European, U.S. Stock-Index Futures Decline; Asian Shares Drop

By Daniela Silberstein

June 29 (Bloomberg) -- European stock futures retreated, indicating the Dow Jones Stoxx 600 Index will drop after its first back-to-back weekly declines since March. Asian shares fell for the first time in four days and U.S. futures slipped.

Anglo American Plc may be active after the Sunday Telegraph said that the mining company is considering a partnership with Aluminum Corp. of China in Anglo’s Brazilian iron-ore business. UBS AG may move as Sonntag said the Swiss bank plans to reach an agreement with U.S. tax authorities that may cost as much as $4.6 billion.

Futures on the Dow Jones Euro Stoxx 50 Index slid 0.7 percent to 2,372 at 7:23 a.m. in London.

The MSCI Asia Pacific Index lost 1 percent, erasing an earlier gain of as much as 0.3 percent on speculation that equity sales by Daiwa Securities Group Inc. and Mizuho Financial Group Inc. will dilute shareholder value. Futures on the Standard & Poor’s 500 Index decreased 0.7 percent.

Europe’s Stoxx 600 last week posted its first consecutive weekly declines since the start of the rebound in March on concern that a global economic recovery will falter. The gauge has lost 4.8 percent since June 11 after a three-month, 36 percent rally drove valuations to 25.4 times earnings, the highest level since 2004.

Anglo American may move. The mining company that last week rejected Xstrata Plc’s proposed merger plans to begin talks with Chinalco about investing in Anglo’s Brazilian iron-ore business, the Sunday Telegraph reported.

Anglo Leadership

Separately, Anglo approached former Rio Tinto Chairman Jim Leng and National Grid Plc’s John Parker to replace Mark Moody- Stuart, the Sunday Times reported. Anglo is in talks with Dubai Natural Resources World to develop iron-ore sources in Brazil, the Times reported, without saying where it got the information.

UBS will probably be active. The European bank with the biggest losses from the credit crisis plans to reach an agreement with U.S. tax authorities that may cost as much as 5 billion Swiss francs ($4.6 billion), newspaper Sonntag reported, citing three unidentified “independent sources.”

UBS spokeswoman Sabine Jaenecke declined to comment when contacted by Bloomberg News.

Daiwa, Japan’s second-largest brokerage, slumped 12 percent after saying it plans to raise about 240 billion yen ($2.5 billion) in a share sale. Mizuho, Japan’s third-biggest bank by market value, lost 4.2 percent after people familiar with the matter said it may start selling shares as early as this week.

Vodafone, Porsche

Vodafone Group Plc and Deutsche Telekom AG may be active. Vodafone, the world’s largest mobile-phone company, is considering a bid for T-Mobile UK Ltd., the British wireless unit of Deutsche Telekom, a person familiar with the situation said.

Porsche SE may move after the automaker’s supervisory board Chairman Wolfgang Porsche balked at an ultimatum from Volkswagen AG and the state of Lower Saxony to agree on a blueprint for the merger of the two carmakers. A June 29 deadline to agree the corporate marriage that was first reported in German newspapers is “blackmail” and “damaging” to the companies, Porsche, who is also a major shareholder in the eponymous sports-car maker, said in a statement. “We won’t let ourselves be blackmailed.”

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net

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European Stock-Index Futures Advance; Michelin, BP May Climb

By Adria Cimino

June 26 (Bloomberg) -- European stock futures rose, indicating the Dow Jones Stoxx 600 Index will trim its second straight weekly decline. Asian stocks advanced, while U.S. futures slipped.

Michelin & Cie. may climb after Bridgestone Corp., the world’s largest tiremaker, narrowed its loss forecast. U.S.- traded shares of BP Plc, Europe’s second-biggest oil company, increased as crude rose. UBS AG, the European bank with the steepest credit-crisis losses, may be active after raising $3.5 billion in a share sale.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, added 0.7 percent to 2,416 at 7:13 a.m. in London. The U.K.’s FTSE 100 Index may increase 27, according to Cantor Index, a betting firm.

A rally by Bridgestone helped send the MSCI Asia Pacific Index up 1.3 percent, extending the gauge’s weekly gain to 1.6 percent.

Futures on the Standard & Poor’s 500 Index slipped 0.3 percent. U.S. stocks advanced the most in three weeks yesterday as investors bet that Ben S. Bernanke’s defense of emergency measures to rescue Merrill Lynch & Co. bolstered his chances of remaining Federal Reserve chairman.

Europe’s Stoxx 600 has lost 1.7 percent this week, heading for its first back-to-back weekly declines since the start of a three-month rebound in March. The World Bank predicted the global recession will be deeper this year than it forecast in March, while European Central Bank council member Axel Weber said the bank has used up its room to cut interest rates.

‘Green Shoots’

“There are doubts over the sustainability of these green shoots of recovery we keep hearing about,” Matthew Buckland, a dealer at CMC Markets in London, wrote. “The fact that oil has broken back above the $70 mark may offer some support for the petrochemicals sector.”

The Stoxx 600 has lost 4.7 percent since June 11 amid speculation share prices have outpaced the outlook for economic growth after a three-month, 36 percent rally drove valuations to 25.4 times earnings, the highest level since 2004.

Michelin, the world’s second-biggest tiremaker, and Continental AG, Europe’s second-largest auto-parts maker, may climb. Bridgestone narrowed its first-half net loss forecast to 46 billion yen ($480 million) from 62 billion yen, citing reduced costs. Bridgestone climbed 8.5 percent in Tokyo.

American depositary receipts of BP added 1.3 percent from the stock’s close in London. ADRs of StatoilHydro ASA, Norway’s biggest oil and gas producer, advanced 1 percent.

Crude oil rose for a second day, exceeding $70 a barrel. The contract for August delivery gained as much as 0.8 percent on the New York Mercantile Exchange.

UBS may be active. The Zurich-based lender raised about 3.8 billion Swiss francs ($3.5 billion) by selling shares to boost capital and said it expects a second-quarter loss.

