"We don't see this as the most likely outcome although we recognize that there is a high possibility that the Fed could ease." Mkt moves will affect FOMC decision, but most likely is an easing bias and Fed emaining "committed to supporting the functioning of the financial system through its liquidity tools." Fed probably has not changed its forecasts in recent days and a 2% FF rate is already low, JPM says.

The major indices trade are on the defensive as teh financial sector (-6.2%) falls to a new session low.
Goldman Sachs (GS 138.88, -15.33), which has managed to avoid much of problems that rocked its peers on Wall Street, is down 10% to establish a fresh 52-week low.

"While the timing is still highly uncertain, financial conditions are tightening to such an extent that we think it makes perfect sense for the Fed to cut rates by 50 basis points on Tuesday and we may even see additional moves as conditions warrant (the risk of only going 25 bps at this juncture is that it will be viewed as too tepid a response to these epic contractionary events)."

The session's weakness is widespread, but there are a few select pockets of strength. With the downturn in oil prices, currently off 4.3%, airline stocks are flying higher. The Amex Airline Index is up 4.1%.
Upgrades of Continental Airlines (CAL 20.27, +1.32), Delta Air Lines (DAL 8.41, +0.28), US Airways (LCC 8.38, +0.50), and Northwest Airlines (NWA 10.01, +0.16) to Buy from Neutral at UBS has also helped the industry.
In the latest news from the financial sector (-5.6%), CNBC reported that the Federal Reserve has hired Morgan Stanley (MS 33.78, -3.45) to negotiate AIG (AIG 5.79, -6.35) for a bridge loan following word Warren Buffett is no longer in talks with AIG.

The yen strengthened the most in 10 years against the dollar after Lehman Brothers Holdings Inc. filed for bankruptcy, prompting traders to sell assets financed by loans in Japan.
Japan's currency also climbed to near the strongest level in two years versus the euro as insurer American International Group Inc. failed to present a plan to raise capital and avoid credit downgrades. The yen and the Swiss franc rose against every other major currency as investors reversed carry trades.
``This is momentous, it's hard to imagine anything more cataclysmic than this,'' said Alan Ruskin, head of international currency strategy at RBS Greenwich Capital Markets in Greenwich, Connecticut. ``It will be hard to top that kind of news flow. The yen hasn't looked so good for quite a while.''
The yen gained as much as 3.2 percent to 104.54 per dollar, the most since October 1998, and traded at 105.86 at 10:27 a.m. in New York, compared with 107.94 on Sept. 12. The dollar rose 0.3 percent to $1.4184 per euro, from $1.4224, after weakening to $1.4481 earlier. It touched $1.3882 on Sept. 11, 2008, the strongest since Sept. 18, 2007.
Japan's currency surged 2.1 percent to 150.21 per euro as investors reduced trades in which they borrow in countries with low borrowing costs and buy higher-yielding assets elsewhere. The yen increased 4 percent to 85.37 versus the Australian dollar and 3.6 percent to 69.53 against New Zealand's currency.
Lehman filed a Chapter 11 petition in the U.S. Bankruptcy Court for the Southern District of New York after Bank of America Corp. and Barclays Plc pulled out of talks to buy the New York-based bank.
AIG, trying to stave off credit downgrades that would force it to post more than $13 billion in collateral, asked the Federal Reserve for a $40 billion loan after rejecting an offer from J.C. Flowers & Co., the New York Times reported, citing an unidentified person.
``The yen will strengthen on the back of this news,'' said Ian Stannard, a senior currency strategist at BNP Paribas SA in London. ``Risk reduction is the theme.'' The dollar may trade as low as 101 yen in the coming weeks, he said.
The dollar weakened versus the yen as expectations for a Fed rate cut surged. Futures on the Chicago Board of Trade showed an 86 percent chance the central bank will lower its 2 percent target rate for overnight lending between banks by a quarter-percentage point tomorrow, compared with no chance a week ago.
The U.S. currency rose against the euro after Bank of America agreed to acquire Merrill Lynch & Co. for $50 billion, reducing the risk of financial collapse, and as investors sought the relative safety of U.S. Treasuries.
``I expect dollar strength to be the core theme of the day,'' said Simon Derrick, chief currency strategist in London at Bank of New York Mellon Corp. ``People move back into cash and the dollar on safe-haven flows.''

