The major indices take a sudden retreat. Tech stocks (-0.5%) are seeing a notable amount of selling pressure, sending the Nasdaq into negative territory for the first time since the early-going. The S&P 500 and Dow are holding onto modest gains, but are well off their best levels.
There is not a specific catalyst for the recent weakness, other than traders looking to lock in some profit after the stock market's strong 2.7% gain last week. Four of the ten economic sectors are now in negative territory.

June NYMEX contract now at $127.13, up $0.84.

Stocks slip off their best levels in a broad-based retreat but continue to post formidable gains. Within the S&P 500, 78% of components are in positive territory. Heavy-weights Exxon Mobil (XOM 93.90, +1.23) and General Electric (GE 32.54, +0.41) are leading the way. Microsoft (MSFT 29.66, -0.33) and Anheuser Busch (BUD 50.46, -1.27) are the worst-performing names.
European markets ended their session with solid gains, as oil and commodity stocks provided leadership. London's FTSE advanced 1.2%, France's CAC rose 1.0% and Germany's DAX gained 1.3%.

The dollar gained the most against the euro in four days and strengthened versus the yen as global stocks rallied and the index of leading U.S. economic indicators unexpectedly rose in April.
The greenback had traded earlier near the lowest level in more than two weeks against the common European currency on concern that a decline in consumer confidence may prevent a rebound in U.S. economic growth.
``Any hint toward stabilizing in the U.S. could be seen as bearish for the euro,'' said Benedikt Germanier, an analyst with UBS AG in Stamford, Connecticut. ``Investors are buying the dollar against the euro on dips.''
The dollar advanced after the Conference Board's gauge increased 0.1 percent for a second month, better than forecast, the New York-based research group said today. The measure points to the direction of the economy over the next three to six months.
``The European economy will continue to slow down while the U.S. is bottoming out,'' said Alan Kabbani, a senior currency trader at Wachovia Corp. in Charlotte, North Carolina. ``We are staying the range $1.5250 to $1.5650 until we get a better understanding of where the economy is going.''
The dollar may gain further on speculation minutes from the Fed's meeting last month will show policy makers are concerned that rising commodity prices will fan inflation. The Fed on May 21 will release minutes of its April meeting, where the policy- setting Federal Open Market Committee cut the benchmark interest rate by a quarter point to 2 percent.

The Dow is outperforming as it extends its gains, while the S&P 500 stalls near session highs. Boeing (BA 87.98, +2.81) is the best-performing name in the Dow.
The Semiconductor Index (+1.2%) is outperforming, partially due to strength in Texas Instruments (TXN 32.55, +0.76). Citigroup upgraded Texas Instruments to Buy from Hold, and added the company to Citi's Top Picks Live list. Citi expects a significant increase in chip orders in the second half of 2008. The enthusiasm in semiconductor stocks has not translated to the rest of the tech sector (+0.5%).

The pare earlier high prints near Y104.70 before retreated to Y104.50. Modest volumes in the pair and the better bid tone of US stocks helping to underpin while euro-yen also retains a slight bid tone. Offers Y104.70/75 said to be quite modest, better interest at Y105.00/10.

``Any hint toward stabilizing in the U.S. could be seen as bearish for the euro,'' said Benedikt Germanier, an analyst with UBS AG in Stamford, Connecticut. ``Investors are buying the dollar against the euro on dips.''

Stocks continue to post decent gains, with the S&P 500 up roughly 0.5%. The S&P 500 is now up nearly 14% from its March 52-week low, but is still down 2.5% in 2008.The S&P 500 Retailing Index is trailing the broader market, with a loss of 0.1%. Weakness in Lowe's (LOW 24.25, -0.64) and Home Depot (HD 28.89, -0.21) are largely to blame. Crude oil continues its record run, as it trades up 0.8% to $127.26 per barrel. Crude is up 32.5% this year after gaining 57% in 2007.

``I am feeling that bears are pressing for a weaker dollar,'' said Jeff Gladstein, global head of foreign-exchange trading at AIG Financial Products in Wilton, Connecticut. ``If the consumer confidence starts to falters, the growth issue becomes a great question.''

The stock market recovered from its early losses and is now posting a modest gain. Six of the ten economic sectors are trending higher, led by gains in tech (+0.5%), utilities (+0.7%) and energy (+0.6%).April leading indicators rose 0.1%, compared to the previous month that saw an increase of 0.1%. Economists forecast a flat reading.

says reflects a weak economy but not one in recession. Stocks, int rate spread, and housing permits gained most; but hours and consumer expectations fell. 6 of 10 indicators gained. Coincident index was unch.

