The stock market is in recovery mode, led by buying interest in consumer staples (+1.4%) and health care (+1.5%). Meanwhile, the Dow has bounced into positive territory.
Within the Dow, 16 of the 30 components are posting a gain. Procter & Gamble (PG 66.03, +1.08), IBM (IBM 127.97, +1.33) and Johnson & Johnson (JNJ 69.15, +1.05) are providing leadership. Energy giants Exxon Mobil (XOM 77.60, -2.12) and Chevron (CVX 83.39, -0.92) are the main laggards.

BASecs' Gary Bigg - "with the deterioration in the labor market this year, along with high gasoline prices and tighter credit conditions, we are currently projecting that consumer spending is likely to advance at a less than 1% annualized pace in 2H 2008."

The stock market continues to post a loss as the recovery effort fades. The enthusiam over the drop in crude (-3.5%) and commodity (-3.3%) prices is partially offset by steep drops in the energy (-4.1%) and materials (-3.8%) sectors.

The stock market is back on the decline. Crude prices (-3.0%) have remained relatively stable since the previous update, but that has not stopped the energy sector (-4.2%) from extending its losses.
All 39 components within the sector are posting a loss, with notable weakness in Exxon Mobil (XOM 77.43, -2.29), Schlumberger (SLB 95.47, -4.73) and Occidental Petroleum (OXY 75.51, -3.80)

The dollar fell from a one-month high against the euro as stocks declined amid concern losses in U.S. credit markets may widen.
U.S. consumer spending rose 0.6 percent in June following a 0.8 percent increase in May, the Commerce Department said in Washington today. The median forecast of 67 economists surveyed by Bloomberg News was for an increase of 0.4 percent.
The Fed's preferred price gauge, known as the core measure which excludes food and fuel, rose 0.3 percent last month after a revised 0.2 percent May gain. The median forecast was for a 0.2 percent increase.
Policy makers will keep their target rate for overnight loans between banks at 2 percent when they meet tomorrow.
``The dollar is very fragile for now,'' said Hidetoshi Yanagihara, senior currency trader at Mizuho Corporate Bank in New York. ``Stocks are falling and there's some bad news from the financial sector.''
The Standard & Poor's 500 Index fell for a third day, dropping 0.7 percent to 1,251.84. Stocks also fell in Europe and Asia. HSBC Holdings Plc, Europe's biggest bank by market value, said emerging markets may grow more slowly this year and first- half profit fell 29 percent as bad loans rose in the U.S.
The pound fell against the euro for a third day and dropped versus the dollar after an industry report showed the U.K.'s construction industry shrank in July at the fastest pace in 11 years. It weakened 0.6 percent to 79.28 pence per euro, from 78.79 pence on Aug. 1.

The stock market is trading with a modest loss as a steep decline in energy stocks (-3.7%) act as the main drag. The financial sector (-0.4%) makes it back to the unchanged mark and then runs into some modest resistance.
Crude oil (-3.2% at $121.12) continues to trade with a steep loss. Commodities as a whole are under selling pressure, as all 19 components within the CRB Index (-3.1%) are posting a loss. The session's worst performing commodities include cocoa (-7.6%), natural gas (-6.7%), soy beans (-5.1%) and corn (-5.0%).

Oil reached to $119.50 before regaining some poise to trade back at $120.62 currently.

The Commerce Department reported that personal spending and income edged higher in June.
Individual income increased by 0.1% after a revised 1.8% jump in May, matching economists expectations. The increase was due in part to the government's economic stimulus plan, which included billions of dollars in rebate checks sent to Americans in May and June.
Personal spending increased by 0.6%, topping the 0.5% increase that economists had expected. When adjusted for inflation, however, individual spending actually fell 0.2% following a 0.3% increase in May.
On the labor front, outplacement firm Challenger said the nation's employers announced 26% more planned job cuts in July when compared to June.
The price of crude fell as traders continued to worry about weakening U.S. demand. Light, sweet crude for September delivery lost $1.03 to 124.08 a barrel in New York.

Cable met resistance at $1.9720, with rate since slipping back, currently meeting demand interest placed just under $1.9700. A break below the figure expected to allow for a deeper pullback toward $1.9680/70 ahead of stronger area between $1.9650/40. Offers remain in place toward $1.9720.

