Dollar is heading for a second monthly advance against the yen as well as euro, as rising US equities and crude oil advances being halted have improved the near-term outlook for the US economy.

Overnight News Bullets

• NO Unemployment rate (May) out at 1.5% vs. 1.6% expected.
• NO Retail Sales MoM/YoY (Apr) out at 0.4%/3.2% vs. 0.6%/3.8% expected.
• EC Euro-Zone M3 YoY (Apr) out at 10.6% vs. 10.3% expected.
• EC Euro-Zone M3 3 mth-av. (Apr) out at 10.7% as expected.
• EC Business Climate Indicator (May) out at 0.54 vs. 0.41 expected.
• EC Euro-Zone Consumer Confidence (May) out at -15 vs. -12 expected.
• EC Euro-Zone Economic Confidence (May) out at 97.1 vs. 96.8 expected.
• EC Euro-Zone Indust. Confidence (May) out at vs. -2 expected.
• EC Euro-Zone Services Confidence (May) out at 8 vs. 7 expected.
• CA Current Account (1Q) out at $5.6B vs. $2.9B expected.
• US GDP QoQ (1Q) out at 0.9% vs. 0.9% expected.
• US Personal Consumption (1Q) out at 1.0% vs. 1.0% expected.
• US GDP Price Index (1Q) out at 2.6% vs. 2.6% expected.
• US Core PCE QoQ (1Q) out at 2.1% vs. 2.2% expected.
• US Initial Jobless Claims (May) out at 372K vs. 370K expected.
• US Continuing Claims (May) out at 3104K vs. 3080K expected.
• US Help Wanted Index (Apr) out at 19 vs. 19 expected.
• US DOE US Crude Oil Inventories (May) out at -8883K vs. -625K expected.
• US EIA Natural Gas Storage Change (May) out at 87 vs. 84 expected.
• NZ Building Permits MoM (Apr) out at 82.1% vs. -9.1% prior.
• UK GfK Consumer Confidence Survey (May) out at -29 vs. -25 expected.
• JN Jobless Rate (Apr) out at 4.0% vs. 3.9% expected.
• JN Tokyo CPI YoY (May) out at 0.9% vs. 0.8% expected.
• JN Natl CPI YoY (Apr) out at 0.8% vs. 1.0% expected.

Markets

• FX: EURUSD flirting with key support at 1.5480 on the strong US figures. Quiet sesion overnight with JPY and NZD rallying.
• Fixed income: Hard sell-off in fixed income yesterday, however looking supported at current levels
• Stocks: Still a positive sentiment, Europe slightly positive while US up 1% and Nikkei posting a 1.50% gain.
• Commodities: Crude continued the volatile week and is once again below $130, silver and gold followed oil down.

O/N Data Heat map:

Calendar

Today’s Highlights:

This and Next Week’s Highlights:

What’s going on?

• Asian stocks have advanced, adding to gains earlier this week and paring this month’s decline. Speculation has centered on earnings benefiting from recent decline in oil prices and stronger dollar.
• Despite continued global credit worries and slowing economic activity, India has managed to hold a growth an annual rate of 8.8%in Q1 of 2008. While India aspires to reach a double digit growth rate in the coming years, higher lending rates for now have cooled the economy from the peak growth period.
• Dollar is heading for a second monthly advance against the yen as well as euro, as rising US equities and crude oil advances being halted have improved the near-term outlook for the US economy.

FX

FX Trading Strategies

Equities

The Recent Sell-off in Statoil Offers a Good Buying Opportunity

Equities: European markets will open flat or slightly higher Friday with U.S. indices and futures relatively unmoved overnight. We recommend buying the low cost airlines after a fall in crude prices to $126 a barrel. EasyJet, Air Berlin and our sector favorite, Ryanair, will likely benefit from oil’s fall and its influence on airlines’ profitability. Dollar weakness will also be a focus and while that’s normally good for automakers, weak consumer sentiment prevents us from recommending the sector.

Equity Trading Strategies

Trade Idea (Equities -TrendSpotter- Buy: STATOILHYDRO - STL:xosl)

The Norwegian oil and natural gas company has endured a massive sell off the last couple of days, our technical indicators are telling us of an oversold state and that the longer term trend is still intact so far. We like the risk/reward setup and look to buy at 190 with a stop at 185, initially targeting 205.

Futures

Silver: We Sell a bounce towards 17.00 area.

Futures Trading Strategies

We Sell Silver (sin8) @ $16.90/17.20 area with a stop above $17.25, target $15.90/50

After 3 days in the red and a 2 figures correction, Silver is holding on support at 16.50. Although we could have a short term bounce, the momentum is to the downside for Precious Metals with Oil ongoing price adjustments.

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