The major indices fall back into the red, but losses are modest. The small-cap Russell 2000 Index is managing to hold onto a modest 0.3% gain.
The dollar has seen some swings this session. The Dollar Index is currently down a sligh 0.04%, but was up as much as 0.82% and down as much as 0.44%.

Drifts to fresh lows for the US session sub $1.5820 but not a lot of flows behind the move. Bids $1.5780/75.

The stock market rebounds into positive territory as it trades at its best level of the session. Buying interest has been mostly broad-based, although energy (+2.0%) and telecom (+0.8%) have made some notable gains. There is no specific news item that would account for the recent spike.

S&P's David Wyss & Beth Ann Bovino - "we expect the Fed to lower rates again at its April 29-30 meeting. The current data, especially after the weak employment report last Friday, would suggest a 50 bps-rate cut, but the cut could be only 25 bps if the rest of the month's data improve."

The S&P 500 and Nasdaq are trading with modest losses. The Dow is outperforming on a relative basis, as it posts a slight gain.
Within the Dow, 15 of the 30 stocks are posting a gain. IBM (IBM 117.45, +1.45) is posting the largest gain . Citigroup (C 22.33, -1.03) is showing the most weakness.

The dollar fell against the euro after the Group of Seven nations failed to convince investors that they will intervene to prop up the U.S. currency.
The G-7 said on April 11 that the recent ``sharp fluctuations'' in exchange rates risk hurting the global economy, a sign to some traders that it would support the dollar. It was the most significant change in the G-7 statement since the Boca Raton, Florida, meeting in February 2004, when officials cautioned against ``excess volatility.''
The latest statement didn't explicitly mention the dollar or suggest plans for intervention, in which central banks arrange purchases or sales of foreign exchange.
``There's a credibility gap between what the G-7 is saying and what they can do,'' said Mike Moran, senior currency strategist at Standard Chartered Bank in New York.
The greenback dropped as Wachovia Corp. unexpectedly reported a first-quarter loss, fueling concern the worst of the credit crisis hasn't passed. Sterling rose versus all of the major currencies after a report showed British producer prices rose in March at the highest annual rate since 1991.

The major indices fall to fresh session lows after some broad-based selling pressure. Losses remain modest.
In overseas trading, Europeans markets came under selling pressure after Wachovia (WB 24.99, -2.82) announced its disappointing results. England's FTSE is down 0.9% and Germany's Dax is down 0.6%.
Asian markets posted steep losses following General Electric's (GE 32.11, +0.06) large earnings miss last Friday. Japan's Nikkei fell 3.1% and Hong Kong's Hang Seng shed 3.5%.

Stocks were mostly lower Monday as Wachovia's surprise quarterly loss revived fears about how the economic slowdown is impacting company earnings.
However, any declines were limited by a stronger-than-expected retail sales report.
Wachovia (WB, Fortune 500) reported a quarterly loss of 20 cents per share versus a profit of $1.20 a year earlier. Analysts surveyed by Thomson/First Call thought it would report a profit of 40 cents per share. The company also cut its quarterly dividend and said it will raise $7 billion through a share sale. Shares fell nearly 8%.
A variety of financial stocks slumped on the news, including Citigroup, Bank of America and Washington Mutual.
In other merger news, Delta Air Lines and Northwest are reportedly close to announcing a deal after months of speculation.
U.S. based Manitowoc (MTW), a diversified manufacturer is buying food equipment maker Endodis for $2.1 billion. Endodis is listed in the U.K. but operates out of Tampa, Fla.
Commodity prices. U.S. light crude oil for May delivery rose 61 cents to $110.75 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery rose $2.40 to $929.40 an ounce.
Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.48% from 3.47% late Friday.

