"Lower mortgage rates will probably support new home sales in coming months, but at least through August there was no sign that sales had stabilized. The only positive thing in this report was that homebuilders continued to rapidly reduce inventories, they say, adding that inventories have fallen over the last three months at the fastest pace on record. On durables, the ensuing downward revision to 3Q real equipment and software spending is one reason JPM revised down their 3Q GDP outlook. Moreover, with corporate financing conditions turning decisively more restrictive, the outlook for capital spending is not bright.

Analysts at GS say "WTI Crude rally was capped at major resistance at $111/112. A close above is needed to confirm a base."

"Fed policy will likely remain on hold, balancing uncertain downside risks and lingering inflation concerns, while it waits to assess the impact of pending fiscal plans".

The dollar fell against the euro for the first time in three days after traders increased bets the Federal Reserve will cut borrowing costs as banks' reluctance to lend threatened to slow economic growth further.
The yen dropped versus the euro, the dollar as stocks rose on speculation Congress will reach an agreement on a $700 billion bailout of financial institutions, encouraging investors to buy higher-yielding assets funded by low-cost loans in Japan.
``The right medium-term trade is selling the dollar,'' said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York, in an interview on Bloomberg Television. ``When you add together all the fiscal contingent liability risk the U.S. government is taking on to backstop the financial system, you really have to question the long-term prospects for the dollar.''
Futures contracts on the Chicago Board of Trade showed an 86 percent chance that the Fed will cut the 2 percent target rate for overnight lending between banks on Oct. 29. That compares with 80 percent odds yesterday.
President George W. Bush said in an address to the nation yesterday that swift action is needed to help avert ``a long and painful'' recession. Immediately after the speech, House Financial Services Committee Chairman Barney Frank told reporters that House and Senate Democrats had reached a deal on legislation.
``The prospects of loose fiscal and monetary conditions in a economy that's slowing rapidly is hitting the dollar,'' said Simon Derrick, chief currency strategist at Bank of New York Mellon Corp. in London. The bailout package ``may restore confidence in a lot of things, but it won't restore confidence in the dollar.''
The euro may advance as high as $1.53 as the market refocuses on economic fundamentals once the bailout package is in place, wrote Tom Fitzpatrick, London-based global head of currency strategy at Citigroup Global Markets Inc., in a note sent to Bloomberg News yesterday.
The collapse of Lehman Brothers Holdings Inc. and the U.S. government takeover of American International Group Inc. have led to a seizure in lending between banks. The three-month London interbank offered rate, or Libor, for dollars rose to 3.77 percent today, the highest level relative to the Fed's target rate on record.
``The credit channel is blocked up,'' said Stephen Malyon, co-head of currency strategy in Toronto at Scotia Capital Inc., a unit of Canada's third-largest bank by assets. ``Odds favor the next move by the Fed will be a cut. It surely will hurt the dollar.''
The dollar has fallen 6 percent against the euro since touching a one-year high of $1.3882 on Sept. 11. The dollar reached $1.6038 on July 15, the weakest level since the European currency made its debut in 1999.
Orders for U.S. durable goods, items meant to last several years, dropped 4.5 percent in August after a revised 0.8 percent gain in the prior month, the Commerce Department reported today. The median forecast of 74 economists surveyed by Bloomberg News was for a 1.9 percent decrease.
``Restrictive credit conditions are preventing previous rate cuts from stimulating the economy,'' said Vassili Serebriakov, a currency strategist at Wells Fargo & Co. in New York. ``At the same time, economies in Europe and Japan are not getting better. The euro-dollar in the $1.45-$1.50 range is consistent with economic fundamentals and rate expectations.''

Econ at BOA say the supply of new homes for sale fell a large 4.4% in August, the largest monthly percentage decline since November 1963 and is an encouraging sign that inventories are approaching normal levels. They estimate that another 17% nventory decline for new homes on the market likely lies ahead. However, they note new home sales typically bottom well before the inventory of homes for sale.