Deutsche Bank AG, Germany’s biggest bank, was upgraded to “buy” from “neutral” at UBS.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

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Forex Market Update: Strong Equity Rally Puts USD Back On The Defensive As Another Day Sees Yet Another Direction Change

Daily Forex Fundamentals | Written by Saxo Bank | Jun 26 09 06:54 GMT |

Bonds also rally, keeping JPY crosses relatively contained despite strong risk appetite HEADLINES - PREVIOUS SESSION New Zealand Q1 GDP fell -1.0% QoQ vs. -0.7% expected Japan May CPI fell -1.1% YoY and fell -1.1% ex Fresh Food vs. -1.0%/-1.1% expected, respectively THEMES TO WATCH - UPCOMING SESSION Germany May Import Price Index (0600) Sweden May Trade Balance (0730) Switzerland Jun. KOF Swiss Leading Indicator (0930) US May Personal Income and Spending (1230) US May PCE Core (1230) US Jun. Final University of Michigan Confidence (1400) US Fed's Fisher to Speak about US Economy (1700) Market Comments Equities rallied strongly into the North American close and knocked the USD well back from the strongest levels it posted after the FOMC meeting. The final auction of the week - this time for $27 billion of 7-year notes - from the US treasury saw heavy bidding and interest rates also headed lower. We'll refrain somewhat from the usual picking apart of the intermarket movements, as behavior has diverged sharply from past patterns and it feels like the markets are a bit chaotic here and scrambling for a new toehold on what is going on. For the shortest term, the USD weakening today may have simply been an unwinding of USD buying in the wake of the FOMC meeting and we're back to square one. Looking at the charts, the dollar index has gone into hibernation for almost three weeks now since the lows below 80.00 were rejected about a month ago. The equity rally came at a key technical pivot point today, as technicals were looking ominous for major indices like the S&P500 and its flirtation with the 200-day moving average and recent lows. This allowed FX to continue the range trading as well and prevent any further directional signals from developing. The strong rally in bonds after the US auction (and reversing the kneejerk sell-off induced by the Fed's lack of new debt buying announcements on Wednesday) was constructive for the Japanese Yen, but the risk appetite in evidence elsewhere confused the picture and instead, the JPY eased a bit lower on the day, though it did gain vs. the greenback. Japan's ex Fresh Food year-on-year CPI measure registered the lowest reading in the 38-year history of the series. The Fed's Bernanke faced a very tough panel of House interrogators yesterday on his actions related to the Bank of America/Merrill Lynch deal, who are trying to score political points for their constituencies. The questioning session was quite a spectacle, as some representatives' questioning techniques and tone bordered on lack of respect at times. Mr. Bernanke bore himself with dignity and did not appear as testy or indignant as the situation certainly justified. It is interesting to note, as a few articles pointed out, that Fed criticism is actually intense from both sides of the aisle - from the Republican minority which is aghast at the level to which the government and the Fed have intervened in the economy, and from the left, which is aghast at bankers' continuing to make hay regardless of the weather. It will be interesting to see how Bernanke's star fares as we head towards his potential January renomination. If the economy continues to sour between now and then, every political leader will be looking for a scapegoat. New Zealand suffered worse than expected contraction in its GDP in Q1, and the vastly stronger kiwi probably isn't doing much to help out the situation in Q2. Shouldn't the kiwi rally be tiring here? We're scanning the calendar in vain for catalysts today. Next week will hopefully provide sufficient impetus for pushing the market action out of these mind-numbing ranges. The ECB and the US employment report are putting in a rare appearance on the same day Thursday next week as US markets have a holiday-shortened week due to the Independence Day holiday. Analysis Disclosure & Disclaimer SaxBank A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by SaxBank that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis dnot occur as anticipated. SaxBank utilizes financial information providers and information from such providers may form the basis for an analysis. SaxBank accepts nresponsibility for the accuracy or completeness of any information herein contained. Any recommendations and other comments in SaxBanks analysis derive from objective fundamental macreconomical and company specific calculations, statistical and technical analysis, and subjective general market assessment. If an analysis contains recommendations tbuy or sell a specific financial instrument, such recommendation should be seen as SaxBanks opinion that the specific instrument will respectively outperform the relevant market or underperform compared tthe market. SaxBanks recommendations should statistically correspond tan even distribution between buy and sell recommendations. The recommendations may expire promptly due tmarket volatility and in general, SaxBank does not anticipate its recommendations tbe valid more than one month. An analysis will be updated if and only if a market development or other issues relevant tthe analysis render a new analysis on the same topic relevant. SaxBanks analysis does not cover any specific financial product over time but only products which SaxBanks strategy team finds it important tcover at any given point in time. In order tprevent conflicts of interest, SaxBank has established appropriate business procedures, incl. procedures applicable tresearch and analysis tensure objective research reports. SaxBanks research reports have not been discussed with the parties, e.g. issuers of securities, mentioned in the analysis. SaxBank is under supervision by the Danish Financial Supervisory Authority. SaxBank does not engage in corporate finance activities and accordingly, SaxBanks employees, incl. the persons responsible for an analysis, dnot receive remuneration associated with investment banking transactions.

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Forex Technical Update

Daily Forex Technicals | Written by India Forex | Jun 26 09 07:04 GMT |

Rupee : The markets are currently holding slightly bearish bias . Breaking of 48.90 on the upside would confirmation of further weakness towards 49.50 and 49.95 . On the downside 48.00 levels is holding support. Despite late monsoons if the rupee maintains bullishness day after day and breaks 48.00 then we need to reconsider bearishness. (USD/INR : 48.55) Euro :Euro had broken the falling trend to the upside but again fell drastically yesterday after FOMC rate decision. The bias again stays neutral to downside. Break of 1.3800 or 1.4100 would determine the clear trend. (Eur/Usd:1.4040). Neutral Sterling :Cable made a kind of double top formation at 1.66 levels and still moving in quite a volatile fashion in last 14 days showing both sides movement. of 250-300 pips . Important support holds at 1.6200 levels breaking which we could see extreme bearishness. View needs to be reconsidered only if 1.6650 breaks.(Gbp/Usd: 1.6420). Very Range bound Yen :Dollar-Yen pair is trading sideways confined between the cluster support of 94 levels and resistance of 99.55. We should not initiate positions until this wide range breaks on either side. The bias is towards yen strength and dollar weakness due to increased risk aversion again. (USD/JPY : 95.83) Rangebound Australian Dollar :Aussie stays below trendline. Remain bearish overall below .8050. 2 closings above .8100 would negate the view.(Aud/Usd: 0.8045).Neutral Gold :Gold rose quite a bit after FOMC decision . The view stays neutral as of now. (Gold- $941.66). Neutral Dollar Index :Dollar index extends the rebound from 79.56 and is set to take on 80.94. We're anticipating a break of 80.94 resistance to signal resumption of rise from 78.33, to be confirmed by break of 81.36/47 resistance zone. Further rally should be seen to next key resistance at 82.62 (38.2% retracement of 89.62 to 78.93 at 82.64). in such case.. (DI- 80.45) Bullish India Forex http://www.indiaforex.in DISCLAIMER These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