The major indices are now posting modest losses as the financial sector (-2.1%) falls deeper in the red. The sector will likely see volatility this week with the earnings reports coming from US Bancorp (USB 32.38, -0.24), JPMorgan Chase (JPM 41.99, -0.54), Wells Fargo (WFC 27.40, -0.57), Merrill Lynch (MER 42.73, -0.95) and Citigroup (C 22.40, -0.96) to name a few.
Despite the recent dip, the stock market's range in the early-going has been limited. It was up 0.1% at its peak, and down 0.3% at its recently reached trough.

Economists at JPM say after “today's retail sales data, preliminary estimate for real consumer spending in 1Q08 is still tracking a 0.5% growth rate. They anticipate a contraction in consumer spending in 2Q08 at a 1% rate”.

Just hitting the wires, February business inventories rose 0.6%, matching the consensus estimate.The stock market is trading with a slight gain after getting a modest boost from the economic data. Seven of the ten sectors are in positive territory, with most of the selling pressure isolated to financial stocks.Energy stocks are up 1.0% which is helping to offset some of the financial sector's 1.5% drop. The financial sector is facing the most selling pressure due to the disappointing results from Wachovia.

EUR/GBP fell to stg0.7960 before rebounding to current stg0.7983. Bids still noted between stg0.7965/60. Offers remain in place between stg0.8010/15, stronger between stg0.8030/40.

EUR/USD $1.6000, $1.5400
USD/JPY Y101.00, Y100.00, Y102.50
EUR/JPY Y160.05, Y155.00
EUR/CHF Chf1.5820/30
AUD/USD $0.9300

EUR/USD printed high on $1.5885 but retreated amid US retail sales data. Bids on $1.5835/30 ahead of $1.5810/00. Offers now seen placed at that fresh intraday high at $1.5885, more between $1.5895/05 ahead of life high at $1.5915.

From US, key economic data include retail sales, CPI & PPI, housing data including NAHB & new residential construction, Empire state and Philly Fed survey & industrial production, TIC capital flow. Fed's beige book will be featured to. From Eurozone, HICP final, German ZEW will be major focus. From UK, focus is on PPI & CPI as well as employment report. From Japan, BoJ minutes, industrial production will be watched. Canadian CPI and Swiss retail sales & ZEW will be featured too.
One of next week's interesting events is the Fed's Beige Book. It is an extract of comments from businesses across the US. The comments describe developments in the various sectors of the economy such as the manufacturing industry, retail sales, the housing market, the financial sector etc. And there are comments across sectors about employment, wages and prices. The report is thus a relatively updated description of developments in the US economy. It also reflects the Fed's numerous contacts in the US corporate sector and it is one of the instances where the Fed is better informed than the rest of the market.

The following data was released
08:30UKPPI (Output) (March) unadjusted 0.9% 0.5% 0.3%
08:30UKPPI (Output) (March) unadjusted Y/Y 6.2% 5.6% 5.7%
08:30UKPPI Output ex FDT (March) adjusted 0.3% - 0.3%
08:30UKPPI Output ex FDT (March) unadjusted Y/Y 3.1% 3.0% 3.0%
08:30UKPPI (Input) (March) adjusted 1.8% 1.8% 1.7%
08:30UKPPI (Input) (March) unadjusted Y/Y 20.6% 18.9% 19.3%
09:00EU(15)Industrial production (February) 0.3% 0.3% 0.6 (0.9)%
09:00EU(15)Industrial production (February) Y/Y3.1% 3.0% 3.3 (3.8)%

The dollar fell against the euro after Wachovia Corp. reported an unexpected loss, fueling concern the worst of the credit crisis hasn't passed. The U.S. currency also declined a second day against the yen after Wachovia posted its first quarterly loss since 2001.
The Group of Seven said after a weekend meeting it's concerned ``sharp fluctuations'' in currency markets may hurt the global economy, which ``continues to face a difficult period.''
The euro also gained after European Central Bank council member Yves Mersch said policy makers can't afford to cut the region's 4% benchmark rate this year with inflation likely to breach its 2% limit in 2009.
Futures show traders see a 50% chance that the Fed will cut its benchmark rate by 50 basis points to 1.75% at the next meeting on April 30.

