The third-biggest U.S. railroad CSX Corporation reports first-quarter profit increased to 85 cents a share because of higher shipping revenue, beating forecasts. The world's biggest chipmaker Intel Corporation forecast second-quarter sales of $9B to $9.6B. Analysts estimated $9.25B. The investment bank JPMorgan Chase & Co posted a 50% drop in first-quarter net income as it wrote down $2.6B in leveraged lending and mortgages and quadrupled its credit-loss provision; results were, nonetheless, better than Street expectations. The Coca-Cola’s first-quarter profit rose 19%, beating forecasts, on strong international sales making up for a sluggish U.S. economy and rising commodity costs. Pozen Inc and partner GlaxoSmithKline Plc, Europe's largest drugmaker, won U.S. approval to sell their migraine pill Treximet. The biggest western bank Wells Fargo & Company reports revenue growth and gave an optimistic outlook, despite an 11% drop in net earnings on $326M in mortgage-related writedowns and nearly tripling its credit-loss provision.

"Our translation of the CPI and PPI data points to a low +0.1% outcome for the March core PCE, which would leave the year/year rate unchanged at +2.0%. Also, a lower than previously assumed headline inflation reading takes our estimate for real consumption from +0.7% to +0.8%. As a result, we now see Q1 GDP tracking at -0.1% instead of -0.2%."

The major indices are trading near session highs, but have dipped slightly on the release of the Fed's Beige Book. The Fed's Beige Book is just hitting the wires. It provides anecdotal evidence on the state of the economy ahead of the FOMC meeting at the end of this month. The book notes economic conditions have weakened since February, and consumer spending has softened.

Says growth weakened since Mar, and 9 of 12 Districts noted slowing. Construction/ real est is softening, but mfg & services are mixed. Labor mkts are weakening but there are scattered labor shortages. Sees few signs that hsg deterioration is quickening but there is downward pressure on home prices. Widespread input cost rise seen, profit margins are being squeezed. Mixed lending trends. Book was prepared by FRBNY based on info gathered before Apr 7.

Stocks are holding on to gains as buying interest remains strong. The stock market continues to trade near its session high.Six of the ten economic sectors are trading with gains in excess of 1%. Four of them are sporting gains above 2%.
Of the sectors, materials (+3.6%) remains the leader this session. Particular strength is being exhibited by Alcoa (AA 35.94, +1.10), Freeport-McMoRan (FCX 111.72, +6.22), and Monsanto (MON 129.11, +6.43).

The dollar fell to a record low against the euro as European inflation accelerated last month, reducing chances the European Central Bank will follow the Federal Reserve in cutting interest rates. The currency had its biggest decline versus the euro in three weeks, weakening to $1.5979 as U.S. housing starts dropped more than twice as much as forecast to a 17-year low. The Canadian and Australian dollars and the Norwegian krone increased after crude oil touched a record $114.53 a barrel. The U.S. currency has fallen almost 1 percent against the euro since Group of Seven finance ministers said after meeting in Washington on April 11 that they're concerned ``sharp fluctuations'' in currency markets may hurt the global economy.
Futures on the Chicago Board of Trade showed a 28 percent chance that policy makers will reduce the fed funds target by a half-percentage point to 1.75 percent on April 30, compared with a 42 percent likelihood a week ago. The rest of the odds were for a reduction of a quarter-percentage point.
The European inflation rate accelerated to 3.6 percent last month, the highest in almost 16 years, the European Union's statistics office in Luxembourg said today. ECB executive board member Juergen Stark said yesterday that interest rates at 4 percent may not be high enough to contain inflation.
Work began on 947,000 U.S. homes in March at an annual rate, down 11.9 percent from February and the fewest since March 1991, the Commerce Department said. Starts were projected to fall 5.2 percent to a 1.01 million pace from an originally reported 1.065 million rate in February, according to the median forecast of 72 economists surveyed.
The pound fell to the lowest level ever against the euro after a report showed European inflation accelerated more than initially estimated in March, bolstering speculation the U.K. currency's yield advantage over the single currency will diminish. Britain's currency declined to a record for a second day as the euro region's inflation rate rose to 3.6 percent last month, the highest level in almost 16 years, the European Union's statistics office said today. Rising consumer prices have forced the European Central Bank to keep the benchmark rate at a six- year high of 4 percent, while the Bank of England has cut its main rate three times since December, to 5 percent.

