Market News

The yen and the Swiss franc slid versus most major counterparts, with Japan’s currency dropping against the euro for the first time in six days, as stocks and commodities advanced, damping demand for safer assets.
The euro fluctuated versus the dollar after a spokesman for German Chancellor Angela Merkel said a restructuring of Greece’s debt isn’t being considered, while a European Union official said the nation’s fiscal progress is being studied.
French Finance Minister Christine Lagarde said in Zurich today the EU will keep up its efforts to aid Greece after bailing out the country a year ago.
The German newspaper Handelsblatt reported Euro-area countries are readying a further “two-digit” billion-euro loan for Greece, the newspaper reported, citing unidentified “euro- zone sources” in Brussels. The exact figure is still to be decided, the newspaper said, adding that a figure of some 60 billion euros is being discussed in Brussels.
The Athens newspaper Kathimerini said, without citing its sources, that the IMF also is arranging new aid for Greece, an 80 billion-euro ($115 billion) to 100 billion-euro plan
Speculation about new financial assistance from Europe and the IMF came after S&P yesterday downgraded Greece’s credit rating for the fourth time since April 2010, rekindling concern that the region’s debt crisis is escalating.  The Swiss franc dropped after data showed inflation slowed in April.
“You have firmer equity and commodity prices, putting the safe-haven currencies, yen and Swiss, in offer,” said Mark McCormick, a New York-based currency strategist at Brown Brothers Harriman & Co. “It’s hard to get a sense of where European politicians headed and what the outcome will be for Greece as a whole.”

Financials lagged yesterday, but the sector has rallied to a 0.9% gain this session. It strength is underpinned by diversified financial services plays like Bank of America (BAC 12.35, +0.16) and investment banks like Morgan Stanley (MS 25.50, +0.42). Insurance giant AIG (AIG 29.44, -0.26) has failed to find much support, though.
Energy stocks have recovered from their morning decline. The sector is now up 0.5%, thanks largely to leadership from refiners like Tesoro (TSO 26.24, +0.45) and Sunoco (SUN 42.45, +0.60).

June WTI is up $0.60 at $103.15, at the top of the day's $100.12/103.48 range.

Despite modest strength in the dollar index, most commodities are trading higher this morning. Silver is extending gains from yesterday and is currently one of the best performing commodities after sugar futures, which are 4.1% higher.
Silver traded between ~$37-38 for most of the overnight session before breaking out again and pushing past $38.50. In current trade, silver is up 3.5% at $38.42/ounce.
Gold extended yesterday's gains as well in the overnight session. it hit session highs of $1518.90 just a few minutes before floor trading began, but after touching that level, it went on to steadily decline $12/oz. over the next hour. it has since recovered and is back near session highs, now at $1515.20, up 0.8%.
Crude oil has been in the red for the entire session so for today. Since the close of floor trade yesterday, crude has remained above the $100 level, but it did get close by falling to $100.15. The energy component has recovered off those session lows and is now down 0.2% at $102.36/barrel. Natural gas 0.8% higher at $4.25/MMBtu.

GBP/USD gained to $1.6360 but extends its rise slowly. Offers ahead of $1.6400. Stops above. Daily highs were earlier printed on $1.6420.

EUR/USD holds around $1.4345 amid oil prices rebounding off morning US lows. Bids mentioned ahead of $1.4300 and the euro remains sensitive to eurozone headlines about Greece.

June WTI slipped back lower again through $101.00 to $100.77 following some falls in equities and precious metals, but quickly bounces to $101.30.

EUR/USD $1.4160, $1.4250, $1.4375, $1.4400
USD/JPY Y79.80, Y80.20, Y80.95, Y81.00, Y81.35
EUR/JPY Y119.00, Y119.25
GBP/USD $1.6520, $1.6475, $1.6185

Stocks were headed for positive open Tuesday after China reported a large trade surplus and investors awaited reports on wholesale inventories.
Early Tuesday, China announced that China's monthly trade surplus grew for the second month in a row. The world's second largest economy reported a massive $11.43 billion surplus in April, up from its $1.68 billion in the same month last year.
Top officials from the United States and China are currently meeting in Washington D.C., and trade issues are top of mind.