"Industrial production is on track to decline for a second consecutive quarter."This was last seen in the 2001 recession.

The recovery effort fades, although the stock market is still well above session lows. Conversely, Treasuries on the long end of the curve post strong gains, but have declined from their best levels.
European markets have pared some losses, although they continue to trade with very steep declines. London's FTSE is down 3.4%, France's CAC is down 3.8% and Germany's DAX is down 2.9%.

"With a sharp drop in the production of transit equipment (-4.2%), production of business equipment was off 0.6% in Augu:st. The July-August average of business equipment production is up an annualized 0.6% versus the second quarter. This result suggests weak equipment investment in the 3Q GDP report."

The major indices remain in the red, but are trading at their best levels of the session. Retailers (+0.4%) are showing some relative strength, with Amazon.com (AMZN 79.56, +1.19) and Sherman Williams (SHW 62.51, +0.75) providing leadership.
The consumer staples (-0.1%) and consumer discretionary (-0.3%) sectors are outperforming on a relative basis.

- shows mfg is in recession.

Stocks are posting steep declines with all ten sectors in negative territory. The energy sector (-4.4%) is posting the steepest loss as crude prices plunge 4.9%. The defensive oriented consumer staples sector is outperforming on a relative basis with a 1.2% loss.
CNBC reported that AIG (AIG 7.05, -5.09) plans to disclose a restructuring plan later this morning and the company is in talks with Warren Buffet, who is CEO of Berkshire Hathaway (BRK.A 117000, -2500).
Wells Fargo (WFC 34.61, +0.31) rebounds to a modest gain, although the financial sector as a whole is posting a steep 3.9% loss.

Futures are on the defensive, with a worse-than-expected economic reading not helping matters: S&P futures vs fair value: -43.60. Nasdaq futures vs fair value: -52.80. Just hitting the wires, August industrial production fell 1.1% in August (consensus -0.3%) and capacity fell by one percentage point to 78.7% (consensus 79.6%). In deal news, Long Drugs Stores (LDG) confirmed earlier today that Walgreen (WAG) expressed unsolicited interest of $75.00 per share in cash for all outstanding shares of LDG. CVS Caremark (CVS) and Longs entered a merger agreement at $71.50 per share in August.
Bof A-Merrill: Bank of America announced early Monday that it will acquire Merrill Lynch for $50 billion in stock. The purchase price values the company at more than $29 a share, at least a 70% premium from Merrill's closing price on Friday of $17.05.
Merrill could use some help. Battered by bad bets in real estate, Merrill has posted net losses of more than $17 billion over the last four quarters. Last week, the stock plunged 27%.
In premarket trading, Merrill was up 36%, while BofA was down 14%.
Lehman bankruptcy: The deal came after another troubled real estate investor, Lehman Brothers, announced that it was filing for bankruptcy, ending a desperate three-day search for a buyer to save the investment bank. The filing came after Bank of America and Barclays pulled out of negotiations to acquire Lehman.
Lehman shares plunged 89%.
Oil prices were down $6.28 a barrel to $94.90. Oil dipped below $100 a barrel on Friday for the first time in five months.
Treasury prices soared in a flight to safety by investors; the 10-year note yield skidded to 3.51% from 3.72% late Friday.

Continues to claw its way higher, as rate recovers off late European morning lows of $1.7768, break above $1.7850 allows rate to push on to $1.7880. Offers seen placed toward $1.7900, a break above to open a move on toward 1.7950.

New orders and shipments improved as inventories fell. Prices paid 44.83 vs 65.17.

Recovery off lows of $1.4087 finds resistance ahead of $1.4140, with rate currently trading around $1.4125. Offers now seen palced from around $1.4140, with interest extending toward $1.4160 (falling resistance line, a break of which could boost recovery efforts, one trader suggests). Bids remain in place to $1.4080, more at $1.4050 ahead of stronger area between $1.4030/20.

