per barrel to $72.32.

Capacity-Util was 68.3%

Breaks above $1.6500 as the dollar comes under renewed pressure, the rate lifting to $1.6506 and failing on the initial move to trigger reported stops above $1.6510. Rate currently holds backa round $1.6474. Above $1.6510 and rate can push on toward $1.6520/25 ($1.6525 76.4% $1.6622/1.6210). Support noted at $1.6480 ahead of $1.6465.

Data:
03:30 Japan BoJ meeting announcement 0.1% 0.1% 0.1%
06:30 Japan BoJ press conference
08:30 UK HICP (May) +0.6% 0.3% 0.2%
08:30 UK HICP (May) Y/Y +2.2% 2.0% 2.3%
08:30 UK HICP ex EFAT (May) Y/Y +0,4% 1.5% 1.5%
08:30 UK Retail prices (May) +0.6% 0.1%
08:30 UK Retail prices (May) Y/Y -1.1% -1.5% -1.2%
08:30 UK RPI-X (May) Y/Y +1.6% 1.3% 1.7%
09:00 Germany ZEW economic expectations index (June) -89,7 31.1
09:00 Italy CPI (May) final 0.2% 0.2% 0.2%
09:00 Italy CPI (May) final Y/Y 0.9% 0.9% 0.9%
09:00 Italy HICP (May) final Y/Y 0.8% 0.8% 0.8%
09:00 EU(16) Harmonized CPI (May) final 0.1% 0.0% 0.4%
09:00 EU(16) Harmonized CPI (May) final Y/Y 0% 0.0% 0.6%
09:00 EU(16) Harmonized CPI ex EFAT (May) Y/Y 1.5% 1.6% 1.8%
09:00 EU(15) Labour cost index (Q1) Y/Y 3.7% 3.8%

The ZEW Center for European Economic Research in Mannheim said its index of German investor and analyst expectations, which aims to predict economic developments six months ahead, increased to 44.8 this month from 31.1 in May. That’s the highest reading since May 2006. Economists had expected a gain to 35, according to the median of 35 forecasts in a Bloomberg News survey. “The confidence indicators have been positive,” said Gregoire Scheiff, a fund manager at DNCA Finance in Paris, which oversees $5.3 billion. “The market can continue to gain. Now we need to see more data on investment.” Standard & Poor’s 500 Index futures added 0.2 percent. The measure tumbled the most in a month yesterday as lower oil and metals weighed on commodity producers. Morgan Stanley said in a report that the rally in U.S. stocks “may now be over.”
A Federal Reserve report may show industrial production in the U.S. fell 1 percent in May. Other reports may show builders began work on more houses in May and wholesale prices rose.
Euro - Dollar recovery from 1.3745 intra-day low has halted at 1.3922 intra-day low after buoyant German ZEW Economic expectations Index, and the Euro has pulled down to levels right below 1.3900 later on.

The Pound has consolidated at levels above 1.6400, on recovery from 1.6210 low, as pull down from 1.6485 intra-day high has hold above 1.6410, and the Pound returned upwards reaching 1.6435 at the time of writing. Inital resistance lies at 1.6485 (Today's high), and above here, 1.6520 and then 1.6580/00. On the downside, below 1.6400, support levels lie at 1.6325, and below there, 1.6200/10 and 1.6100.

The Dollar rebounds from 96.05 intra-day low against the Yen has risen further in the last hour and the pair has climbed up to levels above 97.00 in a 105 pips up movement from this level to break 96.91 resistance and post 97.10. Currently the pair is trading around 97.02/10, yet 0.60% below opening price action. In case of further climbing, above 97.00, next resistance level lies at 97.30 and then 97.50. On the downside, support levels lie at the 96.00/15 area, and below there, 95.90, and then 95.55.

US: May PPI +0.2%, -5.0% y/y; core -0.1%, +3.0% y/y

US: May US housing starts +17.2% to 532k SAAR

- Failure To Revoke Stimulus May Cause Depression
- Ordonez Sees Spain Budget Deficit Around 10%/GDP In 2010
- Spain Has No Margin For Further Econ Stimulus

- Still see more hurdles to overcome

having climbed steadily overnight, and covered the $926.90 - $935.50 range. Traders reported some good support being found at the $930/oz level in yesterday's session, although the metal broke for $927.50 as stops were activated. The fall offered bargain hunters a chance in Asia, which has
followed through to the London market this morning, allowing gold to push back past $935/oz. The greenback is still leading direction however, and traders will be looking to the DXY for continued weakness during the session. Spot gold is up $5.97 at $934.27.