EUR/USDopened around $1.5728. Mid-East demand pushed the rate up to $1.5780, then to $1.5825 and $1.5880, triggering offers on $1.5850/60. Bids $1.5810/00, $1.5775, $1.5750
GBP/USD stretched on to a high of $1.9897 amid strong inflation data from UK. Cable exposed offers between $1.9800/10 and $1.9850. Bids remain at $1.9865, with interest extending down to $1.9745.
USD/JPY printed low on Y101.20, послечегорезкооткатилк Y101.30.

Today’s focus on Retail sales and Business inventories. Analysts predict sales rose 0.4% in March versus -0.6% month earlier.

EUR/USD $1.6000, $1.5400
USD/JPY Y101.00, Y100.00, Y102.50
EUR/JPY Y160.05, Y155.00
EUR/CHF Chf1.5820/30
AUD/USD $0.9300

Economists at Goldman say consumer confidence declines yet further, to the lowest level since 1982. At this low of a level it tough to see it as consistent with anything but a recession. This level of confidence is consistent with outright declines in consumer spending.

TJ Marta of RBC Capital Markets notes that “the March U of Mich confidence reading was the worst since 1982. The components were no less dismal. The economic conditions component (fell to 78.4 from 84.2) was also the worst since 1982 too.”

"It's going to be generally a dollar-weakening environment,'' John Horner, a currency strategist in Sydney for Deutsche Bank AG, the world-largest currency trader, said in an interview with Bloomberg Television. Policy makers at the G-7 won't ``argue for a stronger dollar,'' he said, forecasting the dollar may fall beyond $1.60 a euro in coming weeks.

The U.S. dollar remained on the backfoot as market players continued to reflect over the outcome of the weekend meeting of the Group of Seven industrialised countries. The G7 finance ministers surprised markets by acknowledging that there have been sharp fluctuations in major currencies since its last meeting, and that they are concerned about their possible implications for economic and financial stability.

The dollar initially gained on these comments, but then came under pressure on concerns that there were no firm comments on the possibility of intervention to stem the volatility of certain major currencies.

"The fact that intervention by the major central banks won't be seen just yet has seemingly limited gains for the greenback," said Gary Thomson, head of sales trading at CMC Markets.

Elsewhere, the pound briefly gained but quickly fell back following stronger-than-expected data in the United Kingdom, which revealed that inflationary pressures from the manufacturing sector remains high. PPI rose by 0.9% in March from the previous month on an unadjusted basis, to take the annual rate up to 6.2%, well above expectations for gains of 0.7% and 5.7% respectively.

Today’s focus on Retail sales and Business inventories. Analysts predict sales rose 0.4% in March versus -0.6% month earlier.

Market players will be looking ahead to the ZEW research institute's German economic expectations index on Tuesday, which is projected to improve to -29.0 in April from -32.0 last month, but remain well below its long-term average.

EUR/JPY triggered stops through Y159.20 and offers around at Y159.40/50 as the cross recovers strongly off the Asia lows. Rate printed high on Y159.86 and currently holds near Y159.60.

Wachovia reported a quarterly loss of $393 million or 20 cents a share -- first quarterly loss since 2001 and cut its quarterly dividend to 37.5cents/share vs 64 cents/share. Market talk was earlier that it was looking to receive $7.0bln capital injection from investors.

Resistance 3: Y102.80
Resistance 2: Y102.30
Resistance 1: Y101.50
Current price: Y100.99
Support 1: Y100.40
Support 2: Y100.00
Support 3: Y99.40
Comments: Dollar drops. The nearest support comes at session low on Y100.40 with a break under will widen losses to Y100.00 and Y99.40. Back above session high at Y101.50 will open a way to Y102.30 and resume rebound to Apr 07-09 high on Y102.80.

