USD/JPY holds at Y95.95 area amid very muted flows, the dollar traversing an extremely narrow Y95.72/96.07 or so range during US hours. Dollar bids eyed at Y95.70 area, more at Y95.50. Area sub Y97.50/52, support line from the 21 Jan low, Lows 17 June, techs remind, said key, a break perhaps to expose stops.

July crude oil looking to close out the Monday floor session with steep losses, although off its lows of the day. July crude down $2.45 at $67.10, well off earlier low at $66.25.

EUR/USD sees slight lift to $1.3870 area but flows are extremely light. Focus remains stocks, further weakness from here likely to drive euro-dollar lower.

Apple Inc’s Chief Executive Officer Steve Jobs, on medical leave since January, had a liver transplant about two months ago, a person familiar with the matter said.

Bank Of America Corporation said board members Tommy Franks and Joseph Prueher resigned, pushing the total of departing directors to seven since April.

Eastman Kodak Co will retire Kodachrome color film this year after 74 years on the market. Kodachrome sales have plunged since the introduction of both new films and digital technology, and the product now accounts for less than 1% of Kodak's still-picture-film sales.

Goodyear Tire & Rubber Co is cutting production at its Union City, Tenn., moving to a five-day, three-shift operation from a continuous operating schedule on July 6. 550 workers will take buyout packages.

Siemens AG said expects to win new orders, generated by government stimulus programs, worth around 15B euros ($20.8B) in the three fiscal years to 2012.

Specialty Underwriters Alliance Inc agreed to be bought by insurer Tower Group Inc. in a deal valued at around $107M.

The yen and dollar advanced versus most of their major counterparts as the World Bank said the global recession will be deeper than it predicted in March, encouraging safety demand. The global economy will contract 2.9% this year, the World Bank forecast in a report, compared with a previous estimate of a 1.7% decline.
The Australian dollar and Norway’s krone were the biggest losers against the dollar and yen as prices of crude oil and copper tumbled. Australia’s currency gained 16% versus the dollar and yen in the past three months on speculation evidence the worst of the recession is over will spur carry trades.
The Japanese and U.S. currencies also strengthened after Iran’s government said at least 17 people were killed during protests over this month’s disputed election.
The greenback may reverse its advance and weaken on speculation the Fed will craft its statement to keep interest rates down, some analysts said.
“We expect the statement to give a very clear signal over its commitment to maintain the current ultra-loose monetary stance,” Derek Halpenny at Bank of Tokyo-Mitsubishi UFJ Ltd.. “The dollar is vulnerable.”

EUR/USD orbiting $1.3855 area in current quiet trading after testing earlier $1.3900. Area of $1.3820/25 still seen to hold bids, as does the zone ahead of $1.3800 with traders still debating event risk ahead in the form of the FOMC statement Wednesday and Bernanke testimony Thursday on the BA/Merrill merger. Could the latter destabilise dollar if Bernanke's future at the helm of the Fed is called into question?

Though trading with a sizable loss, the Dow has managed to keep itself from posting the percentage losses seen in the S&P 500 and the Nasdaq. Wal-Mart, Verizon and Travelers are providing primary support to the Dow. Pfizer is also providing some support to the blue-chip index.

GBP/USD presses to fresh lows for the day around $1.6330 as euro-sterling extends its rebound off stg0.8400 for trade around stg0.8475. Flows modest in cable but a few stops flushed as the pair eased under $1.6350, a trader confirms. Currently rate holds near $1.6342.

Traders note the index has broken below the 200 day-moving average which comes in at 900.82 Monday. The S&P dipped below the 200-day on June 17 but closed back above it. The index has closed above its 200-day since June 1. Technical analysts continue to view the 875/880 zone (peaks earlier in the year/lows in May) as a pivot zone. A clear cut break below there is expected to trigger a larger correction

Oil and gold prices slumped and the dollar was mixed. Treasury prices rallied as investors sought safety, sending the corresponding yields lower.
Stocks were mixed Friday at the end of the first down week in a month on Wall Street. A three-month rally propelled the S&P 500 by as much as 40% off of 12-year lows. But the advance has lost steam lately as investors have worried that the recession may stretch on longer than anticipated.
The World Bank cut its 2009 forecast, predicting that global growth will shrink by 2.9% versus its earlier forecast for a 1.7% contraction. Global trade is expected to plummet 9.7% this year, it said. Developing countries have been especially hard, with the exception of booming China and India.
The forecast sent European markets tumbling as well, while Asian markets ended higher.
Treasury prices rallied, lowering the yield on the benchmark 10-year note to 3.74% from 3.78% Friday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for July delivery fell $2.55 to $67 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery fell $14.50 to $921.70 an ounce.