EUR/USD: $1.3830, $1.3900, $1.4000/10, $1.4050, $1.4135, $1.4150
USD/JPY: Y97.15, Y97.30, Y97.65, Y97.95, Y98.00, Y95.50
AUS/USD: $0.7835, $0.8020
USD/CAD: C$1.1250, C$1.1285, C$1.1200, C$1.1100

European equity bourses are trading near flatTuesday, with the FTSE-100 outperforming slightly. The oil and energy sector is seeing some bargain hunting helping to bolster prices this
morning, with gains made in the crude market offering further support - BG Group (BG.), Total SA (FP), and E.ON AG (EOAN) outperforming. Mining
stocks on the other hand are still suffering from declines in basemetals prices, particularly in London, where Rio Tinto (RIO) and BHP Billiton (BLT) are now leading losses. Banks are also generally weaker across exchanges, although Lloyds (LLOY) is a notable exception, currently up around +3.3% after Redburn raise their share outlook to 'Buy' from 'Unattractive'.

The pound rose against the dollar after a report showed U.K. inflation slowed in May by less than economists forecast, making it more likely the Bank of England will raise interest rates from a record low. The pound also advanced versus the euro and the Swiss franc after the Office for National Statistics said consumer prices in the U.K. rose an annual 2.2 percent in May, compared with 2.3 percent in April. The rate was forecast to fall to 2 percent, according to the median estimate of 30 economists surveyed by Bloomberg. Policy makers cut the main rate to 0.5 percent in March and began buying bonds to depress rates further.“The higher-than-expected inflation number is clearly supporting sterling,” said Marcus Hettinger, a foreign-exchange strategist in Zurich at Credit Suisse Group AG, Switzerland’s largest bank by market value. “The market is pricing in higher interest rates.”
The euro snapped two days of declines versus the dollar after German investor confidence rose more than economists forecast to a three-year high in June. “The panic situation is behind us but the economy is still only scraping along the bottom,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi Ltd. in London. “The reflation trade may have one more leg up left in it before it loses steam.” The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months ahead, increased to 44.8 from 31.1 in May. That’s the highest reading since May 2006. Economists expected a reading of 35, according to the median of 35 forecasts in a Bloomberg News survey. The euro may rise to as high as $1.50 per dollar in the next three months before retreating to about $1.35 by the end of the year, Hardman said.
EUR/USD has extended its gains after the sharp improvement of German ZEW Economic Expectations Index and, rebound from 1.3745 low has reached an intra-day high at 1.3922. At the moment, the Euro trades around 1.3900.
GBP/USD soared after UK CPI posted the lowest year on year increase in 18 months, and from 1.6210 intra-day low the Pound extended its recovery to 1.6480 intra-day high, to pull back afterwards to levels around 1.6440.
USD/JPY decline from 98.55 high yesterday has bottomed at 96.05 low during Today's Asian session, and the Dollar has picked up during the European trading session to reach levels around 96.90 at the time of writing.

Resistance 3: Y99.60
Resistance 2: Y98.60
Resistance 1: Y97.80
Current price: Y96.82
Support 1: Y96.00
Support 2: Y95.20
Support 3: Y94.40
COMMENTS: US dollar has picked up during the European trading session to reach levels around 96.90. Rate tested key support at Y96.00 (session low and 38.2% Fibo of Y110.70 - Y87.00 decline). Below strong support comes at trend line from Jan 21 at Y95.20. Break under will strengthen the bearish momentum and open the way to Y94.40 (Jun 01 low). Resistance is near Y97.80 (session high). Then – near yesterday’s highs on Y98.60 and at Y99.60/70 (May 07 highs).

FTSE +20.00 (+0.45%) at 4,346, CAC +5.00 (+0.15%) at 3,224, Dax -4.00 (-0.08%) at 4,886

Resistance 3: Chf1.1150
Resistance 2:Chf1.1050
Resistance 1:Chf1.0950
Current price: Chf 1.0841
Support 1:Chf1.0740
Support 2:Chf1.0650
Support 3: Chf1.0600
СOMMENTS: Techs on dollar hasn’t changed. Strong resistance comes at channel line from Apr on Chf1.0950. Above the target is on Chf1.1050 (May 21 high) and Chf1.1150 (50% of Chf1.1720 - Chf1.0590 move). Support is near Chf1.0740, stronger – on Chf1.0650 (Jun 11 low). Then the rate may decline to Chf1.0590/00 (Jun 02 low).