The major indices fall to session lows. The financial sector is the main laggard (-2.6%), although materials (-1.6%) and telecom (-1.5%) are also posting steep declines.
Shares of Motorola (MOT 9.62, +0.81) are getting a nice 9% boost on news that the struggling communication equipment company appointed Dr. Sanjay Jha as co-CEO of Motorola and CEO of Motorola Mobile Devices. Jha was previously COO and president of Qualcomm CDMA Technologies. Separately, Imclone (IMCL 64.61, -0.73) formed a committee to study the all-cash $60 per share, or $4.5 billion, buyout offer from Bristol-Myers Squibb (BMY 21.27, +0.16). Imclone gave a preliminary view that the offer, which represented a 29% premium, "substantially undervalues" IMCL. The market expected Imclone to respond in this manner, as shares of IMCL had already rose well above the buyout bid.

GBP/USD continues to get a leg up from euro-dollar's rally. Cable met resistance around $1.9707 on the initial move back above the figure (50% $1.9760/1.9654) and expected to meet further resistance on approach to $1.9720 ($1.9718 61.8%).

USD/CAD easing away from C$1.0300 to C$1.0264 with traders noting decent supply seen from domestic names. Rate earlier traded as high as C$1.0309. Rate triggered bids placed at C$1.0285/80. Now demand mentioned at C$1.0260.

EUR/USD: $1.5430
USD/JPY: Y107.30, Y107.75, Y106.25, Y109.00
AUS/USD: $0.9400

Stock futures declined early Monday as investors awaited a wave of economic reports and the Federal Reserve's upcoming rate decision.

Before the bell reports showed personal income rose slightly in June after surging in May when the first wave of stimulus checks arrived, the government reported Monday. The Commerce Department said individual income increased by 0.1% in June after a revised 1.8% jump in May. Economists were expecting personal income to decrease by 0.1% in June. Personal consumption increased by 0.6% in June, which was more than the 0.5% increase that economists polled expected.
The economic data will be closely scrutinized as investors await the Federal Reserve's policy decision. The Fed, faced with economic weakness and inflation risks, is widely expected to hold rates steady Tuesday.
Among corporate news: Europe's largest bank, HSBC, said Monday that profits fell 29% through the first half of the year, the most since 2001, due to bad U.S. mortgages.
Chrysler said on Sunday that its financial unit had renewed lines of credit totaling $24 billion. The privately-held automaker had originally sought $30 billion in credit.

USD/CHF printed session highs on Chf1.0500/05 as the greenback trades with a firm tone on the back of the US data. Offers come at Chf1.0520/25. Additional supply noted at Chf1.0540, with the May high seen as the key upside target at Chf1.0620.

European stocks have reversed early weakness and are trading close to flat. The FTSE was last 0.28% higher with Cac down 0.1% and the Dax underperforming at -0.30%. Elsewhere, Japan's benchmark stocks ended the day lower, close to the worst levels of the session. The benchmark Nikkei 225 was down 156.09 points, or 123%, at 12933.18. The broader-based TOPIX was down 24.68 points at a session low 1248.25.

The following data were issued

09:00EU(15)PPI (June) 0.9% 0.9% 1.2%

09:00EU(15)PPI (June) Y/Y 8.0% 7.9% 7.1%

The dollar traded near a one-month high against the euro before a Federal Reserve meeting tomorrow at which policy makers may leave interest rates on hold and signal prices are increasing too quickly.
The U.S. currency was also near the strongest in a month against the yen before a report today that may show the Fed's preferred measure of prices rose in June by the most this year, supporting the case for higher borrowing costs. Crude oil rose for a second day as a tropical storm threatened U.S. output.

EUR/USD opened in early Europe around $1.5587. Offers placed on the approach to $1.5600 prevented further gains and allowed rate to ease back to $1.5565. Offers $1.5600, stops $1.5605/10, offers $1.5620/30, bids $1.5550/40.

GBP/USD opened early Europe at $1.9737. Renewed selling into early Europe took rate through the overnight base down to $1.9665. Cable bids $1.9650/40. Offers $1.9700, $1.9730/35-50.

