Morning Call 6/14/2010

Stone Street Advisors

ChiBondKing laszlochi@gmail.com

Morning Focus
Rather light on macro-related headlines over the weekend/Asian Monday session -- Asia markets were higher overnight, with
China and Australia on holiday. Nikkei ended at 9879.85 up 1.8pct, Hang Seng at 20051, up 0.90pct. Notable news that may have
some geopolitical undertones from Afghanistan where there was a miraculous finding of 1tr. of metals. Another hot spot of
activity this morning is out of Iran where a relief ship is on its way to the Gaza strip all these headlines could make for an
interesting mix of geopolitical risk over the coming week.

Notable Overnight Headlines

Asia
Host US under pressure in Asia-Pacific trade talks (Reuters)
Tackle local debt units, China tells banks, officials (Reuters)
S.Korea curbs banks' fx trades to limit volatility (Reuters)
S.Korea sells 5-year treasury bonds at 4.38 pct (Reuters)
NZ c.bank chief warns on debt (Reuters)
Japan PM Kan: To realise budget balance by 2020 (Reuters)
HK Q1 Industrial Production Rises 0.4% Annually Vs. 4.9% In Q4

Europe
Greece on track with EU/IMF fiscal programme-finmin (Reuters)
Germany Q1 Large Business Start-Ups Down 1.8% On Year
ECB governor says rates to stay on hold (MarketWatch)
U.K. Economy To Grow 1.3% This Year
Bank Of France chairman calls for caution regarding tax on banks that could hurt the economy (Reuters)
EU's Van Rompuy says strong euro masked problems- FT
Eurozone April Industrial Output Up 0.8% On Month, Consensus 0.6%
Portugal May CPI rises 0.2 pct vs previous month (Reuters)
Portugal CPI Up 1.1% On Year
Spain April House Sales Falls 8.6% On Month, Rises 17.6% On Year
Sweden May Jobless Rate At 4.5%, Consensus 4.7%

US Pre Open
Economic News

Bullard Comments: US benefiting from EU crisis as flight to quality pushes down long term tsy yields, May have inflation
risk in mid-term due to deficits/ultra low rates (Reuters)
Without jobs, housing rebound may take years (MarketWatch)
The good news is the U.K. is going broke slower (MarketWatch)

Equities

BP: UK FM Hague says BP will decide on its own dividend (Reuters)

UBS: Accounts of 500 UBS clients already sent to US (Reuters)

See Important Disclosures on page 4

Notable Bond Market/Economic Events
Bond Auctions (1PM ET)
o 13 & 26 Week Bills
Upcoming Bond Auctions (This Week)
o 6/15 4 Week Bill
Economic Releases For Today
o None in the US (Bullard spoke around 5AM EST)
o Potential Japan Monetary Policy Statement this evening.

See Important Disclosures on page 4

Market Summary 7AM

Futures Currencies Fixed Income

Symbol Last Chg Symbol Last Chg Symbol Last Symbol Last
DOW 10195 57 EURUSD 1.2223 0.0109 2s5s 131.00 US2Y .76
SP500 1092 7 GBPUSD 1.4719 0.0166 2s10s 252.00 US5Y 2.07
NSDQ 1853.5 11 EURJPY 112.15 1.22 2s30s 343.00 US7Y 2.73
ZB 123'13 -0'26 USDCAD 1.0283 -0.0044 5s10s 121.00 US10Y 3.28
ZN 120'045 -0'165 USDJPY 91.77 0.15 5s30s 212.00 US30Y 4.19
ZF 116'275 -0'092 NZDUSD 0.695 0.0041 10s30s 91.00 UK5Y 2.23
ZT 109'022 -0'020 UK10Y 3.5
CLN0 75.1 1.32 UK30Y 4.25

See Important Disclosures on page 4

 Morning Call 6/14/2010
Stone Street Advisors
ChiBondKing laszlochi@gmail.com

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