"We see two reasons to believe that the bottom for housing activity is coming closer. First, with new home sales now close to our long-standing target of 500,000 (annualized), there are ome signs of stabilization in home demand. Second, on a like-for-like basis, housing starts are now running below new home sales, by an amount that is comparable to that seen at the bottom of past housing downturns." Still they call for starts to fall 200k to 750k annualized.

FTSE 100 +11.10 +0.18% 6,069.60
CAC 40 +64.55 +1.32% 4,971.11
Xetra Dax +75.18 +1.08% 7,033.84

The dollar reached a two-week high against the yen as a measure of U.S. durable goods orders unexpectedly increased, signaling the outlook for the world's biggest economy may improve. The Commerce Department provided traders with some economic data. Durable goods orders fell 0.5% during April, which is a less severe downturn than expected. Excluding transportation, durable goods orders increased 2.5%. Economists forecast a 0.5% downturn following 1.7% increase registered in the previous month.
Japan's currency touched a one-month low against the euro and the weakest since November versus the Australian dollar, dropping to the day's lowest levels as an earlier decline in crude oil spurred investors to buy higher-yielding assets funded in Japan's currency, a strategy known as the carry trade. The yen pared its drop as oil reversed its decline.
Futures on the Chicago Board of Trade showed a 30 percent chance the Federal Reserve will raise its target rate by a quarter-percentage point to 2.25 percent on Sept. 16, up from 21 percent a week ago.
``A pull-back in oil prices has calmed some nerves,'' said Stephen Malyon, co-head of currency strategy at Scotia Capital Inc. in Toronto.
The euro pared its drop after a report showed inflation in Germany, Europe's largest economy, accelerated more than forecast in May.
German consumer prices rose 3 percent this month from a year ago after rising 2.6 percent last month, when measured using a harmonized European Union method, the Federal Statistics Office said. The median forecast was for inflation to quicken to 2.9 percent. A separate report showed French consumer confidence dropped to a record low in May.
The euro will trade at $1.56 at the end of next month, and fall to $1.49 at year-end, according to the median forecast in a Bloomberg survey of 44 analysts.
The dollar also rose against the yen as the Treasury prepared to sell $30 billion of two-year notes today and $19 billion of five-year debt tomorrow. The U.S. currency appreciated 0.3 percent against the yen when the government sold $30 billion of two-year securities on April 23.

EUR/USD $1.5850, $1.5900
USD/JPY Y105.60
GBP/USD $1.9775
Kiwi; $0.7890

Upbeat quarterly results from a handful of retailers and a dip in crude oil prices sent stocks higher in early trading. However, oil made a rebound midmorning, prompting broad-based selling in the stock market. Stocks are making a drop to their worst levels of the session.
Prior to opening bell, Chico's FAS (CHS 7.70, +0.53) and American Eagle Outfitters (AEO 18.78, +1.56) announced better-than-expected earnings results for the most recent quarter. Polo Ralph Lauren (RL 68.45, +6.70) reported this morning an increase in sales and earnings; the company also reaffirmed its full-year outlook. Discount variety store operator Dollar Tree (DLTR 35.00, +1.22) also reported upbeat results for its latest quarter.
Global delivery and shipment company United Parcel Service (UPS 70.70, +2.30) is also receiving attention from buyers after reports surfaced the company may see its sales climb upon reaching a deal to provide services for competitor DHL Express. Notably, shares of UPS were also upgraded to Buy from Hold at Merrill Lynch.

Spot gold holds at $899.50/oz, after trading in a $889.90/$909.40 range. The precious metal, like other financial market instruments, has been driven largely by oil price swings, ebbing and flowing accordingly.John Reade, precious metals analyst at UBS, looks for levels to buygold, but says he wants to first see "long positions reduced - and preferably the market feeling as short as it did at $850/oz - togetherwith strong jewelry demand." UBS has raised its one month gold forecastto $900/oz vs $850 previously and has increased its three month forecast to $850 from $800.

The stock market has poked its nose into positive territory. The Dow Jones Industrial Average has also moved higher and is now sporting a decent gain.
Regional banks (-3.9%) have been some of the worst performers this session. Industry members Fifth Third Bancorp (FITB 18.83, -0.72), KeyCorp (KEY 19.76, -2.19), and Suntrust Banks (STI 51.96, -2.04) are some of the primary laggards. Each is trading at or near its 52-week low.

