AUSTRAIAN PRIVATE SECTOR CREDIT +0.1% IN APR VS MAR

Credit to the Australian private sector rose a seasonally adjusted 0.1% in April from March and rose 4.6% from a year earlier, the Reserve Bank of Australia said Friday.

Housing sector credit rose 0.7% in April from March and rose 7.1% from a year earlier, the RBA said.

Personal sector credit fell 0.3% in April from March and fell 6.6% from a year earlier, while business sector credit fell 0.5% from March and rose 3.5% from a year earlier, the RBA said.

USD/JPY CURRENT PRICE: 96:48

USD/JPY Current price: 96.48. After a 200 pip rise, pair is correcting and has just reached the 38.2% of the last up leg in 4 hours charts at 96.43.

Price under 20 SMA, bearish momentum and CCI crossing the 200 line, suggest under current low, correction could extend first to 96.20, 50% of the mentioned rally and then to the 95.80/90 zone.

“If the pair manages to regain the 96.80 level, expect a fresh high in the next hours,” said Valeria Bednarik.

EURO REMAIN BULLISH

EUR/USD, hourly charts remain bullish in the pair despite choppy trade over the past few hours. 20 SMA remains with a nice bullish slope, while indicators have no clear bias at this hour. Bigger time frames show the pair has lost some of the upside strength, yet not signaling further falls.

“Watch the descendant trend line around 1.3980 to confirm further rises, while under 1.3910, base of a small triangle, pair could extend losses to the 1.3810 zone,” said Valeria Bednarik.

USD/JPY CURRENT PRICE: 95.85

USD/JPY Current price: 95.85. Break above 95.50 trigger some bullish momentum in the pair early Asia, as better than expected macro news trigger some risk appetite and yen safe haven sell.

With hourly hours a bit exhausted, yet bigger time frames suggesting further upside in the session, expect some downside correction to the 95.50 zone before a new rise to the 96.10 zone. “Break above this last, will confirm the pair continuation north,” said Valeria Bednarik.

USD BACK REGAINING MAJOR FUNDING STATUS

Greenback firmed against major rivals Wednesday, despite a sell-off in other U.S. assets, as dollar benefit as the major funding currency in times of fear. A very choppy American session closed with dollar stronger across the board, even against Japanese yen, that have been strong for the past two weeks.

Early Asia, EUR/USD comes under fresh pressure as traders react to overnight news that Moody's affirmed its U.S. AAA rating, which could continue favoring greenback once Japan open its doors. Gbp was the main mover early in the day, breaking through 1.6050 barriers and triggering stops as high as 1.6085. EUR/GBP slumped through key support at 0.8720 and the 200-day moving average at 0.8677 on the way to 0.8654 lows.

USD/CAD NEARING POTENTIALLY MAJOR SUPPORT

In the May 13th email on $/cad and the market bouncing from a retest of the Nov low at 1.1470/80, said that the downside pattern was not “complete”, and with a resumption of the longer term declines to new lows favored after. Unfortunately, did not reach the sell target at 1.1865 (reached 1.1815), before reversing sharply lower and taking out those 1.1470/80 lows (Nov/May 11th).

Currently, the market is quickly nearing important, longer term support at 1.1050/00 (both the bullish trendline and a 50% retracement from the Nov 2007 low at .9060, see longer term below). Note too that the market is oversold after the last few months of declines, and is likely within the final downleg in the fall from the April high at 1.2715 (wave 5, see numbering on daily chart below).

This in turn suggests that risk is rising for at least a few weeks of correcting and minimum 600-700 tick bounce, and with the key 1.1050/00 support area a “logical” area to form such a bottom. However from a position standpoint, there are still no signs “pattern-wise” that such a bottom is in place while the downside momentum remains strong, so still too risky to just buy here. "Instead for now, would just be patient for a better risk/reward entry ahead (expected to be on the long side)," said David Solin.

DOLLAR RISES AFTER WALL STREET ENDED LOWER

Markets in Wall Street fell today. Dow Jones lost 2% and Nasdaq 1.11% on the day that Treasuries slumped and General Motors failed to reach an agreement with bondholders. Crude-oil futures on the other side, ended at their highest level since November 5. The Dollar moved most of the session with no clear direction reaching new multi-month lows against GBP, CAD and AUD. Afterward greenback recovered.

Dollar rises after the closing bell

EUR/USD is falling 1% so far today from the opening price. Dollar was able, after several attempts to stay below 1.3900. Current price is 1.3840 near intra-day low at 1.3823.

USD/JPY is up 0.38%. The pair has been moving in a range the last hours between 95.15 and 95.30. Early in the session the pair bottomed at 94.64 but it was rejected from that zone.

GBP/USD is now below 1.6000.Early in the American session the Pound rose to a fresh 5-month high but was enable to stay in those levels. After the closing bell in Wall Street the Dollar got stronger and now GBP/USD is falling further to 1.5950.

