The world's biggest biotechnology company Amgen Inc said a study of its experimental osteoporosis drug denosumab showed the medicine appeared to work better than Merck & Co.'s Fosamax in strengthening bones.

Reports in press say that Barclays PLC is considering acquisitions in the United States and abroad of banks ranging from Lehman Brothers to UBS.

Elbit Sys Ltdsaid first-quarter net income rose 68%.

The world's largest home improvement retailer Home Depot, Inc posted a 66% drop in quarterly profit.

The retailer Target Corp reported fiscal first-quarter net fell 7.5% to $602M, hurt in part by a 0.7% decline in comparable sales.

EUR/USD still holds below morning highs at $1.5681, the pair easing now to $1.5663. Pair still unable to gain traction beyond $1.5680.

The stock market remains well into negative territory after some unsuccessful attempts to reclaim session losses.Only energy (+1.0%) is trading with noticeable gains.

USD/JPY holds Y103.80 area amid light flows, rebounding from session lows on Y103.45. Unfilled stops remain in place below Y103.45, supply at Y104.50.

The dollar fell the most in almost two months against the euro as the price of oil rose above $129 for the first time and speculation increased that the European Central Bank will keep interest rates high.
The euro gained after an adviser to the German government said European policy makers may raise borrowing costs as soon as the financial crisis ends.
The Producer Price Index gained 0.2% in April, short of economists' expectations and following a rise of 1.1% in the previous month. But prices excluding food and energy costs rose 0.4%, twice what was expected.
The euro gained after a government report showed German producer-price inflation, an early indicator of price pressures in the economy, accelerated to the fastest pace in almost two years in April on energy costs.
The single currency briefly pared gains after an industry report showed investor confidence in Germany unexpectedly fell. The ZEW Center for European Economic Research said its index of investor and analyst expectations declined to minus 41.4, from minus 40.7 in April. Economists expected a gain to minus 37, according to a survey.
The Japanese currency held gains earlier after the Bank of Japan kept its benchmark interest rate at 0.5%. Governor Masaaki Shirakawa told a press conference inflation risks are rising globally.

June NYMEX crude still holding solid gains at $129.12, up $2.07, but is off earlier life highs at $129.60. July contract trades at $128.84.

Susumu Kato, chief strategist at Calyon: “Once the financial market turmoil calms down, the BoJ has to start adjusting interest rates, which are still at exceptionally low levels compared to the economic fundamentals and prices. We believe a rate hike may take place before the end of this year.”

A survey of analysts shows the following calls:
- crude oil stocks up 900,000 barrels
- gasoline stocks up 500,000 barrels
- distillates stocks up 1.45 million barrels

Michael Blythe, chief economist at Commonwealth Bank: “Any sign the Australia’s domestic (demand) side of things picks up, you'll see a rapid interest rates response.”

Spiking commodity prices sent stocks tumbling Tuesday morning, as investors took a look at oil prices at more than $129 a barrel.
Steadily rising commodity prices have raised worries about how further pricing pressure will hit an already strained consumer.
U.S. light crude oil for June delivery hit an all-time trading high of $129.45 a barrel.
Before the bell the Producer Price Index gained 0.2% in April, short of economists' expectations and following a rise of 1.1% in the previous month. But prices excluding food and energy costs rose 0.4%, twice what was expected.
Corporate news: Home Depot reported sharply lower sales and earnings that nonetheless topped forecasts. Shares tumbled 4%.
Target reported weaker earnings due to tepid sales and higher costs. However, results topped forecasts.
Staples reported higher earnings that met forecasts on higher sales that topped estimates.

GBP/USD printed high seen at $1.9707 in recent trade as earlier noted offers were filled. Further offers $1.9725.

Masaaki Shirakawa, Bank of Japan Governor, today said: “Recent data show that exports (from Japan) have expanded across the globe, but they also confirmed the flat trend of industrial output, a moderation of the growth of corporate profits and a slowdown in the expansion of capital investment. Thus, an economic slowdown is becoming more evident.”

Traders point out that today is the last trading day for June Nymex crude oil futures contract and risk of profit-taking is large ahead of expiry. June Nymex crude oil trades at $129.02, having hit $129.58 record high earlier.

EUR/USD retreats from session highs near $1.5680, being unable to overcome supply in the $1.5670/80. Further offers seen around $1.5700. Currently rate holds near $1.5642.

