FINANCIAL MARKETS REPORT

QUOTATION AND COMMENTS

GOLD* SPOT CURRENCIES*COMMODITY FUTURES*STOCK INDEXES

Chinese April PMI rose for the fourth consecutive month.

The Chinese manufacturing sector improved in April for the third consecutive month, showing that the world’s second-biggest economy is still positive with stability signs amid Europe’s debt crisis and a cooling domestic property market.Chinese May PMI is a bit weaker than expected, and it did fall from last month, but it's not all bad news. The light at the end of the tunnel for two big reasons.1) The drop wasn't that big.2) Inflationary pressure is clearly easing. After falling rapidly in April, manufacturing activity growth probably stabilized in May. This could be because there had been no additional negative supply shocks as a result of the power shortages from April into May which has been a biding constraint on certain sectors of the economy (especially energy-intensive heavy industrial sectors).The PMI manufacturing, where the nation's purchasing-managers index advanced to 53.3 in April compared with 53.1 in March, lower than economists’ forecast of 53.6, but the reading is still above 50 that indicate there is an expansion in the industrial sector. The Chinese economy is on the track after the slowest pace in about three years, but this period the Chinese economic performance is still facing pressures as companies face increasing operational difficulties. Higher electricity and fuel prices are pushing up costs and average wages across the nation this year may increase by 20 percent. Moreover, China’s gross domestic product expanded 8.9 percent in the fourth quarter of 2011, slowing from a 9.1 percent gain in the previous three months, as the government waged a campaign to tame gains in consumer and housing prices. Signs of economic improvement include an incline in industrial output and surge in new lending in March, where the companies’ profits at industrial companies rose in March from a year earlier, rebounding from the first quarter decline since 2009.U.S personal income rise up to come in at 0.4 percent in March; higher than the forecasted reading of 0.3 percent and the prior revised reading of 0.3 percent from 0.2 percent, On the other hand the consumer spending remain on climbing but lost strength undoubtedly in March as it came in at 0.3 percent, which is lower than the prior revised reading of 0.9 percent from 0.8 percent.

Hang Seng Index (H.K)

The Hang Seng Index closed down 0.28 % at 21,249.53. The China Enterprises Index of the top mainland listings in Hong Kong finished down 1.43 % at 10,987.06. The Shanghai Composite Index closed up 0.07 % at 2,440.08, with strength in brokerages overpowering weakness in property and banking shares with A-share bourse trading volume sinking almost 20 % from Wednesday.

*Cautious ahead of Friday's U.S. nonfarm payrolls report for April, while government debt prices advanced on safe-haven demand.

* Tension is escalating in south sea between China and Philippine / U.S & China warned to U.S , not involved –the risk of armed conflict closer

*Markets remain cautious ahead of Europe’s debt decease & worries , it is getting worse

Trading could be sluggish & light volumes expected as Friday's U.S. nonfarm payrolls report and weekend elections in Greece and France. Euro zone factories order sank further in to decline , China’s four biggest bank are coming off weaker-than expected 1st quarter earnings posted last week , with a slowing Chinese economy and rising funding costs expected. Poor U.S. retail sales also cast pall over market .Today market range could be in between 21,321to 21,047