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Wakeup Call: Markets Fueled By Liquidity Injection From ECB And Prolonging Of Credit Facilities By FED

Daily Forex Fundamentals | Written by Saxo Bank | Jun 26 09 06:49 GMT |

The injection of cheap liquidity from ECB and the prolonging of credit facilities by FED will make markets trade higher in the short run. Calendar Economic Data Releases Country Name Time (GMT) Expectation Prior Comment US 12:30 Personal Income MoM (MAY) 0.3% 0.5% US 12:30 Personal Spending MoM (MAY) 0.3% -0.1% US 14:00 Consumer Confidence (JUN) 69.0 69.0 What's going on? The US GDP figures were generally as expected, but Jobless Claims were disappointing. The Fed yesterday released a press statement that it would prolong (to 2010) and change some of its credit providing facilities in order to ensure easy credit conditions to households and financial markets. This statement led to a general lift-off in all asset classes (including treasuries) – but the USD was down. Combined with the cheap EUR 442B credit expansion from the ECB earlier this week, we believe that the Fed’s initiative should stimulate to even more risk-taking today and possibly into next week. Buy on dips into next week. Watch out for the PCE figures today. We believe that they could be lower than expectations, lifting bonds higher. FX FX Daily stance Comment EURUSD 0/- EURUSD stalling around 1.4045 and expected to fall towards 1.4000. EURJPY 0/- Can look to trade narrow range as EURJPY expected to converge towards 134.50. USDJPY 0 Uptrend support line expected to support USDJPY around 95.60, buy looking for 96.60. GBPUSD 0/- Heard of large buying of EURGBP, pushing cable lower, expect further weakness towards 1.6280. AUDUSD 0/- Offered throughout Asia session, still looks heavy and we are looking for a test of 0.8000 support. Equities Equities Daily stance Comment DAX 0/+ Buy towards 4829 targeting 4878. S/L below 4800. FTSE 0/+ Buy towards 4274 targeting 4311. S/L below 4250. S&P500 0/+ Buy towards 915 targeting 922. S/L below 908. Nasdaq100 0/+ Buy towards 1473 targeting 1490. S/L below 1466. Nikkei 0/+ Futures Commodities Daily Stance Comment Gold 0/+ Buy at the break of 944 and target 960. Stop below 937. Silver 0/+ Buy at the break of 14.25 and target 14.60. Stop below 14.05. Oil 0/+ Buy on dips towards 70.50 and target 72. Stop below 70 FX Options FX-Options Comment EURUSD vols sold heavily today, and frontend interests all abt EUR puts. 1.37 and 1.38 for early next week among the biggest interests. Vols were at a relatively high level and this off is not unexpected, and our 1-3mo view is still that EURUSD will trade higher, but we will likely see a small correction the next few days. Analysis Disclosure & Disclaimer Saxo Bank A/S shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Saxo Bank that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated. Saxo Bank utilizes financial information providers and information from such providers may form the basis for an analysis. Saxo Bank accepts no responsibility for the accuracy or completeness of any information herein contained. Any recommendations and other comments in Saxo Bank's analysis derive from objective fundamental macro economical and company specific calculations, statistical and technical analysis, and subjective general market assessment. If an analysis contains recommendations to buy or sell a specific financial instrument, such recommendation should be seen as Saxo Bank's opinion that the specific instrument will respectively outperform the relevant market or underperform compared to the market. Saxo Bank's recommendations should statistically correspond to an even distribution between buy and sell recommendations. The recommendations may expire promptly due to market volatility and in general, Saxo Bank does not anticipate its recommendations to be valid more than one month. An analysis will be updated if and only if a market development or other issues relevant to the analysis render a new analysis on the same topic relevant. Saxo Bank's analysis does not cover any specific financial product over time but only products which Saxo Bank's strategy team finds it important to cover at any given point in time. In order to prevent conflicts of interest, Saxo Bank has established appropriate business procedures, incl. procedures applicable to research and analysis to ensure objective research reports. Saxo Bank's research reports have not been discussed with the parties, e.g. issuers of securities, mentioned in the analysis. Saxo Bank is under supervision by the Danish Financial Supervisory Authority. Saxo Bank does not engage in corporate finance activities and accordingly, Saxo Bank's employees, incl. the persons responsible for an analysis, do not receive remuneration associated with investment banking transactions.

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Forex Technical Analytics

Daily Forex Technicals | Written by FOREX Ltd | Jun 26 09 07:00 GMT |

CHF The pre-planned long positions from key supports were implemented with the overlap of minimal estimated target. OsMA trend indicator having marked uncertainty of bullish activity level as a direction priority of the previous day and gives grounds to suppose further rate correction period to channel line '1' at 1,0840/60 levels where it is recommended to evaluate the development of the activity of both parties in accordance with the charts of a shorter time interval. As for short-term buying positions on condition of the formation of topping signals the targets will be 1,0900/20, 1,0960/80, 1,1020/40 and (or) further break-out variant up to 1,1080/1,1100, 1,1160/80, 1,1240/60. The alternative for sales will be below 1,0780 with the targets of 1,0720/40, 1,0640/60, 1,0580/1,0600. GBP The pre-planned break-out variant for sales has been implemented with the achievement of minimal estimated targets. OsMA trend indicator, having marked relative activity rise of both parties, except the risk of technical outlook change favouring to one of the parties, does not clarify the choice of planning priorities for today. Hence and considering slight bearish priority we can suppose probability of rate return to 1,6260/1,6300 supports where it is recommended to evaluate development of the activity of both parties in accordance with the charts of a shorter time interval. As for short-term buying positions on condition of formation of topping signals the targets will be 1,6360/80, 1,6440/60, 1,6500/40 and (or) further break-out variant up to 1,6580/1,6600, 1,6660/80, 1,6740/60.The alternative for sales will be below 1,6160 with the targets of 1,6080/1,6100, 1,5980/1,6020, 1,5800/40. JPY Short positions opened and preserved earlier had positive result in the achievement of minimal estimated target. OsMA trend indicator, having marked the preservation of activity parity of both parties with rate positions within Ichimoku cloud border does not clarify the choice of planning priorities for today. Hence and considering ascending direction of indicator chart we can assume probability of another test of channel line '1' at 96,20/40 levels, where it is recommended to evaluate development of the activity of both parties in accordance with the charts of a shorter time interval. As for short-term sales on condition of the formation of topping signals the targets will be 95,40/60, 94,80/95,00 and (or) further break-out variant up to 94,20/40, 93,60/80. The alternative for buyers will be above 96,80 with the targets of 97,20/40, 97,80/98,00, 98,40/60. EUR The estimated test of key resistance range levels for the implementation of pre-planned short positions has not been confirmed exactly and further developments with bullish activity level enforcement gives grounds to suppose rate rise but without clarifying the choice of planning priorities for today. On the assumption of it we can assume probability of rate return to close 1,3980/1,4000 supports where it is recommended to evaluate the development of the activity of both parties in accordance with the charts of a shorter time interval. As for short-term buying positions on condition of the formation of topping signals the targets will be 1,4040/60, 1,4100/20, 1,4180/1,4200 and (or) further break-out variant up to 1,4240/60, 1,4300/20. The alternative for sales will be below 1,3880 with the targets of 1,3820/40, 1,3760/80, 1,3680/1,3700. FOREX Ltd www.forexltd.co.uk