USD/JPY opened in early Europe around Y107.69. Dollar lifted above Y108.00 and on to a Y108.06 initial high.Dlr-yen offers Y108.35/40, talk barrier Y108.50, stops Y108.60/65.

The personal consumption expenditure index, the Fed's preferred price gauge, rose 2.2% in June after excluding food and fuel, according to economists. It climbed 2.1% the previous month.
Futures contracts on the Chicago Board of Trade showed a 53% chance the Fed will raise its target rate by at least a quarter of a percentage point by Oct. 29, up from 51% a day earlier.
Gains in the dollar may be limited by speculation reports this week will show the U.S. services industry contracted for a second month and home sales declined, casting doubt on the strength of the U.S. economy.

EUR/USD: $1.5430
USD/JPY: Y107.30, Y107.75, Y106.25, Y109.00
AUS/USD: $0.9400

Crude futures are now off the session's best levels. The front-month Nymex WTI Sep 08 contract was last 12 cents lower at $124.98, having touched a high of $126.35.

USD/CAD makes a show above C$1.0300, but reported option barrie rat C$1.0310 so far remains intact. Above C$1.0310 to open a move on toward C$1.0325/35.

EUR/GBP breaks above resistance at stg0.7920, moves on to stg0.7925 before rate retreats to current stg0.7915. Next band of reported sell interest seen placed between stg0.7930/35.

The dollar dipped from near a five-week high against the euro as oil prices jumped above $126 a barrel, surrendering some of the gains scored last week after data showed U.S. companies cutting fewer workers than expected.
The Australian dollar has taken a big hit as investors have been caught off guard by a sharp shift in expectations towards interest rate cuts, tumbling nearly 3 percent against the dollar and yen last week for its biggest weekly drop since the Bear Stearns collapse in March. Traders said the Aussie likely had more room to fall as market players come around to the view that the Reserve Bank of Australia, which holds a policy meeting on Tuesday, could start cutting interest rates before long.
This week's events will feature a raft of central bank meetings including the Federal Reserve and RBA on Tuesday, as well as the Bank of England and European Central Bank later in the week.

Resistance 3: Y111.00
Resistance 2: Y110.00
Resistance 1: Y108.40
Current price: Y107.99
Support 1: Y107.30
Support 2: Y106.00
Support 3: Y105.00
Comments: Dollar holds within the upward channel from Jul 18, limited by Y105.00/Y111.00 (key support/resistance). Resistance is around last Thursday’s high on Y108.40. Strong resistance comes at Fibo level on Y110.00 (50% of the move from Jun 2007 highs at Y124.10 to Mar 16 lows on Y95.70). 100 points higher the next band of resistance is – near channel line on Y111.00. Strong support is near Y107.30 (23.6% of Y103.70 - Y108.30/40 rise). Below losses may widen to 50% Fibo on Y106.05/00, then – near channel line on
Y105.00.

Resistance 3: Chf1.0620
Resistance 2: Chf1.0590
Resistance 1: Chf1.0520
Current price: Chf1.0481
Support 1: Chf1.0390
Support 2: Chf1.0320
Support 3: Chf1.0280
Comments: Dollar tries to rebound with resistance is around Wednesday’s highs on Chf1.0520. A bit higher there is stronger level on Chf1.0590 (upper bound of the upward channel from Jul 15). Break above will open the way to May highs on Chf1.0620. Strong support comes at channel line on Chf1.0390. Below correction may dip to Chf1.0320 (Jul 25-27 lows) with a break under will open the way to Chf1.0280 (Jul 23 lows).

Resistance 3: $1.9920
Resistance 2: $1.9840
Resistance 1: $1.9750
Current price: $1.9680
Support 1: $1.9670
Support 2: $1.9580
Support 3: $1.9370
Comments: Sterling weakens with support comes at session low on $1.9670, then - $1.9580. Key support level is at $1.9370/65 (Jan, Feb and May lows). Resistance is around session highs between $1.9750/60 zone, then - at $1.9840 and near last Thursday’s high on $1.9920/30.

