RBC says there is "deepening weakness in labour markets with jobless claims for the week ending Nov 8 rising to 516,000" and the report "provides little reason for optimism about any easing in the pace of jobs declines from the 240,000 drop in October." RBC also says "The stronger-than-expected September trade numbers are not sufficiently strong to prevent Q3 GDP growth from escaping a small decline."

The major indices have moved back into positive ground, yet small-cap stocks continue to lag substantially. The Russell 2000 is down 3.6%. Crocs (CROX 1.14, -0.76) has been a primary laggard among small-cap names. The company recently posted disappointing quarterly results, which featured slowing sales. Crocs was once considered a hot growth company trading with a rich valuation multiple, but shares are now down nearly 98% from their 52-week high and trade closer to 16x trailing earnings.

US econ is in recession and growth might return by H2:09, calls for 7.7% unemployment by end-09. TARP is helping mkts, 2/3 of respondents said.

The yen gained agains US dollar and the rest or the main currencies as sell off on the Wall Street forced investors to redure carry trades positions.

The euro earlier fell on speculation the German report will prompt the European Central Bank to cut interest rates.
``The German GDP figures didn't support the euro and we've had some more bad news for the world economy,'' said LutzKarpowitz, a currency strategist in Frankfurt at Commerzbank AG, Germany's second-biggest lender. ``It looks like this is a worldwide recession and the dollar usually gains from this situation. Euro-dollar will go down further.''
The pound fell to $1.4600, the lowest since June 2002, following comments yesterday by Bank of England Governor Mervyn King that policy makers ``are prepared to cut bank rate to whatever level is necessary'' to make sure inflation hits the central bank's target.

JPM says ex-9/11, "initial claims are now well higher than they were at any point during the last labor market downturn. The elevated level of claims suggest that large payroll declines will again by reported in the November employment report."

Stocks have fallen to a fresh session low. The S&P 500 is now hovering only a few points above its 52-week low of 839.8.
The recent downturn has been led by the financial sector, which has tucked tail to trade with a 3.9% loss. It is now the worst performing economic sector this session.
Bank of America (BAC 15.61, -1.39) and Citigroup (C 8.60, -1.04) are the sector's primary laggards. Citigroup, according to reports, may be looking to replace its board chairman, given the company's weak performance. Separate reports indicated Citi is pursuing regional lender Chevy Chase Bank.

Chopped down to the Y95.55 area for a marginal fresh low for the US session. Pair remains sensitive to equity swings but bids remain intact at Y95.40/35 area. Stronger demand spotted on approach to the session low Y94.50.

JPM economist Abiel Reinhart says Q3 GDP is tracking -0.7%. He says "September hurricanes may have disrupted exports passing through Gulf Coast ports. Nonetheless, September does not appear to have been a good month for exports, which is likely a sign of things to come. Foreign growth has slowed and the value of the dollar has increased, both of which should damp export growth in future quarters."

Crude futures continue trade higher in the wake of the latest crude inventory report from the Department of Energy. Crude inventories increased by 22,000 barrels during the week ended November 7, which is fewer than the build of 1 million barrels that was widely expected.
Oil found support early on when reports indicated OPEC may schedule an emergency meeting to adjust output amid softer demand and falling prices. OPEC's next regularly scheduled meeting is set for December.
Oil futures are currently up 1.5% to $57.00 per barrel. Crude was up as much as 3.2% earlier.
Stocks are moving in a volatile manner yet again. After opening with solid gains the S&P 500 fell to a loss of 0.6%, but then rallied to a gain of 1.7%. The recent rally proved unsustainable.

Citigroup now expect the ECB to cut either 75bp or 100bp in December and further cuts in 2009, writes Citi economist Jurgen Michels. The report cites the latest monthly ECB bulletin in combination
with negative economic news (e.g. larger than expected fall in 3Q German GDP and downward revision of the growth and inflation forecasts by the IMF and the OECD). Citi were previously looking for ECB to cut again by at least 50bp in December.

"The trade balance narrowed in September primarily because a sharp decrease in the oil import bill even though exports also plunged. On a trend basis, from early 2007, imports had been slowing while exports have been accelerating... oil import bill will continue to fall over the next couple of months and overall imports are likely to be weak. Any rebound in exports would help
to sharply reduce the trade deficit over the next couple of months."