``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 major indices are in negative territory, with the Dow underperforming, largely due to weakness in home improvement retailer Home Depot (HD 27.96, -0.91). Home Depot reported earnings that topped analyst expectations, but traders are still driving the stock 3.1% lower.
As a result, the S&P 500 Retailer Index (-1.4%) is under some selling pressure, despite better-than-expected earnings at Target (TGT 55.23, +0.31).
Seven of the ten economic sectors are posting a loss in early trade, with notable declines in materials (-1.3%), tech (-1.1%) and financials (-1.2%). The defensive utilities sector (-0.4%) is outperforming.

The latest move occured on back of comments from US investor T. Boone Pickens, who said he expects prices to reach $150.00 this year. Nothing new in this view as commodity analysts at Goldman Sachs earlier this month predicted oil rising as high as $150 to $200.00 a barrel within two years. Prices have since moderated to $128.80, up $1.75.

Futures have a delayed reaction to the PPI data, eventually falling to fresh session lows: ( S&P futures vs fair value: -9.0. Nasdaq futures vs fair value: -8.2.).
Dow component Home Depot reported that earnings plunged by two thirds in the quarter as it took a $543 million charge to close stores and scale back expansion plans. But the drop in earnings excluding charges was not quite as large as analysts had expected, as revenue at the nation's largest home improvement retailer topped estimates despite the slump in home building and real estate.
Other retailers due to report results before the bell Tuesday include discounter Target, which is forecast to post slightly lower earnings, and office supplies retailer Staples, which is expected to see earnings per share rise by a penny.
In other deal news, investors will be keeping a close watch on Microsoft and Yahoo again. Microsoft said Sunday it had resumed talks with Yahoo about a deal. According to the Wall Street Journal, Microsoft's proposal would involve breaking up Yahoo, which would not be well received by Yahoo's board.
Rating agency Standard & Poor's downgraded the rating for how mortgage finance firm Fannie Mae would be without any support from the government. The so-called "risk-to-the-government" rating was cut to "A+" from "AA-."
Oil prices edged higher in early trading, as the commodity took another run at a record trading high before retreating slightly. A barrel of U.S. crude was up 19 cents to $127.24 in electronic trading.

EUR/USD $1.5400
USD/JPY Y104.70, Y105.00
USD/CHF Chf1.0500
NZD/USA $0.7840

The dollar fell against the yen and euro after the International Monetary Fund said the U.S. housing slump still poses ``serious risks'' to financial markets.
The currency declined against the Swiss franc and British pound before private and industry reports this week that may show the housing market is worsening. The euro gained after a report showed German producer-price inflation accelerated. The Australian dollar rose to its highest level in 24 years after minutes of the central bank's last meeting signaled policy makers considered raising rates.
The euro gained against the dollar after a government report showed German producer-price inflation, an early indicator of price pressures in the economy, accelerated to the fastest pace in almost two years in April on energy costs.
Prices for goods from newsprint to plastics increased 5.2 percent from a year earlier, the most since August 2006, the Federal Statistics Office in Wiesbaden said today. Economists expected a 4.7 percent gain
Center for European Economic Research said its index of investor and analyst expectations declined to minus 41.4, from minus 40.7 in April. Economists expected a gain to minus 37, according to the median of 41 forecasts in a The single currency briefly pared earlier gains after an industry report showed Investor confidence in Germany unexpectedly fell. The gauge reached a 15-year low of minus 41.6 in January. A negative reading means that pessimists outnumber optimists.


EUR/USD traded within $1.5500/40 before buying from a major US name and a German bank provided added momentum as the pair pushed on to $1.5674 before easing to $1.5640. Offers rest at $1.5670/80, $1.5695/1.5705, bids located around $1.5570 and $1.5550
GBP/USD firmed from $1.9530 to $1.9670. Offers $1.9680, $1.9695/05, $1.9725. Cable bids $1.9590/70, $1.9550.
USD/JPY bounsed from Y103.70 to Y104.15. Offers Y104.50, Y104.70, bids Y103.60.

PPI data at 1230GMT leads the US releases and is expected to rise 0.4%in April on an increase in energy prices and a smaller, but still solid,rise in food prices. Core PPI is forecast to rise 0.2%. The weekly Redbook data is then due at 1255GMT.