USD/JPY Y104.00, Y104.90
EUR/JPY Y163.00
GBP/USD $1.9350
Kiwi; $0.7750, $0.7650, $0.7600

Stock futures drifted early Monday as investors weighed a new forecast of further weakness in the U.S. economy along with Microsoft's new approach to Yahoo.
Investors will be watching Microsoft and Yahoo. On Sunday, Microsoft said it had approached Yahoo about teaming up on a transaction. Microsoft said it hadn't resurrected full takeover bid for Yahoo, but left that possibility open.
In other deal news, another troubled takeover effort could be revived. The Wall Street Journal reported that Electronic Arts (ERTS) is likely to again extend the deadline for its hostile tender offer to acquire videogame rival Take-Two Interactive Software (TTWO) after failing to get the support of a majority of the company's shareholders for a deal.
General Motors shares rose in after-hours trading Friday after a local of the United Auto Workers union ratified a deal to end a month-long strike at a plant that made the popular Buick Enclave, Saturn Outlook and GMC Acadia. That Michigan plant is set to reopen Monday.

Extended losses to $1.9526, as rate extended its corrective pullback from earlier highs at $1.9624. Reported bids between $1.9525/20 contained the move with further buying able to lift the rate back up to $1.9540. Moves seen dictated by euro-dollar action, while euro-sterling continues to pressure up against resistance in the stg0.7975/80 area. Below $1.9525/20 and rate can slip on toward $1.9505/95. Offers $1.9570/80, more around $1.9600 with stronger interest at $1.9625/35.

The dollar slipped to a 2-1/2 week low against a basket of major currencies on Monday, as the worst U.S. consumer confidence reading in nearly three decades raised concerns about stagflation. The May Reuters/University of Michigan index of U.S. consumer confidence dropped to 59.5 on Friday, the lowest level since June 1980, while short-term inflation expectations surged to their highest in a quarter of a century. The dollar traded near the lowest level in more than two weeks against the euro before an industry report this week that may signal the worst housing slump in a quarter of a century is deepening.

USD/JPY Y104.00, Y104.90
EUR/JPY Y163.00
GBP/USD $1.9350
Kiwi; $0.7750, $0.7650, $0.7600

Crude oil prices are squeezing higher following comments from OPEC President Khelil who reportedly said that he doesn't think OPEC September meeting will result in a supply increase. WTI Nymex crude oil is at $127.47, having bounced off $125.56 session low. Prices hit fresh record high on Friday at $127.82.

The dollar traded near the lowest level in more than two weeks against the euro before an industry report this week that may signal the worst housing slump in a quarter of a century is deepening.
The currency fell the most against the Canadian dollar and the Mexican peso before the report May 23 that is forecast to show home sales dropped for a second month. The yuan rose to the highest level since the end of its dollar link in 2005 after U.S. Treasury Undersecretary David McCormick urged China to quicken currency reforms. South Korea's won declined on concern the government will act to curb short-term external borrowing, reducing the supply of dollars.
The U.S. dollar last week fell the most against the euro since March as a slide in consumer confidence to a 28-year low and record oil prices raised concern U.S. economic growth will slow.
Losses in the U.S. dollar may be limited by speculation minutes from the Federal Reserve's meeting last month will show policy makers are concerned that rising commodity prices will fan inflation. The Fed on May 21 will release minutes of its April meeting, where the policy-setting Federal Open Market Committee cut the benchmark interest rate by a quarter point to 2 percent.
``I'd still be looking for any potential long position in the dollar,'' Tobias Davis, senior currency dealer at Custom House Global Foreign Exchange in Sydney, said in an interview with Bloomberg Television. ``The U.S. is importing inflation through food and crude oil. I think the FOMC is pretty confident in sitting tight at 2 percent.''
The yen's advance against the dollar may stall at about 103, said Yuji Saito, head of the foreign-exchange sales department at Societe Generale SA in Tokyo, citing a technical indicator. The 103 level is the baseline of a so-called Ichimoku chart, which analyzes the midpoints of historic highs and lows, he said.

- Euro share in foreign currency reserves already higher than dollar.

Resistance 3: Y107.40

Resistance 2: Y106.40
Resistance 1: Y104.20
Current price: Y104.06
Support 1: Y103.50

Support 2: Y103.00

Support 3: Y102.60

Comments: Dollar rebounds. Resistance comes at today's highs on Y104.20 with a break above will open the way to Y106.40 and then – to Y107.40. Strong support comes at Friday’s lows on Y103.50. Below losses may widen to Y103.00 and Y102.60.

