• The dollar fell against most major currencies on Monday. Global recovery optimism rose after data showed eurozone April industrial production posted the largest year-on-year gain since records started in 1991. The yen reversed overnight losses. The S&P 500 reversed earlier gains and fell 1.97 to 1,089.63 after Moody’s Investors Service said it downgraded Greece’s government bond ratings by four levels to Ba1 from A3. Sterling rose ahead of Tuesday’s UK inflation report on a reduced estimate for UK government borrowing. The Australian dollar advanced and broke the 0.85 resistance. Paring earlier gains, the Canadian dollar was little changed.

• The oversold EUR/USD rose for the fourth day out of five. Although paring gains in late New York trading, the pair was able to break the 1.22-area resistance. Short covering may lift the EUR/USD and a test of the long-term downtrend in the 1.25-1.26 area may occur. If the downtrend is broken, the outlook will change. However, the longer term outlook remains negative.

Financial and Economic News and Comments

US & Canada

• Canada’s new motor vehicle sales fell 4.7% m/m to 125,792 units in April, the third fall in four months, after a revise 4.9% m/m decline in March, figures from Statistics Canada showed, led by a 9.5% m/m drop in passenger car sales. April new motor vehicle sales rose 4.8% y/y, a fifth consecutive year-on-year rise, following a 9.4% y/y March gain.

Europe

• Eurozone seasonally adjusted industrial production grew 0.8% m/m in April, an 11th straight month-on-month gain, after an upwardly revised 1.5% m/m increase in March, according to data from Eurostat. April industrial production rose 9.5% y/y wda, a fourth successive year-on-year rise and the most since records began in 1991, following an upwardly revised 7.7% y/y March advance.

• Switzerland’s producer and import prices were up 0.3% m/m in May after a 0.6% m/m increase in April, the Swiss Federal Statistical Office said. Producer and import prices climbed 1.4% y/y, following April’s 0.8% y/y rise.

Asia-Pacific

• Sentiment among Japanese corporations with capital of more than Â¥1 billion ($11 million) in all industries was 4.0 in Q2 2010 compared with -2.4 in Q1, suggesting large corporations generally turned optimistic on their business conditions, according to the business survey index released by the Ministry of Finance. Sentiment among large manufacturers was 10.0 in Q2 compared with 4.3 the prior quarter, indicating large manufacturers were optimistic for a fourth consecutive quarter. Sentiment among large non-manufacturers was 0.9 in Q2 compared with -6.3 the previous three months, showing large non-manufacturers turned optimistic for the first time in 11 quarters.

• Japan’s seasonally adjusted industrial production grew an unrevised 1.3% m/m in April, the 13th gain in 14 months, after a 1.2% m/m increase in March, final April IP data from the Ministry of Economy, Trade and Industry showed, with the IP index rising to 96.0 from March’s 94.8. April IP rose an unrevised 25.9% y/y nsa, a fifth straight year-on-year gain, following a 31.8% y/y March advance. Seasonally adjusted capacity utilization was unchanged at 90.6 in April after a 0.6% m/m increase in March. April capacity utilization jumped 31.6% y/y nsa.

FX Strategy Update

Expert Market Commentaries, charts and information are provided by Hans Nilsson of Globicus International, Inc., a registered third party CTA, are intended for educational purposes only and do not constitute trading recommendations.

Past performance is not indicative of future results. Trading OTC Forex on margin carries a high level of risk, and may not be suitable for all investors. Please contact a registered trading advisor if you have any questions.

This report is intended solely for distribution to customers of Capital Market Services, LLC. Any information in this report is based on data obtained from sources considered to be reliable, but no representations or guarantees are made by Capital Market Services, LLC with regard to the accuracy of the data. The opinions and estimates contained herein constitute our best judgment at this date and time, and are subject to change without notice. Capital Market Services, LLC accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this report. No part of this report may be reproduced or distributed in any manner without the permission of Globicus International, Inc.

©2004-2010 Globicus International, Inc. and Capital Market Services, LLC.