EUR/USD CURRENT PRICE: 1.3994

EUR/USD Current price: 1.3994. Pair regained the upside after Wall Street positive boost, and pair returned to consolidation mode around the 1.4000 zone. Small descendant trend line at 1.4000 seems to be the first resistance to consider, as the pair rebounded on it a couple of times.

“Momentum seems a bit exhausted in the hourly, but price action seems to be well supported by 20 SMA,” said Valeria Bednarik, collaborator at FXstreet.com . Bullish strength seems to be beginning to recede in bigger time frames.

GBP/USD GAINS FRESH HIGH

GBP/USD, fresh high for the pair in the first hours of Asia, corrective movements seem quite limited in the pair that looks decide to regain the 1.60, thus bigger time frames indicators are presenting divergences.

“1.6000 first resistance above actual high, is followed by 1.6040 zone, where we could see the 38.2% retracement of the last monthly free fall from 2.0158 to 1.3502,” said Valeria Bednarik, collaborator at FXstreet.com. Level should offer some rebound at least as a first attempt. Despite divergences, downside correction don’t seem likely at this time.

US Stocks Up As Consumer Confidence Spurs Broad Gains

A more confident consumer translated into a rallying stock market Tuesday as JPMorgan Chase and American Express paced a nearly 200-point jump in the Dow Jones Industrial Average, with a flood of consumer stocks going along for the ride.

With the Conference Board saying its index of consumer confidence for May jumped to its highest reading since September, investors pushed into nearly every sector. Financials were led by JPMorgan Chase, up 2.13, or 6.2%, to 36.54, and American Express, up 1.17, or 5%, to 24.57.

Notably, market veterans say the improvement in consumer confidence has already been felt in the equities market as portfolio managers' biggest concern in 2008 -- massive redemptions -- has nearly vanished. In a Tuesday report, Barclays Capital and Investment Company Institute said that since bottoming in the beginning of March, inflows into equity funds have picked up in the past nine weeks, with $16.2 billion going into long-term mutual funds in its latest weekly report.

"There is a positive correlation between consumer confidence and market confidence," says Quincy Krosby, chief investment strategist for Hartford Financial Services. She noted the fact "that there isn't a flood of money coming makes a big difference."

Overall, the Dow Jones Industrial Average gained 196.17 points, or 2.37%, to 8473.49, snapping a four-day losing streak. The index, which had its biggest point and percentage gain since May 18, is off 6.2% from its 2009 closing high of 9035, hit on Jan. 2.

Among other indices, the Standard & Poor's 500 index rose 23.33, or 2.63%, to 910.33, also snapping a four-day losing streak. Every sector in the S&P 500 traded in the green, with financials and consumer discretionaries pacing the move.

Home builders were particularly strong, with D.R. Horton tacking on 46 cents, or 5.1%, to 9.47. Other consumer stocks moving higher included Tiffany, up 1.67, or 6.3%, to 28.09, and Host Hotels & Resorts, up 81 cents, or 9.9%, to 9.01.

In addition, Polo Ralph Lauren gained 4.36, or 8.7%, to 54.38, ahead of its quarterly report on Wednesday.

Technology started out strong even before release of the consumer confidence figure, and it stayed higher, with the Nasdaq Composite Index closing up 58.42 points, or 3.45%, to 1750.43. The Nasdaq marked its highest close since May 6.

Still, not all the economic news was rosy. The S&P Case-Shiller home-price indexes showed that prices continued to tumble in March, as 15 of 20 major metropolitan areas showed price declines of more than 10% from a year earlier.

Ahead of reports later in the week on existing- and new-home sales, David Resler, chief economist for Nomura Securities International, said he believes the housing market has seen the bottom in terms of production. More broadly, he said the economy is nearing the end of its decline, but cautioned he expects depressed levels of economic growth for a while.

"We need to have stability in the housing market in both prices and production before the economy can look optimistically to a future of growth," said Resler.

Volume was relatively light following the Memorial Day holiday with the activity dominated by high-frequency traders. These traders noted paltry short-covering during Tuesday's gains could be a positive sign for the rest of the week.

A possible Achilles' heel for the rally Tuesday was that consumer confidence was alone in spurring it, with Hartford's Krosby cautioning that weekly and monthly reports continue to point to still-weak labor markets.

"If the unemployment rate takes an unexpected leap, that same individual with boosted confidence is now going to cash out," she said.

Helping lift the Nasdaq, Apple (Nasdaq) jumped 8.28, or 6.8%, to 130.78. Morgan Stanley boosted its rating on the technology giant to overweight from equal-weight saying the iPhone "is feeding earnings growth that the market is missing."

First Solar (Nasdaq) fell 12.21, or 6.4%, to 179.51, after FBR Capital Markets analyst Mehdi Hosseini said the solar-power modules maker's stock will be pressured by the decline in polysilicon prices amid weak demand in Europe.

