Forex Daily

Just news today, we'll recap on US CPI tomorrow. Be sure to check out key technical levels below.

Corporate News:

Wal-Mart Stores fell 24 cents to $47.60 before the official open of U.S. exchanges. The company predicted second-quarter profit from continued operations of between 75 cents and 79 cents a share. Analysts had expected 79 cents a share. Wal-Mart also posted first-quarter earnings of 68 cents a share, matching analysts' predictions in a Bloomberg survey.

It's been fairly slow today after Friday's massive impulsive rally. We certainly were looking for confirmation of Thursday's trend breaks but all we got was a major bounce across the boards. Whichever catalyst you point to, leaving out liquidity and M&A activity ain't right. Everywhere you look, M&A deals are being announced as private equity firms continue to throw money at the market. As an individual equity investor, why would you unload your shares if there's a bid lurking right around the corner?

Stocks unwind across the board yesterday as Dow drops more then a 100 points sending carry trades on a corrective path. Watch the 1500 level in S&P post US data.#

USD stronger across the board yesterday, with no follow thorugh on the fixed income side. Today's US PPI and Retail Sales could very likely bring the inflation fear out in the open bring more USd strength across the board. Especially Cable looks vulnerable to the downside.

After a prolonged rally, stocks are taking a breather and all eyes are on rate announcements this week, starting tomorrow with US FOMC followed by ECB and BOE Thursday. Euro-Zone and US rates are expected to be kept unchanged but market is looking for a rate hike in UK.

Mining shares were the second best performing sector in Europe after Merrill Lynch said that BHP Billiton could be broken up and sold for a total market cap of 201 billion dollars.

All European indices were higher, with IBEX outperforming the rest with the help from Gamesa, Telecinco and Fomento de Contruc Y Contra (FCC) as the strongest performing members.

Yahoo shares trading in the European session jumped more than 15 percent after Microsoft according to the New York Post had asked for talks about a possible acquisition.

Yesterday's figures in the US were just about as good as they could possibly have been. Much stronger than expected Nonfarm Productivity growth and well contained Labor Costs. Who could have hoped for that? It might even resemble the theme/talk from the "old" bull market in equities in the end-ninties where the US economy allegedly had entered a new economy with eternally high productivity growth and negligible inflation. Bulls might even argue that with these kind of figures, there would be no need to worry about the faltering housing market.