``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 fell against the yen and euro after the International Monetary Fund said the U.S. housing slump still poses ``serious risks'' to financial markets.
The currency declined against the Swiss franc and British pound before private and industry reports this week that may show the housing market is worsening. The euro gained after a report showed German producer-price inflation accelerated. The Australian dollar rose to its highest level in 24 years after minutes of the central bank's last meeting signaled policy makers considered raising rates.
The yen held gains earlier after the Bank of Japan kept its benchmark interest rate at 0.5 percent. Governor Masaaki Shirakawa told a press conference that inflation risks are rising globally. The Federal Reserve has cut rates seven times since September to 2 percent.
The euro gained against the dollar after a government report showed German producer-price inflation, an early indicator of price pressures in the economy, accelerated to the fastest pace in almost two years in April on energy costs.
Prices for goods from newsprint to plastics increased 5.2 percent from a year earlier, the most since August 2006, the Federal Statistics Office in Wiesbaden said today. Economists expected a 4.7 percent gain
Center for European Economic Research said its index of investor and analyst expectations declined to minus 41.4, from minus 40.7 in April. Economists expected a gain to minus 37, according to the median of 41 forecasts in a The single currency briefly pared earlier gains after an industry report showed Investor confidence in Germany unexpectedly fell. The ZEWBloomberg News survey. The gauge reached a 15-year low of minus 41.6 in January. A negative reading means that pessimists outnumber optimists.
Losses in the U.S. dollar may be limited by speculation minutes from the Fed's April 30 meeting will show the central bank is concerned rising commodity prices will fan inflation. Producer prices rose 0.4 percent in April after jumping 1.1 percent the prior month, a Labor Department report may show today, according to a Bloomberg News survey.

Resistance 3: Y107.40

Resistance 2: Y106.40
Resistance 1: Y104.60
Current price: Y103.85
Support 1: Y103.50

Support 2: Y103.00

Support 3: Y102.60

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

Resistance 3: Chf1.0730
Resistance 2: Chf1.0660
Resistance 1: Chf1.0570

Current price: Chf1.0408

Support 1: Chf1.0410

Support 2: Chf1.0380

Support 3: Chf1.0300

Comments: Dollar drops. Support is yesterday's low at Chf1.0410. Below losses may widen to Chf1.0380 and Chf1.0300. The nearest resistance is around Chf1.0570(yesterday's high). Above there is a room for further rise to Chf1.0660 and Chf1.0730.

Resistance 3: $1.9780
Resistance 2: $1.9680
Resistance 1: $1.9630
Current price: $1.9611
Support 1: $1.9440

Support 2: $1.9360
Support 3: $1.9280

Comments: Cable tests strong resistance at $1.9630/40. Above the rise may extend to $1.9680 and then – to $1.9780. Support comes at Friday’s and yesterday's low on $1.9440/50. Break under will points to further slide to $1.9360 and $1.9280.

Resistance 3:$1.5740
Resistance 2: $1.5700
Resistance 1: $1.5650
Current price: $1.5637

Support 1: $1.5480
Support 2: $1.5450
Support 3: $1.5380

Comments: Euro trades below key resistance on $1.5640/50 (50% $1.6020-$1.5285). Above there is a room for a rise to $1.5700 and then – to $1.5740. Minor support comes at $1.5480, stronger – near Friday’s low on $1.5450. Break under will widen correction to $1.5380.

``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.''

Hit a post ZEW low of $1.5562 but rallies back even stronger, pushes through earlier highs at $1.5614 and on to $1.5643 to retest recent rally highs at $1.5644 (May1) with strong offers noted around here, with interest extending to $1.5653 (50% $1.6020/1.5285).

- May economic expectations -41.4 vs Apr -40.7 (median -38.0)
- May current conditions +38.6 vs Apr 33.2 (median 32.0)

closing
Nikkei 225 +50.13 +0.40% 14,269.61
Topix +8.38 +0.60% 1,404.25
FTSE +72.20 +1.15% 6,376.50
DAX +69.39 +0.97% 7,225.94
CAC +64.06 +1.26% 5,142.10
Dow +41.36 +0.32% 13,028.16
NASDAQ -12.76 -0.50% 2,516.09
S&P +1.28 +0.09% 1,426.63
10yr Note ; -0.1100 -0.029% 3.839%
NYMEX Crude Oil +0.76 +0.60% 127.05
Gold +5.90 +0.66% 905.80

