The world's second-largest personal-computer maker Dell Inc posted an unexpected rise in first-quarter earnings, as cost-cutting efforts overcame a slowdown in consumer spending and an ongoing slump in corporate demand and overseas sales outstripped U.S. orders for the first time.

J Crew Group Inc posted strong sales after the close of trading Thursday, but gave disappointing second-quarter and full-year guidance.

Marvell Technology Group Ltd reported first-quarter profit and sales that beat analysts' estimates.

Omnivision Technologies Inc reported fourth-quarter profit of 27 cents a share, below analysts expectations.

Sigma Designs Inc reported sales fell 58% to $56.9M, less than the company forecast.

Ual Corp has ended merger talks with US Airways (LCC).

Wind River Systems Inc reported first-quarter profit before some items of 9 cents a share, above analysts’ forecasts.

Anthony Botros, currency dealer at Easy Forex: “Markets are still quietly confident that there's a possibility of another rate hike coming out of the Reserve Bank of Australia in the second half of 2008.”

The Nasdaq continues to outperform as tech climbs near session highs (+0.9%).Crude has bounced higher, as it is now posting a gain of 1.1% at $127.96 per barrel.
Technology is a standout again today thanks in large part to the move in Dell following its earnings report.For the session the S&P technology sector is up 0.8%, which puts it well ahead of the broader market.
With the material pullback in financial stocks in the wake of the subprime mess, technology has recently supplanted financials as the sector with the heaviest weighting in the S&P 500.It comprises 16.66% of the S&P 500 versus 15.97% for the financials.
The tech sector is still down 4% for the year, but it is up 5.7% for the month.

Holger Schmieding, economist at Bank of America: “The ECB will keep the rate on hold well into next year, but they will harden their language at their June meeting, pointing to record inflation as one of the reasons to do so.”

“The idea that the Fed will continue to cut rates has been completely put to bed and the market is now flirting with the idea of a rate hike,” said Alan Ruskin, head of international currency strategy at RBS Greenwich Capital Markets. “That has given the dollar a boost.”

The dollar was headed for a second straight monthly advance against the euro and yen as signs of improving economic growth boosted investor confidence in U.S. assets.
The U.S. currency also traded close to a three-month high versus the yen as traders bet the Federal Reserve will raise interest rates later this year.
The dollar has risen 0.4% versus the euro this month. The dollar has gained 1.5% this month against the yen.
The dollar got a brief boost after a government report showed personal income was stronger in April than economists expected. Incomes grew 0.2%, bolstered in part by the government's tax rebates, after a 0.4% increase the prior month. The median forecast was for a drop to 0.1%.
The dollar pared its monthly gain against the euro today as private report showed a measure of U.S. business activity shrank in May.
The U.S. economy expanded at a 0.9% annual pace last quarter, faster than the Commerce Department's April 30 estimate of 0.6%, the government said yesterday. U.S. durable goods orders excluding transportation equipment rose 2.5% in April. The median forecast was for a 0.5% drop.
“The data has been dollar-positive because they'll allow the Fed to keep rates where they are,” said Greg Anderson, a foreign exchange strategist at ABN Amro Bank NV.'
The National Association of Purchasing Management-Chicago said today its business index rose to 49.1 this month, higher than forecast, from 48.3 in April. Figures below 50 signal contraction.
The euro fell earlier after retail sales in Germany, Europe's largest economy, unexpectedly dropped in April. Sales adjusted for inflation and seasonal swings fell 1.7% from March, when they dropped 2.2%. Economists forecast a gain of 0.6%.
“Consumption in Germany is cooling down due to hefty oil prices,” said Ryohei Muramatsu, manager of Group Treasury Asia at Commerzbank AG, Germany's second-largest bank. “In such a situation, the Fed could raise rates faster than the European Central Bank”. The euro may fall to $1.52 by June 30, he said.
Britain's pound will fall to 81 pence against the euro in coming months as a weakening economy prompts investors to resume bets the Bank of England will add to interest rate cuts this year, according to a Dresdner Kleinwort note yesterday. U.K. consumer confidence dropped in May to the lowest level since 1990, as people became more pessimistic that the economy will slip into a recession.
Futures on the Chicago Board of Trade show a 29% chance the Fed will raise its target rate by a quarter- percentage point to 2.25% on Sept. 16.