HSBC economist Ian Morris ests US M-3 (which Fed stopped publishing in Feb 2006 but HSBC constructed a proxy) is surging +16% YOY as of March. He says this "is the quickest rise in US M3 sincethe early 1970s, which saw a severe food price shock and the first oilcrisis." He says that's why "the Fed may not want to push its luck. The April or June FOMC meeting may see the last rate cut for a while."

"Our initial estimate of core PCE inflation for March is for a 0.13% increase, which would take the year-ago rate to 2.02%, up from 1.96% in February. We will refine this forecast next wk."

Stocks rallied Wednesday morning as better-than-expected earnings reports from bellwethers Intel and JP Morgan overshadowed record oil and gas prices and another dour reading on the housing market.
More news: Dow stock Coca-Cola reported higher sales and earnings that topped estimates Wednesday morning. Shares were little changed.
Washington Mutual reported a $1.1 billion quarter loss late Tuesday, as it had warned it would a week earlier. The company also said it has concluded its plans to raise $7 billion in capital from private equity firm TPG.
Wells Fargo reported lower quarterly earnings that nonetheless topped analysts' forecasts. The company's profit was hurt because it had to increase loss reserves, setting aside $2.03 billion to cover higher delinquencies and defaults on mortgages and other loans.
Economic news. In the latest troubling sign for the housing market, new home construction fell more than expected to a 17-year low. Building permits, a measure of builder confidence, also declined. The Consumer Price Index (CPI) rose 0.3% in March, up from a flat reading in March, but in line with analysts' estimates. The so-called "core" CPI, which strips out volatile food and energy prices, rose 0.2%, up from a flat reading in March and also in line with forecasts.
U.S. light crude oil for May delivery rose 78 cents to $114.57 a barrel in electronic trading after hitting a record $114.68 earlier.

Attention in the energy market turns to the US DoE weekly inventory data at 1030EDT, and oil analysts are forecasting crude oil supplies to show a build of 1.8mln barrels in the week ended April 11. Distillate supplies expected to show a draw of 1.65mln barrels. WTI Nymex crude trades at $113.8 per barrel

The major indices are posting strong gains in excess of 1%, with all ten economic sectors are in positive territory.
Financials are providing leadership with a 2.4% gain. JPMorgan Chase (JPM 44.00, +1.88) and Wells Fargo (WFC 29.44, +1.63) are posting hefty gains as traders embrace their better than expected earnings results. Tech (+1.6%) is also showing strength, with Intel (INTC 22.14, +1.23) Leading the way.

EUR/USD: $1.5685, $1.5540
USD/JPY: Y101.00, Y100.00, Y102.00
EUR/JPY: Y160.85, Y161.00
AUS/USD: $0.9200, $0.8950

Stock futures continued to rise early Wednesday, lifted by an upbeat outlook from chip giant Intel, better-than-expected earnings from JPMorgan Chase and despite plummeting new home construction and rising inflation. About three hours before the market open Nasdaq and S&P futures were higher and indicating opening gains for Wall Street, with techs poised to lead the advance.
Tech heavyweight Intel, which is also a Dow component, reported first-quarter sales and full-year guidance late Tuesday that exceeded Wall Street estimates. The strong results helped offset worries about the impact the credit crunch and slowing economy will have on corporate profits.
But jitters could return after financial firms JPMorgan Chase and Wells Fargo post their results. Both are due to report before the market open.
Washington Mutual, the nation's largest thrift, reported greater details after the close Tuesday of a $1.1 billion loss in the first quarter that it had pre-reported last week, as it was forced to set aside more money for bad loans.
Another financial giant to watch is Merrill Lynch, which is slated to post results Thursday. The bank is expected to post a loss and take $6 billion to $8 billion in mortgage-related writedowns, according to a report in the Wall Street Journal Wednesday.