Also rising in the consumer sector, Wendy's/Arby's Group gained 22 cents, or 5.2%, to 4.42, as it said it will open more than 35 Wendy's locations in Singapore over the next decade as the fast-food chain continues to expand outside of North America.

Shares of mining-equipment companies Joy Global (Nasdaq), up 3.07, or 11%, to 32.30, and Bucyrus International (Nasdaq), up 2.13, or 8.9%, to 25.96, climbed as KeyBanc upgraded both stocks, saying a climb in commodity prices should eventually pull companies back to the mine shafts.

Analysts at JPMorgan raised their rating on multimedia company Qwest Communications International to overweight from neutral, citing "relatively strong enterprise revenue trends, conservative guidance, upside from potential M&A, as well as an attractive valuation." Qwest closed up 32 cents, or 8%, at 4.33.

Bucking the trend of strong financials, Regions Financial Corp. slid 21 cents, or 5.2%, to 3.83

UAW Wins Right To Name One GM Board Member

The United Auto Workers union, in a key cost-cutting deal with General Motors Corp. (GM), has agreed to accept at least 17.5% of GM's stock, $6.5 billion in preferred stock, and representation on the company's board in exchange for concessions on future health-care obligations.

The UAW will also receive a $2.5 billion note that will be repaid in installments through 2017, and stock warrants for an additional 2.5% of the company. The $6.5 billion in preferred stock includes a 9% cash dividend that will pay out $585 million annually.

The details of the agreement, spelled out in an informational brochure obtained by The Wall Street Journal, come as GM moves toward a June 1 deadline on deciding on whether it will file for bankruptcy protection.

The agreement represents a significant change from the original outline of GM's government-led restructuring, which would have left the union's health-care trust holding a 39% stake in the company.

The outcome of another critical piece of GM's reorganization -- a $27 billion debt-for-equity exchange with bondholders -- is expected late Tuesday or Wednesday. GM has offered bondholders a 10% stake in the company in exchange for at least $24 billion in debt, but bondholders have complained, mainly because they were supposed to get a much smaller stake in the company than the UAW.

Because the UAW is taking 17.5% stake in GM, rather than GM's initial 39% offer, there is a chance the company could sweeten its deal to unsecured bondholders.

The offer to the bondholders is set to expire Tuesday night. It needs the approval of 90% of the bondholders to go through.

Securing a revised agreement with the UAW is an essential piece of the company's reorganization effort. The company has said it could file for bankruptcy protection by June 1.

The key issue facing the UAW is related to renegotiating GM's contribution to a Voluntary Employee Benefits Association, or VEBA, fund that the union will manage and use to cover the cost of health care for retired workers.

GM owes $20 billion in cash to the health-care trust. GM has already set aside $10 billion in assets for the VEBA, and that will be given to the UAW in January. That $10 billion, however, "have been negatively impacted by conditions in the investment market."

Because GM -- which has accepted $19.4 billion in government loans -- doesn't have the financial strength to meet its obligation, the Treasury Department has demanded that the UAW take half of what it is owed in company equity.

According to the UAW, Treasury officials "insisted" that retirees take immediate reductions in benefit levels. The UAW said that the government has committed to "providing massive additional financial support to assist GM in completing its restructuring," and avoid a liquidation of the company.

In order to win additional funding guarantees, however, the UAW was "was required to support a series of changes to retiree medical and VEBA agreements."

Thomas Summers, vice president of UAW Local 22 in Detroit representing thousands of GM workers, said having a stake in the company gives the union a great reason to ensure the auto maker's viability. "Right now it's about just that, it's about survival," he said.

Still, Summers said most of the workers he represents expect GM to file for bankruptcy any day now. "Let's not be naive about it," he said, "I think everybody's been preparing for it."

The UAW and GM have been renegotiating VEBA agreement, which was struck in 2007, in recent weeks. Instead of just getting common stock in GM, the UAW has been promised a variety of instruments designed to pay for the future medical expenses of hundreds of thousands of retirees.

In addition to renegotiating the VEBA, the UAW has agreed to additional buyout offers for the 60,000 people employed at GM factories in the U.S. GM aims to cut at least $1.5 billion in annual labor costs under the new agreement.

GM workers are slated to vote on the deal on Wednesday and Thursday. GM spent $8 billion on hourly labor costs in 2008, but needs to cut that significantly if it hopes to be competitive with Asian competitors building cars in the U.S., and remain viable at much lower auto sales level than normal.

Much of the UAW agreement mirrors concessions granted to Chrysler LLC last month, including a suspension of cost-of-living allowances, bonuses and some holidays, people familiar with the agreement said.

The agreement also includes a provision for future job buyouts, as well as to forbid strikes until 2015, these people said. Wages are expected to remain unchanged, but employees who are on temporary layoff will see a reduction in supplemental unemployment pay.