Resistance 3:$1.6580
Resistance 2:$1.6520
Resistance 1: $1.6420
Current price: $1.6446
Support 1: $1.6340
Support 2: $1.6200
Support 3: $1.6120
COMMENTS: The sterling grows above the Asian maxima. Resistance level comes at $1.6420 (38.2% Fibo of $1.5804 - $1.6612 rise). Further resistance is near $1.6520 (Jun 12 hourly high) and above to $1.6580. Support is around $1.6340, then – at session lows on $1.6200/10 and further at $1.6120.

Resistance 3:$1.4180
Resistance 2:$1.4040
Resistance 1:$1.3881
Current price: $1.3838
Support 1: $1.3740
Support 2: $1.3600
Support 3: $1.3440
COMMENTS: The euro grows on report ZEW and bargains at the nearest resistance $1.3880. Support comes at $1.3740 (session low). Below correction may widen to $1.3600 (50% Fibo of $1.2880 - $1.4330). Further downside target is around 61.8% Fibo on $1.3440. Resistance comes at $1.3880, then – on $1.4040 (Jun 12 hourly high). Stronger level is near $1.4180 (Jun 11 high).

- Consumer Price Index - Core (YoY) (May) 1.5%
- Consumer Price Index (YoY) (May) 0%

- June current situation index -89.7 vs May -92.8

Hang Seng Index ends down 1.80% at 18,165.50 points on Tuesday.

- May RPIX +0.6% m/m; +1.6% y/y; median +1.3% y/y
- May RPI +0.6% m/m; -1.1% y/y; median -1.5% y/y

The yen rose against higher-yielding currencies and advanced the most in two weeks versus the dollar as stocks declined and the Bank of Japan said the nation’s deepest recession since World War II is easing.
Japan’s currency extended gains versus the dollar and the euro after the Bank of Japan raised its view of the nation’s economy for a second month and left the overnight lending rate unchanged at 0.1%.
“Japan’s economic conditions, after deteriorating significantly, have begun to stop worsening,” the central bank said in a statement today.
Japan’s currency made the biggest gains against the Australian and New Zealand dollars and the Mexican peso.
The greenback fell for a second day against the yen on concern the leaders of Brazil, Russia, India and China meeting today will call for less reliance on the dollar as the world’s reserve currency.
“If we get a change in attitude from Russia, maybe we will get some softening of the U.S. dollar in the short-term, but I don’t think it’s a medium-term trend,” said Sebastien Barbe, a currency strategist at Calyon. Russia’s President Dmitry Medvedev said in Yekaterinburg that the world economy cannot rely on one reserve currency.

EUR/USD tested lows around $1.3740 before rebounded to $1.3860/70.

GBP/USD initially fell to $1.6200 before rising up to $1.6363.

USD/JPY declined to Y96.00/05 before recovered to Y96.55.

Tuesday is filled with statistics. In Europe UK inflation data are due to come at 08:30 GMT. But the main focus will be on Germany’s ZEW economic expectations index at 09:00 GMT. EU prices data will come the same time too.
US PPI report for May will be released at 12:309 GMT with analysts predict prices rose 0.5% after +0.3% in April. Also at 12:30 GMT US Housing starts and Building permits will be issued. Industrial production (due at 13:15 GMT) is expected to decline 0.6% after -0.5% in April.

ITALY: May HICP +0.2% m/m and +0.8% y/y

WTI Nymex crude has is climbing higher Tuesday, having stayed more rangebound overnight. The commodity broke below the $70/bbl level during Asian trade to a low of $69.90, with the session seeing a $70.65 high. Nymex light sweet crude is currently near flat at $70.57.

EUR/USD: $1.3830, $1.3900, $1.4000/10, $1.4050, $1.4135, $1.4150
USD/JPY: Y97.15, Y97.30, Y97.65, Y97.95, Y98.00, Y95.50
AUS/USD: $0.7835, $0.8020
USD/CAD: C$1.1285, C$1.1200, C$1.1100

Japan's benchmark stock indices ended Tuesday's session lower, recording its steepest percentage fall in over two month and ending below the 10,000 level. The Nikkei 225 was lower by 286.79 points, or 2.86%, to stand at 9752.88. The broader-based TOPIX was 32.06 points lower at 914.76.