EUR/USD $1.2360, $1.2575, $1.2800
USD/JPY Y95.00, Y94.50, Y96.75, Y98.10, Y98.20, Y99.00, Y99.30, Y99.50
AUD/USD $0.6500

Stocks continue to indicate a down start for the session, according to futures (S&P futures -0.70, Nasdaq futures -13.00).
After slumping lower in recent sessions, oil futures are advancing. The commodity is currently indicated 0.5% higher, near $56.45 per barrel. Oil prices hit a 22-month low in the prior session. The dollar is relatively unchanged early on. Year-to-date, the dollar index is up 14% .
Initial jobless claims for the week ending November 8 totaled 516,000, up 32,000 from the prior week, and more than the 480,000 claims that were expected. The elevated number of jobless claims continue to indicate weak labor markets. In other economic data, the September trade deficit totaled $56.5 billion, which is narrower than the $59.1 billion deficit posted in August, and narrower than the $57.0 billion deficit that was widely anticipated.
Semiconductor company and tech bellwether Intel cut outlook. Applied Materials also gave a disappointing outlook. Discount retail giant and Dow component Wal-Mart issued downside guidance of its own upon announcing better-than-expected third quarter earnings per share results.
Restructuring charges and expense provisions gave German engineering giant Siemens AG a loss of approximately $3.1 billion for its latest quarter, according to WSJ. WSJ also reported Citigroup may be considering replacing its current board chairman as some of the company's directors grow dissatisfied with the financial giant's performance. Citigroup has just entered talks to buy regional lender Chevy Chase Bank.

International trade (September), bln -56,5
Jobless claims (week to 08.11) 516К

The following data were published:
04:30 Japan Industrial output (September) final 1.1%
04:30 Japan Industrial output (September) final Y/Y 0.2%
07:00 Germany GDP (Q3) flash -0.5%
07:00 Germany GDP (Q3) flash Y/Y adjusted 0.8%
07:00 Germany GDP (Q3) flash Y/Y unadjusted 1.3%

The euro fell to a two-week low against the dollar after Germany's economy entered its worst recession in at least 12 years, sparking speculation the European Central Bank will cut interest rates.
The 15-nation currency also pared gains against the yen after a German government report showed the biggest contraction over two consecutive quarters since 1996. The yen dropped versus the dollar as intervention by the Reserve Bank of Australia fueled speculation other central banks may follow suit.
The yen fell from two-week highs against the dollar and the euro after the Reserve Bank of Australia intervened to support its currency, fueling speculation Japan may do the same.
The yen declined versus the Australian dollar, after yesterday surging the most in three weeks, as an unidentified spokesman at the RBA confirmed purchases of its own currency. Japan's Finance Minister Shoichi Nakagawa told lawmakers in Tokyo today that abrupt currency moves are ``undesirable'' and a stronger yen hurts domestic stock investors. He said last month Japan may intervene for the first time in four years.
The yen rose earlier to a two-week high against the euro, after U.S. Treasury Secretary Henry Paulson's plan to divert bailout money from banks sparked cuts in purchases of higher- yielding assets. Paulson said yesterday he plans to use the second half of the $700 billion Troubled Asset Relief Program, known as TARP, to help relieve pressure on consumer credit, scrapping a proposal to buy devalued mortgage assets from banks.
The Japanese currency will strengthen to 90 yen per dollar in three months as traders shun higher-yielding assets deemed riskier, Goldman Sachs Group Inc. said, revising earlier forecasts. The euro will fall to $1.20 per euro in the same period, Goldman said. The previous three-month projection was for the dollar at 112 yen and $1.45 per euro.
The Australian dollar rose after an RBA spokesman confirmed the central bank bought its own currency today.

EUR/USD the pair has become stronger from area $1,2380 having established that a session high in area $1,2590, later a rate has slightly decreased.