FTSE 100 (UK) S&P downgrades Spain whilst Spanish jobless rate rises to 24.4%

Spanish stocks suffered strong losses as trading opened in Europe after the Standard and Poor’s downgraded Spain’s credit rating by two notches to BBB+ last night from a previous A rating and data showed that the Spanish unemployment rate increased to 24.4%, pressuring Spanish stocks and pushing up bond yields. Continued weak Spanish retail sales, which fell for a 21st consecutive month in March has also weighed on Spanish stocks whilst a rise in the unemployment rate to 24.4% cast a dark shadow over Spain's ability to turn an economic corner. It is no coincidence that Spanish bond yields have seen upwards pressure today as a result, with benchmark 10yr Spanish bond yields trading back above the important 6% level in early trading. It’s a sad state of affairs in Spain with now 1 in 4 adults without a job and youth unemployment doubles that of adults, with 1 in 2 youths unemployed. The speed at which Spanish jobless rates have climbed over the past few years – where four years ago the rate was 9% - is hugely alarming as it shows strong unemployment momentum, whilst the Spanish austerity plans are likely to exacerbate the situation further. French consumer spending also badly underperformed market expectations, coming in -2.9% for March against expectations of -1.9% from a downwardly revised growth of 2.9% in the previous month. Despite the weak data out of the Euro zone, we did see a bounce back for broader European stocks which rallied from their early lows seeing the FTSE 100, DAX and CAC all retrace back towards flat territory after the first hour of trading.

S & P 500 Index (U.S.A)

The June S&P 500 index closed lower due to profit taking on Thursday. The low-range close sets the stage for a steady to lower opening when Friday's night session begins trading. Stochastics and the RSI are turning bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 1380.13 would signal that a short-term top has been posted. If June renews last week's rally, April's high crossing at 1417.50 is the next upside target. First resistance is Tuesday's high crossing at 1411.50. Second resistance is April's high crossing at 1417.50. First support is the 20-day moving average crossing at 1380.13. Second support is April's low crossing at 1352.50.

Coffee

July coffee close lower on Thursday and the low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. Closes above the reaction high crossing at 18.57 are needed to confirm that a short-term low has been posted. If July renews the decline off January's high, weekly support crossing at 17.16 is the next downside target.

Cotton

July cotton closed lower on Thursday. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. If July extends the decline off April's high, December's low crossing at 84.01 is the next downside target. Closes above the 10-day moving average crossing at 90.68 would confirm that a low has been posted.

Sugar

July sugar closed higher due to short covering on Thursday as it consolidated some of the decline off March's high. The mid-range close set the stage for a steady opening on Friday. Stochastic and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If July extends the decline off March's high, monthly support crossing at 20.40 is the next downside target. Closes above the 20-day moving average crossing at 22.04 would confirm that a short-term low has been posted

Soybean

July soybeans closed down 11 1/2-cents at 14.73 1/2. July soybeans closed lower on Thursday as it consolidated some of this year's rally. Todays export sales report showed net sales of 63.7 million bushels of soybeans in the week ending April 26, including 22 million old-crop bushels.. Today's low-range close sets the stage for a steady to lower opening when Friday's night session begins trading. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 14.51 3/4 would confirm that a short-term top has been posted. If July extends the rally off December's low, weekly resistance crossing at 15.44 1/2 is the next upside target. First resistance is Wednesday's high crossing at 15.12 1/2. Second resistance is weekly resistance crossing at 15.44 1/2. First support is today's low crossing at 14.65 1/2. Second support is the 20-day moving average crossing at 14.53 1/2.

July soybean oil closed down 55 -pts. at 54.16. July soybean oil closed lower on Thursday and below the December-January uptrend line crossing near 54.82 confirming that a trend change has taken place. The low-range close sets the stage for a steady to lower opening when Friday's night session begins trading. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near-term. If July extends the aforementioned decline, March's low crossing at 53.30 is the next downside target. Closes above the 20-day moving average crossing at 55.98 would temper the near-term bearish outlook. First resistance is the 20-day moving average crossing at 55.98. Second resistance is April's high crossing at 57.80. First support is today's low crossing at 54.02. Second support is March's low crossing at 53.30.

A crossover down daily stochastics is a bearish signaling, momentum studies are trending lower from high levels, which should accelerate a move lower on break below the 1st swimming support. The market’s closebelow the 9-day moving average is an indication. The short-term trend reverses negative direction. These could be some early pressure in the market’s negative set-back with the 2nd swing support. The next down side target is 14.704 / 14.588. The next area of resistance is 15.369 and then 15.564, while 1st support will hits today 14.704 and below there at 14.588

EUR/USD Spain was officially put into recession after printing a -0.3% Q/Q rate of GDP in Q1. German Retail Sale grew 0.8% in March and this helped improve sentiment slightly as the German economy is by far the largest in the EU.EURUSD violated the massive 8-month downtrend in play at 1.3242 before peaking at a high of 1.3263, but then sharply reversed course, dropping below uptrend support to 1.3157.