Resistance 3: Chf1.0215
Resistance 2: Chf1.0170
Resistance 1: Chf1.0080
Current price: Chf1.0008
Support 1: Chf1.0000
Support 2: Chf0.9940
Support 3: Chf0.9870
Comments: Dollar retreats. Break under session low on Chf1.0000 will widen losses to Chf0.9940 and then – to Mar 31 lows near Chf0.9870. Strong resistance is around session high on Chf1.0080/00, then – at Chf1.0170 (Apr 09 high).

Resistance 3: $1.9960
Resistance 2: $1.9840
Resistance 1: $1.9760
Current price: $1.9734
Support 1: $1.9650
Support 2: $1.9580
Support 3: $1.9540
Comments: Cable tries to rebound. Resistance comes at $1.9760. Break above April 10 high at $1.9840 will open a way to $1.9960. Below session low at $1.9650 losses may extend to $1.9580 and lower - till $1.9540.

Resistance 3:$1.5910
Resistance 2: $1.5850
Resistance 1: $1.5800
Current price: $1.5780
Support 1: $1.5670
Support 2: $1.5620
Support 3: $1.5540
Comments: Euro challenged $1.5800 (strong resistance) and retreated. $1.5850 there is a chance of challenging record high at $1.5900/15. Strong support is around session low on $1.5670. Break under will widen losses to Fibo 50% t $1.5620 and lower- to Apr 08 low on $1.5540.

EUR/USD $1.6000, $1.5400
USD/JPY Y101.00, Y100.00, Y102.50
EUR/JPY Y160.05, Y155.00
EUR/CHF Chf1.5820/30
AUD/USD $0.9300

UK March PPI data is due at 0830GMT, where median estimate is for input prices to rise 1.8% m/m, +18.9% y/y and output prices seen up +0.5%, +5.6% y/y. Base effects are seen preventing both annual output and input prices from putting in fresh record highs, where input prices at 19.3% y/y is the highest since 1980 and output prices at 5.7% is the highest since 1991.

Against the euro, the dollar fell 0.6 percent to $1.5831 this week, from $1.5737 on April 4. The U.S. currency dropped 0.7 percent to 100.77 yen, from 101.47 last week. The Swiss franc advanced 0.8 percent to 0.9999 per dollar and 0.2 percent to 1.5834 per euro. The yen was little changed at 159.56 per euro, compared with 159.69.

Crude oil rose last week and was little changed Friday after the International Energy Agency cut its 2008 global oil-demand forecast for a third straight month. The IEA, an energy adviser to 27 nations, today reduced its outlook by 310,000 barrels to 87.23 million barrels a day, from last month. The IEA reduced its estimate of non-OPEC oil production for 2008 by 85,000 barrels a day to 50.5 million barrels a day, as Canada, Mexico, Columbia, Kazakhstan and Sudan all saw downward output revisions of about 20,000 barrels a day or more. Output in the U.S., Norway, China and Syria was revised up. Non-OPEC production growth will be about 815,000 barrels a day in 2008, potentially the highest growth rate since 2004, the report said.

Crude-oil supply from the Organization of Petroleum Exporting Countries, whose members pump than 40% of the world's oil, will need to average 31.6 million barrels a day this year in order to balance global demand, the report said. OPEC crude production fell by 265,000 barrels a day in March to 32.1 million barrels because of field maintenance in the United Arab Emirates, Nigeria and Venezuela. The decline may have been partly offset by higher Iranian supply, the IEA said.
OPEC, which is next scheduled to meet on Sept. 9, shouldn't produce more oil because the market is well supplied, Saudi Arabian Oil Minister Ali al-Naimi said yesterday.

Crude oil for May delivery rose to $110.14 a barrel. Prices rose 3.7% last week and are up 77% from a year ago. Oil reached a record $112.21 a barrel on April 9 and is up about 78% from a year ago. Crude oil rose to a record $112.21 a barrel on April 9 after the Energy Department reported an unexpected decline in U.S. inventories. Brent crude for May settlement rose to $108.75 a barrel. It was a record closing price. Futures reached an all-time intraday high of $109.98 a barrel Thursday.

