The S&P 500 is managing to hold above the 1400 level, which is considered a key area of resistance by technical traders. Crude has traded in a volatile manner this session, as it has quickly fallen to a session low with a loss of 1.7% to $123.84 per barrel.
Each of the three major indices are posting a gain of at least 1%, with the Nasdaq outperforming. Small-caps are also seeing some buying interest, with the Russel 2000 Index up 1.9%.

June trading now at $124.10, down $1.82.

The stock market is off its best level, but continues to post a decent gain. Telecom (-0.03%) has joined the energy sector (-0.3%) in the red.
JPMorgan Chase (JPM 46.64, +0.07) said it expects $200 million to $250 million in second quarter subprime loan losses, and will have to add to loan loss reserves. The firm believes the capital market crisis is 75% done, and will probably be over by the end of the year.
Just hitting the wires, April Treasury Budget came in at $159.3 billion, which is basically in-line with the $160 billion consensus.

YTD deficit $152.2 bn vs 2007 YTD deficit $80.8b

The major indices have pulled back from their session highs, but remain well into positive ground. The Nasdaq continues to trade more than 1% higher, led by a few of tech's heavyweights.
Microsoft (MSFT 29.80, +0.41), Apple (AAPL 187.63, +4.18), and Oracle (ORCL 21.47, +0.47) are all helping the Nasdaq move higher. But Research In Motion (RIMM 141.67, +8.90) is providing the most positive influence to the index.

Euro-dollar gains extended tagainst a backdrop of fresh remarks from ECB's Trichet that track earlier commentary and show no let-up in the ECB Pres. stance on inflation and price concerns.
The dollar rose against the yen for the first time in six days as traders speculated the Federal Reserve won't cut interest rates next month.
The currency increased from a three-week low versus the yen as a chart traders use to predict price movements signaled last week's 2.4 percent decline was too large to be sustained. The yen dropped against the South African rand and the Brazilian real as speculation the worst of the financial crisis is over led investors to buy higher-yielding assets funded in Japan.
``It's not going to be an express train toward a much stronger dollar, but it will trade stronger slowly and gradually,'' said Jeff Gladstein, global head of foreign- exchange trading at AIG Financial Products in Wilton, Connecticut. ``The U.S. is not going to have as deep a downturn as everyone initially portrayed.''
Futures on the Chicago Board of Trade show an 84 percent chance the Fed will hold its target lending rate at 2 percent at its next meeting on June 25, up from 82 percent odds on May 9. The balance of bets is for a cut of a quarter-percentage point. There's a 10 percent chance of an increase to 2.25 percent in September. The central bank has lowered the fed funds target 3.25 percentage points since September.
``It's doubtful that the Fed can afford to cut more,'' said Benedikt Germanier, an analyst at UBS AG in Stamford, Connecticut, in an interview on Bloomberg Television. ``We are short on the euro-dollar. Our three-month forecast is $1.47.''
Chicago Fed President Charles Evans said in a speech today in Illinois that the central bank's current interest-rate stance is ``appropriate.''
The pound increased from a two-week low against the euro and climbed versus the dollar after a surge in U.K. producer prices led traders to reduce bets that the Bank of England will cut its 5 percent target lending rate next month. Sterling rose 0.2 percent to 79.05 pence per euro and 0.3 percent to $1.9605.

Falling crude prices helped stocks inch higher Monday morning, but gains were limited as gas prices hit new records and some corporate news from FedEx, MBIA and others disappointed.
MBIA. The bond insurer reported a $2.4 billion quarterly loss as it contended with ongoing problems in the credit market and took billions in writedowns.
Sprint Nextel. The wireless telecom reported results that fell from a year earlier, as it lost monthly subscribers and had to pay severance and other charges. The results, excluding items, nonetheless topped analysts' forecasts. Sprint Nextel (S, Fortune 500).
FedEx lowers guidance. The package delivery firm, often seen as a proxy for the economy, warned Friday that fiscal fourth-quarter earnings won't meet forecasts due to surging fuel costs.