The dollar fell the most in a decade against the yen after Lehman Brothers Holdings Inc. filed for bankruptcy and traders speculated the Federal Reserve may need to cut interest rates to buoy financial markets.
The U.S. currency also dropped the most since June against the Swiss franc as American International Group Inc. sought capital to avoid credit downgrades. The dollar pared declines against the euro after Bank of America Corp. agreed to acquire Merrill Lynch & Co. and as investors sought the relative safety of U.S. Treasuries.
AIG, trying to stave off credit downgrades that would force it to post more than $13 billion in collateral, is seeking capital from buyout firms Kohlberg Kravis Roberts & Co. and J.C. Flowers & Co., said a person familiar with the situation yesterday. The insurer is seeking $40 billion from the Fed, the New York Times reported.
Bank of America Corp. said in a statement today it agreed to acquire Merrill Lynch for about $50 billion, after shares in Merrill plummeted in the past week.
The dollar also declined as the implied yield on federal funds futures contracts for December delivery slid 16 basis points to 1.75 percent, a quarter-percentage point less than the Fed's target rate. The last time the deficit was so large was in April before the central bank cut the rate by a quarter point on the last day of the month.
China cut its one-year lending rate by 27 basis points and lowered the reserve ratio by 1 percentage point at some of the banks, according to People's Bank of China, in response to the slowdown in the global economy.

EUR/USD tested $1.4440 before falling to $1.4085.

Breaks under $1.4150, with retracement off earlier Asian highs of $1.4482 extending to $1.4120. Bids now seen placed between $1.4110/00.

The dollar fell the most in a decade against the yen after Lehman Brothers Holdings Inc. filed for bankruptcy and traders speculated the Federal Reserve may need to cut interest rates to buoy financial markets.
The U.S. currency also dropped the most since June against the Swiss franc as American International Group Inc. sought capital to avoid credit downgrades. The dollar pared declines against the euro after Bank of America Corp. agreed to acquire Merrill Lynch & Co. and as investors sought the relative safety of U.S. Treasuries.
``The pressure on the dollar will be more emphasized against the low-yielders as markets remain volatile and risk reduction is the theme,'' said Ian Stannard, a senior currency strategist at BNP Paribas SA in London. The dollar may trade as low as 101 yen in the coming weeks, he said.
AIG, trying to stave off credit downgrades that would force it to post more than $13 billion in collateral, is seeking capital from buyout firms Kohlberg Kravis Roberts & Co. and J.C. Flowers & Co., said a person familiar with the situation yesterday. The insurer is seeking $40 billion from the Fed, the New York Times reported.
Bank of America Corp. said in a statement today it agreed to acquire Merrill Lynch for about $50 billion, after shares in Merrill plummeted in the past week.
The dollar also declined as the implied yield on federal funds futures contracts for December delivery slid 16 basis points to 1.75 percent, a quarter-percentage point less than the Fed's target rate. The last time the deficit was so large was in April before the central bank cut the rate by a quarter point on the last day of the month.
China cut its one-year lending rate by 27 basis points and lowered the reserve ratio by 1 percentage point at some of the banks, according to People's Bank of China, in response to the slowdown in the global economy.

Resistance 3: Y109.10
Resistance 2: Y107.80
Resistance 1: Y106.70
Current price: Y105.15
Support 1: Y104.50
Support 2: Y103.80
Support 3: Y102.50
Comments: The rate has decreased. Support is around session low on Y104.50, stronger – near Jul 16 low on Y103.80. break under will widen dollar’s losses to May 12 low on Y102.50/60. Speaking about the resistance level it should be mentioned the session highs Y106.60/70 zone. Above the rate may recover to Friday’s highs on Y107.80/90. Further level come at 09 Sep high on Y190.00/10.