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FX Technical Analysis

Daily Forex Technicals | Written by Mizuho Corporate Bank | Jun 26 09 06:18 GMT |

EURUSD Comment: Tricky as prices remain within the 1.3800 to 1.4100 range that has held most of the time since May. We continue to feel we are preparing to break out of recent ranges, the best examples currently AUD and NZD. Strategy: Attempt longs at 1.4030; stop below 1.3800. Short term target 1.4100, then 1.4200. Direction of Trade: →↗ Chart Levels: Support Resistance 1.3982 " 1.4062 1.3888 1.4109 1.385 1.4139 1.3826 1.4178 1.38 1.423 GBPUSD Comment: Pushing towards the apex of the 'triangle/pennant' and moving averages suggest a long position. The pound is not in the slightest bit overbought and bullish momentum is among the strongest in years. A weekly close above 1.6600 is needed to take bullish momentum back up to the very strong levels of early June. Strategy: Attempt small longs at 1.6390/1.6300; stop below 1.6080. First target 1.6500, then 1.6600. Direction of Trade: →↗ Chart Levels: Support Resistance 1.6368 " 1.6474 1.6231 1.6507 1.6209 1.6562 1.6187 1.6622 1.612 1.6664* USDJPY Comment: Retreating smartly from the lower edge of the Ichimoku 'cloud' to form a 'spike high' candle against the moving averages. This has added to bearish momentum and the US dollar is not oversold. Probably not today, but maybe next week, we favour a test of the pivotal 94.00 area. Strategy: Sell at 95.85/96.00; stop well above 96.65. First target 95.50, then 95.00 and more. Direction of Trade: →↘ Chart Levels: Support Resistance 95.62 " 96.07 95.5 96.58 95 96.80* 94.88 97.27* 94.44 97.65 EURJPY Comment: Holding above trendline support, rather better than expected though well below this year's high. Expect more consolidation today. Strategy: Possibly attempt small shorts at 134.60; stop above 135.50. Short term target 133.00, then 132.00. Direction of Trade: → Chart Levels: Support Resistance 134.10 " 134.82 133 135 132.35 135.38/135.50* 131.8 136 131.41* 137.35 Mizuho Corporate Bank Disclaimer The information contained in this paper is based on or derived from information generally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Any opinions expressed in this paper are subject to change without notice. This paper has been prepared solely for information purposes and if so decided, for private circulation and does not constitute any solicitation to buy or sell any instrument, or to engage in any trading strategy.

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Japan Aluminum Shipments Drop at Slower Pace in May

By Aya Takada

June 26 (Bloomberg) -- Japan’s shipments of aluminum rolled products dropped at a slower pace in May than in April as demand from beverage can producers and carmakers increased on month.

Supplies to the domestic and export markets declined 30 percent to 138,503 metric tons from 196,842 tons a year earlier, the Japan Aluminium Association said in a statement today. The pace of decrease slowed for a third month after starting to drop in October. Shipments plunged 39 percent in February, the worst slump in 34 years, tumbled 36 percent in March and fell 31 percent in April.

Japan’s government and central bank raised their assessments of the economy for a second month in June after industrial output advanced at the fastest pace in 56 years and exports improved. Bank of Japan Governor Masaaki Shirakawa said June 16 he is “cautious” about the rebound because renewed demand may only be temporary.

“Shipments in May were supported by good sales to can makers and improvement in demand from the auto sector,” Koji Iida, an association spokesman, said in Tokyo today.

Shipments to the car industry dropped 50 percent from a year earlier to 13,024 tons in May as the pace of contraction moderated for a second month. The volume increased 23 percent from April, when shipments fell 62 percent to 10,590 tons.

Demand from can producers, the largest consumers of aluminum rolled products in Japan, climbed 4.5 percent to 42,065 tons in May from a year earlier as individuals stayed at home and drank more beer and other canned beverages amid the recession, Iida said.

Members of the Japan Aluminium Association include Furukawa-Sky Aluminum Corp., Kobe Steel Ltd. and Nippon Light Metal Co. Details of output, shipments and inventories for May are as follow:

==============================================================

May ‘09 April ‘09 May/April May Y/Y

==============================================================

(%) (%)

OUTPUT 139,723 137,442 +1.7 -28.7

Flat-rolled 90,177 85,244 +5.8 -26.5

Extruded 49,546 52,198 -5.1 -32.5

SHIPMENTS 138,503 137,718 +0.6 -29.6

Flat-rolled 89,486 86,159 +3.9 -27.7

Extruded 49,017 51,559 -4.9 -33.0

INVENTORY 80,529 79,219 +1.7 +1.8

Flat-rolled 68,862 68,048 +1.2 +1.1

Extruded 11,667 11,171 +4.4 +6.1

===========================================================

To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.net

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S. African Mines Ministry Met With Xstrata Officials, Anglo CEO

By Antony Sguazzin

June 26 (Bloomberg) -- Sandile Nogxina, the director general of South Africa’s mines department, met separately yesterday with a delegation of officials from Xstrata Plc and Cynthia Carroll, the chief executive officer of Anglo American Plc.