Resistance 3: $1.2720
Resistance 2: $1.2650
Resistance 1: $1.2590
Current price: $1.2555
Support 1: $1.2380
Support 2: $1.2330
Support 3: $1.2200
Comments: Growth EUR/JPY continues to support to eurodollar. The pair has updated session high. As the nearest resistance acts the level $1,2590 (38,2 % FIBO of decrease $1,2925-$ 1,2380). Further growth to $1,2650 (50,0 %) and above to $1,2720 (61,8 %) is possible. The nearest support there is an area of a session low on $1,2380. Overcoming of the given level will open road to two years low on $1,2330. Below possible falling to a level $1,2200.

The euro fell to a two-week low against the dollar after Germany's economy entered its worst recession in at least 12 years, sparking speculation the European Central Bank will cut interest rates.
The 15-nation currency also pared gains against the yen after a German government report showed the biggest contraction over two consecutive quarters since 1996. The yen dropped versus the dollar as intervention by the Reserve Bank of Australia fueled speculation other central banks may follow suit.
``The German GDP figures didn't support the euro and we've had some more bad news for the world economy,'' said Lutz Karpowitz, a currency strategist in Frankfurt at Commerzbank AG, Germany's second-biggest lender. ``It looks like this is a worldwide recession and the dollar usually gains from this situation. Euro-dollar will go down further.''
Germany's gross domestic product shrank 0.5 percent in the third quarter after contracting 0.4 percent in the previous three months, the Federal Statistics Office in Wiesbaden said.
Traders increased bets the ECB will reduce its 3.25 percent rate in the first quarter. The implied yield on Euribor futures contracts expiring in March fell to 2.75 percent, from 3.15 percent at the end of last month. The ECB benchmark rate is 0.50 percentage point higher than the Euribor contract yield, compared with a 12-month average of 0.19 percentage point below the futures rate.
The yen fell from two-week highs against the dollar and the euro after the Reserve Bank of Australia intervened to support its currency, fueling speculation Japan may do the same.
The yen declined versus the Australian dollar, after yesterday surging the most in three weeks, as an unidentified spokesman at the RBA confirmed purchases of its own currency. Japan's Finance Minister Shoichi Nakagawa told lawmakers in Tokyo today that abrupt currency moves are ``undesirable'' and a stronger yen hurts domestic stock investors. He said last month Japan may intervene for the first time in four years.
``The yen has partially retraced yesterday's sharp gains driven by heightened fears over the prospect of intervention,'' said Lee Hardman, a currency strategist in London at Bank of Tokyo-Mitsubishi Ltd. ``Those concerns were fueled by both the confirmation that the RBA directly intervened in the market overnight to slow the Australian dollar's decline, and by comments from Japanese Finance Minister Nakagawa.''
The yen rose earlier to a two-week high against the euro, after U.S. Treasury Secretary Henry Paulson's plan to divert bailout money from banks sparked cuts in purchases of higher- yielding assets. Paulson said yesterday he plans to use the second half of the $700 billion Troubled Asset Relief Program, known as TARP, to help relieve pressure on consumer credit, scrapping a proposal to buy devalued mortgage assets from banks.
The Japanese currency will strengthen to 90 yen per dollar in three months as traders shun higher-yielding assets deemed riskier, Goldman Sachs Group Inc. said, revising earlier forecasts. The euro will fall to $1.20 per euro in the same period, Goldman said. The previous three-month projection was for the dollar at 112 yen and $1.45 per euro.
``Deleveraging and funding constraints have likely created a new source of foreign-exchange demand and supply,'' a Goldman team analysts led by New York-based Jens Nordvig wrote in a research note. ``We expect deleveraging patterns to continue into year-end, driving the dollar and yen stronger and putting pressure on higher-yielding currencies.''
The Australian dollar rose after an RBA spokesman confirmed the central bank bought its own currency today.
``The RBA's intervention is most likely designed to prevent hectic moves in the market,'' said Kimihiko Tomita, head of foreign exchange in Tokyo at State Street Bank & Trust Co., a unit of the world's largest money manager for institutions. ``The initial reaction is that people will be reluctant to sell other currencies for yen.''
The British pound slumped as recruitment firm Morgan McKinley said job vacancies in London's financial-services industry sank 48 percent in October from a year earlier.