Utilities stocks have made their way to an impressive 0.5% gain. Meanwhile, the broader market remains stuck in a funk at fresh session lows.
The upward move by the utilities sector comes amid strength in electric utilities stocks, which are up 1.1%. Duke Energy (DUK 14.70, +0.29) remains a primary leader in the space.
However, shares of generation giants with nuclear capabilities like Exelon (EXC 49.65, -0.29) and Constellation Energy (CEG 26.65, -0.17) are under a bit of pressure following an article in The Wall Street Journal indicating that several nuclear utilities must remedy shortfalls in their plant decomissioning reserves by year's end.

Economist Charles Lieberman at Advisors Capital says hsg is bottoming. Reasons are stable new construction, anecdotes about competing bidders trying to purchase homes, and "housing prices have increased in several regions within California" - CA was one of the most overbuilt areas.

Stocks are extending their losses. The downward move has put the S&P 500 just a few points above the psychologically significant 900 level, which was last touched in late may when stocks crossed the line from the underside.
Weakness remains broad-based, but defensive-oriented sectors are showing relative strength. As such, telecom and utilities are both down a modest 0.1%. Utilities stocks actually made their way into the green, but their visit to positive territory was short lived.
Early movers: Trading up -- SUAI +58.8%, MEDX +17.4%, MNTG +16.6%, ONTY +9.2%, ERY +8.1%, FINL +7.1%, SMN +7%, DTO +6.7%, POWR +6.4%, ZSL +5.9%; Trading down -- LNET -19.2%, AEG -11.4%, FEED -11.2%, MTL -10%, SGY -9.5%, PDS -9.5%, BRY -9.4%, CLNE -8.9%, MFC -8.9%, HK -8.7%, CENX -8.7%, ALU -8.4%, EXM -8.3%, NGD -8.2%, PCX -8%

Recovery off lows around $1.6365 pulled along by euro-dollar's stronger recovery, with rate edging toward $1.6400. Offers noted from this level, extending toward $1.6415, with a break above to open a move toward $1.6430 ahead of $1.6450. Support now seen from $1.6365, the interest extending toward $1.6350.

Stocks are down in broad-based fashion. Losses are rather sizable, too.
All 10 major sectors in the S&P 500 are in the red. Seven of which are showing losses of 1% or more. The steepest declines are being seen in the materials sector and the energy sector, which are down 3.3% and 2.9%, respectively. Their downturn comes as the U.S. dollar makes a healthy advance and pressures commodities prices, like those of oil, gold, and other basic materials.

Volumes are seen relatively light. Oil and energy stocks have continued to underperform midday, with Total SA (FP) and BP (BP.) still leading losses. Anglo American (AAL) is continuing to buck the selling in Miners, following confirmation of Xstrata's (XTA) proposed merger with their rival. Banks have weakened a little during the morning, with Deutsche Bank (DBK), BNP Paribas (BNP) and Barclays (BARC) weighing heaviest.
The FTSE-100 is currently down 61pts (-1.4%), CAC-40 down 62pts (-1.9%), and Xetra-DAX down 83pts (-1.7%).

Markets were looking for a fall when they open Monday, as the World Bank said a global recovery was 'unusually uncertain' and cut growth forecasts for most countries.

Probing the downside again with fresh prints below $1.3830 but finding support ahead of bids at $1.3820/25, the pair cautious about testing the downside amid earlier chatter of sporadic sovereign demand and also due to the proximity of recent bases in the pair. Still, euro is due for a test of $1.3750. Bids $1.3820/25 and $1.3800/10. Resistance still $1.3860.