U.S. stocks fell the most in five weeks after General Electric Co. said the credit-market crisis caused an unexpected earnings decline, while slowing economic growth and rising energy prices eroded profit at United Parcel Service Inc. and Alcoa Inc.
The Standard & Poor's 500 Index lost 2.7% this week, putting the measure 15% below its October record high. The Dow Jones Industrial Average declined 2.3%. The Russell 2000 Index of small-cap companies slumped 3.6%.

GE attributed the bulk of its shortfall to the adverse effects of disruptions in the capital markets that hurt its financial services business. GE, in turn, slashed its full-year EPS guidance to a range of $2.20 to $2.30, up 0-5%, from "at least" $2.42 or 10% growth, to reflect a slower economy and an assumption that capital markets remain challenging.

Entering Friday's trade, however, the market was still down for the week, having been clipped by other earnings-related disappointments that included an earnings miss from Alcoa (AA), another Dow component, a first quarter earnings warning from UPS (UPS), and a downward revenue revision from semiconductor company Adv. Micro Devices (AMD).

Other hang-ups for the market included oil prices rising to a new record high of $112.21 on Wednesday following a weekly inventory report and an indication from major investment banks Goldman Sachs (GS), Lehman Bros. (LEH) and Morgan Stanley (MS) that each saw an increase in their Level 3 assets.

The financial sector tried to keep the rally going early in the week after a report that savings & loan Washington Mutual (WM) was on the verge of getting a $5 billion capital infusion from private equity firm TPG and other investors. As it turned out, WaMu raised $7 billion, only it did so in a dilutive offering and at a price that was well below where its stock had been trading. That combination knocked some wind out of its stock and helped deflate buying interest in the sector.

The dollar rose the most in two weeks against the euro after the Group of Seven nations signaled increased unease with the currency's 14 percent slump over the past year.
The G-7 changed its statement on currencies for the first time in four years, expressing concern about ``sharp fluctuations'' after the meeting in Washington on April 11. The yen rose versus the euro and pared losses against the dollar as a drop in Asian stocks reduced investor appetite for buying higher-yielding assets with loans from Japan. The change in the G-7 statement was the most significant since the Boca Raton, Florida, meeting in February 2004, when officials cautioned against ``excess volatility.'' The latest statement didn't explicitly mention the dollar or suggest plans for intervention, in which central banks arrange purchases or sales of foreign exchange.``Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability,'' the G-7 statement said. ``We continue to monitor exchange markets closely, and cooperate as appropriate.'' The G-7 downgraded its outlook for the world economy from that of two months ago, blaming the U.S. housing recession, credit-market turmoil and inflation pressures.
Gains in the dollar may be limited before a Commerce Department report today that may show retail sales in the U.S. stagnated in March, according to the median estimate of economists surveyed.

EUR/USD rose from $1.5670 to $1.5730.
GBP/USD firmed from $1.9660 to $1.9730.
USD/JPY retreated from Y101.45/50 to Y100.70.

Japanese stock indices ended Monday's session sharply lower across the board, weighed by the sell-off in the US ahead of the weekend. The benchmark Nikkei 225 was down 406.27 points, or 3.05% at 12917.51, shy of the session's worst levels. The broader-based TOPIX was down 32.38 points at 1246.38.

Resistance 3: Y102.80

Resistance 2: Y102.30
Resistance 1: Y101.50
Current price: Y100.80
Support 1: Y100.60

Support 2: Y100.00

Support 3: Y99.40

Comments: Dollar drops. The nearest support comes at Y100.60 with a break under will widen losses to Y100.00 and Y99.40. Back above session high at Y101.50 will open a way to Y102.30 and resume rebound to to Apr 07-09 high on Y102.80.