Strong euro, high oil price to dampen economy
Sees industrial output to moderate in coming months
Strong euro to slow Germany export momentum

The 2008 wage rounds are not free of inflationary risk and eurozone labor costs probably accelerated noticeably in 1Q.
- Although M3 has slowed, monetary developments continue to pose an inflationary risk.
- German HICP would rise again in the coming months.
- The U.S. may skirt a recession but the situation there remains fragile.

Resistance 3: Chf1.0730
Resistance 2: Chf1.0660
Resistance 1: Chf1.0480

Current price: Chf1.0456

Support 1: Chf1.0410
Support 2: Chf1.0380

Support 3: Chf1.0300

Comments: Dollar rebounds. Support is session low at Chf1.0410. Below losses may widen to Chf1.0380 and Chf1.0300. The nearest resistance is around Chf1.0480. Above there is a room for further rise to Chf1.0660 and Chf1.0730.

Resistance 3: $1.9780
Resistance 2: $1.9680
Resistance 1: $1.9620
Current price: $1.9590
Support 1: $1.9440Support 2: $1.9360
Support 3: $1.9280Comments: Cable continues to advance. Strong resistance at $1.9620. Above the rise may extend to $1.9680 and then – to $1.9780. Support comes at Friday’s low on $1.9440. Break under will points to further slide to $1.9360 and $1.9280.

Resistance 3:$1.5740
Resistance 2: $1.5700
Resistance 1: $1.5640
Current price: $1.5605

Support 1: $1.5560
Support 2: $1.5450
Support 3: $1.5380

Comments: Euro trades below session high on $1.5640 (strong resistance). Above there is a room for a rise to $1.5700 and then – to $1.5740. Minor support comes at $1.5560, stronger – near Friday’s low on $1.5450. Break under will widen correction to $1.5380.

USD/CHF remains under pressure, eroding reported demand from the Chf1.0430 area. Those bids are stretched down to Chf1.0400. Stops come in under the May 9 low at Chf1.0390.

GBP/USD triggered stops on the break above $1.9605 and printed highs around $1.9617. Next band of offers seen placed between $1.9625/35 ahead of $1.9650/60.

EUR
Bids: $1.5560/50, $1.5530/20
Offers: $1.5600/10, $1.5610/20, $1.5640/55

JPY
Bids: Y103.60/50, Y103.20/00, Y102.60
Offers: Y104.30, Y105.00/10, Y105.40/50

GBP
Bids: $1.9550/40, $1.9520
Offers: $1.9590/00, $1.9625/35, $1.9650/60

AUSSIE
Bids: $0.9510/00
Offers: $0.9570, $0.9600

A quiet start for the week upon us, especially after the dollar managed to end Friday bearish.
We have more light data from the US economy this week while the focal concern is to Wednesday's minutes of the last FOMC meeting which concluded a two days meeting on the 30th of April where the feds decided to cut rates by 25 basis points to 2.0% and as the vote was opposed by two members where they preferred steady rates.
The only piece of information on the housing this week will be existing home sales which is expected to show more declines as Americans are still not lured strongly into the markets. A survey showed that expectations for the American economy to rise from recession was by September which is the end of the third quarter as once assumer the second is the last, while now more economist see that the US is in or might be falling into a recession that previously thought.
Rest a shore that thought the week sounds quiet from the US yet other economies may take the lead and as well we have heavy earnings on Wall Street this week so do not miss out on all the details…

The dollar traded near the lowest in more than two weeks against the euro on speculation an industry report this week will signal the worst housing slump in a quarter century is weighing on the U.S. economy.
The currency was also close to a one-week low versus the pound before a report May 23 that economists say will show existing home sales fell for a second month.
The dollar last week fell the most against the euro since March as a slide in consumer confidence to a 28-year low and record oil prices raised concern U.S. economic growth will slow.

EUR/USD printed lows around $1.5550/55 before rising up to $1.5600.
GBP/USD held within the $1.9540/85 range.
USD/JPY fell from Y104.30 to Y103.80.

U.S. home sales declined 1.6% to a 4.85 million annual rate in April, according to the median estimate of economists.
Losses in the U.S. dollar may be limited by speculation minutes from the Federal Reserve's meeting last month will show policy makers are concerned that rising commodity prices will fan inflation. The Fed on May 21 will release minutes of its April meeting, where the policy-setting Federal Open Market Committee cut the benchmark interest rate by a quarter point to 2%.

Japanese stocks ended Monday's session higher across the curve: the Nikkei 225 was higher by 50.13 points, or 0.35%, at 14269.61. The broader-based TOPIX was ahead by 8.33 points at 1404.25.