Nogxina, whose department is overseen by the mines ministry, didn’t meet Xstrata’s CEO, Mick Davis, said Jeremy Michaels, a spokesman for the department. The ministry still wants more “clarity” on any proposed transaction, he said.

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Benxi Steel Plans to Join in Exploration of Iron Ore Deposit

By Bloomberg News

June 26 (Bloomberg) -- Benxi Iron & Steel Group plans to join in the exploration and development work on an iron ore deposit, touted as Asia’s largest, in China’s Liaoning province.

The group hasn’t obtained exploration or mining rights for the discovery, located 20 kilometers (12.4 miles) from the company in Benxi, listed unit Bengang Steel Plates Co., said today in a statement to the Shenzhen stock exchange. The group can’t verify claims that the deposit has reserves of more than 3 billion metric tons, it said in the statement.

China, the biggest buyer of iron ore, wants to lift domestic output to reduce imports from Vale SA, Rio Tinto Group and BHP Billiton Ltd. The Dataigou find in the northeastern Chinese province is deeper than any domestic mines in production, according to Zou Jian, a consultant and former chairman of the China Metallurgical Mining Enterprise Association.

“It would take at least a few years for the deposit to start production,” said Zhu Limin, an analyst with Shanghai Securities Co. “The deposit is too deep underground to be an ideal mine resource for the mills.”

The Benxi local government this week announced the find after an exploration team drilled 17 holes in the area. The deposit may have 3 billion tons of iron ore, and material was found from 1.2 kilometers below ground to 2.015 kilometers, it said in a statement.

Angang Steel

Anshan Iron & Steel Group and listed unit Angang Steel Co. haven’t considered exploring or investing in the deposit, the unit said yesterday in a statement. Anshan and Benxi could be given the right to develop the project, the Guangzhou Daily reported yesterday.

Separately, Bengang Steel also said it may have a first- half net loss of 400 million yuan ($59 million) to 900 million yuan. The shares jumped 9.2 percent to 8.17 yuan today in Shenzhen at 11:29 a.m. local time.

“The forecast interim loss is in line within market expectations,” said Zhu. “Bengang surged today because it’s cheaper than many other mills.”

The stock has almost doubled this year, lagging behind the 139 percent gain in rival Xinjiang Ba Yi Iron & Steel Co. Gansu Jiu Steel Group Hongxing Iron & Steel Co. almost tripled this year.

Chinese steel stocks have surged this year on optimism the nation’s stimulus spending plan will revive demand and prices.

--Helen Yuan. Editors: Tan Hwee Ann, Ang Bee Lin

To contact the Bloomberg News staff on this story: Helen Yuan in Shanghai at hyuan@bloomberg.net

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Oil Rises a Second Day on Equity Gains, Shell Pipeline Attack

By Christian Schmollinger and Ben Sharples

June 26 (Bloomberg) -- Crude oil rose for a second day, exceeding $70 a barrel, as Asian equities extended a global stock-market rally, raising expectations of fuel demand growth.

The MSCI Asia Pacific Index gained 1 percent, adding to increases in the Dow Jones Industrial Average and the Standard & Poor’s 500 yesterday. The dollar fell, set for a weekly loss against the euro. Militants said yesterday they attacked a Royal Dutch Shell Plc pipeline supplying an export terminal in Nigeria, Africa’s largest producer.

“We’ve really got the right mix of a couple of factors,” said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore. “Asian equities are up. The dollar weakened yesterday on top of the attack in Nigeria disrupting the Shell pipeline supply.”

Crude oil for August delivery rose as much as 54 cents, or 0.8 percent, to $70.77 a barrel in electronic trading on the New York Mercantile Exchange. It was at $70.66 a barrel at 12:31 p.m. Singapore time.

“The factor supporting oil is the situation in Nigeria,” said David Moore, a commodity strategist with Commonwealth Bank of Australia Ltd. in Sydney. “It seems to have intensified and it’s something that’s helping keep prices at a higher level.”

Yesterday, the contract rose $1.56, or 2.3 percent, to settle at $70.23 a barrel. Oil has gained 1.5 percent this week after falling 3.5 percent last week.

‘Buying Support’

The MSCI Asia Pacific Index gained 1 percent to 102.81 as of 12:37 p.m. in Tokyo, taking its advance this week to 1.3 percent. Japan’s Nikkei 225 Stock Average added 0.5 percent.

The Standard & Poor’s 500 Index yesterday gained 2.1 percent to 920.26 and the Dow Jones Industrial Average rose 2.1 percent to 8,472.40 as investors were buoyed by Federal Reserve Chairman Ben S. Bernanke’s performance before the House Oversight Committee.

“It seems when the oil price dips into that high $60s it does attract buying support which has helped keep it there,” Moore said. “It is providing something of a short-term base to the oil price.”

Brent crude oil for August settlement rose as much as 42 cents, or 0.6 percent, to $70.20 a barrel on London’s ICE Futures Europe exchange. It increased $1.45, or 2.1 percent, to end yesterday’s session at $69.78 a barrel.

A falling dollar makes raw materials such as oil and gold an attractive alternative investment. The dollar traded at $1.4047 versus the euro at 12:48 p.m. in Singapore, following a 0.4 percent decline yesterday.

Nigerian Attack

Oil prices have been supported and supply curbed since December 2005 because of militant activity in the Niger River delta, Nigeria’s main oil-producing region. MEND has stepped up a sabotage campaign in the area since a military offensive began last month.

Fighters from the Nigerian group damaged the Bille-Krakrama pipeline, cutting supplies from Shell’s Cawthorne 1, 2 and 3 oil-pumping stations, MEND spokesman Jomo Gbomo said in an e- mail yesterday. A Shell spokeswoman confirmed an attack on a manifold on the pipeline and couldn’t say whether production was halted by the incident.

Nigeria produces so-called sweet, or low-sulfur, crude oil that is prized by refiners because yields a large amount of gasoline and diesel fuel when processed.

Gasoline for July delivery increased 0.16 cent, or 0.1 percent, to $1.8999 a gallon at 12:06 p.m. in Singapore. Yesterday, it gained 5.58 cents, or 3 percent, to end the session at $1.8983 a gallon.

Exxon Mobil Corp. shut a fluid catalytic cracker at the Baytown, Texas, refinery, the largest in the U.S., late yesterday, according to a union official.

The gasoline-making unit was taken down after the loss of a cooling tower, said the official. Other units related to the cooling tower are operating at reduced rates, the official said.