Majors close
Nikkei -96.15 -1,0% 10,039.67
Topix -3.72 -0.4% 946.82
FTSE -115.94 -2.61% 4,326.01
CAC -106.56 -3.20% 3,219.58
Dax -179.30 -3.54% 4,889.94
Dow -187.13 -2.13% 8,612.13
NASDAQ -42.42 -2.34% 1,816.38
S&P -22.49 -2.38% 923.72
10yr Note -0.7500 -0.198% 3.713%
NYMEX Crude Oil -1.42 -1.97% 70.62
Gold -13.20 -1.40% 927.50

Japanese stocks fell, led by financial and resource shares, on concern equity sales will dilute shareholder value and as oil and copper prices retreated.
Sumitomo Mitsui Financial Group Inc. lost 6.9% on a Nikkei newspaper report it would sell more stock than previously planned.
Japan Petroleum Exploration Co. fell 2% and Nippon Mining & Metals Co. lost 2.6%.
Sumitomo Realty & Development Co. soared 6.8%, leading real estate shares higher after Daiwa Securities Group Inc. raised its rating on the sector.
Japanese Prime Minister Taro Aso has unveiled three stimulus packages worth 25 trillion yen ($253 billion) since taking office in September. Ballooning government spending has helped drive the yield on 10-year Japanese government notes up by 32 basis points this year.
Sumitomo Mitsui fell 6.9%, and the stock was the most active in Tokyo. After the market closed, Sumitomo Mitsui said it will raise as much as 923 billion yen. It will be the biggest new share sale in Japan since 2001. The bank said last month it might sell up to 834 billion yen worth of new shares.
Other financial shares also slipped, with Mitsubishi UFJ Financial Group Inc., which has raised more than 1.3 trillion yen since December in sales of shares and securities, losing 3.2% and insurer T&D Holdings Inc. sinking 4.1%.

European stocks fell the most in a month on speculation share prices have outstripped the prospects for earnings with the Dow Jones Stoxx 600 Index trading at the highest level relative to profits in five years.
BHP Billiton Ltd. and Royal Dutch Shell Plc retreated more than 2% as copper, lead and crude decreased. TomTom NV, the region’s largest maker of car-navigation devices, sank 5.1% after saying it plans to raise 430 million euros ($596 million) selling shares.
BHP slid 2.8%, while Rio Tinto Group decreased 6.9%.
Copper declined in London on speculation supply may outpace demand in China, the world’s largest consumer, as the country’s imports climbed to record levels for the fourth month and domestic stockpiles jumped to the highest in nearly 15 months.
Shell sank 4.2%, the biggest decline in more than three months. Crude oil for July delivery dropped as much as 3.4% to $69.58 a barrel on the New York Mercantile Exchange.
TomTom slid 5.1%. The company plans to raise funds in a fully committed rights offering and through a private placement. The manufacturer said its lenders also agreed to change the terms of its financial covenants to provide “greater headroom.”
Air France-KLM Group fell 5.2%. Citigroup Inc. cut its recommendation on Europe’s largest airline to “hold” from “buy.”
Bank of Ireland Plc sank 17% for the biggest decline in the Stoxx 600. Deutsche Bank AG cut its recommendation on shares of the nation’s biggest lender by market value to “hold” from “buy.”

The Wall Street fell to June lows by logging its worst single-session percentage loss in one month. Most of the losses were registered in the first leg of trading, leaving stocks to spend the rest of the session moving sideways.