YOY CPI is +4.0% but YOY core is 2.4%, both far less than the rises in PPI, illustrating that some of the recent cost rises are being 'eaten'
by companies. CPI still is not moving lower as fast as it should in a recession, but its magnitude of change is less worrisome than that of raw materials prices.

Building permits -5.8% to 927k

The dollar fell to a record low against the euro after a report showed European consumer prices climbed more than forecast in March, making it less likely the European Central Bank will follow the Federal Reserve in cutting interest rates.
The U.S. currency had its biggest decline versus the euro in three weeks, trading as low as $1.5965, after the European Union said the inflation rate in the region rose to a 16-year high last month, exceeding a March 31 estimate. The dollar also dropped against the yen before a report that may show U.S. housing starts slid to near a 17-year low.

EUR/USD break above $1.5865, as react buying on release of firmer than expected eurozone inflation data overcomes profit take selling, move took the rate on to new high $1.5965.

GBP/USDtriggered stops on the break of $1.9765 and posted high at $1.9800. Offers noted around the later level $1.9790/00 caused pull back to $1.9750. Further offers seen close behind at $1.9820 ahead of $1.9840/50.

USD/JPY declined from Y101.50 to Y100.80 before demand located in the area pushed the dollar up to Y101.30

Today’s focus is on US CPI report at 12:30 GMT. New data from housing market is also due to come this time. Later (at 13:15 GMT) Industrial Production and Cap-Ut will be released.

Cable stops triggered on the break of $1.9765, taking rate onto a high of $1.9800. Offers noted around the later level $1.9790/00 caused pull back to $1.9750. Further offers seen close behind at $1.9820 ahead of $1.9840/50.

- UK manufacturing sector 'doing well'
- Manufacturing firms being affected by market uncertainty
- UK economy not in same position as US

- UK not in the same position as US, where recession is in train. (regional press/Rtrs)

The dollar fell to a record low against the euro after a report showed European consumer prices climbed more than forecast in March, making it less likely the European Central Bank will follow the Federal Reserve in cutting interest rates.
The U.S. currency had its biggest decline versus the euro in three weeks, trading as low as $1.5967, after the European Union said the inflation rate in the region rose to a 16-year high last month, exceeding a March 31 estimate. The dollar also dropped against the yen before a report that may show U.S. housing starts slid to near a 17-year low.
``We could see the euro rally some more against the dollar,'' said Adam Myers, director of market strategy in London at Credit Suisse Group, one of the world's 10 biggest currency traders. ``The ECB will continue to be hawkish as there's little evidence of a let-up in European inflation,''
The dollar fell to $1.5965 against the euro as of 10:56 a.m. in London, from $1.5790 in New York yesterday. The dollar also was at 101.01 yen from 101.83. The dollar may fall to $1.62 versus Europe's single currency in the next month, Myers said.

Earlier reported demand at Y101.50 gives way as the weight of dollar sales gather momentum, led by the move in euro-dollar. Bids now seen from Y101.00 into Y100.80 with stops below. Note also expiry interest at Y101.00/50 today.

Resistance 3: Y102.80

Resistance 2: Y102.30
Resistance 1: Y101.80
Current price: Y100.94
Support 1: Y100.30

Support 2: Y100.00

Support 3: Y99.40

Comments: Dollar retreats. The nearest support comes at Monday’s low on Y100.30 with a break under will widen losses to Y100.00 and Y99.40. Back above Y101.80 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: Chf1.0080Current price: Chf0.9952

Support 1: Chf0.9920
Support 2: Chf0.9870

Support 3: Chf0.9780

Comments: Break under Chf0.9980 to widen losses to Chf0.9920 and then – to Mar 31 lows near Chf0.9870. Strong resistance is around recent high on Chf1.0080/00, then – at Chf1.0170 (Apr 09 high).