Resistance 3:$1.5800
Resistance 2: $1.5700
Resistance 1: $1.5600
Current price: $1.5574
Support 1: $1.5520
Support 2: $1.5460
Support 3: $1.5300
Comments: Euro still under pressure with support zone remains between $1.5520/00 (Friday’s low). Break down will accelerate the decline to the channel line from Jul 15 on $1.5460 and then – to Jun lows around $1.5300. Minor resistance comes near $1.5600 (50% of $1.5700 - $1.5510 decline), then – at last Thursday’s high on $1.5700. Stronger level is around channel line from Jul 15 on $1.5790/00.

Crude futures are holding onto gains in late morning trade Monday, but are shy of the session's best levels. The front-month Nymex WTI was last 35 cents higher at $125.45, having touched a high of $126.35 in Asia.

EUR/USD: $1.5430
USD/JPY: Y107.30, Y107.75, Y106.25, Y109.00
AUS/USD: $0.9400

EUR
Bids: $1.5555/45, $1.5515/00
Offers: $1.5600, $1.5620/30, $1.5650

JPY
Bids: Y107.30, Y106.90, Y106.75
Offers: Y108.00/05, Y108.35/40

GBP
Bids: $1.9680, $1.9670
Offers: $1.9730/35, $1.9750/60, $1.9780/85, $1.9820/25

AUSSIE
Bids: $0.9300, $0.9275
Offers: $0.9350

Published EU data showed, that while eurozone producer prices slowed somewhat in June (+0.9% versus +1.2% in May), the annual increase climbed to a new record high (+8.0% after +7.1% month earlier). This compares to a recent low of +1.8% y/y last summer. The annual rate was last this high in June 1982, when it hit +8.61%. The month-on-month reading matched a median forecast of analysts while the year-on-year result was a shade above expectations. The most significant impact has come from energy, which accounts for 17.6% of the PPI basket, and from non-durable consumer goods, which include processed foods and account for 25.7% of the basket.

European stocks have reversed early weakness and are trading higher, boosted by what appear solid earnings from HSBC: the FTSE was last 1% higher 5405.

1.Monetary policy options limited, hard for BOJ to move now
2.Would be 'disqualified as FinMin' if commented on forex, intervention policy
3.Hope BOJ provides appropriate money flows to markets to support economy
4.Expects exports to start falling slightly
5.Hard to cut income taxes

Crude oil rose last week after Israeli Deputy Prime Minister Shaul Mofaz said Friday that all options are open as Iran drives toward a ``major breakthrough'' in its nuclear weapons program. Oil climbed more than $4 a barrel in intraday trading as Mofaz's comments fueled speculation that the U.S. or Israel may attack Iran. Iranian President Mahmoud Ahmadinejad said OPEC's second-largest producer will ``resist with force'' any outside efforts to slow its nuclear program. Iran with a nuclear weapon would pose an ``unacceptable'' danger and be ``an existential threat'' to Israel, Mofaz said.

Similar speculation of an attack on Iran contributed to the oil-price rally that took futures to a record $147.27 a barrel on July 11. Iran previously has threatened to blockade the Strait of Hormuz, through which a quarter of the world's crude is exported, if its nuclear facilities are targeted. It pumped about 3.85 million barrels of oil a day in June. Iranian Supreme Leader Ayatollah Ali Khamenei, the country's highest authority, said this week that his country will push forward with its nuclear program, which Iranian officials say is designed for energy generation and other peaceful purposes.

Crude oil for September delivery rose to $125.10 a barrel. Earlier, it touched $128.60 a barrel. Oil rose $1.84, or 1.5%, this week. It was the first weekly increase in four. Futures have slipped more than $22 a barrel, or 15%, from the record on signs of declining demand in the U.S., which consumed about 24% of the world's crude in 2007. They fell 11% in July, the biggest one-month decline since December 2004. Brent crude oil rose to $124.18 a barrel.

Gold fell as better-than-expected U.S. jobs data boosted the dollar and reduced demand for alternative assets. Gold futures fell to $917.50 an ounce. The metal dropped 2.1% for the week, the third straight weekly decline. Gold has more than doubled since 2003, as the U.S. attacked Iraq and violence in the Middle East escalated. The precious metal sometimes moves in tandem with rising geopolitical instability. Silver futures settled at $17.52 an ounce. Silver gained 17% this year, including a 0.8% rise last week. Platinum and palladium prices fell heavily on Friday as poor results from carmakers including General Motors raised fears of tumbling demand. Carmakers consume about half the world’s platinum and palladium. Platinum fell to a six-month low of $1,641.50 a troy ounce in London, down 6% on the week.

