The powering words concerning accommodative current rates and the Feds support to a strong dollar were scattered with the winds of change as the labor market is still weak and that is to prevail on the rest of the economy especially as spending is to remain subdued which accounts for 2/3 of the economy.

Pending home sales in April are projected today to have dropped 0.5% after 1.0% drop in March. As long as the housing market does not bottom the ongoing spread of weakness is to continue prolonging the rise of the economy, especially that now markets foresee the downside trend to prevail in the labor market.

Mainly still the highlight will be upon the retail sales after their unexpected rise last month which supported optimism in the market they are expected to continue the support. While at the end of the week clues to the Feds fears regarding inflation as consumer prices are on the queue and expected to have edged up slightly from April especially as crude was on the journey of setting constant records high.

Bernanke indicated clearly that there is no room for further rate cuts, while the FOMC meeting is approaching us and future traders are betting on steady rates, as now we are building the anticipation for when the economy will be able to withhold reversal to the easing policy the Feds implemented.

It is a light week though with moving fundamentals, that in role does not rule out heavy market movement as the volatility is back strong as the market sentiment is vague and constantly changing regarding the US and world economy noting that Trichet hinted for a possible rate hike in July while the UK is confirming their headings to recession for that the outlook is still under through scrutiny this week and basis are to start being build for the upcoming trend.

Watch out and stay tuned as we have a lot to focus on this week, and as I said since Beige Book is on the queue means the FOMC is approaching us and the expectations are now leading the way...