Refiners may have less incentive to produce gasoline as the so-called crack spread, or profit margin, between the motor fuel and crude oil has declined. The price difference has slid to $9.28 a barrel today, down 44 percent from $16.52 a barrel on June 16.

To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Christian Schmollinger in Singapore at christian.s@bloomberg.net

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Japan Stocks Rise on Bridgestone, Nippon Electric Glass Targets

By Masaki Kondo

June 26 (Bloomberg) -- Japanese stocks rose, extending a weekly gain, as forecasts by Bridgestone Corp. and Nippon Electric Glass Co. lifted optimism earnings are recovering.

Bridgestone, the world’s largest tiremaker, leapt 8.5 percent after narrowing its first-half loss forecast. Nippon Electric gained 6.3 percent after increasing its profit target. Nippon Oil Corp. climbed 3.1 percent after saying it’s bidding for an oil project in Iraq. Japan Real Estate Investment Corp. jumped 4.7 percent after Morgan Stanley raised its view on the nation’s real estate investment trusts to “attractive.”

“Bridgestone’s forecast gave us evidence that company earnings will start to rebound,” said Naoki Fujiwara, who oversees the equivalent of $3.7 billion at Shinkin Asset Management Co. “Investors still believe the global economy will start to recover later this year and this confidence is leading to resilience in the market.”

The Nikkei 225 Stock Average gained 81.31, or 0.8 percent, to close at 9,877.39 in Tokyo. The broader Topix index rose 7.03, or 0.8 percent, to 926.80, with more than three stocks rising for each that fell. Both gauges climbed 0.9 percent in the past five days, bouncing back from a decline last week.

The estimated price-earnings ration on the Topix is 42.7 times, the highest among the benchmark gauges of the world’s five-biggest stock markets, according to Bloomberg data.

To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

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Asian Stocks Rise on Growth Optimism; Nippon Electric Advances

By Jonathan Burgos and Masaki Kondo

June 26 (Bloomberg) -- Asian stocks rose as Bridgestone Corp. narrowed its loss forecast, commodity prices jumped and a government report showed the U.S. economy shrank less than expected in the first quarter.

Bridgestone, the world’s largest tiremaker, climbed 8.5 percent in Tokyo. Alumina Ltd., partner in the world’s biggest producer of the material used to make aluminum, surged 9.1 percent in Sydney. Nippon Electric Glass Co., the world’s No. 3 maker of glass for flat-panel televisions, gained 6.3 percent after increasing its earnings estimate.

“Bridgestone’s forecast gave us evidence that company earnings will start to rebound,” said Naoki Fujiwara, who oversees the equivalent of $3.7 billion at Shinkin Asset Management Co. in Tokyo. “Investors still believe the global economy will start to recover later this year and this confidence is leading to resilience in the market.”

The MSCI Asia Pacific Index gained 1.2 percent to 103.07 as of 3:12 p.m. in Tokyo. The increase took the measure’s weekly advance to 1.6 percent, recouping some of last week’s 3.5 percent drop. Optimism government stimulus measures worldwide will revive the global economy has boosted the gauge by 46 percent from a more than five-year low on March 9.

Japan’s Nikkei 225 Stock Average added 0.8 percent to 9,877.39, led by Furukawa Electric Co., which jumped 6 percent after Morgan Stanley raised its share-price estimate. Japanese stocks rose even as a government report showed the country’s consumer prices fell at a record pace in May.

Hong Kong’s Hang Seng Index gained 1.2 percent, with China Cosco Holdings Co. climbing 6.9 percent after its chairman said freight rates are set to advance. China’s Shanghai Composite Index added 0.2 percent as the country’s statistics bureau said industrial companies’ profits fell at a slower pace.

Slower Contraction

Futures on the Standard & Poor’s 500 Index fell 0.3 percent. The gauge increased 2.1 percent, the most since June 1, in New York. A government report showed gross domestic product shrank by 5.5 percent last quarter, less than the 5.7 percent decrease forecast by economists. That data countered a separate report showing jobless claims unexpectedly rose last week.

The MSCI Asia Pacific Index’s gain this week, the fifth advance in six weeks, came amid signs the global economy is strengthening. The U.S. Federal Reserve said the pace of economic contraction is slowing, while South Korea raised its gross domestic product forecast. Singapore’s industrial production increased in May, a government report today showed.

“Uncertainty over the global economy has receded,” said Kazuhiro Takahashi, a general manager at Tokyo-based Daiwa Securities SMBC Co. “Business conditions aren’t as bad as some have feared and I’m expecting companies to lift their targets.”

Copper, Oil Prices

Bridgestone jumped 8.5 percent to 1,520 yen. The company narrowed its first-half net loss forecast to 46 billion yen ($480 million) from 62 billion yen, citing reduced costs.

Nippon Electric Glass surged 6.3 percent to 1,054 yen. The company said yesterday operating profit will likely be 10 billion yen in the three months to June 30, twice its previous forecast. Demand for LCD glass is expected to remain “robust,” the company said in a filing to the exchange.

Australia’s Alumina gained 9.1 percent to A$1.505. Komatsu Ltd., which gets 86 percent of sales supplying mining and construction machinery, added 1.6 percent to 1,530 yen.

A gauge of six primary metals in London advanced for a third day to the highest level in two weeks. Copper futures for September delivery rose 1.5 percent in New York.

Rising Valuations

Inpex Corp., Japan’s largest oil explorer, added 1.8 percent to 754,000 yen. Woodside Petroleum Ltd., Australia’s second-largest oil producer, rose 1.8 percent to A$42.80. Crude oil jumped 2.3 percent to $70.23 a barrel in New York yesterday, a level not seen since June 18. Futures gained 0.8 percent in after-hours trading.

Materials and energy companies are the MSCI Asia Pacific Index’s best performing industry groups this year on speculation a global economic recovery will boost demand for commodities.

The rally since March drove the average valuation of companies in the gauge to 1.5 times the net value of assets as of June 12, according to Bloomberg data. That was the highest level since Sept. 26. The gauge sank 3.5 percent last week, its first weekly drop in five.

“I see this as a very strong bear market rally,” said Hugh Young, who helps oversee $30 billion as Asian managing director for Aberdeen Asset. “We fully admit that things have stopped plunging and that in a sense the way business is done has normalized, but most of the companies we have contact with are saying business is still very, very tough.”

Emerging Markets

Emerging-market stock funds lost $1.87 billion in the week ended June 24, the first week of net outflows since early March, on concern that a rebound in exports will be delayed, EPFR Global said.