Japanese stocks advanced to the highest in four months after coal jumped to a 12-week high and crude oil reached a record, boosting the earnings outlook for energy-related companies.
Mitsubishi, Japan's largest trading company, climbed 4.9%, the highest since it was listed on the exchange in 1954. Smaller rival Mitsui, which gets more than half its profit from commodities, rose 3.6%, while Itochu Corp., which has stakes in iron-ore, alumina and coal mines, jumped 4.5%.
Mitsui Matsushima Co., which has stakes in Australian and Canadian coal mines, surged 19%, the highest since July 1999. Operating profit will jump by almost fivefold this year as coal prices are expected to remain high, Mitsui Matsushima said on May 16. Inpex, Japan's largest oil and gas explorer, gained 5.3%, the highest since it was listed on the bourse in April 2006, while smaller rival Japan Petroleum Exploration Co. added 4.5%. UBS AG boosted its 12-month price estimate for Inpex's shares by a quarter and raised its rating on Japan Petroleum to ``buy'' from ``neutral.''
Nippon Steel Corp., the world's second-largest maker of the alloy, added 5%, the highest since Jan. 25. It was the most actively traded company on the first section of the Tokyo Stock Exchange, followed by Mitsui Matsushima.

European stocks rose for a fourth day as higher oil and power prices lifted earnings prospects for energy producers and utilities, while investors speculated takeovers will increase.
E.ON, Germany's largest utility, gained 3.2%. RWE AG, the nation's second-biggest, rose 2.4%.
Enodis advanced 2.4% after Manitowoc, the biggest ice-machine maker in the U.S., raised its offer to buy the U.K. company to 1.08 billion pounds ($2.11 billion), trumping a rival offer from Illinois Tool Works Inc.
Bradford & Bingley Plc led U.K. banks lower on concern the economic outlook may worsen. The nation's biggest lender to landlords, which last week said it would sell 300 million pounds ($585 million) to boost depleted capital, tumbled 16%. HBOS Plc, Britain's biggest mortgage lender, slid 1.4%. Royal Bank of Scotland Group Plc, the U.K.'s second-biggest bank, sank 3.9%.
Infineon Technologies AG, Europe's second-biggest semiconductor maker, climbed 3%. ASML Holding NV, Europe's largest maker of semiconductor equipment, added 2.3%.
Novartis AG added 3.2%. The RAD001 experimental drug made by Switzerland's second-largest drugmaker slowed progression of kidney cancer in a study, according to documents released by an oncology group. British Airways Plc dropped 4.4%. Europe's third-largest carrier had its shares cut to ``sell'' from ``buy'' at Deutsche Bank AG.

US Blue chips rose Monday, with the S&P 500 narrowly testing a five-month high, thanks to a stronger-than-expected economic indicators report. But tech selling kept the Nasdaq in the red, along with record commodity prices.
Investors watched 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.
Flash memory maker SanDisk (SNDK) reportedly made bearish comments about its sales outlook at a JP Morgan tech conference. The comments weighed on the shares of SanDisk and other technology stocks. Amazon.com shares jumped 7.6% after Goldman Sachs resumed coverage of the company with a "buy" rating and boosted its six-month price target to $98 from $75, according to reports.

Breaks above resistance at $1.5595/1.5600 and trades to a fresh intraday high of $1.5610. Next level of reported offers seen placed around Monday's highs at $1.5634, with further interst behind in the area between $1.5644/53 (Rally high May 1/50% $1.6020/1.5285, respectively). Traders note that upside momentum appears to have faded, rate currently holding back around $1.5600, and suggest market could be wary of going into the afternoon/NY session overly long of euros. ZEW on the horizon at 0900GMT, with expectations for an improved headline number, which market appears to be positioned for. Bids $1.5580/70, more between $1.5550/40.

The dollar fell against the yen and euro as the International Monetary Fund said there's a risk the U.S. housing slump will cause further financial-market turmoil.

The currency declined against the Swiss franc and British pound before industry reports this week that economists forecast will show falling U.S. home prices and sales. The Australian dollar rose to its highest in 24 years against the dollar after minutes of the central bank's last meeting signaled policy makers considered raising rates.

