Losses in the utility sector have eased. It is now trading at the unchanged mark. The Dow Jones Utility Average, however, is trading with a gain of 0.3%, thanks partly to strength in companies like Consolidated Edison (ED 41.25, +0.49) that hold regulated utilities.
Though stocks remain out of favor, Treasuries are not garnering considerable attention. The benchmark 10-year Note is only up 7 ticks despite heavy losses in stocks.

The S&P 500 is trading just off its worst level of the session, currently down 1.5%, as all ten of the major economic sectors fall to session lows. Earlier there were a few pockets of strength, but now each sector is showing a loss.

Point by point, eases to Y110.00. As noted earlier, stops a risk sub Y109.95 area of overnight lows although bids had also been noted there earlier. Further stops sub Y109.85/80 could add to downside momentum if triggered.

Stocks have fallen another leg lower and are now trading at their worst level of the session. Roughly 80% of the S&P 500 components are trading with losses.
Meanwhile, oil is trading near the unchanged mark after climbing out of the red.
Energy (+0.1%) has joined the utility sector (+0.2%) in positive territory. Oil and gas exploration companies are holding up; as an industry it is up 0.4%. Refiners, however, are down 4.2%.

Stocks are trading sideways after falling to a new session low. The Dow Jones Industrial Average is now down roughly 1%. Only four of its 30 components are trading with gains.
The dollar has declined further. It is down 0.3% currently. However, it is still up 0.3% year-to-date.
The 10-year Treasury Note has found modest favor. It is currently up just a few ticks, yielding roughly 3.8%.

The U.S. currency retreated from its strongest level in almost six months against the euro before housing and inflation reports that may add to speculation that the Federal Reserve will delay raising interest rates. The greenback has gained 8.4 percent versus the euro since touching the record low in July on evidence economies outside the U.S. are slowing.
``The dollar had a significant run without any consolidation,'' said Dustin Reid, a senior currency strategist at ABN Amro Bank NV in Chicago. ``It's not surprising to see it taking a break.''
``The relentless dollar rally is coming to an end,'' said Matthew Kassel, director of proprietary trading at ING Financial Markets LLC in New York. ``The market now is finding equilibrium.''
The dollar will trade in a range of $1.45 to $1.50 in the next two weeks, Kassel said.
Futures on the Chicago Board of Trade show a 21 percent chance the U.S. central bank will increase the 2 percent target rate for overnight lending between banks by at least a quarter- percentage point by its Dec. 16 meeting, down from 47 percent odds a week earlier. Policy makers next meet Sept. 16.
U.S. housing starts dropped to an annual rate of 960,000 in July, the fewest in 17 years, according to the median forecast of 75 economists surveyed by Bloomberg News before the Commerce Department's report tomorrow.
The Labor Department will report tomorrow that the producer price index probably climbed 0.6 percent in July after increasing 1.8 percent the prior month, according to the median forecast of 75 economists in a separate Bloomberg News Survey.
``We are essentially in a bull market for the dollar,'' said David Watt, a senior currency strategist in Toronto at RBC Capital Markets Inc., a unit of Canada's biggest bank by assets. ``A modest pullback in the dollar would be an opportunity to build new longs.'' A long position is a bet that a currency will appreciate.
JPMorgan Chase & Co., the third-largest U.S. bank, raised its forecasts for the dollar against the euro. The dollar may trade at $1.47 per euro by year-end, compared with a previous forecast of $1.50, wrote Tohru Sasaki, chief currency strategist at JPMorgan in Tokyo, in a research note today. Goldman Sachs Group Inc. said last week that the dollar has ``bottomed'' against the euro, predicting it will strengthen to $1.45 per euro in three months.

The pare has broken back under $0.8700 as euro-dollar slips back on to a $1.46 mark, Aussie having taken out demand notedfrom three US houses in earlier trade in the $0.8720 area. Bids now seen into $0.8655/50, with a break then exposing Friday's low at $0.8610.