Breaks out of the $1.9750/65 resistance zone and edges on toward the next level of reported offers at $1.9780. Above here and rate can move toward $1.9800 ahead of $1.9825/35. Bids remain in palce between $1.9710/00.

Stocks have opened Wednesday's trading session in positive ground. Buying interest is broad-based with the majority of the major economic sectors posting gains.
Energy (-0.7%) is posting the largest decline. The sector has been hit by a drop in crude oil prices for the second consecutive session. Oil is currently trading more than 1.0% lower, near $127.50 per barrel.

Clears below $1.9730 and moves into the area of reported demand interest between $1.9715/00. Rate trades to a low of $1.9706, currently holding around $1.9712. A break below $1.9700 to expose reported stops, placed below $1.9695, which if triggered opens a deeper move toward $1.9680.

Stocks are looking to start Wednesday's session in positive ground: (S&P futures vs fair value: +4.9. Nasdaq futures vs fair value: +10.2. ). Oil is headed lower again. Crude is indicated roughly 1.5% lower in electronic trading.
Stocks rose Tuesday, as falling oil prices and a stronger dollar helped boost sentiment.
Oil prices extended their decline Wednesday. U.S. crude tumbled $1.93 to $126.92 a barrel in electronic trading.
Stocks to watch include Exxon Mobil, which faces disgruntled shareholders, including members of the Rockefeller family, at its annual meeting today.
The Wall Street Journal reported that Bear Stearns plans to hand over documents to the Securities and Exchange Commission showing that several Wall Street firms, including Goldman Sachs, cut their exposure to Bear in the weeks leading up to its collapse.
Computer maker Dell suffered a setback late Tuesday when a New York state judge ruled it engaged in repeated false and deceptive advertising of its promotional credit financing and warranty terms.

EU-harmonized HICP and the national CPI up to 3.0% y/y

In the wake of the durable goods data, the pare posted high near Y105.30 where the supply so far proved adequate to contain the pair. Further offers seen at Y105.40/50 area, near the May peak.

Investiors fear of demand slowdown for gasoline, with reports that leverage accounts are liquiding long oil positions. Crude oil prices are now at lowest levels since May 19.

Durables ex transport were +2.5% (second up month), and ex defense -0.3%.

The move comes after oil production in Indonesia has dropped to less than 1mln barrels/day, due to declining investment in exploration and legal
disputes. Oil analysts now see Indonesia increasing oil production in order to take advantage of high crude oil prices, which in turn is seen
weighing on prices. Indonesia has been a member of OPEC since 1962 and reportedly been considering leaving the cartel for the past 3-years. WTI Nymex crude oil is at $127.00, down $1.85.

The yen fell to a one-month low against the euro as rising stocks spurred investors to add to holdings of higher-yielding assets funded in Japan's currency.

The currency also traded near a three-month low versus the Australian dollar, a favorite for so-called carry trades, as crude oil fell for a second day and Standard & Poor's 500 Index futures reversed declines to advance 0.1 percent. The dollar traded near at its highest in a week against the euro.
``S&P futures were down before and now they are up slightly,'' said Adrian Schmidt, a senior currency strategist at Royal Bank of Scotland Group Plc in London. ``People are eager to put on carry trades and the dollar is generally firmer.''
German stocks gained for a third day, with the benchmark DAX Index adding 0.7 percent, as oil dropped to $126.50 a barrel on the New York Mercantile Exchange, the lowest since May 19. Today’s focus on US Durable goods orders at 12:30 GMT. At 15:45 GMT Germany CPI report is schedule to come.

Making an extended break on a Y164 handle now after triggering stops through Y164.10 as dollar-yen also breaks higher. Little now reported to the topside until offers placed around this year's high kick in at Y164.90/165.00.

- High oil price a matter of concern
- Must ensure second round effects are avoided.

Resistance 3: Y105.50

Resistance 2: Y105.00
Resistance 1: Y104.80
Current price: Y104.59
Support 1: Y103.00

Support 2: Y102.20

Support 3: Y101.60

Comments: Dollar rebounds from Friday's lows at Y103.00 (strong support). Below losses may widen to Y102.20 and Y101.60. Resistance comes near session's high on Y104.80. Above Y105.00 there is a room for a rise to May 14 high on Y105.50.