Crude prices have pulled out of their morning lows to trade at a session high. They are currently up 1.5% after being down as much as 2.4%.
The Department of Energy announced gasoline inventories dropped to their lowest level in decades, falling 5.9 million barrels to 178.7 million barrels. Refining capacity has been crimped in recent weeks as facilities fall off line from hurricane threats.
Oil and gas refiners are up 3.8% this session. With lower levels of gasoline supplies, refiners gain pricing power.
The recent rise in energy prices is not undermining the gains sported by stocks. The major indices are near their session highs.

CitiFX declaring that they "do not like the price action" and thus are cutting their euro-dollar and Aussie dollar longs. "There has been every reason for them to head higher today and they have tried 3 times to do so only to fail. It feels like the market is short USD so we
are getting out of our shorts as we feel a rout could be coming," the strategists say.

Economists at JPM say weekly claims would have been around 430,000 if not for the hurricanes. They expect that Hurricane Ike, which struck the Gulf Coast on September 13, will probably continue to bias up claims in the next report.

Says that Capitol Hill is improving Paulson's 'unacceptable' plan, and that the House will take up a separate stimulus plan Friday; one that will be completely separate from the rescue plan.

Dresdner Kleinwort economists say - "Orders excluding transportation goods, were much weaker than anticipated, dropping -3.0%. These data suggest that real business spending on plant and equipment may post its third consecutive uarterly
decline in Q3."

Stocks are spiking on word from CNBC that House and Senate Democrats have agreed on a plan to fund asset repurchases from financial service companies.
Financial stocks are now up more than 3%, collectively

The major indices have opened with solid gains, following the prior session's relatively flat performance. The Dow, the Nasdaq, and the S&P 500 are all up more than 1% currently.
Only two sectors are trading lower: materials (-0.7%) and industrials (-0.1%).
Treasury Notes have failed to catch a bid as equities climb higher. The 10-year Note is currently unchanged.

Recovery off earlier pullback lows at $1.8520 extend to make a show above $1.8600, currently trading around $1.8590. Offers noted between $1.8600/10, a break above to open a move on toward $1.8630. Above here and rate can push on to $1.8650 ahead of $1.8670/80. Bids $1.8560/50, stronger at $1.8520.

Stock futures (S&P futures vs fair value: +6.50. Nasdaq futures vs fair value: +6.30.) turned mixed Thursday after General Electric cut its profit outlook for the third quarter and full year and as investors mulled President Bush's speech about the seriousness of the economic crisis.

Dow Jones industrial average and Nasdaq futures were still higher, but S&P 500 futures slipped into negative territory.
On Wednesday, markets ended mixed amid ongoing jitters over with the government's $700 billion bailout proposal. The Dow and S&P 500 both slipped by about 0.2% and the Nasdaq gained 0.1%.
After the market close, Research in Motion (RIM), the Canadian maker of BlackBerry communication devices, is expected to release quarterly results. A consensus of analysts from Thomson FirstCall projects that third-quarter earnings will surge 74% to 87 cents per share.
European markets were mixed, while Japanese stocks closed lower. The price of oil fell $1.97 a barrel to $103.76

"This looks horrible but the Labor Department reckons the impact of Hurricanes Ike and Gustav added about 50K to claims, a bit more than we expected. Together with the distortions caused by extended benefits, we just don't know what is happening to the underlying trend in claims. It is certainly not good, but it is equally certainly not as bad as this headline suggests."

EUR/USD probed resistance at $1.4720 able to cap, with rate dropping back below $1.4700. Offers remain at $1.4720, a break above to open a move on toward $1.4750/60. Bids now seen at $1.4690, more between $1.4670/65 ahead of 1.4650.

Nondefense capital goods shipments were -2.8%, and were -1.7% excluding civilian aircraft shipments.
The data confirm that manufacturing activity has made no improvement.

