USD/JPY fell to Y102.22 low before sharply retreated to current Y102.47. Dollar remains well above the overnight low area at Y101.77.

The aluminum maker Alcoa Inc announced, after the closing bell yesterday, profits dropped more than half on increasing costs and a declining dollar despite the increase in sales prices for aluminum.

The maker of the iPhone Apple Inc is cut to “underperform” from “market perform” by Morgan Keegan & Co.

Advanced Micro Devices, Inc announced a 10% cut of its workforce after the closing bell yesterday, lowers its quarterly sales forecast on weaker demand.

Lehman upgrades Fannie Mae to “overweight”.

EUR/USD lifted to $1.5725 area in the wake of the FOMC minutes. Currently rate holds near $1.5712. Offers eyed $1.5770/80.

Minutes detail how mkt conditions deteriorated and econ prospects worsened. Dallas Fed's Fisher wanted to focus more on measures targeted at liquidity probs and worried about inflation prospects; Philly's Plosser focused on inflation worries.

Simon Rubinsohn, RICS chief economist: “The sharp fall in the Halifax house price index in March highlights the growing pressure on the residential market as lenders continue to scale back their activity in the market.”

Much of the same as the major indices trade in negative territory.Declining issues outpace advancing issues by 4-to-3 on the NYSE and the Nasdaq.

The dollar was little changed against the euro on speculation minutes of the Federal Reserve's March meeting will show it's preparing to slow interest-rate cuts, while the pound fell to a record against the euro.
The U.S. currency has risen 0.5% against the euro this month.
The chance that the Fed will lower the target lending rate by three-quarters of a percentage point to 1.5% by the end of October has been cut in half in the past month, futures on the Chicago Board of Trade show. Traders see a 12% chance the central bank will make such a reduction, compared with 25% odds a month ago. The central bank is next scheduled to decide on interest rates April 30.
The central bank cut the fed funds rate to 2.25% at the March 18 meeting.
The European Central Bank will hold the main refinancing rate steady on April 10 at a six-year high of 4%. The euro gained 1.6% against the dollar in the two weeks following the ECB's last meeting on March 6.
The pound fell after the U.K. housing report raised speculation that the Bank of England will reduce the 5.25% benchmark lending rate on April 10.
In the U.S., the National Association of Realtors reported that the number of Americans signing contracts to buy previously owned homes declined more than forecast in February, indicating the real-estate recession will extend into a third year. Former Fed Chairman Alan Greenspan told a conference in Tokyo via satellite that the drop in U.S. home prices will probably end this year.

Chris Turner, head of FX strategy at ING: “It's raining bad news on the UK. There's now speculation that the MPC could cut rates by 50 basis points rather than 25 basis points.”

David Pais, currency strategist at Citigroup: “I don't think expectations have changed a great deal. The ECB will stay on hold and likely maintain their hawkish rhetoric.”

Boris Schlossberg, senior currency strategist at FXCM: “We are getting a bit of dollar strength as we go forward. The focus is now shifting from weakness in the U.S. to the possibility of the rest of the world having to begin to lower interest rates to combat a global slowdown.”

Aroop Chatterjee, analyst at Barclays Capital says “The main highlight of today's schedule will be the minutes from the March (Fed) meeting. We expect those minutes to give additional details on the thinking behind the 75 basis point rate cut announced after that meeting on March 18.”

EUR/USD cultivates near $1.5700, above morning lows at $1.5675, flows are light and bids at $1.5670 remain intact.

EUR/JPY pushing back above Y161.00 and set a high at Y161.26, still off the Asian highs at Y161.75. A clean break of this area would expose supply in the Y162.20/30 area, next resistance at Y163.14.

Stocks slipped Tuesday as Alcoa's weak results and AMD's profit warning spooked investors at the start of the earnings reporting period.
Among corporate news: The Dow component and aluminum producer Alcoa set the earnings period in motion late Monday on a down note, reporting quarterly results that fell from a year earlier and missed estimates, on sales that fell and beat forecasts.
The chipmaker Advanced Micro Devices warned late Monday that first-quarter sales won't meet its previous forecast due to weakness across all of its businesses. The company also said it was cutting 10% of its workforce.
Economic news: The National Association of Realtors' (NAR) Pending Home Sales Index fell to 84.6 in February, down 1.9% from a revised reading of 86.2 in January and down 21.4% versus the same period last year. Economists were expecting the index to decline to 85.2 for the month.