Dollar slippage elsewhere allows dollar-yen to backtrack from morning high at Y104.04 for current trade around Y103.35, slippage in euro-yen adding some weight as that pair correlates with US stocks and ebbs lower on the day. Tech resistance and residual supply at Y104.00/05 remains in place, a layer of stops sub Y103.50 now erased and demand interest at Y103.20 now in sight.

The stock market has stalled near session highs. The Nasdaq is outperforming thanks to strength in Research In Motion (RIMM 139.54, +6.77) -- which is not a component of the S&P 500 because it is a Canadian company. RIM is up 22% this year, making it the fourth best performing Nasdaq 100 stock year-to-date.

The S&P 500 briefly slips into the red and then quickly recovers back to the unchanged mark. MBIA (MBI 10.36, +0.93) is up nearly 10%, even though the bond insurer posted a first quarter loss of $2.4 billion, or $13.03 per share.
Apple (AAPL 184.61, +1.16) is outperforming tech (+0.3%) with a 0.6% gain after having its price target raised at AmTech and BMO Capital. However, buying interest is being held in check on news of Research In Motion's (RIMM 138.05, +5.28) new BlackBerry Bold, which will compete with the iPhone. RIM's stock has hit a new lifetime high as traders embrace what they have heard at the company's analyst day.

The S&P 500 is clutching the unchanged mark after slipping off its opening highs. Six of the ten economic sectors are in positive territory. Financials are leading the way with a 0.7% gain, after facing notable selling interest in the prior week. The energy sector is the main laggard with a 1.2% decline, as crude slips 0.5% to $125.28 per barrel.

"We may very well have seen the bottom in the dollar,'' said Stephen Jen, the global head of currency research at Morgan Stanley in London, who forecasts the dollar will rise to $1.40 per euro by year-end. ``The dollar has regained some traction lately. Against the euro, the U.S. dollar is around 25 percent undervalued.''

EUR/USD $1.5475, $$1.5700, $1.5750
USD/JPY Y101.90, Y105.20, Y105.50
GBP/USD $2.0000, $1.8500
AUD/USD $0.9325
USD/CAD C$1.0000

Stock futures rose early Monday as investors looked for bargains after the previous session's brutal selloff and crude prices retreated from record levels.
In major corporate news, Cablevision reportedly is close to buying the Long Island, N.Y., newspaper Newsday from Tribune Co. for $650 million. The deal was expected after News Corp., which owns the rival New York Post, pulled out of the bidding for Newsday Saturday.
In other corporate news, the Wall Street Journal reported that troubles at American International Group are prompting International Lease Finance Corp., an airplane-leasing giant run by one of AIG's largest shareholders, to consider seeking a split from the company. AIG, a Dow component, reported a $7.8 billion first-quarter loss last week, due primarily to subprime mortgage losses.
HSBC (HBC) disclosed on Monday $3.2 billion in writedowns in its consumer finance business plus other impairments, but said it expects to record larger first-quarter profit than a year earlier. Shares of the bank were up 2% in heavy London trading on the news.
Research in Motion (RIMM) unveiled its first major new BlackBerry, called the Bold, in more than a year. The latest model has twice the screen resolution of the current model.
FedEx cut its fourth-quarter guidance late Friday, blaming a steep increase in fuel costs.

``It is more likely than not that reasons for speculators returning to selling the dollar will be greater than reasons for them to sell the euro,'' said Derek Halpenny, head of global- currency research in London at Bank of Tokyo-Mitsubishi UFJ Ltd., who expects the euro to reach a record high within three months. ``I see risk that the ECB doesn't do anything this year and expect the Fed will ease again in 2008.''

the next data was issued
08:00 Italy Industrial production (March) adjusted -0,2% -0.2%
08:00 Italy Industrial production (March) Y/Y adjusted -2,5% -0.8%