Resistance 3: $1.9880

Resistance 2: $1.9840

Resistance 1: $1.9780
Current price: $1.9774
Support 1: $1.9600

Support 2: $1.9540
Support 3: $1.9480

Comments: Resistance comes near $1.9780, stronger around $1.9840. Key resistance is near Apr 14 highs on $1.9880. Support line from Apr 2006 at $1.9600 with a break under will widen losses to $1.9540 and $1.9480.

Resistance 3:$1.6000
Resistance 2: $1.5950

Resistance 1: $1.5910

Current price: $1.5891

Support 1: $1.5750
Support 2: $1.5660
Support 3: $1.5510

Comments: Euro gains further. Resistance comes at the record high on $1.5910/15. Breack higher to open the way to $1.5950 and $1.6000. Support comes at yesterday’s low on $1.5780. Below the downward target is around Monday’s low on $1.5660 and Apr 03 low at $1.5510.

Breaks above $1.5865, as react buying on release of firmer than expected eurozone inflation data overcomes profit take selling, move takes rate on to retest post G7 highs between $1.5875/87. Above here and rate can push on toward $1.5895/05. Further offers to life highs at $1.5915 (apr10), with stops noted on a break of $1.5920. If stops triggered seen opening a move on toward $1.5940/50.

EUR/USD: $1.5685, $1.5540
USD/JPY: Y101.00, Y100.00, Y102.00
EUR/JPY: Y160.85, Y161.00
AUS/USD: $0.9200, $0.8950

GBP/USD printed high above $1.9700, but sharply retreated to current $1.9695. Bids remain in place at $1.9685/80, more between $1.9665/50. Offers $1.9730, stronger between $1.9740/50.

EUR
Bids: $1.5780, $1.5750
Offers: $1.5850, $1.5895/05, $1.5915

JPY
Bids: Y101.50, Y101.00/80, Y100.30/00
Offers: Y102.00, Y102.30, Y102.80/00

GBP
Bids: $1.9645/35, $1.9600
Offers: $1.9700/10, $1.9750

AUSSIE
Bids: $0.9250, $0.9200
Offers: $0.9300/10, $0.9340/50

The euro rose against the dollar before a report that will probably show inflation in the 15 countries that share the currency accelerated, limiting the European Central Bank's scope to lower interest rates.
Data today may confirm a preliminary estimate that European consumer prices rose 3.5% in March, the fastest pace in almost 16 years. ECB governing council member Juergen Stark said yesterday in a speech in Brussels he ``cannot be sure'' if rates at a six-year high of 4 percent can curb inflation.
``As long as there are inflation concerns, the ECB won't be able to lower rates,'' said Masashi Kurabe at Bank of Tokyo-Mitsubishi UFJ Ltd. ``The euro will remain firm.''Europe's single currency may rise to $1.64 versus the dollar this quarter, Kurabe said.

EUR/USD fell to $1.5760 before rebounding to $1.5845.
GBP/USD consolidated within the $1.9600/40 range before recovering to $1.9685.
USD/JPY declined from Y101.90 to Y101.50.

Today’s focus is on US CPI report at 12:30 GMT. New data from housing market is also due to come this time. Later (at 13:15 GMT) Industrial Production and Cap-Ut will be released.

Japanese stock indices ended Wednesday's session higher across the board, boosted by a modest dollar rally and overnight gains in the US. The benchmark Nikkei 225 was up 155.55 points, or 1.20%, at 13146.13. The broader-based TOPIX was also higher, up 15.91 points at 1271.88.