Canadians bought C$1.27B

--Still risks of sudden unexpected financial turbulence
--Easy to unwind ECB's measures if price stability threatened
--Easy to unwind ECB measures once financial crisis attenuates
--Some indication money market functioning is improving
--To ensure inflation expectations resist s-t inflation volatility
--L-t inflation expectations resistant to s-t inflation volatility
--Govternments must spell out how they will unwind fiscal steps
--ECB will do all necessary to be anchor of stability
--Covered bond purchases do not limit monpol flexibility
--Covered bond buys target whole EMU,will help real economy
--Some spreads narrowed since covered bond plan announced
--Covered bond buys don't burden national central banks w/excessive risk
--ECB steps reflect very significant rebalancing of inflation risks

Continues to trade with a firm tone, on the back of a firmer US dollar/lower commodity prices. Rate has extended its recovery to C$1.1462 during the european morning, up from earlier Asian range of C$1.1335/92. Offers now seen placed around that mentioned high, with stronger interest placed between C$1.1480/85. Above here and rate can extend toward C$1.1520/25. Support now seen at C$1.1400.

Data:
08:00 Germany IFO - Expectations (Jun) 89.5
08:00 Germany IFO - Business Climate (Jun) 85.9

The yen and the dollar advanced after the World Bank said the global recession will be deeper than it predicted in March, spurring demand for the currencies as a refuge.
The Japanese currency strengthened versus all 16 major peers after Iran’s government said at least 17 people were killed during protests over this month’s disputed election. The Australian and New Zealand dollars fell the most against the dollar and the yen as the World Bank warned a flight of capital from developing nations will increase the number of jobless.
The world economy will contract 2.9 percent this year, the World Bank forecast in a report, compared with a previous estimate of a 1.7 percent decline.
Japan’s gross domestic product will shrink 6.8 percent this year, more than the Washington-based bank’s prediction in March of a 5.3 percent decline. The euro area may shrink 4.5 percent, compared with a previous forecast of 2.7 percent.
The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners including the euro, yen and pound, gained 0.5 percent to 80.66.
The euro stayed lower even after a gauge of German business confidence rose for a third month in June, providing further evidence that the recession is easing.
The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, increased to 85.9, from 84.3 in May, more than the median-estimate of forecasts.

EUR/USD the pair established a session low in the field of $1,3830 where continues to bargain at present

"For the near-term outlook, core inflation trends tend to unfold slowly, as price-setting decisions respond with a lag.The Fed is likely to remain more cautious in its assessment of the improvement in the growth outlook."

Earlier reports of sovereign buy interest positioned under $1.3840 continues to keep rate buoyed, but underlying tone remains heavy, traders say. A break underr $1.3835 to allow for a deeper move toward $1.3825/20 ahead of $1.3810/00. Resistance $1.3860/65.

The yen and the dollar advanced after the World Bank said the global recession will be deeper than it predicted in March, spurring demand for the currencies as a refuge.
The Japanese currency strengthened versus all 16 major peers after Iran’s government said at least 17 people were killed during protests over this month’s disputed election. The Australian and New Zealand dollars fell the most against the dollar and the yen as the World Bank warned a flight of capital from developing nations will increase the number of jobless.
“We’re seeing a dip in risk appetite,” said Ian Stannard, a senior currency strategist at BNP Paribas SA in London.
The world economy will contract 2.9 percent this year, the World Bank forecast in a report, compared with a previous estimate of a 1.7 percent decline.
Japan’s gross domestic product will shrink 6.8 percent this year, more than the Washington-based bank’s prediction in March of a 5.3 percent decline. The euro area may shrink 4.5 percent, compared with a previous forecast of 2.7 percent.
The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners including the euro, yen and pound, gained 0.5 percent to 80.66.
The euro stayed lower even after a gauge of German business confidence rose for a third month in June, providing further evidence that the recession is easing.
The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, increased to 85.9, from 84.3 in May, more than the median-estimate of forecasts.
The dollar may weaken before a Federal Reserve announcement on June 24 that may be designed to keep interest rates down, Stannard said.

Economists at Commerzbank say "The econ situation is still much too fragile for swift rate hikes" and normally Fed waits until unemployment rate falls before hiking. "However, the huge extent of unconventional measures probably requires Fed to initiate its exit strategy earlier" - they call for rate hikes in Fall 2010.

Resistance 3: Y98.50
Resistance 2: Y97.30
Resistance 1: Y96.80
Current price: Y95.97
Support 1: Y95.40
Support 2: Y94.40
Support 3: Y93.80
COMMENTS: The pair bargains near former levels. The nearest resistance is on Y96.80 (38.2 % FIBO of Y98.70-Y95.50 falling. Above the purpose of growth becomes Y97.30/40 (area June 16 high). Further is not excluded growth to Y98,50 (area of June 11 and 15 high). Strong support comes at Y95.40. Below – on Y94.40. Stronger level comes at May 22 lows near Y93.80.