-DEC STAFF FCSTS OPPORTUNITY TO DECIDE MONETARY POLICY
-EXPECT RAPID INFLATION SLOWDOWN, BUT NO DEFLATION
-EMU ECONOMY NOW IN RECESSION, CONTINUING INTO 2009
-HOPE FOR ECONOMIC UPTURN 2H 2009 IF ACTION TAKEN NOW
-EXPECT INT RATE CURVE TO RETURN TO NORMAL THIS YEAR

Crude oil prices have bounced off 21-month low on profit-taking on short positions after the IEA cut its oil demand forecasts for 2008 and 2009 by 330 kb/d and 670 kb/d respectively, in response to gathering economic weakness. The IEA report was widely rumoured in recent sessions and priced in following bleak assessment from the IMF. Focus today turns to the US weekly inventory data, where
oil analysts are forecasting builds across the board -- crude oil stocks up 1.0 million barrels. Elsewhere, the Dec Brent crude oil contract expires today. WTI Nymex crude oil trades at $56.10, down 6 cents and Dec Brent crude oil trades at $51.90.

EUR/USD $1.2360, $1.2575, $1.2800
USD/JPY Y95.00, Y94.50, Y96.75, Y98.10, Y98.20, Y99.00, Y99.30, Y99.50
AUD/USD $0.6500

The International Energy Agency Thursday cut its oil demand forecasts for 2008 and 2009 by 330 kb/d and 670 kb/d respectively, in response to gathering economic weakness. The following are highlights of
the IEA's October report: Oil prices continued their slide in October, with crude benchmarks falling around $25 since the last report to just under $60/bbl, as demand prospects weakened further. But, crude futures stabilised in early November on a cut in OPEC output targets and further coordinated efforts to prop up the global economy.

The following data were published:
04:30 Japan Industrial output (September) final 1.1%
04:30 Japan Industrial output (September) final Y/Y 0.2%
07:00 Germany GDP (Q3) flash -0.5%
07:00 Germany GDP (Q3) flash Y/Y adjusted 0.8%
07:00 Germany GDP (Q3) flash Y/Y unadjusted 1.3%

The euro fell to a two-week low against the dollar after Germany's economy entered its worst recession in at least 12 years, spurring speculation the European Central Bank will cut interest rates.
The 15-nation currency also pared gains against the yen after a German government report showed the biggest contraction over two consecutive quarters since 1996. The yen declined versus the Australian dollar, after yesterday surging the most in three weeks, as currency intervention by the Reserve Bank of Australia fueled speculation other central banks may follow suit.
Germany's gross domestic product contracted 0.5 percent in the third quarter after shrinking 0.4 percent in the previous three-month period, the Federal Statistics Office in Wiesbaden said today. A common definition of a recession is two consecutive quarters of a contraction in GDP.
The Australian dollar climbed after an RBA spokesman confirmed the central bank bought its own currency today.
The yen fell from a two-week high against the dollar on speculation other central banks will intervene in currency markets.
Abrupt currency moves are undesirable and a stronger yen hurts domestic stock investors, Japan's Finance Minister Shoichi Nakagawa told lawmakers today in Tokyo. He said last month Japan was prepared to intervene for the first time in four years.
The yen earlier rose to a two-week high against the euro after U.S. Treasury Secretary Henry Paulson's plan to divert bailout money from banks sparked a reduction in purchases of higher-yielding assets.
The British pound slumped after Bank of England Governor Mervyn King said the U.K. economy will shrink through most of next year and policy makers will cut interest rates further.

EUR/USD having begun the session of Thursday in the field of $1,2495, the pair has established 2 years low at a level $1,2384. Later the rate could block today's losses, having raised in area $1,2500.
GBP/USD having updated 2 years low ($1,4808), the pair has continued to bargain in a range $1,4810-$ 1,4970.
USD/JPY having tested a yesterday's low on mark Y94,40, the pair has become stronger above level Y96,00.

US data is at 1330GMT with the weekly jobless claims and trade data. The international trade gap is expected to narrow to $57.0 billion in September. The import price index was down 3.0% in September on a sharp dip in imported petroleum prices.