Joerg Radeke, economist at the Center for Economic and Business Research: “The inflation data will support the European Central Bank in its wait-and-see policy. We expect interest rates to stay on hold during the second and third quarter of 2008.”

From Lehman: “Depressed consumer sentiment and rising inflation expectations put the Fed in a difficult position. We expect Fed officials to continue to talk tough on inflation, citing rising long-run inflation expectations as a reason to be concerned.”

Christoph Weil, economist at Commerzbank: “Inflation in EU will become an even greater concern over the coming months, since the relentless rise in oil and food prices is likely to push it up to 4% this summer.”

Stocks struggled higher Friday as investors welcomed Dell's improved earnings and a bigger-than-expected rise in personal income, but held back amid rising oil and gas prices.
Stocks gained Thursday on sliding oil prices, a rallying dollar and a report that showed first-quarter GDP growth was better than initially reported.
Economic reports: Personal income rose 0.2% in April, the government said, matching forecasts. Personal spending rose 0.2%, as expected. Core PCE, the report's closely-watched inflation measure, gained 0.1% as expected. Chicago PMI, a regional manufacturing survey, rose 1.7% to 49.1.The results topped the expected reading of 48.5.It is the fourth straight month that the reading has reflected contraction in manufacturing activity in the Chicago region.The stock market had a mostly muted response to the data. Separately, the May University of Michigan consumer sentiment reading was revised slightly higher to 59.8 from 59.5.Sentiment declined 4.5% from April.
Among corporate news: The PC-maker Dell reported higher quarterly sales and earnings late Thursday that topped estimates thanks to cost cutting, notebook sales and growth in markets overseas.
Commodities: U.S. light crude oil for July delivery rose $1.28 to $127.90 a barrel, following a slump of more than $4 Thursday.

EUR/JPY gets close to Y164.20, but sharply retreats to current Y164.03. Earlier rate triggered stops above Y164.10 and offers around Y164.00. Resistance at Y164.40/45, the 76.4% retracement of the decline from Y169.05 to Y149.33 and High 28 May.

The stock market gives up a portion of its advance, but remains in the green.The Nasdaq 100 is substantially outperforming the S&P 500.
The Nasdaq is benefiting from Dell's 8.8% spike on its better-than-expected earnings.Marvell Technologies is also playing as substantial role as the semiconductor company soars 22% on its relatively strong earnings report.

Hans Nilsson, FX strategist at CMS Forex: “The greenback rose on Thursday as the US Q1 2008 GDP grew at a faster pace than initially estimated and US 10-year yields rose to a 5-month high. The dollar was also supported by Federal Reserve Bank of Dallas President Richard Fisher’s comment last night that the Fed will raise interest rates if inflationary expectations deteriorate further. Sterling declined on further signs of falling UK house prices.”

EUR/USD pushes through the overnight high at $1.5541. Offers still at $1.5550.

A few days ago Dow Chemical Co announced on June 1 it will raise the price of all its products by up to 20%.

1.I strongly believe we'll have a lower inflation in 2009
2.Monpol, national policies must pay attention to inflation
3.Don't expect a big slowdown in economic growth
4.Not running risk of recession; no risk at all

USD/JPY Y105.00, Y104.50, Y104.30
AUD/USD $0.9600, $0.9700
USD/CAD C$0.9895, C$0.9975

Lower oil prices and strong results from computer maker Dell helped point U.S. stocks to a good start Friday, ahead of a batch of economic readings. Stocks finished Thursday's session higher as investors cheered a more than $4 a barrel drop in crude prices.
Oil prices extended declines Friday. U.S. crude for July delivery recently traded down $1.19 at $125.43 a barrel.
Before the bell reports showed consumer spending and personal spending both increased at a slow pace in April, in line with analyst expectations. Personal spending by individuals in current dollars rose 0.2% in April, in line with the 0.2% increase expected by economists. March's gain was a revised 0.4%. Personal income increased 0.2% in April, also in line with the 0.2% increase expected by economists. March's gain was 0.3%.
Other economic reports on tap include the Chicago PMI, which is a regional manufacturing survey, and a revised reading on consumer sentiment from the University of Michigan. Both those are due just after the market opens.
In corporate news, Dell posted an unexpected rise in first-quarter earnings. Shares of Dell gained 5% in after-hours trading Thursday on the report.
Apparel retailer J. Crew Group posted strong sales after the close of trading Thursday, but shares fell on disappointing second-quarter and full-year guidance from the company.
United Airlines has ended merger talks with US Airways, according to published reports. Some reports suggest United might now look to an alliance with Continental Airlines.