Furukawa Electric, which makes wires and cables, jumped 6 percent to 439 yen, while Hitachi Cable Ltd. climbed 7.5 percent to 314 yen. Morgan Stanley increased a 12-month price estimate on Furukawa Electric shares to 560 yen from 410 yen. Hitachi Cable had its target price more than doubled to 290 yen.

China Cosco, the world’s largest operator of dry bulk ships, climbed 6.9 percent to HK$9.76. Chairman Wei Jiafu said yesterday “the BDI will have a V-shape rebound after its dive,” referring to the Baltic Dry Index, a measure of shipping rates. The gauge has fallen 9.1 percent in the last five days.

To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

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Short Selling of S&P 500 Increases for First Time Since March

By Matt Townsend

June 25 (Bloomberg) -- Bets against the Standard & Poor’s 500 Index rose for the first time since March as investors increased short sales of health-care companies including Merck & Co. and Cardinal Health Inc.

Short interest on the S&P 500 climbed to 9.8 billion shares as of June 15, a gain of almost 1 percent from two weeks earlier, according to data compiled by U.S. exchanges and Bloomberg and released yesterday. Wagers against health-care shares rose more than 7 percent, the most of 10 groups, to 890.3 million as President Barack Obama proposed an industry overhaul.

“Anything that’s done could be detrimental to the health- care industry in terms of long-term business prospects,” said Michael Cuggino, who as chief executive officer of San Francisco-based Pacific Heights Asset Management LLC helps manage $3.8 billion. “There’s unease. What policies are ultimately passed could be limiting future earnings of certain companies.”

Investors became more pessimistic on the health-care industry as Obama prepared a plan that aims to force greater efficiency in Medicare, reduce drug costs and cut the number of uninsured Americans. He said on June 13 that the proposal might save $313 billion for the government over the next 10 years.

U.S. stock exchanges release data on short selling, or the sale of borrowed stock with the hope of buying it back at a lower price, every two weeks. Yesterday’s report showed the first increase in bets that equities would drop since March 31.

Merck, Cardinal Health

Short interest on Merck, the Whitehouse Station, New Jersey-based drugmaker, rose 18 percent to 134 million shares. Bets against Cardinal Health, the Dublin, Ohio-based drug distributor, surged 89 percent to 5.41 million shares.

The S&P 500 plunged 38 percent last year, the biggest annual decline since the Great Depression, and sank to a 12-year low in March 2009. The measure rebounded 40 percent through June 12, the steepest rally in seven decades, on speculation that government efforts to end the first global recession since World War II are working. It then fell 5.6 percent through June 22, spurring concern that the three-month advance will be wiped out.

“The higher stock market averages go and stocks go, people get concerned there could be a correction,” Cuggino said.

Bets against financial institutions dropped almost 2.5 percent to 3.18 billion shares. Wagers against Minneapolis-based Ameriprise Financial Inc. sank the most, declining 31 percent.

To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net.

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U.S. Futures Fluctuate; Bed Bath & Beyond May Advance

By Adam Haigh

(Corrects to remove reference to German trading in second and ninth paragraphs.)

June 25 (Bloomberg) -- U.S. stock-index futures drifted between gains and losses as better-than-estimated earnings from Bed Bath & Beyond Inc. offset a slump in orders at Nike Inc.

Bed Bath & Beyond may advance as the largest U.S. home- furnishing retailer said it cut costs by 2.4 percent. Jefferies Group Inc., the New York-based brokerage that specializes in mid-sized companies, may climb after forecasting record revenue for the second quarter. Nike, the world’s biggest athletic-shoe maker, fell 3.3 percent as it said orders declined 12 percent because of the global recession.

Futures on the Standard & Poor’s 500 Index expiring in September slipped 0.1 percent to 897.1 at 11:20 a.m. in London, after gaining as much as 1.2 percent earlier. The index has lost 4.8 percent since June 12 after a 40 percent rebound from its March lows left the measure trading at 14.9 times its companies’ earnings, near the highest since October. Dow Jones Industrial Average futures rose 0.1 percent to 8,267 today, and Nasdaq-100 Index futures were little changed at 1,447.75.

“We increased our exposure to equities ever so slightly,” said Monika Rosen, head of research at Bank Austria Asset Management in Vienna, which oversees about $41 billion. “We are not entirely sure the market will get another setback and not get another reality check from fundamental data,” she told Bloomberg Television.

An index of home prices in 25 metropolitan areas climbed in April for the first time since peaking in June 2007, according to a report by Radar Logic Inc. The RPX Composite Index, which measures the price per square foot of residential properties in and around major cities, rose 1.2 percent from March, New York- based research firm Radar Logic said in a report released today.

Bond-Purchase Program

Most U.S. stocks advanced yesterday as durable goods orders unexpectedly jumped and earnings topped estimates at Oracle Corp. Equities pared gains and the Dow average fell as the Federal Reserve disappointed investors by not increasing its bond-purchase program.

Fed policy makers yesterday voted to maintain the size and pace of their $1.75 trillion program to buy mortgage debt and Treasuries. The central bank said it sees a “gradual resumption of sustainable” growth.

Bets against the S&P 500 rose for the first time since March as investors increased short sales of health-care stocks including Merck & Co. and Cardinal Health Inc. Short interest on the index climbed to 9.8 billion shares as of June 15, a gain of almost 1 percent from two weeks earlier, according to data compiled by U.S. exchanges and Bloomberg and released yesterday.

Bed Bath & Beyond

Bed Bath & Beyond jumped 5.9 percent to $30.06 in after- hours trading yesterday. Net income increased to 34 cents a share from 30 cents a year earlier. Analysts anticipated earnings of 25 cents a share, according to the average of 18 estimates compiled by Bloomberg.

Jefferies added 7.5 percent to $21.98 in after-hours trading yesterday after saying sales may exceed $500 million in the quarter ending June 30. Revenue is expected to be $325 million in the period, according to the average estimate of six analysts surveyed by Bloomberg News.

Nike dropped 3.3 percent to $51.26 in Germany. Excluding the effect of currency exchange rates, worldwide orders for delivery from June through November fell 5 percent from a year earlier. Sara Hasan, an analyst with McAdams Wright Ragen Inc. in Seattle, projected orders would decline 2 percent at most, on that basis.

Warren Buffett followers who invest like the billionaire instead of with him would have earned higher returns since the bear market bottomed more than three months ago.