Oil rose to a new record at $127,82 last week after Goldman Sachs Group Inc. raised its oil price estimate for 2008 to $141 per barrel on supply concerns. China may increase fuel imports to generate power after the most powerful earthquake in 58 years killed more than 22,000 and damaged hydroelectric plants. Oil and commodities, including gold and platinum, also advanced on the falling dollar. PetroChina International Co., the trading unit of PetroChina Co., the country's biggest oil producer, has already purchased 2.9 million barrels of diesel for June. That's in addition to the 1.45 million barrels that China International United Petroleum & Chemicals Corp. bought for the month.
Prices fell from the Friday’s high after Saudi Arabia's oil minister, Ali al-Naimi, said his country will increase crude oil production by 300,000 barrels a day to 9.45 million barrels a day next month in response to customer requests. Saudi Arabia is the world's largest oil exporter and the most influential member of the Organization of Petroleum Exporting Countries.

Wall Street stocks slipped back on Friday but remained ahead for the week as resurgent oil prices boosted energy stocks but threatened to squeeze already weak consumer spending and financials lost ground. Energy stocks were in sharp focus again. Oil prices hit record highs after analysts at Goldman Sachs raised their oil price forecast for the second half of 2008 from $107 to $141 a barrel. ConocoPhillips shares rose 2.1%, Chevron added 1.4% and an index of energy stocks advanced 1.5%.

Resistance 3: Y107.40
Resistance 2: Y106.40
Resistance 1: Y105.00
Current price: Y104.00
Support 1: Y103.50
Support 2: Y103.00
Support 3: Y102.60
Comments: Dollar tries to rebound. Resistance comes at Friday’s highs on Y105.00 with a break above will open the way to Y106.40 and then – to Y107.40. Strong support comes at Friday’s lows on Y103.50. Below losses may widen to Y103.00 and Y102.60.

Resistance 3: Chf1.0730
Resistance 2: Chf1.0660
Resistance 1: Chf1.0500
Current price: Chf1.0475
Support 1: Chf1.0430
Support 2: Chf1.0380
Support 3: Chf1.0300
Comments: Dollar rangebounds above Friday’s lows at Chf1.0430 (strong support). Below losses may widen to Chf1.0380 and Chf1.0300. Minor resistance is around Chf1.0500. Above there is a room for further rise to Chf1.0660 and Chf1.0730.

Resistance 3: $1.9780
Resistance 2: $1.9680
Resistance 1: $1.9600
Current price: $1.9563
Support 1: $1.9440
Support 2: $1.9360
Support 3: $1.9280
Comments: Cable consolidates around recent highs after it failed to break above strong resistance at $1.9600. Above the rise may extend to $1.9680 and then – to $1.9780. Support comes at Friday’s low on $1.9440. Break under will points to further slide to $1.9360 and $1.9280.

Resistance 3:$1.5700
Resistance 2: $1.5640
Resistance 1: $1.5500
Current price: $1.5561
Support 1: $1.5520
Support 2: $1.5450
Support 3: $1.5380
Comments: Euro looks optimistic, despite holding a bit below session high on $1.5600 (strong resistance). Above there is a room for a rise to $1.5640 and then – to $1.5700. Minor support comes at $1.5520, stronger – near Friday’s low on $1.5450. Break under will widen correction to $1.5380.

High Low Close
EUR/USD 1.5600 1.5436 1.5591
USD/JPY 105.07 103.50 104.06
GBP/USD 1.9598 1.9440 1.9552
USD/CHF 1.0586 1.0431 1.0470

EUR/JPY 162.46 161.23 162.28
EUR/GBP 0.7974 0.7924 0.7972
GBP/JPY 204.39 202.60 203.51
GBP/CHF 2.0589 2.0414 2.0471

Change % Change Last
Nikkei 225 -32.26 (-0.23%) 14219.48
Topix +3.00 (+0.01%) 1395.87
DAX 30 +75.50 (+1.04%) 7256.55
САС 40 +20.53 (+0.4%) 5078.04
FTSE 100 +52.50 (+0.8%) 6304.30
Dow -5.86 (-0.05%) 12986.80
Nasdaq -4.88 (-0.19%) 2528.85
S&P +1.78 (+0.13%) 1425.35
10YR 96 0 100 7/32 3.84%
OIL NYMEX +2.17 (+1.75%) $126.29

Canada Victoria Day
14:00 USA Leading indicators (April) -0.1% 0.1%
23:50 Japan Tertiary activity index (March) - -1.7%