Stocks are trending upward now that oil has gone on the retreat. Crude futures are now down more than 1%. The ascent is broad-based with traders rotating out of energy (-0.2%) and materials (+0.2%) into various other sectors. Though off their session lows, the two largest economic sectors, tech (-0.6%) and financials (-1.3%), are still trading with losses. In the tech sector, video game maker Electronic Arts (ERTS 48.08, -0.16) is letting its offer for Take-Two Interactive (TTWO 23.96, -0.88) expire tonight. Electronic Arts has long been interested in acquiring Take-Two, but Electronic Arts stated it needs to validate the assumptions it made in pricing its offer of $25.74 per share for TTWO. Take-Two continues to believe that offer undervalues its shares, but will allow Electronic Arts to join in its process for reviewing strategic alternatives.

Stocks are trading with appreciable losses. Small, mid, and large-cap stocks have all fallen out of favor. The Russel 2000 is down 0.4%, the S&P 400 is down 0.2%, and the S&P 100 is down 0.4%.
Losses are not as steep as earlier, easing off morning lows as oil prices ease off morning highs. Oil was up more than 1% earlier, but is now up just 0.1% to $114 per barrel.

Squeezing under $1.8650 support, but reported demand placed won to $1.8640 continues to provide a cushion. Move seen as euro-sterling recovers back above stg0.7880, with one trader suggesting that current pressure on sterling, especially cable, linked to expiries at the NY cut (at 1400GMT). A break below $1.8640 to open a deeper move toward
$1.8615/00. Offers remain in place between $1.8690/00.

All three of the major indices are trading with losses. Seven of the ten economic sectors are showing declines.
Declines are most pronounced in the financial sector (-1.7%). Each of its industry groups is showing a loss. Thrifts and mortgages (-4.9%) are the worst performing industry group, but the weight of diversified financial service companies (-1.9%) is having the most adverse effect. Members of the diversified financial services industry include JPMorgan Chase (-0.53), Bank of America (-0.68) and Citigroup (-0.38).

Despite the to and fro in euro-dollar, dollar-yen has wandered lazily inside a 15 pip range atop Y110.20 in recent action, showing little directional inclination. Bids underpin at Y110.00 area while offers cap atop the overnight high at Y110.55 with further supply behind that at Y110.65/75.

Stock futures indicate an upward start to trading Monday (S&P futures +5.30, Nasdaq futures +6.75).

Oil has pared early morning losses and now trades with a slight decline. The dollar is also trading slightly lower relative to major foreign currencies.
BHP Billiton posted its sixth record full-year profit and offered an upbeat outlook, according to an article in this morning's edition of The Wall Street Journal. The article also stated that BHP believes its proposal to acquire Rio Tinto makes more sense than ever.
Lowe's posted better-than-expected earnings per share results for its second fiscal quarter. The company, however, issued a mixed outlook for its third quarter and the fiscal year.

The dollar fell from a seven-month high versus the yen before U.S. government housing and inflation reports this week that may add to speculation the Federal Reserve will delay raising interest rates.
The currency also retreated from the strongest level in almost six months against the euro, snapping a three-day advance, after crude oil and gold gained, eroding the allure of dollar-denominated assets. The British pound slid against the euro as an industry report showed U.K. home prices dropped the most since at least 2002.
``The dollar is looking somewhat vulnerable at these levels,'' said Michael Klawitter, a currency strategist at Dresdner Kleinwort. ``People are being cautious before tomorrow's housing starts report. If we see signs that the U.S. housing slowdown is worsening then that will be bad for the dollar.''
The Labor Department will tomorrow report the producer price index climbed 0.5 percent in July after jumping 1.8 percent in June, a separate survey showed.
Crude oil for September delivery rose 0.5 percent to $114.37 a barrel, climbing for the first time in three days, as Tropical Storm Fay prompted evacuations from rigs and production platforms in the Gulf of Mexico.
Fed funds futures on the Chicago Board of Trade show a 14 percent chance the U.S. central bank will increase the 2 percent overnight lending rate between banks by a quarter-percentage point at its September meeting, down from 18 percent a week earlier.
Gains in the euro may be limited by speculation that investor confidence in Germany remained near a record low, discouraging the European Central Bank from raising rates.
The ZEW Center for European Economic Research's index of investor and analyst expectations, to be published tomorrow in Mannheim, was minus 62 in August, according to survey. That's near last month's minus 63.9, which was the weakest since the ZEW began compiling the data in December 1991.
``I expect the euro to decline further based on a deteriorating economic outlook,'' said Katsunori Kitakura, chief treasury dealer in Tokyo at Chuo Mitsui Trust & Banking Co., Japan's seventh-largest publicly listed lender.