Resistance 3: Y98.10
Resistance 2: Y96.70
Resistance 1: Y96.30
Current price: Y96.00
Support 1: Y94.60
Support 2: Y93.60
Support 3: Y90.90
Comments: The yen fell today against most of the main currencies after the Reserve Bank of Australia intervened to support its currency, fueling speculation more central banks plan to enter the market. The yen yesterday rose to a two-week high against the greenback after U.S. Treasury Secretary Henry Paulson's plan to divert bailout money from banks sparked a reduction in purchases of higher-yielding assets. The nearest resistance is located in the field of Y96,30 (session high and a level of 50,0 % FIBO of yesterday's falling). Overcoming of the given mark will open road to level Y96,70 (61,8 %) and further to yesterday's high on Y98,10 (also this mark acts as level МА (200) for Н1). The nearest support is presented by a level of 61,8 % FIBO of growth Y90,90-Y100,55 on Y94,90. Below possible decrease to Y93,60 (76,4 %) and further to a 13-month's low on Y90,90.

Resistance 3: Chf1.2000
Resistance 2: Chf1.1960
Resistance 1: Chf1.1890
Current price: Chf1.1877
Support 1: Chf1.1850
Support 2: Chf1.1790
Support 3: Chf1.1700
Comments: The pair has established a new high of 2008 (Chf1,1960, and also area of low of July 2007 and the top border of the ascending channel since July 13) which at present acts as area of resistance. Return to Chf1,1960 is possible after overcoming level Chf1,1890 (61,8 % FIBO of falling Chf1.3285-Chf1.0455). Above Chf1,1960 growth to psychological level Chf1,2000 is possible. Intermediate support acts the area of a session low on Chf1.1850 is represented (and also the level of 23,6 % FIBO of growth Chf1.1550-Chf1.1960), stronger level of support is 31.8 % FIBO on Chf1.1790. Overcoming of the given mark will open road to Chf1.1700 (61.8 %).

Resistance 3: $1.5350
Resistance 2: $1.5220
Resistance 1: $1.5050
Current price: $1.4945
Support 1: $1.4810
Support 2: $1.4530
Support 3: $1.4280
Comments: The British pound slumped yesterday after Bank of England Governor Mervyn King said the U.K. economy will shrink through most of next year and policy makers will cut interest rates further. In connection with sharp falling of pair, it is difficult enough to define at present levels of support. At the further decrease by the nearest support can actthe level of a session low on $1,4810. Below lows of June and April 2002 on $1,4530 and $1,4280 accordingly are located. In case of restoration the pair will encounter resistance in the field of levels FIBO from falling $1,5880-$ 1,4810 on $1,5050 (23,6 %), $1,52220 (38,2 %) and $1,5350 (50,0 %).

Resistance 3: $1.2650
Resistance 2: $1.2590
Resistance 1: $1.2510
Current price: $1.2478
Support 1: $1.2380
Support 2: $1.2330
Support 3: $1.2200
Comments: The euro declined against the dollar on speculation the European Central Bank will lower interest rates to support growth. The nearest purpose of restoration is the level $1,2510 (23,6% FIBO of decrease $1,2925-$ 1,2470). Further growth to $1,2590 (38,2%) and above to $1,2650 (50,0 %) is possible. As the nearest support acts the area of a session low on $1,2380. Overcoming of the given level will open road to two years low on $1,2330. Below possible falling to a level $1,2200.

04:30 Japan Industrial output (September) final 1.1% 1.2%
04:30 Japan Industrial output (September) final Y/Y 0.2% 0.4%
07:00 Germany GDP (Q3) flash -0.5% -0.5%
07:00 Germany GDP (Q3) flash Y/Y adjusted 0.8% 1.7%
07:00 Germany GDP (Q3) flash Y/Y unadjusted 1.3% 3.1%
13:30 USA International trade (September), bln -59.1
13:30 Canada International Merchandise Trade (Sep) , bln -5.8
13:30 USA Export (September), bln 164.7
13:30 USA Import (September), bln 223.9
13:30 USA Jobless claims (week to 08.11) 481К
19:00 USA Federal budget (October), bln +45.7
21:30 USA M2 money supply (03.11), bln -48.2