The dollar also weakened versus the Swiss franc before a U.S. government report today that may show home sales dropped in August, extending the worst housing slump in 17 years. The British pound rose against the U.S. currency after policy maker Andrew Sentance said the Bank of England must temper its response to the credit crisis and stick to its inflation focus.
Futures contracts on the Chicago Board of Trade showed 80 percent odds the Fed will cut borrowing costs in October as Congress mulls a $700 billion proposal to bail out the banking system. That compares with 58 percent odds on Sept. 23.
The collapse of Lehman Brothers Holdings Inc. and the U.S. government takeover of American International Group Inc. has caused a seizure in lending between banks. The three-month London interbank offered rate, or Libor, the rate at which banks charge each other for loans in dollars, rose to 3.48 percent yesterday, the highest in eight months, according to the British Bankers' Association.
Sales of new houses in the U.S. fell to an annual rate of 510,000 last month, from 515,000 in July, according to the median forecast of economists. Sales declined to a 503,000 pace in June, the lowest since 1991.
The British pound climbed against 13 of the 16 most-traded currencies after Sentance said policy makers should guard against ``allowing the economic slowdown to develop into a deflationary spiral which would not be consistent with our mandate to meet the 2 percent inflation target.''
The yen may rise as slowing export growth added to evidence of a global economic slump, prompting investors to reduce purchases of higher-yielding assets financed in Japan, so-called carry trades. In such transactions, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the two. The risk is that currency market moves erase those profits. The benchmark interest rate is 0.5 percent in Japan, compared with 13.75 percent in Brazil and 5.25 percent in South Korea.
Bank of Japan board member Tadao Noda said today that global growth will slow, threatening the bank's expectation that Japan's economy will recover after shrinking in the second quarter. Economic and Fiscal Policy Minister Kaoru Yosano said a drop in Japan's exports was triggered directly and indirectly by the U.S. subprime crisis.
Japan's exports grew 0.3 percent in August from a year earlier after rising 8 percent the previous month, the Finance Ministry said today in Tokyo.

EUR/USD remained within the limits of a range $1,4620-$ 1,4740. Bids $1.4650, $1.4610/00, offers $1.4695/00, stops above.

-- Says financial system must be stabalised "immediately".

Econ to grow "appreciably below potential' in this second half. Since the second quarter, economic activity has "decelerated broadly." And, the FOMC is monitoring developments, to "act as needed."

The dollar snapped two days of gains against the euro after President George W. Bush said the U.S. may face a ``painful'' recession and as traders bet on a Federal Reserve interest-rate cut next month.
The dollar also weakened versus the Swiss franc before a U.S. government report today that may show home sales dropped in August, extending the worst housing slump in 17 years. The British pound rose against the U.S. currency after policy maker Andrew Sentance said the Bank of England must temper its response to the credit crisis and stick to its inflation focus.
``The prospects of loose fiscal and monetary conditions in a economy that's slowing rapidly is hitting the dollar, said Simon Derrick, chief currency strategist in London at Bank of New York Mellon Corp. ``The bailout package may restore confidence in a lot of things but it won't restore confidence in the dollar.''
Futures contracts on the Chicago Board of Trade showed 80 percent odds the Fed will cut borrowing costs in October as Congress mulls a $700 billion proposal to bail out the banking system. That compares with 58 percent odds on Sept. 23.
``The U.S. is the epicenter of the financial crisis,'' said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York, in a Bloomberg television interview. ``The right medium-term trade is to be selling the dollar.''
The collapse of Lehman Brothers Holdings Inc. and the U.S. government takeover of American International Group Inc. has caused a seizure in lending between banks. The three-month London interbank offered rate, or Libor, the rate at which banks charge each other for loans in dollars, rose to 3.48 percent yesterday, the highest in eight months, according to the British Bankers' Association.
Sales of new houses in the U.S. fell to an annual rate of 510,000 last month, from 515,000 in July, according to the median forecast of economists. Sales declined to a 503,000 pace in June, the lowest since 1991.
The British pound climbed against 13 of the 16 most-traded currencies after Sentance said policy makers should guard against ``allowing the economic slowdown to develop into a deflationary spiral which would not be consistent with our mandate to meet the 2 percent inflation target.''
The yen may rise as slowing export growth added to evidence of a global economic slump, prompting investors to reduce purchases of higher-yielding assets financed in Japan, so-called carry trades. In such transactions, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the two. The risk is that currency market moves erase those profits. The benchmark interest rate is 0.5 percent in Japan, compared with 13.75 percent in Brazil and 5.25 percent in South Korea.
Bank of Japan board member Tadao Noda said today that global growth will slow, threatening the bank's expectation that Japan's economy will recover after shrinking in the second quarter. Economic and Fiscal Policy Minister Kaoru Yosano said a drop in Japan's exports was triggered directly and indirectly by the U.S. subprime crisis.
``Investors may become risk-averse,'' said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe General SA, France's largest bank by market value. ``The yen may be bought.''
Japan's exports grew 0.3 percent in August from a year earlier after rising 8 percent the previous month, the Finance Ministry said today in Tokyo.