The pound rebounded from a two-week low against the euro and climbed versus the dollar after traders pared bets the Bank of England will cut interest rates next month following a report showing a surge in U.K. producer prices.
Despite recent rebpund in euro, a slide in business confidence in Germany and France, which account for about half the euro-region economy, renewed speculation the European Central Bank will reduce rates this year. An end to lower rates in the U.S. and the possibility of cuts in Europe raises the appeal of dollar-denominated assets.
The ECB will lower its 4 percent main refinancing rate to 3.75 percent by the end of September and 3.50 percent by year-end, according to the median estimate of 31 economists surveyed.
The dollar rose against the euro and advanced against the yen for the first time in six days as traders judged its losses were excessive given speculation the Federal Reserve will refrain from lowering interest rates. The currency rebounded from a three-week low versus the yen as a technical chart traders use to predict price movements signaled the 2.4 percent decline in the past five days was overdone.

EUR/USD: Opened early Europe at $1.5395. Renewed selling into early Europe (thinned by regional holidays) took rate through $1.5400 and on to $1.5367, as reported stops below $1.5385 were targeted and triggered. Sovereign demand lifted rate back to $1.5400, countered by Russian sales to $1.5410, but further Asian demand, semi official interest, lifted rate on to $1.5465. Rate retains a firm tone into NY.Bids $1.5425/20, $1.5410/00. Offers $1.5465, $1.5485/00, $1.5520/30
GBP/USD: Opened early Europe at $1.9455. Cable edged back toward $1.9500, meeting supply here. Release of 'better than feared' HSBC earnings, along with strong UK data, provided sterling with a boost, taking cable to $1.9603, euro-sterling to stg0.7878. The pound was holding off best levels ahead of the New York open. Cable bids $1.9550/40, $1.9520. Offers $1.9600/10, $1.9625/35-50/60
USD/JPY: Opened in Europe at Y103.35. Reversal in euro-dollar prompted a strong recovery in euro-yen, taking rate to highs of Y160.69 as dollar-yen edged to Y103.95.
Dollar-yen bids Y103.20/00. Offers Y103.95/4.10, Y104.30-Y103.50

At 18:00 GMT USA will release its Federal budget (April).

- Says anchoring price expectations is key
- Says price stability is fundamental.

The dollar rose against the euro and advanced against the yen for the first time in six days as traders judged its losses were excessive given speculation the Federal Reserve will refrain from lowering interest rates.

The currency rebounded from a three-week low versus the yen as a technical chart traders use to predict price movements signaled the 2.4 percent decline in the past five days was overdone. Traders have stepped up purchases of options that profit from dollar appreciation against the euro and turned bullish in the futures market for the first time since December 2005.

European equity bourses are holding positive levels on Monday, with HSBC reassuring investors after it reported a rise in interim earnings, despite writing off a further $2.6bln related to the US residential mortgage market. Steelmakers are also higher, with Salzgitter leading the charge after Credit Suisse raised its price target E201 from E189 and also lifted its earnings estimates. CAC-40 is up 39pts (+0.78%), Xetra-DAX is up 48pts (+0.68%) and FTSE-100 is up 30pts (+0.48%).

Extends recovery through resistance at $1.5450, trades to $1.5465 but progress toward earlier Asian highs at $1.5486 proving laboured, one trader suggests. Offers now seen placed between $1.5485/00. Move seen as the dollar comes under further general pressure, with dollar-yen easing away from its earlier rally high at Y103.95.

Resistance 3: Y106.30
Resistance 2: Y105.20
Resistance 1: Y104.50
Current price: Y103.80
Support 1: Y102.60

Support 2: Y102.20

Support 3: Y100.00

Comments: Techs is steady. Dollar rebounds. The nearest resistance is Y104.50. Above there is a room for a rise up to Y105.20, then – to Y106.30. Support is near Friday’s low on Y102.60, then – at Y102.20 with a break under will widen losses to Apr 10 lows around Y100.00.