Resistance 3: Chf1.0570

Resistance 2: Chf1.0400
Resistance 1: Chf1.0350

Current price: Chf1.0345

Support 1: Chf1.0270

Support 2: Chf1.0220

Support 3: Chf1.0180

Comments: Dollar rebounds and now targets the resistance at Chf1.0350. Above the target comes at Chf1.0400 and then – on Chf1.0570 (May 19 highs). Minor support is around Chf1.0270, stronger level- near Chf1.0220 (yesterday’s low) and then - Chf1.0180.

Resistance 3: $1.9900
Resistance 2: $1.9880
Resistance 1: $1.9850
Current price: $1.9776
Support 1: $1.9710
Support 2: $1.9680
Support 3: $1.9580


Comments: Cable remains within the former range. Below strong support $1.9710 (Tuesday’s low), the losses may widen to $1.9680, then – to 50% of the rise from May 19 at $1.9580/90. Resistance comes at yesterday’s highs at $1.9850. Above the target is at $1.9880 and $1.9900 (May 02 high).

Resistance 3:$1.5920

Resistance 2: $1.5820
Resistance 1: $1.5740

Current price: $1.5685

Support 1: $1.5660
Support 2: $1.5630
Support 3: $1.5560

Comments: Strong support is around session lows on $1.5660. Below losses may extend to $1.5640 and $1.5560. Resistance comes at $1.5740 (50% of $1.5820 - $1.5660). Above there is a room for a rise to Tuesday’s high on $1.5820 with a break above will point to Mar highs on $1.5900/20.

EUR/JPY printed high near Y164.00 for the first time this month. Stops still lurking above, with a clean break opening up a run towards this year's high at Y164.96.

EUR/USD: $1.5850, $1.5600, $1.5900
USD/JPY: Y104.00, Y104.75, Y105.00, Y105.60, Y102.05
GBP/USD: $1.9775, $1.9605
EUR/CHF: Chf1.6125
AUS/USD: $0.9550, $0.9525
Kiwi: $0.7890
USD/CAD: C$0.9950

EUR
Bids: $1.5700/85, $1.5665/55, $1.5630/20
Offers: $1.5725, $1.5740/50

JPY
Bids: Y103.75/70, Y103.50, Y103.20/00, Y102.75/70
Offers: Y104.35/50

GBP
Bids: $1.9750/40
Offers: $1.9850

AUSSIE
Bids: $0.9560
Offers: $0.9650/75

The yen rose for the first time in three days against the dollar and euro as a decline in Asian stocks prompted investors to pare holdings of higher-yielding assets funded in Japan.

Japan's currency also gained against the South African rand and New Zealand dollar, two favorites for so-called carry trades.

“The yen is being buoyed by risk reduction among investors, as stocks are performing poorly,” said Joseph Kraft at Dresdner Kleinwort.

EUR/USD rose from $1.5660 to $1.5740.

GBP/USD strengthened from $1.9730 to $1.9815.

USD/JPY fell from Y104.30 to Y103.90.

Today’s focus on US Durable goods orders at 12:30 GMT. At 15:45 GMT Germany CPI report is schedule to come.

Japanese stocks initially opened slightly firmer in Tokyo trade before profit-taking weighed on the index after recent gains. This sent the Nikkei-225 index of Japanese stocks lower, closing down 183.87 points, or 1.32%, at 13,709.44

Stock market fixing:
Nikkei 225 +203.12 +1.5% 13,893.31
Topix +24.07 +1.8% 1,368.25
FTSE 100 -28.80 -0.47% 6,058.50
CAC 40 -31.28 -0.63% 4,906.56
Xetra Dax +4.82 +0.07% 6,958.66
DOW +68.72 +0.55% 12,548.35
NASDAQ +36.57 +1.50% 2,481.24
S&P 500 +9.42 +0.68% 1,385.35
10yr Note +0.9000 +0.235% 3.921%
NYMEX Crude Oil -3.34 -2.53% 128.85
Gold -19.20 -2.07% 906.60