Resistance 3: Y108.00
Resistance 2: Y107.20
Resistance 1: Y106.30
Current price: Y105.91
Support 1: Y105.55
Support 2: Y104.00
Support 3: Y103.50
Comments: Techs on hasn't changed. Resistance is around yesterday’s high on Y106.30, then – at Monday’s high on Y107.20. Stronger level remains at Friday’s high on Y108.00. Support is around recent low on Y105.10/15 and then – to stronger support at Y103.50 (trend line from Mar 17).

Resistance 3: Chf1.1050
Resistance 2: Chf1.0980
Resistance 1: Chf1.0930
Current price: Chf1.0806
Support 1: Chf1.0820
Support 2: Chf1.0680
Support 3: Chf1.0610
Comments: The pair continue to consolidate. Support is around session low on Chf1.0820, then – near Monday’s low on Chf1.0680. Break under will lead the dollar to May highs on Chf1.0600/10. Resistance comes at yesterday’s high and 38.2% of the decline from Friday’s high on Chf1.1280 – at Chf1.0910/30. Next band of resistance comes at 50% Fibo on Chf1.0980.

Resistance 3: $1.8800
Resistance 2: $1.8740
Resistance 1: $1.8640
Current price: $1.8580
Support 1: $1.8460
Support 2: $1.8360
Support 3: $1.8280
Comments: The pound continues to remain within the limits of the channel $1.8470-$ 1.8640. Below losses may widen to $1.8360 and key level - $1.8280 (50. Resistance comes at Monday’s high on $1.8640, then – around 14-days channel resistance line between $1.8740/50. Break above will open the way to Aug 21 high on $1.8800.

Resistance 3:$1.4960
Resistance 2: $1.4870
Resistance 1: $1.4750
Current price: $1.4078
Support 1: $1.4620
Support 2: $1.4590
Support 3: $1.4500
Comments: EUR/USD has updated a session high then has returned to former levels. Minor support comes at $1.4660 with a break under will open the way to 38.2% on $1.4580/90 (rally from $1.4150 to $1.4860) and then to key support on $1.4500/05 (50% of the $1.4150 - $1.4860 move). Resistance comes at yesterday’s high on $1.4755/60, then - between $1.4840/60 (Monday’s high). Above there is a chance to recover up to $1.4950 (50% of the $1.6030 - $1.3870 decline).

EUR/USD $1.4785, $1.4870, $1.4600
USD/JPY Y106.00, Y104.50, Y107.50, Y107.80
EUR/JPY Y155.25
GBP/USD $1.8600, $1.8495
NZD/USD $0.6900

EUR/USD
Offers $1.4770, $1.4750/55, $1.4735/40
Bids $1.4670, $1.4665/45

GBP/USD
Offers $1.8690/00, $1.8650, $1.8620/25
Bids $1.8580/60, $1.8540, $1.8510/00

EUR/JPY
Offers Y156.80/00, Y156.20/30
Bids Y154.50

USD/JPY
Offers Y106.90/00, Y106.50, Y106.30/35
Bids Y105.50/45, Y105.15/17

The dollar fell against the euro, ending a two-day gain, as President George W. Bush warned the U.S. may face a ``painful'' recession and traders bet on a Federal Reserve interest-rate cut next month.
The dollar weakened versus the British pound and Swiss franc before a U.S. government report today that economists forecast will show home sales declined, extending the worst housing slump in 17 years. Futures contracts indicate 80 percent odds the Fed will lower borrowing costs in October as Congress delays a $700 billion bailout proposal.
The yen may rise as slowing export growth added to evidence of a global economic slump, prompting investors to reduce holdings of higher-yielding assets financed in Japan.
In a carry trade, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the two. The risk is that currency market moves erase those profits. The benchmark interest rate is 0.5 percent in Japan, compared with 13.75 percent in Brazil and 5.25 percent in South Korea.
Bank of Japan board member Tadao Noda said today that global growth will slow, threatening the bank's expectation that Japan's economy will recover after shrinking in the second quarter. Economic and Fiscal Policy Minister Kaoru Yosano said a drop in Japan's exports was triggered directly and indirectly by the U.S. subprime crisis.
Japan's exports grew 0.3 percent in August from a year earlier after rising 8 percent the previous month, the Finance Ministry said today in Tokyo.

