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From DealingFloor:

** ASIAN MARKETS @ 5AM EDT**

Nikkei 225 + 0.24%
HSI -1.34%
Kospi -1,58%
Taiwan +0.38%
India -0.61%
Thailand +0.23%
Australia +1.14%

** ASIAN HEADLINES **

- Bank of China Shares Rise 14% in Hong Kong Following $9.73 Billion Share Sale
- Tabcorp Bids $1.4 Billion for Unitab, Topping Agreed Tattersall’s Offer
- Japan’s A2 Sovereign Debt Rating Outlook Raised to `Positive’ at Moody’s
- Asian Stocks Rise as U.S. Dollar Strengthens; Toyota, BHP Billiton Advance
- India May Raise Interest Rate to Curb Inflation as Economy Accelerates
- Thailand’s Inflation Accelerated in May to Seven-Month High on Fuel Costs
- Malaysia Risks Igniting Inflation as Power, Fuel Increases, Spark Protests

** EUROPEAN MARKETS @ 5AM EDT **

FTSE-100 -0.65%
DAX -1.32%
CAC40 -0.77%

Bund future -0,22%; Crude future 71,1; €/$ 1,2773; Gold 635,5

** EUROPE: IN PLAY TODAY **

- ABB Ltd.: The world’s largest maker of electricity networks said creditors holding more than 600 million euros ($770 million) of its debt have agreed to exchange their holdings for a longer-dated bond that will allow the company to extend the maturity of its borrowings.

- Arcelor SA: Luxembourg’s financial securities regulator approved Mittal Steel Co.’s revised offer for the steelmaker and extended the bid’s offer period to July, the agency said.

- Assicurazioni Generali SpA: Italy’s largest insurer denied it’s planning a takeover of Swiss Life Holding, Switzerland’s biggest life insurer.

- Commerzbank AG: Germany’s second-biggest lender may cut as many as 3,000 jobs in its domestic market, Die Welt said, citing unidentified people familiar with the situation.

- Deutsche Bank AG: Europe’s biggest securities firm by revenue plans to expand its wealth management business, the Sueddeutsche Zeitung sai, citing the head of the bank’s private wealth management.

- Deutsche Telekom AG: Europe’s largest phone company is “well underway'’ to complete the first phase of its 3 billion-euro fiber-optic network in Germany that can transmit data such as live television programs.

- Man Group Plc: The world’s largest hedge fund company may say full-year profit rose to a record $1.05 billion from $885 million a year earlier, as clients invested more money and performance fees increased.

- OAO Gazprom: Morgan Stanley Capital International Inc. will raise the weighting of the world’s largest natural gas producer in the MSCI Emerging Markets Index to 2.45 percent from 0.38 percent as of June 1. The index provider will further increase Gazprom’s share to 4.79 percent in August.

- Royal BAM Groep NV: The biggest Dutch builder will probably say first-quarter net income rose 19 percent from a year earlier to 27.4 million euros, according to the median estimate of eight analysts surveyed by Bloomberg News.

- United Utilities Plc: The U.K.’s largest publicly traded water company will release preliminary fiscal full-year earnings, according to the company’s web site.

- E.ON AG’s headquarters may have been searched by European Union regulators, who seized senior managers’ computers in connection with an inquiry linked to competition law, Berliner Zeitung said, citing “official'’ EU documents.

- German PMI Manufacturing Growth is released at 9:55 CET.

** EUROPE: UPS & DOWNS **

+ SCOTTISH POWER ADDED TO `EUROPE 1′ LIST AT MERRILL LYNCH
+ BANK OF IRELAND PRICE EST. RAISED TO EU14 AT DEUTSCHE BANK
+ RICHEMONT RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
+ STADA RAISED TO `BUY’ FROM `HOLD’ AT DEUTSCHE BANK
+ BANK OF IRELAND PRICE ESTIMATE RAISED TO EU15.17 AT LEHMAN
+ TATE & LYLE RAISED TO `BUY’ FROM `HOLD’ AT CITIGROUP

- SCOTTISH & SOUTHERN PRICE EST. CUT TO 1240P AT MORGAN STANLEY

** US: AFTER HOURS / IN PLAY TODAY **

- Excluding non-recurring items, Novell (-9% after hours) reported Q2 earnings of $0.03 per share, in line with the Reuters Estimates consensus of $0.03. Total revenues fell 6.3% year/year to $278.3 mln vs. the $276 mln consensus. Co issued downside guidance for Q3, sees EPS of $0.03 (consensus $0.04) and revenues of $239-247 mln (consensus $282.80 mln).

- Sun Microsystems (unchanged after hours) announced that its board of directors has approved a growth plan with the goal of accelerating Sun’s return to consistent profitability. The plan provides for increasing investment in core technology and channel resources, while accelerating acquisition synergies and disinvestments in non-core processes and R&D activities.

- Investors will get a revision to Q1 Productivity and weekly jobless claims to sift through at 14:30 CET. The May ISM Index and April Construction Spending will be out at 16:00 CET while the Energy Dept's weekly inventories data will hit the wires at 16:30 ET. The OPEC meeting and a UN Security Council meeting to discuss Iran will also keep oil prices in focus while car makers will garner some attention amid the intraday releases of monthly auto sales data.

- Also on the corporate news front, May same-stores sales figures from more than 60 retailers will be out before the bell along with earnings reports from HJ Heinz (NYSE:HNZ), Dollar General (NYSE:DG), Ciena (NYSE:CIEN), and Brown-Forman (NYSE:BF.B).

** US MARKETS ON WEDNESDAY **

Dow 0,67%; Nasdaq 0,65%; S&P 0,81%; Soxx 1,77%; Russel2k 1,4%; DJAIG -1,1%; 10yr Bond -0,09%; 10yr Yield 5,13%; Crude future 71,1; Gold 635,5

¦ Energy 2,01%¦ Utilities 1,36%¦ Materials 1,21%¦ ConsDisc 1,03%¦ Telecom 0,96%¦ Industrials 0,8%¦ Healthcare 0,73%¦ Financials 0,61%¦ ConsStaples 0,44%¦ Technology 0,26%

** US HEADLINES **

- Fed Policy Makers, Seeking Chance to Pause, Less Likely to Get One in June
- U.S. Bancorp, GlaxoSmithKline May Find Favor as Stock Volatility Returns
- OPEC May Keep Oil Production Quotas Steady Until Yearend to Soothe Markets
- Microsoft Allies With Toshiba, DoCoMo, Victor to Develop Japan IPod Rival
- Dollar Gains Versus Euro as Traders Boost Bets for Further Rate Increases
- Gold Falls Most in a Week as Iran Nuclear Talks Ease Demand for Safe Haven
- Oil Falls as U.S. Offers to Join Talks on Iran

** FED MINUTES **

With the market still reeling since the Fed last raised interest rates on May 10th, investors were somewhat optimistic throughout the session about the Fed’s comments discussing a possible pause with its tightening. Nevertheless, since the minutes clearly reflected uncertainty and disagreement on the part of members as to what the future will bring, as the range of discussion bordered a possible no hike to as much as a 50-basis point increase, the slightly higher degree of concern about inflation raises the risks that the Fed will find the need to keep raising rates. To wit, fed funds futures are now pricing in more than a 70% chance for the first time since late April of a 1/4% rate hike in late June. Bond traders were also less optimistic about what Fed officials had to say about inflation pressures and a potential pause, as the yield on the 10-yr note crept up 6 basis points from session lows to 5.11% — the highest closing level since mid-May.

Source: European Indexes Down, Asia Mixed