Japan's stocks rose the most in two weeks, led by papermakers, after UBS AG said higher product prices will bolster their earnings, fueling confidence companies can weather an increase in material costs.
Oji climbed 3.1%, the highest since Jan. 15. Nippon Paper added 2.5%, while Rengo gained 3.8%. Hokuetsu Paper Mills Ltd. surged 7.8%, the sharpest jump since July 2006, and Mitsubishi Paper Mills Ltd. leapt 9.1%, with the two companies leading gains on the Nikkei.
Bank of Yokohama, the largest regional financial services company by market value, climbed 5.1%, the sharpest gain since April 2. Bank of Saga Ltd., based in Kyushu southern Japan, jumped 6.2%, the most since Sept. 26, 2005. Mizuho Financial Group Inc., the country's third- biggest bank by value, rose 4.1 percent to 534,000 yen.
Mitsui & Co., which has stakes in oil fields in Oman and Thailand, and Inpex Holdings Inc., Japan's largest oil and gas explorer, advanced after crude rose above $133 a barrel. Mitsui, Japan's second-largest trading company, jumped 3.5%, while bigger rival Mitsubishi Corp. rose 3%. Inpex added 3.2%, the biggest gain since May 19.

European stocks fell for a third day as declines in oil and metals prices weighed on commodity producers, the region's best-performing shares this year, and Vodafone Group Plc said plans to cut call charges may hurt sales.
BP Plc, Europe's second-biggest oil company, dropped as oil tumbled more than $2 a barrel. BP fell 1.2%. Total SA, Europe's third-biggest, lost 1.1%.
British Airways Plc, Europe's third-biggest airline, climbed 3.2%. Ryanair Holdings Plc, the region's largest discount carrier, advanced 2.9%.PSA Peugeot Citroen, Europe's second-biggest carmaker rose 2.5%. Volkswagen AG, the largest carmaker, increased 1.2%.
BHP Billiton Ltd., the world's largest mining company, followed copper and gold prices lower. BHP Billiton fell 1.9%. Rio Tinto Group, the world's third-biggest mining company, declined 1.9%. Vodafone fell 1.7%. The company, which reported annual profit that topped analysts' estimates today, said plans by European Union regulators to cut call charges may hurt future sales and margins. GlaxoSmithKline Plc, Europe's biggest drugmaker, declined 1.4% after Morgan Stanley cut its recommendation on the stock. Roche Holding AG and Novartis AG climbed after Morgan Stanley said it prefered Switzerland's biggest drugmakers over U.K. rivals.

Falling oil prices gave a boost to Wall Street Tuesday, with the market finding some momentum late in a choppy session. The Nasdaq climbed thanks to strength in big tech stocks such as Google, Oracle and Apple .
Apple shares rose on continued anticipation about the late-June launch of the new version of its iPhone. On Tuesday the company said TeliaSonera will release the iPhone in a number of Nordic and Baltic markets.
General Motors fell 2% after a Citi Investment Research analyst downgraded the stock to "hold" from "buy" and cut its 12-month price target as part of a broader bearish note on the auto sector, amid weaker sales and surging commodity prices.
Ford Motor also had its earnings estimates cut by Citi.
Applied Materials Inc demonstrated it could rapidly build manufacturing capacity for a key solar energy customer Signet Solar Inc, according to an analyst.
Borders Group, Inc said it may put itself up for sale, is due to report quarterly results after the market close.
Chemtura Corp reported that Blackstone Group LP and Apollo Management LP are in talks to acquire the specialty-chemicals company.

The yen fell to a one-month low against the euro and dropped versus the dollar as investors added to holdings of higher-yielding assets funded in Japan's currency.
The yen's decline against the Australian and New Zealand dollars, two favorites of so-called carry trades, began earlier as Asian stocks rallied. Australia's dollar traded close to a 25-year high versus its U.S. counterpart, while the kiwi dollar gained a sixth straight day. The U.S. dollar extended gains versus the yen and euro as new-home sales in the U.S. unexpectedly rose in April.
The euro reversed gains versus the dollar after reports showed German consumer confidence fell more than economists forecast and French business confidence declined to the weakest in more than two years in May.
The dollar extended gains as new-home sales in the U.S. rose 3.3 percent to an annual pace of 526,000 from a 509,000 rate the prior month that was the lowest in 17 years, Commerce Department data showed. A separate report today showed home prices dropped last quarter by the most in at least 20 years.
Confidence among U.S. consumers fell to the lowest level in more than 15 years. The Conference Board's confidence index declined more than forecast to 57.2, the lowest level since October 1992, from a revised 62.8 in April, the New York-based research group said.