EUR/USD remained within the limits of a range $1,4620-$ 1,4740.
GBP/USD has raised to the top border of the channel $1.8455-$ 1.8605.
USD/JPY having opened in area Y106.30, the pair has decreased in area Y105.60

US data starts at 1230GMT by the weekly jobless claims and August durable goods data. Jobless claims are expected to fall 5,000 to 450,000 in the September 20 week. Durable goods new orders are expected to fall 1.5% in August after rising in July. At 1400GMT, US New home sales are forecast to stay at a 515,000 annual rate in August after a modest July increase. Late US data sees M2 money supply at 2030GMT.

Japan's benchmark stock indices ended the day lower across the board, although sharply off the morning session lows. The benchmark Nikkei 225 was down 108.50 points, or 0.90%, to stand at 12006.53 The broader-based TOPIX was lower by 14.02 points at 1153.95.

Japan stocks
Most Japanese stocks rose, led by financial companies, as Mitsubishi UFJ Financial Group Inc. and Nomura Holdings Inc. took advantage of depressed prices to buy stakes in overseas rivals. Shipping lines fell as cargo rates for commodities dropped.

Mitsubishi UFJ, the country's biggest lender by value, climbed 4.2 after saying it will buy as much as a fifth of Morgan Stanley. Nomura, Japan's largest brokerage, continued a three-day, 26 percent rally after agreeing to buy the European unit of Lehman Brothers Holdings Inc. Mitsui O.S.K. Lines Ltd., Japan's largest operator of iron-ore ships, retreated 4.8 percent as a benchmark for commodity freight rates fell a second day.

The Nikkei 225 Stock Average added 24.44, or 0.2 percent, to 12,115.03 at the close of trading in Tokyo, reversing a 1.5 percent drop. The broader Topix index retreated 0.72, or less than 0.1 percent, to 1,167.97. The gauge earlier fell 2.1 percent. About nine shares rose for every seven that slipped on the gauge.


European stocks fell for a third day after higher oil prices dragged down automakers and Federal Reserve Chairman Ben S. Bernanke said the credit crisis is damaging household and business spending.

Renault SA, France's second-largest carmaker, dropped 2.9 percent and Daimler AG slipped 1.1 percent as crude traded above $109 a barrel. Anglo American Plc, the fourth-biggest diversified mining company, fell to a two-year low after copper retreated and Bernanke's remarks heightened concern that the world's largest economy may tip into a recession. Royal Bank of Scotland Group Plc led a rally in financial stocks, climbing 3.3 percent as Goldman Sachs Group Inc. won backing from Warren Buffett's Berkshire Hathaway Inc.

Wednesday's trading was generally range bound until stocks fell to a session low shortly before the closing bell.
They managed to finish near the unchanged mark as the session expired. Action was underscored by light volume as traders assessed testimonies from key financial officials and continue awaiting a clear indication whether an asset funding plan will win approval. Their reservation overshadowed a symbolic vote of confidence from a renowned investor.

Famed value investor Warren Buffett gave investors encouragement this morning on word his Berkshire Hathaway (BRK.A 133,300, +4,500) bought $5 billion in perpetual preferred stock from Goldman Sachs (GS 133.00, +7.95). Berkshire will also receive warrants to purchase $5 billion of GS common stock at any time within five years. Goldman also priced a $5.0 billion common stock public offering at $123 per share.
The Treasury's proposal to buy up to $700 billion in illiquid assets from financial institutions remains in focus. Fed Chairman Bernanke stated before the Joint Economic Committee that the stabilization of the financial system is key to an economic recovery since the crisis is affecting the broader economy. Economic activity appears to be decelerating, though Bernanke expects GDP to expand in the second half. Still, he believes it will grow below its potential rate.
The primary culprit undermining economic growth has been a weak housing market. August existing home sales fell 2.2% to an annual seasonally adjusted rate of 4.91 million, according to the National Association of Realtors. Sales were expected to fall 1.2%.
Treasury Secretary Paulson stated before the House Financial Services Committee that stabilizing the U.S. financial system must be done to avoid a continuing series of financial institution failures and frozen credit markets. He also stated the proposed $700 billion program is about benefiting American people since their economic well-being is at risk.
Paulson stated the troubled asset purchase program is the single most effective move to help homeowners, citizens, and the economy.
Government officials continue to pepper Bernanke and Paulson with questions and have yet to clearly indicate favor for the proposed plan.
That has kept traders at bay. In turn, trading volume on the NYSE just passed 1 billion shares. That is only one-third of the volume seen last Friday, when the exchange posted record high volume.