Resistance 3: Chf1.1420
Resistance 2: Chf1.1290
Resistance 1: Chf1.1210
Current price: Chf1.1113
Support 1: Chf1.1070
Support 2: Chf1.1000
Support 3: Chf1.0940
Comments: USD/CHF tested the nearest support Chf1.1070 but could not will be fixed and has receded above Chf1.1100. Break under Chf1.1070 will widen losses to Sep 04 low on Chf1.1000. Below support comes at Chf1.0940. Strong resistance is around earlier broken channel support line from Jul 22 on Chf1.1200/10. Above the target may come on Friday’s low on Chf1.1290/80. Stronger level still at Sep 11 highs on Chf1.1420.

Resistance 3: $1.8340
Resistance 2: $1.8120
Resistance 1: $1.8080
Current price: $1.8038
Support 1: $1.7970
Support 2: $1.7860
Support 3: $1.7640
Comments: Tech on pound hasn’t changed. GBP/USD continues to challenge 23.6% Fibo at $1.8080 (decline from $2.0132 to $1.7440). Earlier rate printed spike0high on $1.81.20 (median resistance). Further resistance may come at 29 Aug high on $1.8340. Support comes at $1.7970/80 with a break under will correct the pound to $1.7860 and then – to earlier broken channel resistance line from Jul 31, coming today at $1.7640.

Resistance 3:$1.4800
Resistance 2: $1.4550
Resistance 1: $1.4480
Current price: $1.4249
Support 1: $1.4230
Support 2: $1.4175
Support 3: $1.4040
Comments:EUR/USD started Asian session with the gap above the channel resistance line from July 31 on $1.4280 but has then returned below it. Currently the resistance comes at session high on $1.4480, stronger – at $1.4550 (04 Sep high). Further target is around 28 Aug high on $1.4800. Support comes at $1.4230 with a break under will correct the euro to $1.4175 and then – to $1.4040 (11 Sep high, 5-8 Sep Low).

EUR/USd $1.4580
YSD/JPY Y105.45
USD/CAD C$1.0635, C$1.0740

The Australian and New Zealand dollars approached two-year lows against the yen as Lehman Brothers Holdings Inc. said it will file for bankruptcy, fueling speculation credit losses will widen and damping demand for higher-yielding assets.
The currencies, favorites of so-called carry trades, fell after Barclays Plc and Bank of America Corp. pulled out of talks to buy the U.S. securities firm. American International Group Inc., the largest U.S. insurer by assets, is seeking a $40 billion bridge loan from the Federal Reserve as it tries to sell assets, the New York Times reported.
Lehman has lost 94 percent of its market value this year after record losses from investments tied to mortgages.
Dollar Weakens Against Euro, Yen as Lehman Files for Bankruptcy
The dollar dropped against the euro and the yen after Lehman Brothers Holdings Inc. filed for bankruptcy and traders speculated the Federal Reserve may need to cut interest rates to buoy financial markets.
The U.S. currency dropped to its lowest in almost two months against the yen, and the Swiss franc surged, as American International Group Inc. sought capital to avoid credit downgrades. The dollar pared declines after Bank of America Corp. agreed to acquire Merrill Lynch & Co. and as investors sought the relative safety of U.S. Treasuries.
The U.S. currency fell against all 16 most-active currencies today as Lehman filed a Chapter 11 petition in the U.S. Bankruptcy Court for the Southern District of New York. The currency is headed for the biggest one-day decline since Aug. 16, 2007, when a global stock rout prompted investors to reduce so-called carry trades.

EUR/USD tested $1.4440 before falling to $1.4250.
GBP/USD printed session high on $1.8129 before slipping to $1.7990.
USD/JPY falling from Y106.89 to Y104.65.

US data starts at 1230GMT, when the Empire State Index is forecast to rise to a reading of 3.00 in September after moving above the break-even point in August. At 1315GMT, US industrial production is expected to fall 0.2% in August, with both manufacturing and mining production expected to fall. Capacity utilization is expected to fall to 79.6%.