Since then the bulls have staged a mild recovery in thin volume. However, the lack of real directional conviction ahead of an event fill week suggests a short period of sideways trading between 1.3232 and 1.3277. Having cleared much of the short range supply levels, fresh resistance are at a distance 1.3277 (support turned resistance), 1.3341 (3rd April pivot) and key level 1.3385 (27th Mar high). Below us, first support from here is the 1.3232 (intraday low), 1.3189 (2-week uptrend channel), 1.3120 (23rd April low), 1.3058 (18th April low), 1.3035 (5th & 9th April low) then 1.2995 (16th April pivot).

GBP/USD Another day with little changed in the technical's as the bulls remain in full control. The uptrend still reigns supreme in GBPUSD, with very few pullbacks or pauses along the way so today day mild correction should worry the bulls. With the cable trading safely above its 200d MA and within uptrend channel, our bias remains bullish. If this rally can gather new bids in the coming sessions next resistance is located at 1.6207 (26th April high), then 1.6252/ 1.6344 (2nd Sept 11’ high). On the downside, support is located at 1.6155 (intraday support), 1.6078 (25th April low), 1.6014 (19th April reversal low), 1.5970 (17th April reversal top), 1.5804 (5th April low), 1.5771 (22nd Mar low), 1.5754 (16th Mar breakout lvl).

CHF/USD hit a high of 0.9223 last week, but the pair has not managed to hold onto all of those gains instead retracing to 0.9129 levels yesterday. The temporary violation of 0.9143 support indicates that the bears are gaining control, but with moderate flow, further downside should be limited. Traders should keep their eyes on EURCHF which is lingering around the 1.2020 levels after a spike to 1.2035 (there is plenty of drama still built into this trade). First support on the downside is located at 0.9143 (intraday low), 0.9095 (3rd April rally correction low), 0.9129 (11th April low), 0.9095(3rd April reaction pause), 0.9006/9 (27th Feb high), 0.8955 (11th Nov ‘11 pivot), then stubborn barrier support at 0.8931 (24th & 29th Feb low). Further rallies are likely to meet sellers back up through, 0.9223 (5th April high), 0.9254 (16th March high), then 0.9335 (15th Mar high)

USD/JPY the USD/JPY broke 80.00 with little fanfare falling to 79.80 in gentle but solid selling. The market has not been able to regain the 80.00level so far and this is a negative sign. Crosses are more resilient bouncing off lows in Asia but with stocks pulling back off highs the temptation to buy with USD/JPY under pressure may be dampened. First supports now come in below us at 80.25 (4th Aug ‘11 reaction high) then 80.02 (28th Feb pivot low) then 79.11 (31st Oct 11 reaction high). On the upside it’s worth noting next resistance at 81.77/88 (failed corrective rally), 82.56 (6th April high), 82.99 (3rd April high), trigger resistance at 83.40 (27th Mar high), 84.18 (15th Mar high & extension target), 84.51 (15th Dec ‘10 high), then 85.50 (Fibo lvl from 101.00 to 75.60).

Copper High Grade (COMEX)

May copper closed lower on Thursday as it consolidated some of the rally off April's low. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are overbought and are turning bearish hinting that a short-term top has been posted. Closes below the 20-day moving average crossing at 370.80 are needed to confirm that a short-term top has been posted. If May renews the rally off April's low, April's high crossing at 395.80 is the next upside target. First resistance is Monday's high crossing at 385.90. Second resistance is April's high crossing at 395.80. First support is the 20-day moving average crossing at 370.80. Second support is April's low crossing at 356.90.