The yen weakened against the euro after the Federal Reserve agreed to provide central banks with more cash to increase lending, encouraging traders to purchase higher-yielding assets funded in Japan.
Japan's currency also slid, dropping against most of its major counterparts, as Goldman Sachs Group Inc. raised $5 billion from Warren Buffett's Berkshire Hathaway Inc. and the same amount in a stock offering. Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson are due to give more congressional testimony on a proposed $700 billion bailout.
Berkshire Hathaway, led by 78-year-old Buffett, is buying $5 billion of Goldman perpetual preferred stock with a 10 percent dividend. Berkshire also gets warrants to buy $5 billion of common stock at $115 a share at any time in the next five years. Goldman also sold 40.65 million shares of common stock at $123 apiece, the firm said in a statement.
Demand for the yen typically drops when appetite for higher-risk assets increases, as traders pare so-called carry trades. In such transactions, investors get funds in a country with low borrowing costs and invest in another with higher interest rates, earning the spread between the two. The risk is that currency-market moves can erase those profits.
The dollar fell against the euro earlier as the Fed arranged $30 billion in swaps lines with central banks in Norway, Sweden, Denmark and Australia, providing easier access to the U.S. currency in a response to demand for dollar loans.
Bernanke and Paulson said yesterday the bailout is needed to avert a recession in the world's biggest economy.
The chance of the Fed cutting its 2 percent benchmark rate by a quarter-percentage point at its Oct. 29 policy meeting was 74 percent, compared with 58 percent yesterday, futures contracts on the Chicago Board of Trade showed.
The dollar fell against the euro today as the National Association of Realtors reported that U.S. sales of existing homes declined last month to a 4.91 million annual rate. The median forecast of economists was for a drop to a 4.94 million pace.

EUR/USD traded in a range $1,4620-$ 1,4740.
GBP/USD traded within the limits of the channel $1.8455-$ 1.8605.
USD/JPY having opened in area Y105.50, the pair could finish the trade in area Y106.10.

At 0800GMT Eurozone M3 data is expected to see a rise of 9.1% y/y (9.2% 3m y/y) for August.
US data starts at 1230GMT by the weekly jobless claims and August durable goods data. Jobless claims are expected to fall 5,000 to 450,000 in the September 20 week. Durable goods new orders are expected to fall 1.5% in August after rising in July. At 1400GMT, US New home sales are forecast to stay at a 515,000 annual rate in August after a modest July increase. Late US data sees M2 money supply at 2030GMT.

Resistance 3: Y108.00
Resistance 2: Y107.20
Resistance 1: Y106.30
Current price: Y105.55
Support 1: Y105.55
Support 2: Y104.00
Support 3: Y103.50
Comments: Techs on the rate hasn’t changed – rate consolidates, rebounding slowly. Resistance is around yesterday’s high on Y106.30, then – at Monday’s high on Y107.20. Stronger level remains at Friday’s high on Y108.00. Support is around recent low on Y105.10/15 and then – to stronger support at Y103.50 (trend line from Mar 17).

Resistance 3: Chf1.1050
Resistance 2: Chf1.0980
Resistance 1: Chf1.0930
Current price: Chf1.0806
Support 1: Chf1.0820
Support 2: Chf1.0680
Support 3: Chf1.0610
Comments: USD/CHF weakened as Treasury Secretary Henry Paulson said the financial system was ``frozen to a large extent'' and Fed Chairman Ben S. Bernanke said the U.S. is facing ``grave threats'' to market stability. Futures show 80% odds the Fed will lower borrowing costs in October compared with 58% on Sept. 23 as Congress delays a $700 billion bailout proposal. Techs hasn’t changed much. Support is around session low on Chf1.0820, then – near Monday’s low on Chf1.0680. Break under will lead the dollar to May highs on Chf1.0600/10. Resistance comes at yesterday’s high and 38.2% of the decline from Friday’s high on Chf1.1280 – at Chf1.0910/30. Next band of resistance comes at 50% Fibo on Chf1.0980.