Wall Street stocks fell for a second session on Friday, and trimmed already modest weekly gains, as investors wrestled with downbeat jobs data, poor results from General Motors and a bump in the price of oil. Poor results from GM, the largest carmaker in the US, added to the losses. The company said it had made a second-quarter loss of $15.5bn, four times larger than analysts expected, because of the cost of labour disputes and a slump in domestic sales. GM shares fell 7.6%. Ford shares dipped 3.1%. Over a volatile week, the Dow edged down 0.3%, the Nasdaq held its ground and the S&P 500 rose 0.3% due to mixed second-quarter earnings, a decline in the price of oil and some weak data on growth, home prices and employment.

S&P 500 company second-quarter profits have fallen 20% on average compared to a year ago. Profits have slumped about 82% at financials and more than 100% at consumer discretionary companies while energy company profits have grown by 18%. Excluding financials, average earnings on the S&P 500 rose 3%. Material stocks also fared poorly, hit by new data showing US manufacturing activity stagnated in July. Metals stocks led the materials sector down 2.6%. Titanium Metals dropped 6.8%, Nucor fell 6% and Freeport-McMoRan Copper & Gold lost 5.6%.

In healthcare, renewed safety concerns about Biogen Idec’s multiple sclerosis drug weighed on the sector. Biogen slumped 28.3%, while the sector gave up 1%. In technology, poor results from Sun Microsystems, weighed on the sector. The maker of server computers said profit fell 73%. Shares retreated 12.3%. In energy sector disappointing results from Chesapeake Energy, an independent natural-gas producer, and Chevron, the oil producer, eventually took their toll. Chesapeake lost 1.9%, Chevron dipped 0.3%.

European stocks fell Friday, erasing a weekly advance, as rebounding oil prices dragged down industrial shares and Bayerische Motoren Werke AG abandoned its profit forecast. MAN AG and Rolls-Royce Group Plc dropped as crude futures rallied above $128 a barrel. BMW, the world's largest maker of luxury vehicles, tumbled the most since February after saying ``conditions for the automobile industry have deteriorated sharply.'' BHP Billiton Plc and Anglo American Plc retreated as copper and aluminum prices fell. Deutsche Boerse AG, operator of the Frankfurt exchange, declined 4.4%. London Stock Exchange Group Plc, which said Friday it will cut fees to become the ``cheapest trading venue in Europe,'' slipped 1.8%.

Japanese stocks fell Friday, capping a weekly decline, led by Sumitomo Mitsui Financial Group Inc. and NEC Corp. after both said earnings fell by half as growth slowed at home and abroad. The Nikkei recorded a 1.8% drop for the week, while the Topix fell 2% . Both gauges slumped to the lowest level since July 18. Sumitomo Mitsui, the nation's second-largest bank by market value, plunged the most in six months as bad-loan provisions reduced first-quarter net income. NEC, the country's largest personal-computer maker, posted its steepest decline in two decades as a drop in network equipment orders eroded profit. Pacific Holdings Co., Japan's third-largest real-estate asset manager, dropped by its daily limit amid speculation banks will tighten lending.

The dollar showed increasing signs of resilience last week, hitting a one-month high against the euro as evidence mounted that the effects of the credit crisis were making themselves felt across the globe. Over the week, the dollar rose 1% against the euro, climbed 0.8% against the pound. The dollar lost ground against the yen. The currency increased for a third week against the euro, its longest stretch of gains since May 2007.

The dollar’s rally came in spite of figures on Thursday that showed that US growth came in below forecast in the second quarter and data on Friday that revealed that US unemployment rose to its highest level in more than four years in July. The U.S. economy shrank at the end of 2007 and grew less than forecast in this year's second quarter, figures from the Commerce Department showed July 31.

U.S. payrolls shrank in July for a seventh straight month, decreasing by 51,000, matching the previous month's decline, the Labor Department said yesterday in Washington. The median forecast of 79 economists was for a reduction of 75,000. The unemployment rate rose to 5.7%, the highest since March 2004, from 5.5% .