Resistance 3:Chf1.1050
Resistance 2:Chf1.0950
Resistance 1:Chf1.0880
Current price: Chf 1.0869
Support 1:Chf1.0760
Support 2:Chf1.0650
Support 3:Chf1.0600
СOMMENTS: The pair tests a channel line of resistance from April 22 (Chf1.0880). Above the target comes at Chf1.0950/30 and Chf1.1050 (May 21 high). Support is near friday’s low on Chf1.0760, stronger – on Chf1.0650 (Jun 11 low). Then the rate may decline to Chf1.0590/00 (Jun 02 low).

Resistance 3:$1.6860
Resistance 2:$1.6660
Resistance 1: $1.6620
Current price: $1.6468
Support 1: $1.6340
Support 2: $1.6240
Support 3: $1.6100
COMMENTS: The pound continues to consolidated. The nearest support - on $1.6340 ( area of session low 11.06.09), further - $1.6240 (low 10.06.09). Below the area of 06.06.09 high on $1.6100 is located. The nearest resistance is June 11 high on $1.6620. Break above will open the way to June 03 high on $1.6660.

Resistance 3:$1.4300
Resistance 2:$1.4180
Resistance 1:$1.4000
Current price: $1.3852
Support 1: $1.3830
Support 2: $1.3720
Support 3: $1.3610
COMMENTS: The pair sustains losses. The nearest support is $1.3830 (session lows). Below correction may reach $1.3720 (area of May 13 high and May 21 low) and 50,0% FIBO of $1,2880-$ 1,4330 growth on $1.3610. Resistance comes at yesterday’s highs on $1.4000 with a break above will target $1.4180 (peak of June 11). Above resistance is around $1.4330 (six-month high).

EUR/USD $1.3800, $1.4150
USD/JPY Y96.00, Y95.70, Y95.50, Y97.00, Y97.50
USD/CAD $1.6365
AUD/JPY Y75.00

Data:
01:30 Australia New Motor Vehicle Sales (MoM) (May) -12.6% 0.9%
01:30 Australia New Motor Vehicle Sales (YoY) (May) 5.4% -20.3%
03:00 New Zealand Credit Card Spending (May) -2.4% -1.6%
08:00 Germany IFO - Business Climate (Jun) 85.9 85.1 84.2
08:00 Germany IFO - Expectations (Jun) 89.5 87.0 85.9

The yen and the dollar gained as concern the political tension in Iran is worsening and a World Bank report saying the global recession will be deeper than earlier predicted fanned demand for the currencies as a refuge. The yen strengthened versus all 16 major currencies after Iran’s government detained five members of former President Ali Akbar Hashemi Rafsanjani’s family and said at least 17 people had been killed during protests over this month’s disputed election. The Australian and New Zealand dollars and South Africa’s rand fell the most against the greenback and the yen after the World Bank also warned that a flight of capital from developing nations will increase the number of jobless.
“There is growing uncertainty over what will happen in Iran that seems to be sparking risk aversion,” said Ryohei Muramatsu, manager of Group Treasury Asia in Tokyo at Commerzbank AG, Germany’s second-largest bank. “This would be supportive of the yen.”

Euro retracement from 1.4000 high on Friday has extended on Monday's early European session to levels below 1.3870 support, and the Euro has hit 1.3850 intra-day low.

EUR/USD
Offers $1.3970/80, $1.3950/60, $1.3910/20
Bids $1.3825/20, $1.3810/00, $1.3790, $1.3750

USD/JPY
Offers Y96.90/00
Bids Y95.70, Y95.50, Y95.30/25

- June Ifo current assessment 82.4 (median 83.5, May 82.5)
- June Ifo business expectations 89.5 (median 87.0, May 85.9)

Crude futures are trading lower in Asian hours, consolidating below the $70 level, but off the session lows. The front-month Nymex WTI July 09 contract was last down 26 cents at $69.29, having touched a low at 469.05.