USD/JPY rallied to current Y102.64 area as euro-yen provided some lift. Offers in place to Y102.80/90.

Economist Ian Shepherdson at HFE says -1.9% Feb pending home sales is a new cycle low, "but it is not a big enough decline to signal a further downward lurch in the trend. Allowing for the volatility of the numbers and the scope for future revision, the
trend has been more or less flat for the past six months." He says next move will be lower, however, as house price declines accelerate.

The major indices remain in the red, with nine of the ten sectors posting a loss. Telecom (-1.9%), tech (-1.0%) and financials (-0.8%) are showing weakness in the early-going. Energy (+0.6%) is providing leadership as crude oil (+0.2% to $109.32) recovers into positive territory.

Futures continue to point to a lower start (S&P futures vs fair value: -8.7. Nasdaq futures vs fair value: -17.0. ). Crude oil prices (-0.7% to $108.36) have eased a bit after rallying yesterday. On the economic front, February pending home sales is set for release at 1400GMT, and the March 18 FOMC minutes are set for release at 1800GMT.
Alcoa, the first company to report first-quarter earnings, announced a 54% plunge in net income to $303 million, or 37 cents a share.
Also, semiconductor maker Advanced Micro Devices said on Monday that it is laying off 10% of its workforce, or about 1,680 employees.
Meanwhile, Washington Mutual is working on a deal for an equity injection from by a group of investors led by the private equity firm TPG that could reach $7 billion, according to the Wall Street Journal.

EUR/USD $1.5550
USD/JPY Y102.00, Y102.05, Y102.85, Y100.00, Y103.35
EUR/GBP stg0.7900
AUD/USD $0.9260, $0.9100, $0.8950
USD/CAD C$1.0080, C$1.0190

The euro traded close to a one-week high against the dollar on speculation the European Central Bank will signal plans to keep interest rates on hold as the Federal Reserve reduces borrowing costs.
The pound fell to within half a euro cent of a record low against the common European currency on speculation the Bank of England will lower interest rates on April 10 as U.K. economic growth slows. British home prices tumbled 2.5 percent last month, the biggest drop since 1992, HBOS Plc said today.
Losses in the dollar may be limited by speculation minutes of the Fed's March 18 meeting due to be published today will show policy makers are concerned prices may rise too quickly.

EUR/USD retreated from $1.5780 to $1.5675. Offers ahead $1.5800, and $1.5820. Bids $1.5700/95, $1.5670
GBP/USD went to a high at $1.9925, but fell later till $1.9670. Cable bids $1.9680/70, $1.9650 Offers $1.9800/10, $1.9850
USD/JPY rebounded from from Y101.75 to Y102.30.

US data starts at 1255GMT by the Redbook for the same week. Data continues at 1400GMT with the NAR Pending Home Sales for February.Later, at 1800GMT, the Federal Reserve also releases the minutes of itsMarch 18 FOMC meeting, in Washington.

"Economic data is confirming a recession scenario, but in the financial markets risk premiums are fading. Recent capital injections into the financial sector are part of the story, but the turnaround in the credit markets can be traced back to the Bear
Stearns rescue which provoked the Fed to offer substantial backstops to the financial system. The rally in credit and equity markets may reflect narrowing risk premiums rather than improving expectations."

Drops back to around $1.5720. Bids now seen placed ahead of $1.5700, with demand said to extend to $1.5690 with stops placed on a break below. Offers remain in place toward $1.5780, stronger ahead of $1.5800.

