Euro Overvalued?

Bloomberg reports bearish sentiment is growing on the euro because a slowdown in the region’s economy may be more severe than in U.S, and this will force the European Central Bank to reverse this month’s rate increase.

The euro may be lower against the yen, the dollar, and even the pound according to a survey by Bloomberg. Further, PIMCO’s Bill Gross, manager of the world’s largest bond fund, turned bearish on the euro for the first time since the currency’s inception in 1999. The firm says the currency is 30% overvalued versus the dollar, based on purchasing power parity, which is more than any other currency among the Group of 10 richest nations.

From the Bull Pen: One vehicle of choice may be the dollar bullish fund (UUP); sell-stops can be set below $21.85.

From the Bear Cave: Would commodity prices come in because of gains in the dollar? Those that believe in this inverse relationship could test the downside in an oil-service stock like Schlumberger (SLB); buy-stops can be set in the $100-102 range.


Sony PlayStation 3

Bloomberg reports Sony’s (SNE) PlayStation 3 trailed in the video-game console battle in 2007. But for the first five months of 2008, the unit has outsold Microsoft’s (MSFT) Xbox 360, overtaking the battle for second place. The PS3 had sales of 1.3 mln consoles compared to 1.12 mln Xbox units. Analysts believe with the rise of Sony’s Blue-ray and hit games like “Metal Gear Solid 4,” the company may be able to hold onto the lead as well because consumers now have more reason to buy the unit. Leading the competition was Nintendo’s (NTDOY) Wii which had sales of 2.8 million.

From the Bull Pen: Regardless of the end result of the video-game console battle, bulls might see an upside bounce in Sony off the $40 support level. Sell-stops can be set below.

From the Bear Cave: Bears can consider the downside in Nintendo. Does the company have a diversified revenue stream capable of withstanding a global economic slowdown? And considering the stock may be breaking its February uptrend, bears can test the downside should the stock approach the $70 level.

For more ideas in real time throughout the trading day, check out Minyanville’s Buzz & Banter.


Quick Check Around the World

Asian trading closed skewed to the downside with the Hang Seng -0.77%, Nikkei -0.23%, Sensex -1.03%, Taiwan -1.21% and Shanghai +0.76%.

Quickly glancing towards Europe, we see green with the CAC +1.84%, DAX +1.30%, FTSE +1.98%

As of 8:30 AM EST; S&P futures are trading +16.80 points to 1256, and Nasdaq futures are up +22 points to 1842.


A Look At Commodities

Commodities are lower. Crude oil is lower -1.37 to 143.71. Gold is down -1.37 to 143.71. Silver is off -0.050 to 18.695, and copper is up +1.55 to 377.10.

The dollar index is higher +0.125 to 72.221.


On the Radar

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Happy Monday! Good luck!