Members said to be concerned about the downturn in oil. Oil settled at $69.85 per barrel Thursday, the first sub $70 close since Aug 23 2007 (when front contract settled at $69.83). "It appears increasingly likely that OPEC will cut production at the gathering, in order to attempt to bring some stabilisation to prices, with the market looking to OPEC to cut by 1.5mb/d, perhaps 1mb/d this month and 0.5mb/d later," say strategists at Barclays Capital.

"The housing construction market goes from bad to worse and the very depressed level of building permits for September and the drop in the homebuilders sentiment index for October points to more declines in the fourth quarter."

--Main risk is a "vicious spiral" of tight credit, economic downturn;
--Must normalize interbank flows to reduce impact of turmoil
--Benefits of single currency in the midst of crisis "crystal clear";
--Situation today "clearly different" from 1930s
--Integration has reduced arbitrage, spillover from crisis

Stocks have advanced to their best level of the session. The move comes as a collective effort across each of the major economic sectors. All ten are now up.
Energy is the best performing sector. It has successfully shaken its early funk to join crude; each are at session highs. Energy is up 4.3%, while oil is now up 6% this session to trade near $74 per barrel.

NYMEX light sweet crude oil futures, currently at $72.44 per barrel, settled at $69.85 Thursday, the first sub $70 close since August 2007. At Thursday's settlement, the front contract was down $77.42 or 52.5% from the $147.27 high posted

Stocks have moved back into positive ground, but a lack of leadership continues to challenge the sustainability of the advance. Health care is up 1.4%; it is the best performing sector, but is currently the second largest sector in the S&P 500 behind tech (+0.8%).
Many participants are keeping an eye on financials, but the sector is without buying interest. It is down 0.7%.

"Incoming data lead us to revise down our estimates for Q3 08 real GDP growth (0.0% from 0.5%) and the CPI in coming months. We look for the weakening in the economy, the declines in the stock market, and the effects of fiscal packages to boost the federal budget deficit to $1trn in FY 09, up from $455bn in FY 08."

The dollar fell against the yen as reports showed U.S. construction of single-family homes dropped to a 26-year low and consumer confidence declined, increasing concern the world's largest economy is headed for a recession.

The Nasdaq is trying to fight off selling efforts that are threatening to take it back into negative territory, where it would join the Dow and the S&P 500.
Large-cap tech names like IBM (IBM 92.21, +0.69) and Google (GOOG 378.91, +25.89) are providing support to the Nasdaq. Their performance is further reflected in the Nasdaq 100, which is up 0.3%. Both IBM and GOOG are benefiting from buying interest after reporting better-than-expected earnings per share results.

Sentiment remains generally negative as stocks continue to trade in the red. Although, the Dow has pulled up approximately 200 points from its early low.
Oil futures are trading higher after a concerted selling effort in the prior session. They are currently indicated up more than 2% to around $71.50 per barrel. Week-to-date, though, oil futures are down nearly 8%.
Energy has actually traded inversely to oil in recent sessions. Oil slid in the prior session, but energy stocks zoomed to close almost 8% higer. Though oil is up today, energy is down 0.9%.

Gold has made a show underneath Thursday's base and now seen challenging the 76.4% retracement of the September-October rally at $782.61. Yesterday's close under $820.00 is seen as the trigger for a double-top pattern, opening up a potential move towards the September lows at $737.00.

Stocks have pulled up from their early lows, but the morning's tone remains downbeat. The negative bias persists despite upbeat earnings per share results from tech giants like IBM (IBM 90.75, -0.77) and Google (GOOG 370.99, +17.97).
The much smaller Advanced Micro Devices (AMD 4.50, +0.38) is also trading higher after announcing pleasing quarterly results. AMD recently announced it was dividing itself so that one company manufactures microprocessors and the other will design and sell them.

Сurrent conditions 58.9 (record low), expectations 56.7; this was largest mo drop in overall number since the survey began in the 1950s. 1y infl expectations 4.5%, 5y exp 2.8%.

The major U.S. indices are off to a negative start. All ten of the major economic sectors are trading lower. Even gold is down, despite its attractiveness in tumultuous times.
The tone contrasts with the mood on European bourses. London's FTSE is up 1.5%. Germany's DAX is up 1.0%. France's CAC is up 1.0%.

Insight Economics says despite hsg data declines, "inventories are still elevated. With sales very slow, and with the recent credit market turmoil and tighter lending standards, single family housing starts will probably drop somewhat further" but is close to a bottom.

Recovery off recent pullback lows of $1.3385 seen meeting resistance around $1.3420 (61.8% $1.3443/1.3385), with further offers seen placed toward $1.3430. Supply noted on approach to $1.3520, $1.3550. Bids remain at $1.3380 and $1.3350/45.