The euro traded close to a one-week high against the dollar on speculation the European Central Bank will signal plans to keep interest rates on hold as the Federal Reserve reduces borrowing costs.
The 15-nation currency also rose to near a three-month high against the yen after ECB council member Axel Weber said in Berlin yesterday policy makers remain focused on ensuring price stability. The British pound fell against every major currency after a report showed a slump in house prices. The ECB and Bank of England announce interest-rate decisions in two days' time.
``Because Weber was hawkish, the market has scaled down the probability of a more neutral ECB,'' said Henrik Gullberg, a currency strategist at Calyon, the investment-banking arm of Credit Agricole SA. ``They definitely won't be dovish and that has weighed on chances of seeing a rate cut at some point.'' The euro may rise to $1.60 by the end of the quarter, Gullberg said.
Data today will show U.S. pending home sales fell 1 percent in February after no change the previous month, according to a Bloomberg survey.
The pound fell to within half a euro cent of a record low against the common European currency on speculation the Bank of England will lower interest rates on April 10 as U.K. economic growth slows. British home prices tumbled 2.5 percent last month, the biggest drop since 1992, HBOS Plc said today. The pound traded as low as 79.78 pence per euro, the weakest since March 31. It was at $1.9767 from $1.9883.
``We expect the pound to face significant downside pressure this week,'' BNP Paribas SA analysts led by Hans-Gunter Redeker wrote in a research note dated yesterday. ``We expect the BOE to cut rates this week. The state of the U.K. economy has also been underlined by Darling being accused of complacency.''
Losses in the dollar may be limited by speculation minutes of the Fed's March 18 meeting due to be published today will show policy makers are concerned prices may rise too quickly.

"Major Equity Indices remain within their congestion ranges. There is significant resistance in S&P at 1396-1406, Nikkei at 13500. S&P 500 trades at 1375 currently while the Nikkei closed at 13,450 on Monday.

Strategist Lee Olver at AMH Capital says "Credit conditions seem to be easing - riskier spreads are dropping, but still remain high. Bank spreads (and by implication finance spreads) have flattened out; other sectors are falling."

Resistance 3: Y104.00

Resistance 2: Y103.60
Resistance 1: Y102.90
Current price: Y102.03
Support 1: Y102.00

Support 2: Y101.40

Support 3: Y100.80

Comments: Techs is steady. Strong resistance is around Friday’s and yesterday's high on Y102.90. Above the target comes at Y103.60 (Mar 11 highs) and Y104.00. Support is near Y102.00, stronger – on Y101.40 (Friday’s low), with a break under will widen losses to Y100.80.

Resistance 3: Chf1.0250
Resistance 2: Chf1.0220
Resistance 1: Chf1.0170
Current price: Chf1.0082

Support 1: Chf1.0060
Support 2: Chf0.9960

Support 3: Chf0.9880

Comments: Dollar rebounds. The nearest resustance is yesterday's high at Chf1.0170. Above there is a room for a rise up to Chf1.0220 and then – to Chf1.0250 (Mar 24). Break lower Chf1.0060 will widen losses to and then - to Chf0.9960. Stronger support is around Chf0.9880 (Mar 31 low).

Resistance 3: $2.0180

Resistance 2: $2.0050

Resistance 1: $1.9930
Current price: $1.9785
Support 1: $1.9750

Support 2: $1.9720
Support 3: $1.9620

Comments: Cable trades under pressure after weak Halifax data. Support is around $1.9750 with a break under widens the losses to April 1 low at $1.9730/20. Resistance comes at recent day's highs on $1.9930, stronger – near $2.0050 (Friday’s high), with a break above will open the way to Mar 27 high on $2.0180.

Resistance 3:$1.5900
Resistance 2: $1.5840

Resistance 1: $1.5800

Current price: $1.5750

Support 1: $1.5730
Support 2: $1.5650
Support 3: $1.5510

Comments: Euro retreats. Resistance comes at session high on $1.5800 with stronger – on $1.5840, with a lift higher possibly till record on $1.5900. Support is around broken resistance line at $1.5730. Below losses may widen to $1.5650 and $1.5510 (Thursday’s low).

``The U.S. economy is deteriorating so fast that it's hard to believe economies outside of the U.S. won't get affected,'' said Tom Fitzpatrick, global head of currency strategy at Citigroup in New York. ``As the slowdown in the U.S. reverberates to Europe, the ECB can't be sitting this one out. They have to cut,'' which may limit dollar losses, he said.