Resistance 3: Chf1.0730
Resistance 2: Chf1.0670
Resistance 1: Chf1.0520

Current price: Chf1.0484

Support 1: Chf1.0400
Support 2: Chf1.0320

Support 3: Chf1.0280

Comments: Dollar consolidates after recent growth. Resistance is around Chf1.0520, then – near Thursday’s high on Chf1.0620. Above there is a room for a rise up to Chf1.0670. Support comes near Friday’s low on Chf1.0390/Chf1.0400, then – on Chf1.0320 and Chf1.0280.

Resistance 3: $1.9780
Resistance 2: $1.9730
Resistance 1: $1.9600
Current price: $1.9570
Support 1: $1.9440

Support 2: $1.9360
Support 3: $1.9280
Comments: Cable trades near highs. Resistance comes at $1.9600 (session highs). Above there is a room for a rise up to $1.9730 and $1.9780.Support comes near today's lows on $1.9440. Below losses may widen to Feb lows at $1.9360.

Resistance 3:$1.5590
Resistance 2: $1.5530
Resistance 1: $1.5480
Current price: $1.5440

Support 1: $1.5280
Support 2: $1.5230
Support 3: $1.5140

Comments: Euro rebounds. The nearest serious support is Friday’s low on $1.5280. Further sales may widen till $1.5230 and March 5 low at $1.5140. Session high on $1.5480 is quite a strong resistance. Above the rate may rise to $1.5530/40 and than to May 6 high at $1.5590.

- Says interest rates not hurting growth
- ECB can act flexibly in next months as needed
- Says monetary policy stance is "fully appropriate".

EUR/USD $1.5475, $$1.5700, $1.5750
USD/JPY Y101.90, Y105.20, Y105.50
GBP/USD $2.0000, $1.8500
AUD/USD $0.9325
USD/CAD C$1.0000

GBP/USD breaks above resistance between $1.9550/65 and extends rally to $1.9585. Offers seen placed to $1.9580, more on approach to $1.9600/10. Stops noted on a break above this latter level, which if triggered seen opening a move on toward $1.9625/35 ahead of $1.9650.

EUR
Bids: $1.5367/60, $1.5330/20
Offers: $1.5395/10, $1.5425, $1.5440/50

JPY
Bids: Y103.10/00, Y102.60/50
Offers: Y103.60, Y104.00/10

GBP
Bids: $1.9450/40, $1.9410/00
Offers: $1.9495/05, $1.9525, $1.9550/65

For the first time since December 2005, futures traders are turning bullish on the dollar. The ECB will lower its 4 percent main refinancing rate to 3.75 percent by the end of September and 3.50 percent by year- end, according to the median estimate of 31 economists.
Interest-rate futures on the Chicago Board of Trade show an 82% chance the Fed will keep its target unchanged at 2% when policy makers next meet on June 25, with the balance of the odds calling for a quarter-percentage point cut.

EUR/USD printed low on $1.5377 before rate began to rebound to $1.5402.
GBP/USD slowly declined to $1.9445. Later rate recovered to $1.9500.
USD/JPY rose from Y102.50 to Y103.80.

In Europe Italy will issue its industrial production data. At 18:00 GMT USA will release its Federal budget (April).

Japanese stock markets ended Monday's session higher. The benchmark Nikkei 225 was higher by 88.02 points, or 0.64%, 13743.36. The broader-based TOPIX was 1.03 7 points higher at 1342.79.

Crude oil rose above $126 a barrel last week as the dollar weakened against the euro, prompting investors to buy commodities as a hedge against the currency's decline. For a fifth day oil climbed to all-time highs as the euro strengthened on signs the European Central Bank will keep rates at a six-year high to cut inflation.

The Organization of Petroleum Exporting Countries, the producer of more than 40% of the world's oil, may meet before September to consider increasing output in an attempt to rein in record crude-oil prices, Libya's Shokri Ghanem said. Nigerian Petroleum Minister of State H. Odein Ajumogobia said today that there are no plans for an additional OPEC meeting because oil supplies are adequate. OPEC kept its production target unchanged at its past three meetings. The group last increased its target on Nov. 1.