Stock market fixing:
Nikkei 225 +73.07 (+0.6%) 12,990.58
Topix +9.73 (+0.8%) 1,255.97
DAX 30 +30.56 (+0.5%) 6585.05
САС 40 +14.19 (+0.3%) 4780.68
FTSE 100 +75.30 (+1.3%) 5906.90
Dow +52.76 (+0.43%) 12354.82
Nasdaq +8.69 (+0.38%) 2284.51
S&P +5.05 (+0.38%) 1333.37
10YR -19/32 3.58% 99 9/32
OIL NYMEX +2.03 (+1.82%) $113.79

Japan's stocks gained, led by trading companies including Mitsubishi Corp. and Mitsui & Co. after crude oil prices climbed to a record.
Mitsubishi rose 2.3%, the highest close since Nov. 2. Mitsui advanced 3.1%, the highest since Dec. 12. Smaller rival Itochu Corp., which recently formed a venture to import mineral water, climbed 3.8%.
Oji Paper Co., Japan's second-largest papermaker, slumped 3.8%. Japan Airlines Corp., Asia's biggest carrier, lost 2%.
JFE jumped 6.1%, the most since March 19, while larger rival Nippon Steel Corp. added 2.8%.

European stocks advanced for the first time in six days after manufacturing in New York state unexpectedly rose, record oil prices lifted energy companies and Tesco Plc reported earnings that beat analysts' estimates.
Siemens, Europe's largest engineering company, rallied 1.7%. Nestle, the world's biggest food company, gained 3.1%.
Shell added 1.7%. Total SA, Europe's third-biggest oil company, gained 1.3%.
Repsol surged 9.3%, and BG Group Plc advanced 5.4%.
Tesco jumped 7.3%. Net income rose to 2.1 billion pounds ($4.2 billion) in the year ended Feb. 23, from 1.89 billion pounds a year earlier. That beat the 2.05 billion-pound average of 13 analysts' estimates.
Burberry Group Plc surged 11%.

Wall Street rose as investors eyed record oil and gas prices, a mild reading on core inflation, a strong regional manufacturing report and earnings from Johnson & Johnson and others.
Delta Air Lines announced a long-expected deal to buy Northwest Airlines for about $3.1 billion in a move that will create the world's largest airline.
Shares of other airlines also trended lower, amid questions about how this might lead to a broader consolidation in the industry.
Johnson & Johnson, the maker of drugs and healthcare products, reported higher quarterly sales and earnings that topped estimates. US Bancorp reported weaker earnings and higher sales, all of which topped forecasts. The bank attributed its weaker earnings to the mortgage market fallout, but said its credit problems are manageable.

The dollar rose against the euro and yen as reports showed U.S. wholesale prices advanced almost twice as much as forecast in March and New York state manufacturing unexpectedly expanded this month.
The British pound fell to the all- time low per euro after a report showed the U.K. housing slump is the worst since 1978.
The euro dropped from an intraday high of $1.5875 after the ZEW Center for European Economic Research showed investor confidence in Germany unexpectedly fell this month.
European Central Bank council member Yves Mersch said in an April 12 interview in Washington that the central bank has no room to lower borrowing costs with inflation likely to breach the bank's 2 percent preferred limit in 2009.
The New York Fed's general economic index, which measures manufacturing in the state, rose to 0.6 in April from minus 22.2 in March, the bank said. The median forecast was minus 17.
The Fed has lowered its target rate for overnight bank lending by 3% since September to 2.25%.

EUR/USD printed high on $1.5870 before retreated to $1.5750 and set stable a bit higher.
GBP/USD fell from $1.9660 to $1.9600 after the weak UK housing prices report.
USD/JPY fell to Y100.75 before rising to Y101.80.

Today’s focus is on US CPI report at 12:30 GMT. New data from housing market is also due to come this time. Later (at 13:15 GMT) Industrial Production and Cap-Ut will be released.