EUR/USD: $1.5550
USD/JPY: Y102.00, Y100.00, Y103.35
EUR/GBP: stg0.7900
AUS/USD: $0.9100, $0.8950
USD/CAD: C$1.0190

Continues to edge higher, looks set to retest life highs at stg0.7982 (Mar31). Rate currently trades around stg0.7977 after touching a high of stg0.79785. A break above stg0.7982 to open a push on toward stg0.80000, the level said to hold option barrier interest and expected to draw protective selling ahead.

WTI Nymex crude oil spiked higher to $109.60 on wire report citing Iranian state radio that Iranian President Ahmadinejad saying that Iran is to install 6,000 new advanced enrichment centrifuges at a Natanz plant. WTI Nymex crude oil is now trading at $109.40, up 31 cents.

Futures traders doubled bets against the greenback in the past two months, data from the Commodity Futures Trading Commission in Washington show. Citigroup Inc., Deutsche Bank AG and Royal Bank of Scotland Group Plc, which handle almost 40 percent of global foreign exchange trading, say the currency may slump to $1.65 per euro by October. U.S. growth likely declined to a 0.2 percent annual pace last quarter, the weakest since 2002, according to the median forecast of 85 economists in a Bloomberg survey.
Foreign private investors sold a net $37.6 billion of U.S. stocks and bonds in the six months ended Jan. 31, the most recent Treasury Department data show. The last time sales exceeded purchases over a six-month period was April 1996.
Citigroup predicts it will depreciate to $1.65 per euro next quarter, compared with an earlier forecast of $1.51. Deutsche Bank's Boyton and Adrian Schmidt, a senior currency strategist at Edinburgh-based RBS, say it may reach that level by July. Deutsche Bank revised its six-month euro forecast to $1.55 in March, from $1.41 in February. RBS, the fourth-biggest currency trader, sees it at $1.57 on June 30, compared with an earlier estimate of $1.47.
The euro fell earlier after European finance chiefs and central bankers said at the end of two days of talks in Slovenia on April 5 that the credit squeeze increasingly threatens to undermine growth in the 15-nation currency region.
The yen and Swiss franc weakened as investors bought high- yielding assets financed by loans in Japan and Switzerland.

EUR/USD: fell from $1.5730 to a low at $1.5628, rebounding later till $1.5700/30.
GBP/USD: skillped from $1.9940 to a tough at $1.9837. Further trade saw rate up to $1.9885/00.
USD/JPY: gained from Y101.50 to Y102.85 retreating later till Y102.40.

US data starts at 1255GMT by the Redbook for the same week. Data continues at 1400GMT with the NAR Pending Home Sales for February.Later, at 1800GMT, the Federal Reserve also releases the minutes of itsMarch 18 FOMC meeting, in Washington.

closing
Nikkei 225 +157.01 +1.20% 13,450.23
Topix +16.69 +1.30% 1,305.63
CAC +43.72 +0.89% 4,944.60
DAX +57.64 +0.85% 6,821.03
FTSE 100 +67.70 +1.14% 6,014.80
DOW 2.03 +0.02% 12,611.45
NASDAQ 6.15 -0.26% 2,364.83
S&P 500 2.12 +0.15% 1,372.52
10YR 25/32 99 16/32 Yield: 3.56%
Light Crude (NYM) May 08 ($US per bbl.) +2.86 109.09
Gold (CMX) June 08 ($US per Troy oz.) +13.60 926.80

Japan's stocks rose to the highest in a month, led by commodity-related companies, after copper climbed to a near record and crude oil prices rose.
Mitsui & Co., which gets more than half its profit from commodities dealing, posted the biggest gain in more than four years, while Nippon Steel Corp. and JFE Holdings Inc. led steelmakers lower on a report the cost of raw materials may increase. KDDI Corp. and Softbank Corp. advanced after a brokerage raised its ratings on the mobile-phone carriers.
Nippon Mining, Japan's biggest copper smelter, soared 8.9%, the steepest leap since October 2003. The company has minority stakes in mines including Escondida in Chile, the world's largest copper mine.
Tokyo Electric Power Corp., Asia's largest generator, fell 3.2%, the first drop in five days. Tokyo Gas Co., the largest distributor of the fuel, sank 2.9%.
KDDI and Softbank, the nation's second- and third-largest mobile-phone carriers, jumped after Mitsubishi UFJ Financial Group Inc. raised them to ``strong outperform.'' KDDI's total subscribers climbed to 30 million at the end of last month, the carrier said.