Major European bourses are initially seen trading modrstly lower Monday. UK spreadbetters Cantor Index are calling the FTSE down 5, the DAX down 6, the CAC down 9 and the Eurostoxx 50 down 5.

The S&P Sep contract was last up 3.00 points at 918.70, with the Nasdaq Sep contract gaining 5.75 points to 1469.75. The DJIA Sep contract was last up 28 points at 8504.

Resistance 3: Y98.50
Resistance 2: Y97.30
Resistance 1: Y96.80
Current price: Y96.58
Support 1: Y95.40
Support 2: Y94.40
Support 3: Y93.80
COMMENTS: The pair is consolidated after growth. The nearest resistance is on Y96.80 (38.2 % FIBO of Y98.70-Y95.50 falling. Above the purpose of growth becomes Y97.30/40 (area MA(200) for H1 and June 16 high). Further is not excluded growth to Y98,50 (area of June 11 and 15 high). Strong support comes at Y95.40. Below – on Y94.40. Stronger level comes at May 22 lows near Y93.80.

Resistance 3:Chf1.1050
Resistance 2:Chf1.0950
Resistance 1:Chf1.0880
Current price: Chf 1.0830
Support 1:Chf1.0760
Support 2:Chf1.0650
Support 3:Chf1.0600
СOMMENTS: The dollar shows growth. Above session high is channel resistance line from Apr 22 on Chf1.0880 and retreated. Above the target comes at Chf1.0950/30 and Chf1.1050 (May 21 high). Support is near friday’s low on Chf1.0760, stronger – on Chf1.0650 (Jun 11 low). Then the rate may decline to Chf1.0590/00 (Jun 02 low).

Nikkei 225 ends midmorning up 0.10% at 9,796.02 on Monday.

Resistance 3:$1.6860
Resistance 2:$1.6660
Resistance 1: $1.6620
Current price: $1.6497
Support 1: $1.6340
Support 2: $1.6240
Support 3: $1.6100
COMMENTS: The pound is consolidated in a narrow range.. The nearest support - on $1.6340 ( area of session low 11.06.09), further - $1.6240 (low 10.06.09). Below the area of 06.06.09 high on $1.6100 is located. The nearest resistance is June 11 high on $1.6620. Break above will open the way to June 03 high on $1.6660.

The Shanghai Composite Index ends morning up 0.91% at 2906.62

Resistance 3:$1.4300
Resistance 2:$1.4180
Resistance 1:$1.4000
Current price: $1.3908
Support 1: $1.3880
Support 2: $1.3720
Support 3: $1.3610
COMMENTS: Euro tries to recover. Resistance comes at yesterday’s highs on $1.4000 with a break above will target $1.4180 (peak of June 11). Above resistance is around $1.4330 (six-month high). The nearest support is $1.3880 (session lows). Below correction may reach $1.3720 (area of May 13 high and May 21 low) and 50,0% FIBO of $1,2880-$ 1,4330 growth on $1.3610.

Change % Change Last
Nikkei +25.32 +0.26% 9,811.58
FTSE +65.07 +1.52% 4,345.93
DAX +1.98 +0.04% 4,839.46
CAC +27.21 +0.85% 3,221.27
Dow -15.87 -0.19% 8,539.73
NASDAQ +19.75 +1.09% 1,827.47
S&P +2.86 +0.31% 921.23
10yr Note -0.4500 -0.117% 3.789%
NYMEX Crude Oil -1.82 -2.62% 69.55
Gold +1.60 +0.17% 936.20

High Low Close
EUR/USD 1.4010 1.3881 1.3940
GBP/USD 1.6560 1.6301 1.6492
USD/JPY 1.0892 1.0763 1.0810
USD/CHF 97.17 95.99 96.27

EUR/JPY 135.15 134.03 134.18
EUR/GBP 0.8526 0.8442 0.8449
GBP/JPY 159.61 157.37 158.84
GBP/CHF 1.7865 1.7706 1.7826

01:30 Australia New Motor Vehicle Sales (MoM) (May) 0.9%
01:30 Australia New Motor Vehicle Sales (YoY) (May) -20.3%
03:00 New Zealand Credit Card Spending (May) -1.6%
08:00 Germany IFO - Business Climate (Jun) 85.1 84.2
08:00 Germany IFO - Expectations (Jun) 87.0 85.9
12:30 Canada Foreign investment in Canadian securities (Apr) $6.849B