The yen held gains after the Bank of Japan kept its benchmark interest rate at 0.5 percent, in line with the median estimate in a survey. The Federal Reserve has cut rates seven times since September to 2 percent.

The euro gained against the dollar before a report today that may show German investors grew less pessimistic in May. The ZEW Center for European Economic Research will say its index of investor and analyst expectations rose to minus 37 this month from minus 40.7 in April, according to a survey. A negative reading means pessimists outnumber optimists.

Japanese stock indices ended Tuesday's session lower across the board, although shy of the session lows. The benchmark Nikkei 225 was down 109.52 points, or 0.77%, at 14160.09. The broader-based TOPIX was down 4.41 points at 1399.84.

-BOJ to take timely policy action
- Worsening terms of trade hurting capex most
- japan inflation expectations a bit higher now
- Need to watch Japan CPI rise carefully
- Must see how downside, upside balance shifts
- Both global downside, upside risks growing
- Japan GDP show real national income falling
- Soem countries see improving terms of trade
- Japan exports to those countries to rise

Resistance 3: Y107.40Resistance 2: Y106.40
Resistance 1: Y104.60
Current price: Y103.85
Support 1: Y103.50

Support 2: Y103.00

Support 3: Y102.60

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

Resistance 3: Chf1.0730
Resistance 2: Chf1.0660
Resistance 1: Chf1.0570

Current price: Chf1.0456

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

Support 3: Chf1.0300

Comments: Dollar drops. Support is yesterday's low at Chf1.0410. Below losses may widen to Chf1.0380 and Chf1.0300. The nearest resistance is around Chf1.0570(yesterday's high). 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 tries to recover after yesterday's drop. Strong resistance is at $1.9620. Above the rise may extend to $1.9680 and then – to $1.9780. Support comes at Friday’s and yesterday's low on $1.9440/50. 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: $1.5562

Support 1: $1.5480
Support 2: $1.5450
Support 3: $1.5380

Comments: Euro trades below yesterdays high on $1.5630/40 (strong resistance). Above there is a room for a rise to $1.5700 and then – to $1.5740. Minor support comes at $1.5480, stronger – near Friday’s low on $1.5450. Break under will widen correction to $1.5380.

- Japan economy to slow for now.
- Economy to resume modest growth at later date.
- Must watch global growth, mkts, high int'l prices.
- Pace of rise in corporate capex slower.
- Housing investment likely to be on recovery trend.
- Corporate profits struggling to rise.

- RBA at May 6 meeting agreed to allow more time for policy to work
- RBA noted CPI, underlying inflation had risen further, uncomfortably high
- Will review policy if demand doesn't slow enough

High Low Close
EUR/USD 1.5631, 1.5484, 1.5517
USD/JPY 104.66, 103.61, 104.30
GBP/USD 1.9621, 1.9452, 1.9485
USD/CHF 1.0570, 1.0413, 1.0528

EUR/JPY 162.51, 161.55, 161.88
EUR/GBP 0.7977, 0.7948, 0.7961
GBP/JPY 204.04, 202.91, 203.26
GBP/CHF 2.0571, 2.0407, 2.0516

Change % Change Last
Nikkei 225 +50.13 +0.40% 14,269.61
Topix +8.38 +0.60% 1,404.25
FTSE +72.20 +1.15% 6,376.50
DAX +69.39 +0.97% 7,225.94
CAC +64.06 +1.26% 5,142.10
Dow +41.36 +0.32% 13,028.16
NASDAQ -12.76 -0.50% 2,516.09
S&P +1.28 +0.09% 1,426.63
10yr Note ; -0.1100 -0.029% 3.839%
NYMEX Crude Oil +0.76 +0.60% 127.05
Gold +5.90 +0.66% 905.80

05:00 Japan Leading indicators (March) final 20,0
05:00 Japan Coincident indicators (March) final 33,3
06:00 Japan BoJ monthly economic report (May)
06:00 DE PPI (April) 0.5% 0.7%
06:00 DE PPI (April) Y/Y 4.7% 4.2%
09:00 DE ZEW economic expectations index (May) -38.0 -40.2
12:30 USA PPI (April) 0.3% 1.1%
12:30 USA PPI (April) Y/Y 6.9%
12:30 USA PPI excluding food and energy (April) 0.1% 0.2%
12:30 USA PPI excluding food and energy (April) Y/Y 2.7%