European stocks lifted for a second day as companies announced more than $14 billion of mergers and acquisitions, Merrill Lynch & Co. said the worst of the credit markets' turmoil is over and Goldman Sachs Group Inc. advised buying mining shares.
Nestle SA climbed to the highest since January in Zurich after Novartis AG agreed to buy a 25 percent stake in its eye- care unit. UBS AG, Europe's biggest bank by assets, rallied to a five-week high after Merrill upgraded the stock.
Anglo American gained 4%. Goldman added the stock to its ``conviction buy'' list and set a price estimate of 3,945 pence for the shares.
BHP Billiton, the world's largest mining company, jumped 4.2%, while Rio Tinto Group, the third- biggest mining company, advanced 2.6%.
Vedanta Resources Plc, India's largest copper producer, rose 4.9% after Goldman upgraded the stock to ``buy'' from ``neutral.''

US stocks went higher Monday as a spate of deal talk encouraged investors, including the latest in the potential Microsoft-Yahoo combination and a possible $5 billion investment for mortgage lender Washington Mutual. However, gains were limited by spiking oil, gold and gas prices.
Over the weekend Microsoft gave Internet bellwether Yahoo a three-week deadline to agree to a takeover or face a proxy fight for control of the company. Yahoo's board responded early Monday that it is not opposed to a deal, but does not believe Microsoft's current offer is in the best interest of shareholders. Microsoft shares were 2% higher in early trading in Frankfurt trading, while Yahoo shares were 0.5% higher.
Swiss pharmaceutical maker Novartis said Monday it is buying a quarter of eye-care company Alcon with an option to buy more than three-quarters of the company in a deal potentially worth $38 billion.
Washington Mutual, the nation's largest thrift, is in talks to get $5 billion investment from private equity firm TPG, according to a report in The Wall Street Journal, while the Financial Times reports that Delta Air Lines and Northwest Airlines have revived their merger talks.
The first-quarter earnings reporting period starts after the close of trade Monday when Dow component Alcoa reports earnings. Earnings for the overall S&P 500 are expected to decline versus a year ago, due largely to a big drop in financial sector results amid the credit and housing market crises.

The euro traded near a one-week high against the dollar on speculation the European Central Bank will signal plans to keep interest rates on hold as the Federal Reserve reduces borrowing costs. The 15-nation currency also gained to a three-month high against the yen after council member Axel Weber said in Berlin yesterday the ECB remains focused on ensuring price stability. The central bank will keep its key rate at a six-year high of 4 percent on April 10, compared with the Fed's benchmark rate of 2.25 percent, according to a survey of economists.
The dollar declined after former Fed Chairman Alan Greenspan told a conference in Tokyo via satellite that the extent of losses stemming from a collapse in the subprime-mortgage market won't be known for months.
Losses in the dollar may be limited by speculation minutes due later today from the Fed's meeting on March 18 will show policy makers are concerned that prices may rise too quickly.
The yen fell on speculation the Bank of Japan will signal the economy is weakening. The central bank will keep its overnight lending rate unchanged at 0.5 percent at a two-day meeting starting today, according to economists surveyed.The central bank will announce its rate decision tomorrow in the early afternoon and publish its monthly assessment of the economy at 3 p.m. The government last month cut its evaluation for a second month, saying the recovery is ``pausing.''
The pound fell to a one-week low against the euro on speculation the Bank of England will lower interest rates this week as the U.K. economy slows. The pound fell to as low as 79.32 pence per euro, the weakest since April 1.

EUR/USD gained from $1.5690 to $1.5797, retreating later till $1.5740.
GBP/USD went to a high at $1.9925, but fell later till $1.9840.
USD/JPY sunk from Y102.50/60 to Y102.05.

US data starts at 1255GMT by the Redbook for the same week. Data continues at 1400GMT with the NAR Pending Home Sales for February.Later, at 1800GMT, the Federal Reserve also releases the minutes of itsMarch 18 FOMC meeting, in Washington.