EUR/USD eased back over the course of a quiet morning session, easing under $1.4720 late-on, with early US dealing then providing added momentum for a move back to $1.4700. Offers $1.4780/00 (strong), stops $1.4800, bids $1.4700/1.4690.

GBP/USD Rate recovered to hold between $1.8665/75, a late lift to $1.8695 before slipping to $1.8660. Bids $1.8650/40, $1.8615/00. Offers $1.8695/05, $1.8720/25.

Today’s focus is US NAHB Housing Market Index (Aug), due at 17:00 GMT.

European equity bourses squeezing higher midday Monday: CAC-40 is up 45pts (+1.01%), Xetra-DAX is up 25pts (+0.39%) and FTSE-100 is up 34pts (+0.62%).

Squeezing lower again, clears below the $1.4720 area to currently trade around $1.4710. Bids now seen placed to $1.4705/90, a break below to open a deeper move toward $1.4675/70 ahead of $1.4655/45. Large stops noted on a break of $1.4640, which if triggered to bring the $1.4600 option barrier into view. Through here and downside technical target at $1.4569 seen possible. Offers $1.4740.

The dollar fell from a seven-month high versus the yen before U.S. government housing and inflation reports this week that may add to speculation the Federal Reserve will delay raising interest rates.
The currency also retreated from the strongest level in almost six months against the euro, snapping a three-day advance, after crude oil and gold gained, eroding the allure of dollar-denominated assets. The British pound slid against the euro as an industry report showed U.K. home prices dropped the most since at least 2002.
``The dollar is looking somewhat vulnerable at these levels,'' said Michael Klawitter, a currency strategist at Dresdner Kleinwort. ``People are being cautious before tomorrow's housing starts report. If we see signs that the U.S. housing slowdown is worsening then that will be bad for the dollar.''
The Labor Department will tomorrow report the producer price index climbed 0.5 percent in July after jumping 1.8 percent in June, a separate survey showed.
Crude oil for September delivery rose 0.5 percent to $114.37 a barrel, climbing for the first time in three days, as Tropical Storm Fay prompted evacuations from rigs and production platforms in the Gulf of Mexico.
Fed funds futures on the Chicago Board of Trade show a 14 percent chance the U.S. central bank will increase the 2 percent overnight lending rate between banks by a quarter-percentage point at its September meeting, down from 18 percent a week earlier.
Gains in the euro may be limited by speculation that investor confidence in Germany remained near a record low, discouraging the European Central Bank from raising rates.
The ZEW Center for European Economic Research's index of investor and analyst expectations, to be published tomorrow in Mannheim, was minus 62 in August, according to survey. That's near last month's minus 63.9, which was the weakest since the ZEW began compiling the data in December 1991.
``I expect the euro to decline further based on a deteriorating economic outlook,'' said Katsunori Kitakura, chief treasury dealer in Tokyo at Chuo Mitsui Trust & Banking Co., Japan's seventh-largest publicly listed lender.

Resistance 3: Y112.30
Resistance 2: Y111.80
Resistance 1: Y110.70
Current price: Y110.12
Support 1: Y109.30
Support 2: Y108.40
Support 3: Y107.20
Comments: USD/JPY still retreats with strong support comes at channel line from Jul 16 at Y109.30. Below correction may extend to last Wednesday’s low on Y108.40, then – to Y107.20 (Aug 01 lows). Resistance is around Friday’s highs on Y110.70, with a break above will point to key level on Y111.80 (channel line from Mar). Above the target comes at channel line from Jul 16 on Y112.30.

Resistance 3: Chf1.1180Resistance 2: Chf1.1080
Resistance 1: Chf1.1000
Current price: Chf1.0952
Support 1: Chf1.0830
Support 2: Chf1.0770
Support 3: Chf1.0720
Comments: Dollar remains in the around of six monthly highs. Strong resistance is around Friday’s high on Chf1.1000 with a break under will open the way to Chf1.1080/00. Above there the resistance comes on Jan 07 highs at Chf1.1180/90. Support is around last Thursday’s lows on Chf1.0820/30. Stronger level is around 23.6% on Chf1.0770 (Chf1.0030 - Chf1.1010 rise). Stronger level comes at channel line from Jul 15 on Chf1.0720.