Japanese stocks rose, sending the Topix index to a weekly gain, as speculation Lehman Brothers Holdings Inc. will find a buyer abated concern financial market turmoil will linger.
Resona Holdings Inc., Japan's fourth-biggest bank, leapt 12 percent, the most in a year, while Orix Corp. jumped 10 percent. Kawasaki Kisen Kaisha Ltd. led gains by shipping lines as recent drops made their shares cheap. Daihatsu Motor Co. sank 5.3 percent as a decline in oil prices reduced the appeal of its energy-efficient vehicles.
The Nikkei 225 Stock Average climbed 112.26, or 0.9 percent, to close at 12,214.76 in Tokyo. The broader Topix index rose 14.48, or 1.3 percent, to 1,177.20, with almost three stocks gaining for each that slumped on the gauge. The Nikkei ended the week little changed, while the Topix rose 0.5 percent.
Resona, which said on Sept. 8 it will spend as much as 110 billion yen ($1 billion) to buy back shares, surged 12 percent to 119,700 yen, the most since Sept. 27, 2007 and capping its best week in five years. Mitsubishi UFJ Financial Group Inc., the nation's largest listed bank, climbed 4.3 percent to 858 yen.
Orix Corp., whose services range from consumer loans to real estate development, leapt 10 percent to 14,830 yen, making it the fifth-biggest winner on the MSCI World Index behind Resona. Banks accounted for 38 percent of the Topix's gain.
Kawasaki Kisen, Japan's third-biggest shipping company, gained 4.7 percent to 698 yen, while bigger competitor Mitsui O.S.K. Lines Ltd. rose 4.2 percent to 1,083 yen, breaking a three-day losing streak. Mitsui & Co., the nation's second- biggest trading company, leapt 5.5 percent to 1,617 yen, while market leader Mitsubishi Corp. jumped 3.4 percent to 2,610 yen.
Trading companies and shipping lines yesterday traded at 8.6 times and 6.3 times earnings respectively, the lowest in at least six months. The 14-day relative strength indexes for both groups approached the 30 threshold some traders use as a signal to buy.
Prospects for slower economic growth and a decline in oil prices reduced the attractiveness of Japanese makers of smaller cars. Daihatsu, Japan's biggest minicar maker, sank 5.3 percent to 1,218 yen, extending its decline to a sixth day, while closest rival Suzuki Motor Corp. dived 4.7 percent to 2,010 yen. Automakers as a group were the biggest drag on the Topix.

European stocks advanced for the first time in four days as speculation Lehman Brothers Holdings Inc. will find a buyer lifted banks and rising metals prices sent commodity producers higher.
UBS AG, the European bank hardest hit by subprime-related losses, climbed 2.7 percent while Barclays Plc gained 3.6 percent. BHP Billiton Ltd., the world's largest mining company, rallied 7.4 percent as copper increased. SAS Group jumped 15 percent after the biggest Nordic airline said it's ``evaluating various structural possibilities'' for the carrier's future.
National benchmark indexes rose in all 18 western European markets except Greece and Iceland. Germany's DAX climbed 0.9 percent, while the U.K.'s FTSE 100 jumped 1.9 percent. France's CAC 40 advanced 2 percent.
Stocks extended gains after a report showed confidence among U.S. consumers climbed more than estimated this month as a drop in gasoline prices provided relief from rising unemployment and tumbling home values.
UBS advanced 2.7 percent to 23.52 francs. Barclays, the U.K.'s third-largest bank, increased 3.6 percent to 350.5 pence. Credit Suisse Group AG, Switzerland's second-biggest bank, added 3.1 percent to 52.6 francs.
BHP Billiton jumped 7.4 percent to 1,509 pence. Rio Tinto Group, the world's third-biggest mining company, added 8 percent to 4,490 pence. Anglo American Plc, the fourth-largest diversified mining company, increased 8.4 percent to 2,502 pence.
Copper for three-month delivery rallied as much as 3.6 percent to $7,180 a ton on the London Metal Exchange, for the first weekly gain since the period ended Aug. 22.
Deutsche Postbank AG fell 6.3 percent to 42.90 euros. Deutsche Bank AG agreed to buy almost 30 percent of Germany's biggest consumer bank by clients for 2.79 billion euros ($3.93 billion) in the country's fourth financial-services acquisition in two months.
Deutsche Bank dropped 2.5 percent to 57.90 euros on plans to sell as much as 2 billion euros in new shares to finance the stake purchase.