USD/CAD tested C$0.9980 and back off to current C$0.9968 as rate reacts to Canadian GDP Q1 data. Rate seen meeting resistance from offers placed ahead of C$0.9980. Traders note that the C$0.9975 level holds the strike of an expiring option for the 1400GMT structure. Another expiry noted at C$0.9895. Traders flash up stops in place on a break above C$0.9990.

EUR/USD getting a kick lower now in the wake of the US data, holding currently around $1.5500. Meanwhile, rate trades above morning lows at $1.5462. Bids in place at $1.5455/45.

The following data were issued
06:00UKNationwide house price index (May) -2.5% -0.6% -1.1%
06:00UKNationwide house price index (May) Y/Y -4.4% -2.1% -1.0%
06:00Germany Wholesale sales (May) real adjusted 0.2% - -1.4%
06:00GermanyWholesale sales (May) real adjusted Y/Y 9.3% - -4.6%
07:55GermanyUnemployment (May) seasonally adjusted +4K -27K -4 (-7)K
07:55GermanyUnemployment (May) seasonally adjusted, mln 3.310 - 3.299
07:55GermanyUnemployment rate (May) seasonally adjusted 7.9% 7.8% 7.9%
07:55GermanyUnemployment (May) seasonally unadjusted, mln 3.283 - 3.413
07:55GermanyUnemployment rate (May) seasonally unadjusted 7.8% - 8.1%
08:00EU(15) M3 money supply (April) adjusted Y/Y 10.6% 10.3% 10.3%
08:00EU(15)M3 money supply (3 months to April) adjusted Y/Y 10.7% 10.6% 11.1%
09:00EU(15)Economic sentiment index (May) 97.1 96.5 97.1
09:00EU(15)Business climate indicator (May) 0.54 - 0.44
10:00UKCBI retail sales volume balance (May) -14% -20% -26%

The dollar rose to the highest level in more than a week against the euro after Federal Reserve Bank of Dallas President Richard Fisher said the central bank will raise interest rates should consumers expect faster inflation.
The euro also declined after a government report showed unemployment in Germany unexpectedly rose in May for the first time in more than two years. The number of people out of work, adjusted for seasonal swings, rose 4,000 from April to 3.31 million, the Nuremberg-based Federal Labor Agency said today.

EUR/USD opened around $1.5615. Bids on approach to $1.5600 were eroded and stops triggered as the rate slipped to initial lows at $1.5560. A bounce back to $1.5610 met with willing sellers, with rate then coming back to make fresh lows for the day at $1.5545 before a slight bounce to end around $1.5570. Stops under $1.5545, bids $1.5520/25, stronger $1.5510/00. Offers $1.5610/30
GBP/USD opened at $1.9738. Weak numbers saw rate drop to $1.9708. Recovery boosted in late morning trade, hitting $1.9780 after CBI data, before easing back to $1.9750.
USD/JPY rose to Y105.40. Offers Y105.30, Y105.40/70, stops above, bids Y105.00/90.

The U.S. economy probably expanded at a 1.0% annual pace last quarter, faster than the Commerce Department's April 30 estimate of 0.6%, according to a survey.

“Fed is still more likely to cut again than hike. A number of positive catalysts are brewing, including more stress in housing resets and for the consumer, post fiscal stimulus.”

From economist Brian Wesbury at FTA: After Q1 revisions, "We still expect real GDP will grow at a 1.5% rate in Q2 and at a 4% rate in the second half of 2008, as the end of the Federal Reserve's rate cutting cycle unleashes the full force of loose monetary
policy. Meanwhile, the inflation news remains bad. In Q1, prices were up at a 2.6% rate for GDP (what we produce) but up at a 3.5% rate for Gross Domestic Purchases (what we buy)."

The rate edged to $1.5500 from around $1.5462 and holding above the figure level after inflation data release. Offers seen placed now at $1.5510. Bids seen toward $1.5460/50, more ahead of $1.5420.