U.S. stocks fell, sending the market to its first weekly drop in a month, on concern that record crude oil prices will reduce profits at refiners and lower copper and gold prices will hurt mining companies.The Standard & Poor's 500 Index sank 7.38, or 0.5 percent, to 1,390.3 at 11:08 a.m. in New York, giving it a 1.7 percent decline this week. The Dow Jones Industrial Average slid 88.66, or 0.7 percent, to 12,778.12, led by a 7 percent drop in American International Group Inc. The Nasdaq Composite Index lost 2.15, or 0.1 percent, to 2,449.09. More than four stocks fell for every three that rose on the New York Stock Exchange.Energy companies in the S&P 500 contributed the most to the retreat even as crude surged to a record above $126 a barrel. Producers of raw materials retreated 1.9 percent as a group, led by Freeport-McMoRan Copper & Gold Inc. and Nucor Corp.

Valero Energy Corp., the biggest U.S. refiner, tumbled to an almost three-year low after Goldman Sachs Group Inc. said it may face reductions in profit estimates. Dril-Quip Inc., which makes equipment for offshore oil and gas production, retreated after profit missed estimates by 10 percent. Financial shares pared earlier declines, led by Citigroup Inc. after the largest U.S. bank said it plans to sell $400 billion in assets.
Mylan Inc. fell 9.8 percent to $11.23. The largest U.S. maker of generic medicines reported a wider first-quarter loss on costs tied to the $6.9 billion purchase of Merck KGaA's generics division in October.
McDonald's Corp. fell 42 cents to $59.35. Goldman Sachs Group Inc. removed the world's largest restaurant company from its ``conviction buy list'' and added Burger King Holdings Inc. McDonald's had risen 16 percent since being added to the list June 12, and additional gains may be ``muted'' in the coming months, Goldman analysts led by Steven T. Kron wrote in a report. Burger King may benefit from price increases and extended summer hours, Goldman said.
Financial shares dropped 0.2 percent, paring a decline of as much as 1.3 percent. Citigroup added 14 cents to $24.44 on plans to ``wind down'' about $400 billion of assets as part of a program to return to profitability. The bank announced the wind- down today in a presentation posted on the company's Web site. The New York-based company, which lost $5.1 billion in the first quarter, has recorded more than $40 billion of credit losses and writedowns since the subprime mortgage market collapsed last year.

The spike in oil prices took its toll on sentiment and knocked the wind out of the market's sails. Its effect was punctuated at the end of the week when FedEx (FDX) issued an earnings warning late Friday that was pinned on rising fuel costs.

By the same token, the financial sector also had a heavy hand in the action, falling 6.3% for the week following a batch of ugly earnings reports from the likes of Fannie Mae (FNM), UBS (UBS) and Dow component American International Group (AIG).

The dollar fell broadly on Friday as sagging stock markets and a jump in oil prices to a record high weighed on the U.S. currency, while fading risk demand boosted the low-yielding yen. Rate pared its loss versus the euro Friday after a Commerce Department report showed the U.S. trade deficit narrowed more than forecast in March as imports dropped by the most in more than six years. The euro rose against the dollar today on speculation the ECB will keep its benchmark rate at a six-year high of 4% in coming months to curb price pressures. Futures on the Chicago Board of Trade show a 78% chance the Fed will hold its target lending rate at 2% at its next meeting on June 25, down from an 82% chance yesterday. The balance of bets is for a cut of a quarter- percentage point.

The euro added to gains after ECB President Jean-Claude Trichet said on Thursday that inflation remained his top concern, suggesting the bank may not cut interest rates soon. Inflation in Europe will stay high ``for a rather protracted period,'' Trichet said at a press conference yesterday following the ECB's decision to keep its main refinancing rate at 4 percent.

The euro recovered after falling to a two-month trough below $1.53 as some investors expected Trichet to temper his tough talk on inflation and focus on signs of slowing euro zone growth.