Resistance 2: $1.8840
Resistance 1: $1.8780
Resistance 1: $1.8720
Current price: $1.8675
Support 1: $1.8620
Support 2: $1.8510
Support 3: $1.8300
Comments: Cable tries to recover with resistance is near session highs on $1.8720, next level - last Thursday’s highs on $1.8780/90. Further rise may extend to $1.8830/40 (23.6% of $1.9930 - $1.8510 decline). Support comes near session low on $1.8620. Below pound’s losses may widen to Friday’s $1.8510/20 (also Oct 2006 lows). Stronger level is around $1.8300 (38.2% of the rise from Jun 2001 lows at $1.3670 to Nov 2007 highs on $2.1160).

Resistance 3:$1.4980
Resistance 2: $1.4830
Resistance 1: $1.4770
Current price: $1.4735
Support 1: $1.4650
Support 2: $1.4540
Support 3: $1.4440
Comments: Techs on EUR/USD hasn’t changed. Nearest resistance is session highs at $1.4760/70. Above there is a risk to rise up to $1.4830 and $1.4980 (23.6% of $1.6030 - $1.4650 decline). Strong support is around Friday’s lows with a break under will drag the euro down to Feb lows on $1.4540 and $1.4440.

EUR/USD: $1.4700, $1.4850
USD/JPY: Y110.00, Y110.45, Y110.70, Y111.00, Y109.45
GBP/USD: $1.8510
AUS/USD: $0.8750, $0.8820, $0.8885
USD/CAD: C$1.0575

EUR
Bids: $1.4720, $1.4705/1.4690, $1.4675/70, $1.4655/45
Offers: $1.4770/80, $1.4800, $1.4820/30

JPY
Bids: Y109.85, Y109.30
Offers: Y110.50

GBP
Bids: $1.8650/40, $1.8615/00

Offers: $1.8720, $1.8735, $1.8750, $1.8770, $1.8790/00

AUSSIE
Bids: $0.8700, $0.8650, $0.8615/10

Offers: $0.8750, $0.8790/95

The dollar fell from a seven-month high versus the yen before U.S. government housing and inflation reports this week that may add to speculation the Federal Reserve will delay raising interest rates.
The currency also retreated from the strongest level in almost six months against the euro and snapped a three-day advance, after crude oil and gold gained, eroding the allure of dollar-denominated assets.
The British pound slid against the euro as an industry report showed U.K. home prices dropped the most since at least 2002.
Fed funds futures on the Chicago Board of Trade show a 14% chance the U.S. central bank will increase the 2% overnight lending rate between banks by a quarter-percentage point at its September meeting.

EUR/USD rebounded from $1.4670 to set stable around $1.4740/70.

GBP/USD held near session highs on $1.8715 before retreated to $1.8663.

USD/JPY held within the Y110.00/30.

Gains in the euro may be limited by speculation that investor confidence in Germany remained near a record low, discouraging the European Central Bank from raising rates.
The ZEW Center for European Economic Research's index of investor and analyst expectations, due tomorrow in Mannheim, was minus 62 in August, according to a survey. That's near last month's minus 63.9, which was the weakest since the ZEW began compiling the data in December 1991.

Japan's benchmark stock indices ended Monday's session higher, although shy of the session's best levels. The benchmark Nikkei 225 was higher by 146.04 points, or 1.12%, at 13165.45. The broader-based TOPIX was 15.68 points higher at 1262.26.

Crude oil fell last week as a strengthening dollar curbed the appeal of commodities as a hedge against inflation. Oil has tumbled 23% from the record $147.27 a barrel reached on July 11. The global economic outlook led the Organization of Petroleum Exporting Countries to leave its forecast for 2009 oil demand growth unchanged today at the lowest rate in seven years. The 13-member group left the rate at 1.03% , the narrowest since 2002, even after raising its estimates of daily demand in 2008 and 2009 by 90,000 barrels.

US stocks climbed modestly on Friday in a quiet session of trading, and made slight gains for the week, as oil prices dropped back and investors digested some positive results from retailers. Over the week, the S&P-500 fought its way to a 0.1% gain – its third in a row. The Dow fell 0.7% while the Nasdaq added 1.4%. The leading equity indices received a boost from a sharp fall in commodity prices. Oil fell with energy sector fell back 1.8% and has now lost ground in seven of the past eight sessions. ExxonMobil and ConocoPhillips gave up 0.5% and 2.2%, respectively.