Resistance 3: Chf1.0215
Resistance 2: Chf1.0170
Resistance 1: Chf1.0080

Current price: Chf1.0000

Support 1: Chf1.0000
Support 2: Chf0.9940

Support 3: Chf0.9870

Comments: Dollar falls testing support on Chf1.0000. Break under will widen losses to Chf0.9940 and then – to Mar 31 lows near Chf0.9870. Strong resistance is around session high on Chf1.0080/00, then – at Chf1.0170 (Apr 09 high).

US index futures are trading lower into early European dealing Monday. The Jun S&P contract was last down 3.50 points at 1332.10, with the Nasdaq Jun contract lower by 4.50 points at 1801.75.

Resistance 3: $1.9960

Resistance 2: $1.9840

Resistance 1: $1.9730
Current price: $1.9728
Support 1: $1.9650

Support 2: $1.9580
Support 3: $1.9540

Comments: Cable tests resistance at $1.9730. Break above April 10 high at $1.9840 will open a way to $1.9960. Below session low at $1.9650 losses may extend to $1.9580 and lower - till $1.9540.

- Japan economy to slow down for now, but pace of growth likely to pick up.
- Japan economy faces both domestic and overseas risks.

- Will continue to monitor impact of subprime on Japan

- March Tankan shows corporatr sentiment cautious
- Japan economy likely to slow for a while.

Resistance 3:$1.5910
Resistance 2: $1.5850
Resistance 1: $1.5730
Current price: $1.5721

Support 1: $1.5670
Support 2: $1.5620
Support 3: $1.5540

Comments: Euro rebounds. The nearest resistance is broken support at $1.5730. Above $1.5850 there is a chance of challenging record high at $1.5900/15 again and then – psychological level at $1.6000. Strong support is around session low on $1.5670. Break under will widen losses to Fibo 50% t $1.5620 and lower- to Apr 08 low on $1.5540.

- Few members said should mull timely action if needed
- Internal, external risks to Japan growing
- Uncertainty over global economy still high
- Risk of high energy prices hurting smaller firms rising
- Board agreed US econ slowdown worsening

High Low Close
EUR/USD 1.5851, 1.5738, 1.5822
USD/JPY 102.24, 100.64, 100.83
GBP/USD 1.9766, 1.9683, 1.9719
USD/CHF 1.0088, 0.9965, 1.0003

EUR/JPY 161.31, 159.33, 159.58
EUR/GBP 0.8036, 0.7974, 0.8022
GBP/JPY 201.84, 198.43, 198.87
GBP/CHF 1.9907, 1.9652, 1.9727

Change % Change Last
Nikkei 225 +378.4 +2.92% 13323.73
TOPIX +30.55 +2.5% 1278.62
FTSE 100 -69.60 -1.17% 5,895.50
CAC 40 -61.49 -1.27% 4,797.93
Xetra Dax -100.75 -1.50% 6,603.57
Dow -261.00 -2.07% 12,339.00
NASDAQ -52.50 -2.82% 1,806.25
S&P -27.20 -2.00% 1,335.60

08:30 UK PPI (Input) (March) unadjusted Y/Y 18.9% 19.3%
08:30 UK PPI (Input) (March) adjusted 1.8% 1.7%
08:30 UK PPI Output ex FDT (March) unadjusted Y/Y 3.0% 3.0%
08:30 UK PPI Output ex FDT (March) adjusted 0.3%
08:30 UK PPI (Output) (March) unadjusted Y/Y 5.6% 5.7%
08:30 UK PPI (Output) (March) unadjusted 0.5% 0.3%
09:00 E-15 Industrial production (February) Y/Y 3.0% 3.8%
09:00 E-15 Industrial production (February) 0.3% 0.9%
12:30 USA Retail sales excluding auto (March) 0.7% -0.2%
12:30 USA Retail sales (March) 0.4% -0.6%
14:00 USA Business inventories (February) 0.7% 0.8%