Resistance 3: $1.8800
Resistance 2: $1.8740
Resistance 1: $1.8640
Current price: $1.8582
Support 1: $1.8460
Support 2: $1.8360
Support 3: $1.8280
Comments: The dollar declined versus the British pound as President George W. Bush said the U.S. is in the ``midst of a serious financial crisis'' and ``our entire economy is in danger.'' Yesterday pound tested support near 23.6% Fibo (rise from $1.7920 to Monday’s high on $1.8640) on $1.8460. Below losses may widen to $1.8360 and key level - $1.8280 (50. Resistance comes at Monday’s high on $1.8640, then – around 14-days channel resistance line between $1.8740/50. Break above will open the way to Aug 21 high on $1.8800.

Resistance 3:$1.4960
Resistance 2: $1.4870
Resistance 1: $1.4750
Current price: $1.4078
Support 1: $1.4620
Support 2: $1.4590
Support 3: $1.4500
Comments: EUR/USD ended two days of losses before a U.S. government report that economists estimate will show new home sales dropped and as traders raised bets for a Federal Reserve cut in interest rates next month. Sales of new houses in the U.S. fell to an annual rate of 510,000 last month from 515,000 in July, according to the median forecast of economists. Sales declined to a 503,000 pace in June, the lowest since 1991. Minor support comes at $1.4660 with a break under will open the way to 38.2% on $1.4580/90 (rally from $1.4150 to $1.4860) and then to key support on $1.4500/05 (50% of the $1.4150 - $1.4860 move). Resistance comes at yesterday’s high on $1.4755/60, then - between $1.4840/60 (Monday’s high). Above there is a chance to recover up to $1.4950 (50% of the $1.6030 - $1.3870 decline).

High Low Close
EUR/USD 1.4745 1.4597 1.4616
USD/JPY 106.34 105.33 106.18
GBP/USD 1.8606 1.8455 1.8468
USD/CHF 1.0853 1.0903 1.0802

EUR/JPY 156.17 154.51 155.17
EUR/GBP 0.7937 0.7882 0.7912
GBP/JPY 197.45 195.30 196.08
GBP/CHF 2.0234 2.0061 2.0165

Change % Change Last
Nikkei 225 +24.44 +0.20% 12,115.03
Topix -0.72 -0.10% 1,167.97
FTSE -40.55 -0.79% 5,095.57
DAX -15.66 -0.26% 6,052.87
CAC -25.28 -0.61% 4,114.54
Dow -28.28 -0.26% 10,825.89
NASDAQ +2.35 +0.11% 2,155.68
S&P -2.35 -0.20% 1,185.87
10yr Note -0.7000 -0.182% 3.771%
NYMEX Crude Oil -0.88 -0.83% 105.73
Gold +3.80 +0.43% 895.00

06:10 Germany GfK consumer confidence (Aug) 1.6 1.5
08:00 Е15 M3 (YoY) (Aug) 9,3%
12:30 USA Durable goods orders excluding defence (August) 2.8%
12:30 USA Durable goods orders excluding transportation (August) 0,7%
12:30 USA Durable goods orders (August) -1,1% 1,3%
12:30 USA Jobless claims (week to 20.09) 455K
14:00 USA New home sales (August) 519K 515K
20:30 USA M2 money supply (15.09), bln -1.9
23:30 Japan Tokyo-area CPI ex fresh food (September) Y/Y 1,5%
23:30 Japan Tokyo-area CPI (September) Y/Y 1,3%
23:30 Japan Tokyo-area CPI (September) 0,1%
23:30 Japan Nationwide CPI ex fresh food (August) Y/Y 2,4%
23:30 Japan Nationwide CPI (August) Y/Y 2,2%
23:30 Japan Nationwide CPI (August) 0.2%