Resistance 3: Y102.80
Resistance 2: Y102.30
Resistance 1: Y101.80
Current price: Y101.60
Support 1: Y100.30
Support 2: Y100.00
Support 3: Y99.40
Comments: Dollar retreats. The nearest support comes at Monday’s low on Y100.30 with a break under will widen losses to Y100.00 and Y99.40. Back above Y101.80 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: Chf1.0040
Support 1: Chf0.9980
Support 2: Chf0.9920
Support 3: Chf0.9870
Comments: techs on dollar hasn’t changed. Break under session low on Chf0.9980 will widen losses to Chf0.9920 and then – to Mar 31 lows near Chf0.9870. Strong resistance is around recent high on Chf1.0080/00, then – at Chf1.0170 (Apr 09 high).

Resistance 3: $1.9880
Resistance 2: $1.9740
Resistance 1: $1.9650
Current price: $1.9644
Support 1: $1.9600
Support 2: $1.9540
Support 3: $1.9480
Comments: Cable tested trend support line from Apr 2006 at $1.9600 with a break under will widen losses to $1.9540 and $1.9480. Resistance comes near $1.9650, stronger – near 50% Fibo of the decline from Apr 14 around $1.9740. Key resistance is near Apr 14 highs on $1.9880.

Resistance 3:$1.5915
Resistance 2: $1.5880
Resistance 1: $1.5840
Current price: $1.5821
Support 1: $1.5750
Support 2: $1.5660
Support 3: $1.5510
Comments: Euro tries to rebound with resistance comes at $1.5840, stronger – on $1.5880 (Monday’s high), with a break above will let testing the record high on $1.5915. Support comes at yesterday’s low on $1.5780. Below the downward target is around Monday’s low on $1.5660 and Apr 03 low at $1.5510.

High Low Close
EUR/USD 1.5872 1.5751 1.5785
USD/JPY 101.87 100.77 101.85
GBP/USD 1.9764 1.9600 1.9627
USD/CHF 1.0086 0.9955 1.0069

EUR/JPY 160.96 159.66 160.76
EUR/GBP 0.8061 0.8004 0.8038
GBP/JPY 200.31 198.33 199.89
GBP/CHF 1.9772 1.9605 1.9760

Change % Change Last
Nikkei 225 +73.07 (+0.6%) 12,990.58
Topix +9.73 (+0.8%) 1,255.97
DAX 30 +30.56 (+0.5%) 6585.05
САС 40 +14.19 (+0.3%) 4780.68
FTSE 100 +75.30 (+1.3%) 5906.90
Dow +52.76 (+0.43%) 12354.82
Nasdaq +8.69 (+0.38%) 2284.51
S&P +5.05 (+0.38%) 1333.37
10YR -19/32 3.58% 99 9/32
OIL NYMEX +2.03 (+1.82%) $113.79

06:00 Germany CPI (March) final 0.5% 0.5%
06:00 Germany CPI (March) final Y/Y 3.1% 3.1%
06:00 Germany HICP (March) final Y/Y 3.2% 3.2%
08:30 UK Claimant count (March) - -2.8K
08:30 UK Claimant count rate (March) - 2.5%
08:30 UK Average earnings (3 months to February) Y/Y - 3.7%
08:30 UK ILO Jobless rate (3 months to February) - 5.2%
09:00 EU(15) Harmonized CPI (March) final 0.9% 0.3%
09:00 EU(15) Harmonized CPI (March) final Y/Y 3.5% 3.3%
09:00 EU(15) Harmonized CPI ex EFAT (March) Y/Y - 1.8%
12:30 USA CPI (March) 0.3% 0.0%
12:30 USA CPI (March) Y/Y - 4.0%
12:30 USA CPI excluding food and energy (March) 0.2% 0.0%
12:30 USA CPI excluding food and energy (March) Y/Y - 2.3%
12:30 USA Housing starts (March), mln 1.010 1.065
12:30 USA Building permits (March), mln 0.970 0.984 (0.978)
13:15 USA Industrial production (March) 0.0% -0.5%
13:15 USA Capacity utilisation (March) 80.4 80.9
18:00 USA Fed Beige book