EUR/USD printed high on $1.5820 before falling to $1.5670, triggering stops.
GBP/USD tested $1.9840 before sliding to $1.9710. Later rate set stable within the $1.9725/80 range.
USD/JPY rose from Y103.20 to Y104.40.

Today’s focus on US Durable goods orders at 12:30 GMT. At 15:45 GMT Germany CPI report is schedule to come.

Resistance 3: Y105.50
Resistance 2: Y105.00
Resistance 1: Y104.30
Current price: Y103.90
Support 1: Y103.00
Support 2: Y102.20
Support 3: Y101.60
Comments: Dollar rebounds from Friday's lows at Y103.00 (strong support). Below losses may widen to Y102.20 and Y101.60. Resistance comes near Tuesday’s high on Y104.30. Above Y105.00 there is a room for a rise to May 14 high on Y105.50.

Resistance 3: Chf1.0570
Resistance 2: Chf1.0400
Resistance 1: Chf1.0350
Current price: Chf1.0285
Support 1: Chf1.0270
Support 2: Chf1.0220
Support 3: Chf1.0180
Comments: Dollar remains under pressure after if failed to break above the resistance at Chf1.0350. Above the target comes at Chf1.0400 and then – on Chf1.0570 (May 19 highs). Minor support is around Chf1.0270, stronger level - near Chf1.0220 (yesterday’s low) and then - Chf1.0180.

Resistance 3: $1.9900
Resistance 2: $1.9840
Resistance 1: $1.9780
Current price: $1.9770
Support 1: $1.9710
Support 2: $1.9680
Support 3: $1.9580
Comments: Cable remains within the range. Below strong support $1.9710 (Tuesday’s low), the losses may widen to $1.9680, then – to 50% of the rise from May 19 at $1.9580/90. Resistance comes at $1.9780, stronger – on yesterday’s highs at $1.9840. Above the target is at $1.9900 (May 02 high).

Resistance 3:$1.5920
Resistance 2: $1.5820
Resistance 1: $1.5740
Current price: $1.5709
Support 1: $1.5660
Support 2: $1.5540
Support 3: $1.5480
Comments: Euro tries to rebound. Resistance comes at $1.5740 (50% of $1.5820 - $1.5660). Above there is a room for a rise to Tuesday’s high on $1.5820 with a break above will point to Mar highs on $1.5900/20. Strong support is around session lows on $1.5660. Below losses may extend to $1.5540 and $1.5480.

High Low Close
EUR/USD 1.5819 1.5671 1.5677
USD/JPY 104.32 103.25 104.25
GBP/USD 1.9844 1.9713 1.9746
USD/CHF 1.0353 1.0222 1.0343

EUR/JPY 163.85 163.01 163.47
EUR/GBP 0.7981 0.7933 0.7936
GBP/JPY 206.15 204.65 205.89
GBP/CHF 2.0442 2.0241 2.0426

Change % Change Last
Nikkei 225 +203.12 +1.5% 13,893.31
Topix +24.07 +1.8% 1,368.25
FTSE 100 -28.80 -0.47% 6,058.50
CAC 40 -31.28 -0.63% 4,906.56
Xetra Dax +4.82 +0.07% 6,958.66
DOW +68.72 +0.55% 12,548.35
NASDAQ +36.57 +1.50% 2,481.24
S&P 500 +9.42 +0.68% 1,385.35
10yr Note +0.9000 +0.235% 3.921%
NYMEX Crude Oil -3.34 -2.53% 128.85
Gold -19.20 -2.07% 906.60

06:00 Germany Import prices (April) 0.7% 0.4%
06:00 Germany Import prices (April) Y/Y 5.5% 5.7%
06:00 Germany Import prices excluding oil (April) Y/Y - 1.5%
06:45 France Consumer confidence (May) -37 -37
08:00 EU(15) Current account (March) unadjusted, bln - 5.0
12:30 USA Durable goods orders (April) 0.2% -0.3 (+0.1)%
12:30 USA Durable goods orders excluding transportation (April) - 1.5%
12:30 USA Durable goods orders excluding defence (April) - 0.3%
15:45 Germany CPI (May) preliminary 0.4% -0.2%
15:45 Germany CPI (May) preliminary Y/Y 2.8% 2.4%
15:45 Germany HICP (May) preliminary Y/Y 2.9% 2.6%
23:50 Japan Retail sales (April) Y/Y - 1.1%