Sterling fell tor a third week against the dollar on speculation the Bank of England will add to three interest- rate cuts since December. Rate fell to a two-month low after the Bank of England kept interest rates on hold at 5% on Thursday.

The yen rose against the euro as concern credit- market losses are spreading hurt stocks and spurred investors to sell higher-yielding assets funded in Japanese currency. The yen was rose versus the dollar after American International Group Inc. said it needs $12.5 billion to offset subprime-related writedowns following two straight quarterly losses. Japan's currency has gained 2% against the euro and 2.2% against the dollar last week. The euro has increased 6 percent against the dollar this year and 0.1% for the week. It has dropped 3.3% against the U.S. currency since reaching a record high of $1.6019 on April 22.

Resistance 3: Y106.30
Resistance 2: Y105.20
Resistance 1: Y104.50
Current price: Y103.45
Support 1: Y102.60
Support 2: Y102.20
Support 3: Y100.00
Comments: Dollar rebounds. The nearest resistance is Y104.50. Above there is a room for a rise up to Y105.20, then – to Y106.30. Support is near Friday’s low on Y102.60, then – at Y102.20 with a break under will widen losses to Apr 10 lows around Y100.00.

Resistance 3: Chf1.0730
Resistance 2: Chf1.0670
Resistance 1: Chf1.0520
Current price: Chf1.0495
Support 1: Chf1.0400
Support 2: Chf1.0320
Support 3: Chf1.0280
Comments: Dollar rebounds. Resistance is around Chf1.0520, then – near Thursday’s high on Chf1.0620. Above there is a room for a rise up to Chf1.0670. Support comes near Friday’s low on Chf1.0390/Chf1.0400, then – on Chf1.0320 and Chf1.0280.

Resistance 3: $1.9780
Resistance 2: $1.9600
Resistance 1: $1.9530
Current price: $1.9458
Support 1: $1.9450
Support 2: $1.9360
Support 3: $1.9280
Comments: Cable still under pressure. Support comes near Friday’s lows on $1.9460. Below losses may widen to Feb lows at $1.9360. Resistance comes at $1.9530 (Friday’s highs). Above there is a room for a rise up to $1.9600 and $1.9780.

Resistance 3:$1.5590
Resistance 2: $1.5530
Resistance 1: $1.5480
Current price: $1.5395
Support 1: $1.5280
Support 2: $1.5230
Support 3: $1.5140
Comments: Euro retreats, holding a bit above Friday’s low on $1.5280. Further sales may widen till $1.5230 and March 5 low at $1.5140. Session high on $1.5480 is quite a strong resistance. Above the rate may rise to $1.5530/40 and than to May 6 high at $1.5590.

High Low Close
EUR/USD 1.5487 1.5392 1.5480
USD/JPY 103.94 102.60 102.97
GBP/USD 1.9568 1.9455 1.9520
USD/CHF 1.0513 1.0388 1.0409

EUR/JPY 160.04 158.58 159.40
EUR/GBP 0.7938 0.7869 0.7927
GBP/JPY 203.27 199.79 201.01
GBP/CHF 2.0555 2.0236 2.0321

Change % Change Last
Nikkei 225 -287.92 (-2.06%) 13655.34
Topix -31.19 (-2.3%) 1340.79
DAX 30 -71.81 (-1.02%) 7000.09
САС 40 -95.02 (-1.9%) 4960.56
FTSE 100 -63.10 (-1.0%) 6207.70
Dow -120.90 (-0.94%) 12745.88
Nasdaq -5.72 (-0.23%) 2445.52
S&P -9.40 (-0.67%) 1388.28
10YR 96 +2/32 3.77% 100 27/32
OIL NYMEX +2.27 (+1.84%) $125.96

Switzerland Whit Monday
08:00 Italy Industrial production (March) adjusted - -0.2%
08:00 Italy Industrial production (March) Y/Y adjusted - -0.8%
18:00 USA Federal budget (April), bln 158.0 -48.1