Indeed, eurozone purchasing managers’ surveys suggested that the region’s services and manufacturing sectors contracted sharply in July. The 15-nation euro fell yesterday versus the dollar as Germany's Federal Statistics Office in Wiesbaden said retail sales, adjusted for inflation and seasonal swings, dropped 1.4% in June after increasing 0.5% in the prior month. The median forecast of economists was for a decrease of 0.5%.

The pound fell to $1.9727, the lowest level since July 10, as an index of British manufacturing dropped in July to the weakest since December 1998. The Bank of England is forecast to hold its target rate at 5% on Aug. 7.

Resistance 3: Y108.40
Resistance 2: Y108.00
Resistance 1: Y107.80
Current price: Y107.70
Support 1: Y107.30
Support 2: Y107.00
Support 3: Y106.50
Comments: Dollar tested session high Y107.80. Strong resistance is around Y108,00 with a break above will open the way to Jul 31 high on Y108.40. Support comes at Y107,30 (Friday’s low). Below losses may widen to Y107.00 and Y106.50.

Resistance 3: Chf1.0610
Resistance 2: Chf1.0520
Resistance 1: Chf1.0490
Current price: Chf1.0480
Support 1: Chf1.0460
Support 2: Chf1.0400
Support 3: Chf1.0310
Comments: Minor support comes at session low on Chf1.0460. Below correction may dip to key level on Chf1.0400 with a break under will open the way to Chf1.0310 (last week low). Resistance is around session highs on Chf1.0490. A bit higher there is level on Chf1.0520 (Friday’s highs). Break above will open the way to May highs on Chf1.0610.

Resistance 3: $1,9930
Resistance 2: $1,9840
Resistance 1: $1.9760
Current price: $1.9710
Support 1: $1.9700
Support 2: $1.9640
Support 3: $1.9580
Comments: Dollar tests minor support is around $1.9700. Break under $1.9640 will widen losses to $1.9580. Resistance comes at $1.9760. Above there is a chance for a rise to $1,9840. (Friday’s high). Strong zone comes at $1,9930 (Jul 31 high).

Resistance 3: $1.5760
Resistance 2:$1.5700
Resistance 1: $1.5600
Current price: $1.5580
Support 1: $1.5510
Support 2: $1.5460
Support 3: $1.5360
Comments: Euro remains in the field of session high $1.5594 ($1,5600) with further resistance is near $1.5700. Stronger level is near $1.5760 (last week high). Support comes at $1.5510 (Friday’s low). Below at $1.5460 and $1.5360.

China's benchmark stock indices ended the day lower across the board. The benchmark Shanghai Comp ended the morning down 24.99 points or 0.89 pct at 2,776.83. The Shanghai a was down 26.21 points or 0.89 pct at 2,912.83 , while the Shenzhen A fell 6.21 points or 0.71 pct to 870.25.

1igh Low Close
EUR/USD 1.5598 1.5513 1.5540
USD/JPY 107.89 107.27 107.74
GBP/USD 1.9841 1.9726 1.9732
USD/CHF 1.0517 1.0459 1.0512

EUR/JPY 168.27 166.95 167.41
EUR/GBP 0.7889 0.7842 0.7871
GBP/JPY 213.97 211.99 212.61
GBP/CHF 2.0804 2.0665 2.0743

Change % Change Last
Nikkei 225 -181,98 -1,37% 13,094.59
Topix -21,45 -1.66% 1,272.93
DAX 30 -83.10 -1.28% 6,396.46
САС 40 -78.02 -1.78% 4,314.34
FTSE 100 -57.20 -1.06% 5,354.70
Dow -51.70 -0.45% 11,326.32
Nasdaq -14.59 -0.63% 2,310.96
S&P -7.07 -0.56% 1,260.31
10YR -0.3100 -0.078% 3.948%
OIL NYMEX +1.02 +0.82% 125.10
Gold -5.20 -0.57% 917.50

09:00 Е15 PPI (June) 1,2%
09:00 Е15 PPI (June) Y/Y7,1%
12:30 USA Personal income (June) 1,9%
12:30 USA Personal spending (June) 0,8%
12:30 USA PCE price index ex food, energy (June) 0,1%
12:30 USA PCE price index ex food, energy (June) Y/Y 2,1%
14:00 USA Factory orders (June) 0,6%