Sellers pushed against stocks in concerted fashion. In turn, 95% of the companies in the S&P 500 finished with a loss.
The selling effort was most intense against materials stocks, which dropped 3.5%. Commodities and basic materials stocks were pressured by an increase in the U.S. dollar, which came after a Russian official made supportive comments regarding the dollar's role as a reserve currency.
With the Dollar Index jumping 1.2% gold and silver fell to monthly lows. Gold dropped 1.4% to $927.30 per ounce, while silver shed 5.7% to settle at $14.03 per ounce in pit trading. Steel stocks sank 4.8% and diversified metals and mining stocks dropped 5.8%.
Industrial stocks also saw steep losses. The sector dropped 3.1%. 3M was a primary laggard and also weighed on the Dow. Microsoft and American Express were the only two components in the blue chip index to log gains. The advance by American Express came after the company posted some better-than-expected monthly metrics.
Health care facilities stocks (+3.6%) and health care tech stocks (+1.9%) were able to garner some of the little support that was left in the market. Their advance came as health care suppliers (-2.7%) and health care equipment stocks (-2.9%) sank amid reports that President Obama is looking to cut $313 billion in new health costs.
Net long-term Treasury international capital (TIC) flows for April totaled $11.2 billion, which is far less than the $57.5 billion that was expected, and down from the $55.4 billion tally for March.
Overseas markets also showed weakness Monday as the major indices throughout Europe and Asia logged sizable losses following a weekend meeting of eight global economic powers, from which officials are looking at ways to unwind recent fiscal stimuli. U.S. Treasury Secretary Geithner stated that it is too early to withdraw stimulus, though.

Data released
12:30 USA NY Fed Empire State manufacturing index (June) -9.4 -3.0 -4.6
13:00 USA TICS (April), bln -53.2 - 25.0 (23.2)
13:00 USA TICS long-term (April), bln 11.2 53.0 55.4 (55.8)

The dollar started the week on a firm footing, helped by a flight from risk as equity markets tumbled, and supported by comments from the weekend’s G8 meeting.
Those fears were heightened last week as Russia, Brazil and China announced plans to invest in bonds issued by the International Monetary Fund and denominated in special drawing rights (SDR). This weighed on the dollar since the SDR is a basket of currencies containing about 45%.
However, Alexei Kudrin, Russian finance minister, allayed fears over diversification away from the dollar at the G8 summit. Mr Kudrin said there was “no alternative” to the US dollar as a reserve currency and that Russia has confidence in the currency which was in “good shape”.
Also helping to support the dollar was increased concerns over the European banking sector. European officials said they were agreed in principle to conducting stress tests, but Christine Lagarde, French finance minister, noted that discussions were ongoing within the European Union as to whether to do it on a consolidated basis or at individual country level.
The euro dropped as data showed eurozone employment plunged by a record 0.8% on a quarterly basis in the first three months of 2009. This was twice as fast as the 0.4% drop seen in the fourth quarter of 2008.
The euro fell after the Telegraph cited Hans Heinrich Driftmann, president of the German Chamber of Commerce and Industry, as saying funding conditions for German businesses are tougher now than they were at the peak of the global crunch months ago.

EUR/USD squeezed down to challenge reported demand between $1.3855/50, later – to key tech support between $1.3816/10. Euro failed to recover ant by the close refreshed lows near $1.3750/60.

GBP/USD managed to extend its recovery, but met decent resistance on approach to $1.6400 which capped. A continued squeeze lower in euro-dollar, and profit take buys of euro-sterling eased cable back to $1.6240. Later rate recovered to $1.6330.

USD/JPY challenged resistance at Y98.50/60 following the decline to session lows on Y98.05. Later rate dipped down to Y97.50.

Resistance 3: Y99.60
Resistance 2: Y98.60
Resistance 1: Y97.80
Current price: Y96.40
Support 1: Y96.00
Support 2: Y95.20
Support 3: Y94.40
COMMENTS: US dollar weakens after BoJ decided to hold tha rate unchanged and lifted its economic assessment. Rate tested key support at Y96.00 (session low and 38.2% Fibo of Y110.70 - Y87.00 decline). Below strong support comes at trend line from Jan 21 at Y95.20. Break under will strengthen the bearish momentum and open the way to Y94.40 (Jun 01 low). Resistance is near Y97.80 (session high). Then – near yesterday’s highs on Y98.60 and at Y99.60/70 (May 07 highs).

Resistance 3: Chf1.1150
Resistance 2:Chf1.1050
Resistance 1:Chf1.0950
Current price: Chf 1.0887
Support 1:Chf1.0740
Support 2:Chf1.0650
Support 3: Chf1.0600
СOMMENTS: Techs on dollar hasn’t changed. Strong resistance comes at channel line from Apr on Chf1.0950. Above the target is on Chf1.1050 (May 21 high) and Chf1.1150 (50% of Chf1.1720 - Chf1.0590 move). Support is near Chf1.0740, stronger – on Chf1.0650 (Jun 11 low). Then the rate may decline to Chf1.0590/00 (Jun 02 low).