Japan's benchmark stock indices ended Tuesday's session lower, weighed by the weaker dollar and profit-taking. The benchmark Nikkei 225 led the way lower, down 199.80 points, or 1.49%, at 13250.43. The broader-based TOPIX was down 22.94 points at 1282.69.

Drops through $1.9800 on release of Halifax house price data for March, the month on month price fall much larger than forecast. Rate falls to $1.9784 before picking up fresh demand, one trader suggesting profit take buying emerged after rate was pressured down in early European trade ahead of this release. Rate currently trades around $1.9798. Rate current seen struggling to make a clean break lower, one trader observes, but adds that if it can press lower expected to meet further demand at $1.9775 ahead of $1.9760/50.

Resistance 3: Y104.00
Resistance 2: Y103.60
Resistance 1: Y102.90
Current price: Y102.33
Support 1: Y102.00

Support 2: Y101.40

Support 3: Y100.80

Comments: Techs is steady. Strong resistance is around Friday’s and yesterday's high on Y102.90. Above the target comes at Y103.60 (Mar 11 highs) and Y104.00. Support is near Y102.00, stronger – on Y101.40 (Friday’s low), with a break under will widen losses to Y100.80.

Resistance 3: Chf1.0250
Resistance 2: Chf1.0220
Resistance 1: Chf1.0170
Current price: Chf1.0114

Support 1: Chf1.0060
Support 2: Chf0.9960

Support 3: Chf0.9880

Comments: Dollar rebounds. The nearest resustance is yesterday's high at Chf1.0170. Above there is a room for a rise up to Chf1.0220 and then – to Chf1.0250 (Mar 24). Break lower Chf1.0060 will widen losses to and then - to Chf0.9960. Stronger support is around Chf0.9880 (Mar 31 low).

Resistance 3: $2.0180

Resistance 2: $2.0050

Resistance 1: $1.9930
Current price: $1.9849
Support 1: $1.9840

Support 2: $1.9810
Support 3: $1.9730

Comments: Techs is steday. Cable trades under pressure. Support is around yesterday's and session low on $1.9840 with a break under widens the losses to $1.9810 and then – to last April 1 low at $1.9730. Resistance comes at recent day's highs on $1.9930, stronger – near $2.0050 (Friday’s high), with a break above will open the way to Mar 27 high on $2.0180.

Resistance 3:$1.5900
Resistance 2: $1.5840Resistance 1: $1.5800Current price: $1.5737

Support 1: $1.5730
Support 2: $1.5650
Support 3: $1.5510

Comments: Euro retreats. Resistance comes at session high on $1.5800 with stronger – on $1.5840, with a lift higher possibly till record on $1.5900. Support is around broken resistance line at $1.5730. Below losses may widen to $1.5650 and $1.5510 (Thursday’s low).

High Low Close
EUR/USD 1.5734, 1.5626, 1.5705
USD/JPY 102.82, 101.50, 102.36
GBP/USD 1.9939, 1.9834, 1.9883
USD/CHF 1.0170, 1.0055, 1.0128

EUR/JPY 161.45, 159.52, 160.79
EUR/GBP 0.7913, 0.7865, 0.7896
GBP/JPY 204.41, 202.35, 203.53
GBP/CHF 2.0187, 2.0040, 2.0139

Change % Change Last
Nikkei 225 +157.01 +1.20% 13,450.23
Topix +16.69 +1.30% 1,305.63CAC +43.72 +0.89% 4,944.60
DAX +57.64 +0.85% 6,821.03
FTSE 100 +67.70 +1.14% 6,014.80
DOW 2.03 +0.02% 12,611.45
NASDAQ 6.15 -0.26% 2,364.83
S&P 500 2.12 +0.15% 1,372.52
10YR 25/32 99 16/32 Yield: 3.56%
Light Crude (NYM) May 08 ($US per bbl.) +2.86 109.09
Gold (CMX) June 08 ($US per Troy oz.) +13.60 926.80

12:15 CAN Housing Starts s.a (YoY) (Mar) 256.9K
14:00 USD Pending Home Sales (MoM) (Feb) 0%
18:00 USA FOMC Minutes (Mar 18)