Resistance 3: Y112.30
Resistance 2: Y111.80
Resistance 1: Y110.70
Current price: Y110.12
Support 1: Y109.30
Support 2: Y108.40
Support 3: Y107.20
Comments: USD/JPY retreats with strong support comes at channel line from Jul 16 at Y109.30. Below correction may extend to last Wednesday’s low on Y108.40, then – to Y107.20 (Aug 01 lows). Resistance is around Friday’s highs on Y110.70, with a break above will point to key level on Y111.80 (channel line from Mar). Above the target comes at channel line from Jul 16 on Y112.30.

Resistance 3: Chf1.1180
Resistance 2: Chf1.1080
Resistance 1: Chf1.1000
Current price: Chf1.0933
Support 1: Chf1.0830
Support 2: Chf1.0770
Support 3: Chf1.0720
Comments: Dollar corrects down after last week’s rise. Strong resistance is around Friday’s high on Chf1.1000 with a break under will open the way to Chf1.1080/00. Above there the resistance comes on Jan 07 highs at Chf1.1180/90. Support is around last Thursday’s lows on Chf1.0820/30. Stronger level is around 23.6% on Chf1.0770 (Chf1.0030 - Chf1.1010 rise). Stronger level comes at channel line from Jul 15 on Chf1.0720.

Resistance 3: $1.8960
Resistance 2: $1.8840
Resistance 1: $1.8780
Current price: $1.8687
Support 1: $1.8620
Support 2: $1.8510
Support 3: $1.8300
Comments: Cable tries to recover with resistance is near last Thursday’s highs on $1.8780/90. Further rise may extend to $1.8830/40 (23.6% of $1.9930 - $1.8510 decline). Above the target comes at $1.8960 (trend line from Jan 2002, that was broken on Aug 13). Support comes near session low on $1.8620. Below pound’s losses may widen to Friday’s $1.8510/20 (also Oct 2006 lows). Stronger level is around $1.8300 (38.2% of the rise from Jun 2001 lows at $1.3670 to Nov 2007 highs on $2.1160).

Resistance 3:$1.4980
Resistance 2: $1.4830
Resistance 1: $1.4770
Current price: $1.4747
Support 1: $1.4650
Support 2: $1.4540
Support 3: $1.4440
Comments: Euro rebounds Monday after 5-weeks decline in a row versus the dollar. Rate challenges channel resistance line from Aug 08 between $1.4760/70. Above there is a risk to rise up to $1.4830 and $1.4980 (23.6% of $1.6030 - $1.4650 decline). Strong support is around Friday’s lows with a break under will drag the euro down to Feb lows on $1.4540 and $1.4440.

Crude continues to extend gains, last up $1.38 at $115.18, in part boosted by the comments from the Iran's OPEC governor Mohammad Ali Khatibi. "The market is oversupplied by at least 1 million barrels a day. If OPEC would like to remove this additional oil out of the market, then OPEC has to cut some production," Khatibi said.

High Low Close
EUR/USD 1.4804 1.4657 1.4672
USD/JPY 110.67 109.62 110.51
GBP/USD 1.8686 1.8511 1.8627
USD/CHF 1.1008 1.0940 1.0970

EUR/JPY 163.07 161.84 162.16
EUR/GBP 0.7943 0.7867 0.7873
GBP/JPY 206.50 204.34 205.85
GBP/CHF 2.0481 2.0355 2.0434

Change % Change Last
Nikkei 225 +62.61 (+0.5%) 13,019.41
Topix +8.38 (+0.7%) 1,247.31
DAX 30 +3.81 (+0.06%) 6446.02
САС 40 +32.71 (+0.74%) 4453.62
FTSE 100 -42.60 (-0.77%) 5454.80
Dow +43.97 (+0.38%) 11659.90
Nasdaq -1.15 (-0.05%) 2452.52
S&P +5.27 (+0.41%) 1298.20
10YR 96 +13/32 3.84% 101 9/32
OIL NYMEX -1.24 (-1.08%) $113.77

05:00 Japan Leading indicators (June) final - 60.0
05:00 Japan Coincident indicators (June) final - 33.3
09:00 EU(15) Trade balance (June) unadjusted, bln - -4.6