Economy Watch

Berkshire Hathaway Inc.’s 19 percent advance since U.S. equity indexes reached their lows on March 9 lags behind 15 of the company’s top 20 stock holdings. A $1 million investment mimicking Berkshire’s portfolio would have produced a $682,300 profit through yesterday, compared with a $185,900 gain for the same-sized investment in Berkshire shares. Buffett is chairman and head of investing at Berkshire.

A government report today may show first-time jobless claims fell last week, adding to evidence the recession is easing. Initial jobless claims probably dropped to 600,000 last week from 608,000 the previous week, according to a Bloomberg News survey of economists before the Labor Department report.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.

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Bed Bath & Beyond, Jazz, Jefferies, Nike: U.S. Equity Preview

By Lu Wang

June 25 (Bloomberg) -- Shares of the following companies may have unusual moves in U.S. trading. Stock symbols are in parentheses.

Acxiom Corp. (ACXM US): The computer-services company said it expects to earn 7 cents a share at most in the fiscal first quarter. Robert W. Baird Ltd. estimated profit of 19 cents.

Bed Bath & Beyond Inc. (BBBY US): The largest U.S. home- furnishings retailer reported first-quarter profit of 34 cents a share, beating the average analyst estimate by 38 percent, according to Bloomberg data.

Cigna Corp. (CI US): The life and health insurance company said Chief Executive Officer Edward Hanway will retire at the end of the year and be succeeded by David M. Cordani.

Jazz Pharmaceuticals Inc. (JAZZ US): The Palo Alto, California-based drugmaker said results from a study on its treatment of fibromyalgia showed a “highly significant” decrease in pain and fatigue.

Jefferies Group Inc. (JEF US): The New York-based brokerage that specializes in mid-sized companies said it expects second- quarter revenue of more than $500 million. That topped the average analyst estimate of $325.8 million in a Bloomberg survey.

Nike Inc. (NKE US): The world’s largest athletic-shoe maker said worldwide orders declined 12 percent.

To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net

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Bad Day Of The Dollar

Daily Forex Fundamentals | Written by Black Swan Capital | Jun 24 09 11:05 GMT |

Currency Currents Key News Japan's export dropped 40.9 percent in May from a year earlier, more than April's 39.1 percent decline, the Finance Ministry said today in Tokyo. (Bloomberg) The European Central Bank said it will lend banks 442 billion euros ($621 billion) for 12 months as it steps up efforts to unblock credit markets in the 16- nation euro region. (Bloomberg) Key Reports Due (WSJ): 7:00 a.m. June 1 Mortgage Refinance Applications: Previous: -23.3%. 8:30 a.m. May Durable Goods Orders: Expected: -1.5%. Previous: +1.9%. 10:00 a.m. May New Home Sales: Expected: +2.6%. Previous: +0.3%. 10:30 a.m. June 1 U.S. Energy Dept Oil Inventories Quotable To know that you do not know is the best. To pretend to know when you do not know is a disease. Lao-tzu FX Trading - Bad Day Of The Dollar We were expecting at least one day of follow-through (actually more) on the green shoot to brown weed re-think, thinking it would benefit the dollar as it did on Monday, but no dice. It seems all attention is back on the Fed and quantitative ease and signs of recovery—QE and recovery both synonymous in traders' minds to sell the greenback. Not to let the facts get in the way of anyone's expectations, knowing we've been steamrolled by real prices moved by real peoples' expectations, but if you didn't notice in the Key News items above, we wanted to re-iterate and expand a bit: Japan, one of the world's MAJOR exporters, just posted a 40.9% DECLINE in exports for the month of May, compared to May last year. Steel, autos, and semiconductors led the slump China's 4 trillion yuan ($585 billion) in stimulus measures haven't been enough to offset sales declines in the U.S. and Europe. Durable goods orders at 8:30 and new homes sales at 10:00, with the verdict from the Fed is delivered at 2:15 p.m. today. Stay tuned. Jack Crooks Black Swan Capital http://www.blackswantrading.com Black Swan Capital's Currency Snapshot is strictly an informational publication and does not provide individual, customized investment advice. The money you allocate to futures or forex should be strictly the money you can afford to risk. Detailed disclaimer can be found at http://www.blackswantrading.com/disclaimer.html

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London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Jun 24 09 10:05 GMT |

As calmer conditions extended, stock markets have pushed higher aided by better earnings in the tech sector and an upturn in commodity prices. Coincident with the rise in stocks and commodities, risk trades were again in favour with the AUD, NZD and to a lesser degree the CAD all making headway vs the USD. Sterling stole the limelight in early London hours by surging through the 1.6500 level. USD/JPY has failed to hold its stronger tone after Japanese economic data overnight reported a 40.9% decline in May exports. This served as a reminder of the detrimental influence of yen strength and also the difficulties facing an export-led economy in the present environment. The yen remains weaker on the crosses. The solid results of yesterday's US 2 yr note auction has calmed underlying concerns about the expansion of US debt and rising interest rates. Today's outcome of the FOMC remains the prime focus with the market consensus focusing on the need of the Fed to assure the market that there is no near-term tightening in the pipeline. A discussion of exit policies may be necessary in order to assure markets that the necessary procedures are in place. However, the Fed is expected to reassure the markets that the risks remain of a potential expansion of asset buying rather than a reversal in the immediate term. Insofar as Fed tightening during the remainder of this year is not expected to be up for discussion today, the dollar started the European session with a softer bias. However, aided by improved US growth forecasts from the OECD the dollar found buying interest ahead of EUR/USD1.4140 bringing it back towards last night's closing levels. Sterling was one of the biggest beneficiaries of USD weakness at the start of the session with cable bursting through the 1.6500 before running into resistance ahead of 1.6600. Upside for the pound was then dampened by news from a revised GDP forecast by the OECD to -4.3% in 2009 from a previous forecast of -3.7%. This throws cold water on hopes that the UK could see growth returning before the end of this year. There were no UK economic data releases today. This afternoon BoE Governor King is due to testify to parliament on the Inflation Report and financial crisis. The market will be hoping for signs that the pessimism with respect to the economy which was very evident in last month's Inflation report may have begun to subside. Following its recent gains, sterling could be vulnerable if King maintains a pessimistic tone. Aside from the FOMC outcome, the market will be focused on the May durable goods release this afternoon in addition to new home sales data. Forex.com http://www.forex.com DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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