The dollar fell the most against the euro since January 2006, pushing it down from a one-year high, on reduced demand for the greenback as a haven.

The euro, the Brazilian real and the pound advanced versus the yen as Lehman Brothers Holdings Inc. negotiated with potential buyers, encouraging investors to reduce bets against higher-yielding assets. The dollar also declined versus the euro as traders increased speculation that the Federal Reserve will cut borrowing costs by the end of the year.

The dollar fell 1.6 percent to $1.4222 at 4:19 p.m. in New York, from $1.3998 yesterday, when it touched $1.3882, the strongest since Sept. 18, 2007. The yen dropped 2.3 percent to 153.40 per euro, from 149.98 yesterday, when it reached 147.54, the strongest since Aug. 11, 2006. Japan's currency decreased 0.7 percent to 107.88 per dollar, from 107.17.

The ICE's Dollar Index, a gauge measuring the greenback against the currencies of six U.S. trading partners, dropped 1.4 percent to 79.011, also the biggest decline since January 2006. It touched 80.375 yesterday, the highest level since September 2007, when the Federal Reserve began cutting the target lending rate from 5.25 percent to 2 percent to stave off a recession.

Dollar's Rally

The dollar has gained almost 12 percent since touching the all-time low of $1.6038 per euro on July 15 as the European economy slumped and crude oil dropped more than 30 percent to about $100.95 a barrel from its peak of $147.27.

That rally ``has ended,'' and the dollar is poised to decline toward $1.50 per euro in the next several weeks after the European currency formed a ``candlestick hammer'' yesterday, said Andrew Chaveriat, a New York-based BNP Paribas SA analyst who uses charts to predict currency moves.

The dollar's failure to strengthen beyond the resistance level of $1.3850 per euro also ``leaves it vulnerable,'' Chaveriat said. Resistance is where sell orders cluster.

Futures on the Chicago Board of Trade showed a 40 percent chance the Fed will cut its 2 percent target rate for overnight lending between banks by at least a quarter-percentage point by December, compared with 35 percent odds yesterday and no chance a month ago. The Fed next decides on rates Sept. 16.

Retail Decline

``The shift of Fed expectations is meaningful,'' said Alan Ruskin, head of international currency strategy in North America at RBS Greenwich Capital Markets Inc. in Greenwich, Connecticut. ``It puts the Fed back into play. It's one factor that may put some floor under the euro-dollar.''

Sales at U.S. retailers fell 0.3 percent last month following a revised 0.5 percent drop in July, the Commerce Department reported today. The median forecast of 80 economists surveyed by Bloomberg News was for an increase of 0.2 percent. Producer prices dropped 0.9 percent in August, the Labor Department reported. The median forecast in a separate survey of economists was for a 0.5 percent decrease.

Today's drop in the dollar versus the euro pared the U.S. currency's weekly gain to 0.3 percent. The yen advanced 0.2 percent against the euro and was little changed versus the dollar for the week.

``The dollar has overshot in the short term,'' wrote Chris Turner, head of currency research in London at ING Groep NV, the largest Dutch financial-services company, in a research note. The firm, citing ``sharp slowing'' in investment flows to Europe, forecasts that the U.S. currency will increase to $1.45 per euro at the end of the third quarter and $1.48 by year-end, compared with the previous forecast of $1.55 for both periods.

Resistance 3: Y109.10
Resistance 2: Y107.80
Resistance 1: Y106.70
Current price: Y105.60
Support 1: Y105.20
Support 2: Y103.80
Support 3: Y102.50
Comments: The greenback dropped to its lowest in almost two months against the yen after Barclays Plc and Bank of America Corp. pulled out of discussions with the U.S. securities firm, spurring investors to reduce holdings of higher-yielding assets financed in Japan. Support is around session low on Y105.20, stronger – near Jul 16 low on Y103.80. break under will widen dollar’s losses to May 12 low on Y102.50/60. Speaking about the resistance level it should be mentioned the session highs Y106.60/70 zone. Above the rate may recover to Friday’s highs on Y107.80/90. Further level come at 09 Sep high on Y190.00/10.