The euro fell after retail sales in Germany, Europe's largest economy, unexpectedly dropped for a second month in April. The U.S. currency traded near a three-month high versus the yen as traders increased bets the Federal Reserve will raise interest rates later this year as the Bank of Japan and the European Central Bank remain on hold.
``There's been an improvement in some bits of data in the U.S. and the equity market looks like it's on the way up on a trend basis,'' said Peter Frank, a currency strategist in London at Societe Generale SA, France's second-biggest bank by market value. ``There's a very big turnaround in the risk environment. As long as oil keeps coming down, that combination is positive for the U.S. dollar.''
The euro fell against the dollar and the U.K. pound after a report suggested the German economy is losing momentum as faster inflation erodes consumers' spending power.
Sales at German retailers, adjusted for inflation and seasonal swings, fell 1.7 percent from March, when they dropped 2.2 percent, the Federal Statistics Office in Wiesbaden said today. Economists in a Bloomberg News survey forecast a gain of 0.6 percent.
``Consumption in Germany is cooling down due to hefty oil prices,'' said Ryohei Muramatsu, manager of Group Treasury Asia in Tokyo at Commerzbank AG, Germany's second-largest bank. ``In such a situation, the Fed could raise rates faster than the ECB.'' The euro may fall to $1.52 by June 30, Muramatsu said.
Britain's pound will fall to a record against the euro in coming months as a weakening economy prompts investors to resume bets the Bank of England will add to interest rate cuts this year, according to Dresdner Kleinwort.

Resistance 3: Y107.00

Resistance 2: Y106.30
Resistance 1: Y105.80
Current price: Y105.42
Support 1: Y104.60

Support 2: Y103.80

Support 3: Y103.20

Comments: Dollar continues to advance. Resistance is around yesterday’s high on Y105.80 with a break above will point to further rise to trend line from Jul 2007 on Y106.30. Above the upward momentum will grow and bring the rate to Y107.00. Strong support is near session low on Y104.60. Below correction may widen to Y103.80 and Y103.20.

Resistance 3: Chf1.0620

Resistance 2: Chf1.0550
Resistance 1: Chf1.0530

Current price: Chf1.0501

Support 1: Chf1.0360
Support 2: Chf1.0200

Support 3: Chf1.0160

Comments: Dollar continues its rise with minor resistance comes at Chf1.0530. Above the target comes at 61.8% Fibo level on Chf1.0550 (Chf1.0100 - Chf1.9640 decline), then – to Chf1.0620. Strong support is around session lows on Chf1.0360 with a break under will weaken the rate to Chf1.0200 (38.2%) and Chf1.0160.

Resistance 3: $1.9900
Resistance 2: $1.9880
Resistance 1: $1.9850
Current price: $1.97422
Support 1: $1.9700
Support 2: $1.9670
Support 3: $1.9580

Comments: Cable tries to rebound with support comes at hourly low on $1.9700, Stronger level comes on $1.9670 and $1.9580. Resistance comes at $1.9850. Above the target is at $1.9880 and $1.9900 (May 02 high).

Resistance 3:$1.5820
Resistance 2: $1.5760
Resistance 1: $1.5660

Current price: $1.5495

Support 1: $1.5460
Support 2: $1.5420
Support 3: $1.5365

Comments: Euro remains under pressure with support now at $1.5460. Below losses may extend to $1.5420. Resistance comes at session high on $1.5660, neat band of resistance is around yesterday’s high on $1.5760 and May 27 top on $1.5820.

The dollar headed for a second monthly advance against the euro and the yen as rising stocks and declining crude oil brightened the outlook for the U.S. economy, the world's biggest oil importer.
The euro fell after retail sales in Germany, Europe's largest economy, unexpectedly dropped for a second month in April.


EUR/USD retreated from $1.5540 to $1.5470.
GBP/USD fell from $1.9788 to $1.9730.
USD/JPY firmed from Y105.25 to Y105.55.


At 0900GMT, the Eurozone May economic sentiment index is seen edging down to 96.5. UK data sees the 1000GMT release of the May and Q2 CBI distributive trades survey/report.

Extends corrective pullback to challenge reported support around to $1.9700. Bids seen placed between $1.9705/1.9695, with stops below, which if triggered to allow for a retest on Thursday's lows at $1.9674, with demand noted between $1.9675/65. Further bids reported at $1.9650. Offers $1.9750, more around $1.9800.

"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.

EUR/USD $1.5600, $1.5200
USD/JPY Y105.00, Y104.50, Y104.30
AUD/USD $0.9600, $0.9700
USD/CAD C$0.9895, C$0.9975

Continental European equity bourses are trading higher Friday, with airline and carmakers underpinned by fall in crude oil prices. WTI Nymex crude oil is at $125.30, -$1.32. However, FTSE-100 is underperforming given it is heavily weighted in commodity stocks, which currently seem to be out of favour. CAC-40 is up 24pts (+0.48%), Xetra-DAX is up 47pts (+0.67%) and FTSE-100 is down 2 ticks at (-0.04%).