Economy: The Labor Department released April import/export prices that stood at +2.2% and +1.1% respectively.
The Commerce Department will report on wholesale inventories at 14:00 GMT.
Companies: Software giant Microsoft (MSFT, Fortune 500) said it agreed to buy Internet video call company Skype for $8.5 billion, including the assumption of debt. Shares of Microsoft ticked down very slightly in premarket trade.
In other tech news, The Wall Street Journal reported that search giant Google (GOOG, Fortune 500) is supposedly entering the music cloud business.
Dow component Disney (DIS, Fortune 500) will report after the closing bell Tuesday. Analysts polled expect the media giant to post a profit of 56 cents a share.

• talk of Brussels of E60 bln new funding for Greece;

• Eurogroup to discuss new bailout package Monday;

• Greece payback period may be extended to 10 years.

Oil rises again and breaking through the earlier highs as equities and metals hold firm to $102.19. June WTI now targeting resistance at $103.12 with a break there leading onto $104.85. Crude trades $102.03/06.

Data released:
07:15  Switzerland Consumer Price Index (MoM) (Apr)     0.1%    0.5%    0.6%

The yen slid against most of its peers as stocks rose and Greece’s newspaper Kathimerini said the International Monetary Fund is arranging fresh aid for Greece, sapping demand for the currency as a haven.
The euro fluctuated against the dollar after the newspaper reported the IMF is arranging an 80 billion-euro ($114 billion) to 100 billion-euro plan, without saying how it got the information.
European Central Bank Executive Board member Lorenzo Bini Smaghi said a Greek debt restructuring would leave the nation’s banks “on their knees.”
German Chancellor Angela Merkel today refused to commit to more aid, saying that it is still too early to decide whether the Greek government will need further financial help to overcome the debt crisis.
The British pound weakened on speculation the Bank of England may lower its economic growth forecasts.
The Swiss franc declined after a report showed consumer-price gains slowed in April.

EUR/USD slowly recovered from $1.4270 to $1.4370 before it set stable within the $1.4320/70 range.

GBP/USD fell to $1.6330 lows, but managed to recover to $1.6368.

USD/JPY rose to Y80.90,  but failed to break above the figure and retreated to Y80.50.


At 1230GMT US  Import/Export Price Index is expected to a 1.8% m/m gain for the Import Price Index.
At 1400GMT US Wholesale Inventories data is due.

• Don't have crisis of the euro but of public finances

• Hope EU Parliament will strengthen current reform proposal

• Must move away from debt culture.

• Don't have crisis of the euro but of public finances

• Hope EU Parliament will strengthen current reform proposal

• Must move away from debt culture.

• then to decide if and what to do on Greece;

• believe Greece will be stronger after reforms;

• convinced to get parliamentary majority for ESM.

• then to decide if and what to do on Greece;

• believe Greece will be stronger after reforms;

• convinced to get parliamentary majority for ESM.

The euro pared losses in volatile trade on Tuesday on a media report, later denied, that heavily indebted Greece could agree a new rescue deal next month to help it meet its funding requirements in the next two years.
The euro rose after Dow Jones quoted a senior Greek official as saying that a new deal could be struck as early as June.
It later fell back after Greece denied it was discussing a new package and a German MP questioned whether Greece had met the terms for its next aid tranche.
"This seems a bit early to come up with something concrete. I think we'll get more posturing before a deal can be agreed on Greece," said Gavin Friend, currency strategist at nabCapital.
Greece must follow the steps laid down in its budget adjustment programme before any additional loans can be considered, European Central Bank Executive Board member Lorenzo Bini Smaghi said on Tuesday.
Asked about the possibility of a new loan being extended to Greece, Bini Smaghi said the Athens government had to press on with what had already been agreed.
On Monday, Standard and Poor's cut Greece's rating to B from BB-, dragging it further into junk territory.
"We need a fresh trigger to go lower in the euro from here. I think we're in a $1.43/1.46 range for now," said Geoffrey Yu, currency strategist at UBS.
Recent weakness in the euro, initially triggered by disappointment over a lack of hints on a rate hike next month from the European Central bank last week, accelerated as panic selling in the commodities market prompted investors to shun risk.

Silver is rising higher again with a move up to $38.49. Resistance above now seen towards Friday's early high of $39.57. Metal trades at the day's high.

At 1230GMT US  Import/Export Price Index is expected to a 1.8% m/m gain for the Import Price Index.
At 1400GMT US Wholesale Inventories data is due.

Japanese stocks fell for a second day on concern that a government request to shut a nuclear reactor located close to an earthquake fault-line may hurt the economy.