Resistance 3:$1.6520
Resistance 2:$1.6420
Resistance 1: $1.6340
Current price: $1.6310
Support 1: $1.6200
Support 2: $1.6120
Support 3: $1.6050
COMMENTS: Sterling tries to recover, heading for minor resistance at $1.6340. Stronger level comes at $1.6420 (38.2% Fibo of $1.5804 - $1.6612 rise). Further resistance is near $1.6520 (Jun 12 hourly high). Support is around session lows on $1.6200/10, then – at $1.6120. Key level is near channel line from Apr 28 on $1.6050.

Resistance 3:$1.4180
Resistance 2:$1.4040
Resistance 1:$1.3880
Current price: $1.3838
Support 1: $1.3740
Support 2: $1.3600
Support 3: $1.3440
COMMENTS: Euro still under pressure. Support comes at $1.3740 (session low). Below correction may widen to $1.3600 (50% Fibo of $1.2880 - $1.4330). Further downside target is around 61.8% Fibo on $1.3440. Resistance comes at $1.3880, then – on $1.4040 (Jun 12 hourly high). Stronger level is near $1.4180 (Jun 11 high).

Major European bourses are initially seen trading mixed: the FTSE unchanged, the DAX up 11, the CAC down 4 and the Eurostoxx 50 down 3.

High Low Close
EUR/USD 1.3999 1.3754 1.3798
GBP/USD 1.6441 1.6239 1.6315
USD/JPY 98.55 97.58 97.81
USD/CHF 1.0949 1.0782 1.0915

EUR/JPY 137.74 134.43 134.43
EUR/GBP 0.8530 0.8449 0.8456
GBP/JPY 161.75 158.85 159.60
GBP/CHF 1.7878 1.7696 1.7810

Change % Change Last
Nikkei -96.15 -1,0% 10,039.67
Topix -3.72 -0.4% 946.82
FTSE -115.94 -2.61% 4,326.01
CAC -106.56 -3.20% 3,219.58
Dax -179.30 -3.54% 4,889.94
Dow -187.13 -2.13% 8,612.13
NASDAQ -42.42 -2.34% 1,816.38
S&P -22.49 -2.38% 923.72
10yr Note -0.7500 -0.198% 3.713%
NYMEX Crude Oil -1.42 -1.97% 70.62
Gold -13.20 -1.40% 927.50

03:30 Japan BoJ meeting announcement 0.10% 0.10%
06:30 Japan BoJ press conference
08:30 UK HICP (May) 0.3% 0.2%
08:30 UK HICP (May) Y/Y 2.0% 2.3%
08:30 UK HICP ex EFAT (May) Y/Y 1.5% 1.5%
08:30 UK Retail prices (May) - 0.1%
08:30 UK Retail prices (May) Y/Y -1.5% -1.2%
08:30 UK RPI-X (May) Y/Y 1.3% 1.7%
09:00 Germany ZEW economic expectations index (June) 35.0 31.1
09:00 Italy CPI (May) final 0.2% 0.2%
09:00 Italy CPI (May) final Y/Y 0.9% 0.9%
09:00 Italy HICP (May) final Y/Y 0.8% 0.8%
09:00 EU(16) Harmonized CPI (May) final 0.0% 0.4%
09:00 EU(16) Harmonized CPI (May) final Y/Y 0.0% 0.6%
09:00 EU(16) Harmonized CPI ex EFAT (May) Y/Y 1.6% 1.8%
09:00 EU(16) Labour cost index (Q1) Y/Y 3.0% 3.8%
12:30 USA PPI (May) 0.5% 0.3%
12:30 USA PPI (May) Y/Y -4.4% -3.7%
12:30 USA PPI excluding food and energy (May) 0.1% 0.1%
12:30 USA PPI excluding food and energy (May) Y/Y 3.2% 3.4%
12:30 USA Housing starts (May), mln 0.490 0.458
12:30 USA Building permits (May), mln 0.505 0.494
12:55 USA Redbook (13.06)
13:15 USA Industrial production (May) -0.6% -0.5%
13:15 USA Capacity utilisation (May) 68.5 69.1

The BOJ said the decision was by unanimous decision. The markets had been widely anticipating the BOJ to stand pat at 0.1% and continuing with the current QE asset buying program. However, for the second straight month, the BOJ amended its outlook on the economy upwards. The BOJ says the economy has stopped worsening and it sees a recovery in the latter half of 2009.