Metting resistance ahead of $1.5510, as rate recovers off earlier German retail sales react lows of $1.5481. Further offers seen placed toward $1.5520 ahead of $1.5540/50. Bids remain in place to $1.5480, a break below to open a deeper move toward $1.5460/50.

Resistance 3: Y107.00

Resistance 2: Y106.30
Resistance 1: Y105.80
Current price: Y105.39
Support 1: Y103.90

Support 2: Y103.00

Support 3: Y102.20

Resistance 3: Chf1.0620
Resistance 2: Chf1.0550
Resistance 1: Chf1.0530

Current price: Chf1.0494

Support 1: Chf1.0420
Support 2: Chf1.0260

Support 3: Chf1.0220

Following the unexpectedly fall in German retail sales data -- -1.7% m/m, -1.0% y/y in April vs downward revised March at -2.2% m/m (was -1.9%), economists at Societe Generale say that "there is a very significant probability to seet German GDP contracting in Q2".

Resistance 3: $1.9900
Resistance 2: $1.9850
Resistance 1: $1.9800
Current price: $1.9768
Support 1: $1.9730
Support 2: $1.9680
Support 3: $1.9580

Comments: Cable remains within the former range of $1.9680/$1.9850. Below strong support $1.9730 (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 $1.9800. stronger one at $1.9850. Above the target is at $1.9880 and $1.9900 (May 02 high).

Resistance 3:$1.5760
Resistance 2: $1.5660
Resistance 1: $1.5580

Current price: $1.5490

Support 1: $1.5500
Support 2: $1.5480
Support 3: $1.5420

After a 0.8% gain in the morning session, the Nikkei-225 is currently edging higher in the afternoon and now up 1.27%, helped by further gains on Wall Street overnight and by a slight softening of the yen.

High Low Close

EUR/USD 1.5662, 1.5484, 1.5508
USD/JPY 105.86, 104.59, 105.56
GBP/USD 1.9817, 1.9673, 1.9754
USD/CHF 1.0522, 1.0263, 1.0497

EUR/JPY 164.20, 163.28, 163.75
EUR/GBP 0.7912, 0.7841, 0.7849
GBP/JPY 208.92, 206.78, 208.54
GBP/CHF 2.0762, 2.0521, 2.0735

Change % Change Last
Nikkei 225 +415.03 +3.00% 14,124.47
Topix +31.94 +2.40% 1,380.63
FTSE -1.50 -0.02% 6,068.10
DAX +21.19 +0.30% 7,055.03
CAC +4.79 +0.10% 4,975.90
DOW +52.19 +0.41% 12,646.22
NASDAQ +21.62 +0.87% 2,508.32
S&P 500 +7.37 +0.53% 1,398.21
10yr Note +0.7000 +0.175% 4.079%
NYMEX Crude Oil -4.41 -3.37% 126.62
Gold -23.80 -2.63% 881.20

00:01 UK Gfk consumer confidence (May) -25 -24
05:00 Japan Housing starts (April) Y/Y - -15.6%
05:00 Japan Construction orders (April) Y/Y - 6.4%
06:45 France PPI (April) 0.5% 0.5%
06:45 France PPI (April) Y/Y 5.1% 5.2%
09:00 Italy PPI (April) - 0.8%
09:00 Italy PPI (April) Y/Y - 6.3%
09:00 Italy CPI (May) preliminary - 0.2%
09:00 Italy CPI (May) preliminary Y/Y - 3.3%
09:00 Italy HICP (May) preliminary Y/Y - 3.6%
09:00 EU(15) Harmonized CPI (May) Y/Y preliminary 3.5% 3.3%
09:00 EU(15) Unemployment (April) 7.1% 7.1%
12:30 USA Personal income (April) 0.2% 0.3%
12:30 USA Personal spending (April) 0.2% 0.4%
12:30 USA PCE price index ex food, energy (April) 0.1% 0.2%
12:30 USA PCE price index ex food, energy (April) Y/Y - 2.1%
13:45 USA Chicago PMI (May) 49.5 48.3
14:00 USA Michigan sentiment index (May) final 60.0 59.5