Resistance 3: Chf1.1420
Resistance 2: Chf1.1290
Resistance 1: Chf1.1210
Current price: Chf1.1113
Support 1: Chf1.1070
Support 2: Chf1.1000
Support 3: Chf1.0940
Comments: USD/CHF is under pressure today amid massive dollar’s sell-off on Lehman’s story. Moreover, some economic report due to release today, is forecasted with decline. Analysts predict Industrial production fell 0.3% in August after 0.2% gain in July. Meanwhile, NY Fed Empire State manufacturing index, probably, rose to 3.0 in September after 2.8 month earlier. Initial support comes at session low on Chf1.1060 with a break under will widen losses to Sep 04 low on Chf1.1000. Below support comes at Chf1.0940. Strong resistance is around earlier broken channel support line from Jul 22 on Chf1.1200/10. Above the target may come on Friday’s low on Chf1.1290/80. Stronger level still at Sep 11 highs on Chf1.1420.

Resistance 3: $1.8340
Resistance 2: $1.8120
Resistance 1: $1.8080
Current price: $1.8038
Support 1: $1.7970
Support 2: $1.7860
Support 3: $1.7640
Comments:GBP/USD continues to challenge 23.6% Fibo at $1.8080 (decline from $2.0132 to $1.7440). Earlier rate printed spike0high on $1.81.20 (median resistance). Further resistance may come at 29 Aug high on $1.8340. Support comes at $1.7970/80 with a break under will correct the pound to $1.7860 and then – to earlier broken channel resistance line from Jul 31, coming today at $1.7640.

Resistance 3:$1.4800
Resistance 2: $1.4550
Resistance 1: $1.4480
Current price: $1.4379
Support 1: $1.4380
Support 2: $1.4280
Support 3: $1.4160
Comments:On Monday the euro rocketed against the U.S. dollar on concern Lehman Brothers Holdings Inc. may file for bankruptcy after potential buyers abandoned talks and the government said it won't step in with funds. EUR/USD started Asian session with the gap above the channel resistance line from July 31 on $1.4280 (strong support). Rate broke above the 23.6% Fibo level on $1.4380 ($1.6038-$1.3880 decline). Currently the resistance comes at session high on $1.4480, stronger – at $1.4550 (04 Sep high). Further target is around 28 Aug high on $1.4800. Back under $1.4380 and $1.4280 will set the rate back near $1.4160.

High Low Close
EUR/USD 1.4223 1.3973 1.4215
USD/JPY 107.88 106.69 107.84
GBP/USD 1.7962 1.7542 1.7939
USD/CHF 1.1397 1.1294 1.1308

EUR/JPY 153.41 149.58 153.29
EUR/GBP 0.7977 0.7909 0.7921
GBP/JPY 193.71 187.55 193.46
GBP/CHF 2.0310 1.9948 2.0287

Change % Change Last
Nikkei +108.92 +0,9% 12,211.42
Topix +15.12 +1,3% 1,177.84
FTSE +98.30 +1.85% 5,416.70
DAX +55.99 +0.91% 6,234.89
CAC 40 +83.59 +1.97% 4,332.66
Dow -11.72 -0.10% 11,421.99
NASDAQ +3.05 +0.14% 2,261.27
S&P +2.65 +0.21% 1,251.70
10yr Note +1.0800 +0.298% 3.730%
NYMEX Crude Oil +0.31 +0.31% 101.18
Gold +19.00 +2.49% 764.50

00:00 Japan Day of Senior Citizens
09:00 E15 Labour cost index (Q2) Y/Y 3.3%
12:15 USA NY Fed Empire State manufacturing index (September) 3.0% 2.8%
13:15 USA Industrial production (August) -0.3% 0.2%
13:15 USA Capacity utilisation (August) 79.6 79.9