The yen advanced against the dollar and the euro on concern the credit crisis may cause the global economy to fall into a recession, spurring investors to sell higher-yielding assets funded in Japan.
The yen gained against 15 of the 16 most-active currencies before a government report today that economists forecast will show U.S. builders began work in September on the fewest homes in 17 years, adding to signs of a slowdown in the world's largest economy.
``It's still very early to see whether these bank-rescue packages will be sufficient, so we still have a defensive position to buy yen,'' said Michael Metcalfe, head of macro strategy at State Street Global Markets in London. ``Risk appetite is still the principal driver.''
U.S. housing starts declined to an annual rate of 872,000 homes in September, the fewest since January 1991, from 895,000 in August, according to a survey of economists. The Commerce Department will release the report at 8:30 a.m. in Washington.
The U.S. currency also dropped against the yen and the Swiss franc as traders added to bets on a Federal Reserve interest-rate cut.
Futures traded on the Chicago Board of Trade show a 46 percent chance the Fed will lower its 1.5 percent target rate for overnight bank loans by a half-percentage point to 1 percent at its Oct. 29 meeting. Traders saw no chance of a cut of that magnitude a week ago. The odds of a quarter-point reduction are 54 percent.

EUR/USD having tested session high on $1,3520, the pair has decreased in area $1,3380. Bids $1.3380, $1.3350/45. Offers $1.3520, $1.3550.
GBP/USD bargains within the limits of a range $1,7250-$ 1,7360. Bids $1.7250, $1.7210/00. Offers $1.7340/50, $1.7380/85.
USD/JPY having shown minima on Y100,60, the pair has receded above level Y101,00. Bids Y100.00, Y99.30. Offers Y101.40/50.

US data sees the 1230GMT release of housing starts and building permits for September, followed by the 1355GMT release of the University of Michigan preliminary consumer sentiment data for October. Housing
starts are forecast to fall to an 885,000 annual rate in September after two sharp declines, while the Reuters/University of Michigan Consumer Sentiment Index is expected to fall to a reading of 65.0 in early-October on the intense market turmoil seen at the end of September and early-October.

Resistance 3: Y104.30
Resistance 2: Y103.05
Resistance 1: Y101.80
Current price: Y100.75
Support 1: Y100.80
Support 2: Y99.20
Support 3: Y98.60
Comments: The pair tests the nearest support Y100,80 (38,2 % FIBO of yesterday's growth). Overcoming of the given mark will open road to a yesterday's minimum on Y99,20 and further to Y98,60. Resistance is the session high on Y101,80. Above is possible growth to Y103,05 (October 14 high). Overcoming this level will open road to Y104,30 (50,0 % FIBO of decrease Y110,70-Y97,90).

Resistance 3: Chf1.1730
Resistance 2: Chf1.1600
Resistance 1: Chf1.1500
Current price: Chf1.1357
Support 1: Chf1.1353
Support 2: Chf1.1185
Support 3: Chf1.1090
Comments: Movement of pair remains is limited by frameworks Chf1.1320-Chf1.1390. Support is located on Chf1,1305 (23,6 % FIBO of growth Chf1,0680-Chf1,1500). Overcoming of the given mark will open road to Chf1,185 (38,2 %) and further to Chf1,090 (50,0 %). Above Chf1.1500 (strong area of resistance - October 6 high) is probability of growth to Chf1,1600 (area of November 2007 high) and further to Chf1,1730 (the top border of the ascending channel from July 17).

Resistance 3: $1.7630
Resistance 2: $1.7420
Resistance 1: $1.7360
Current price: $1.7329
Support 1: $1.7130
Support 2: $1.7020
Support 3: $1.6790
Comments: The rate continues to be consolidated. The nearest support is located in a sessional low on $1,7130, below on $1,7020 the level of 76,4 % FIBO of growth $1,6790-$ 1,7630 is located. Overcoming of the given level will open road to October 10 low on $1,6790. The nearest resistance - area of a session high on $1,7360. Overcoming of the given mark will open road to $1,7420 (61,8 % FIBO of falling $1,7600-$ 1,7130). Resistance acts as strong area $1,7630/55 (area of October 7,8 and 14 highs).

Resistance 3:$1.3770
Resistance 2: $1.3690
Resistance 1: $1.3525
Current price: $1.3425
Support 1: $1.3340
Support 2: $1.3255
Support 3: $1.3050
Comments: Tech on euro hasn't changed. The nearest support remains in a yesterday's low on $1,3340. Further is possible decrease to Oct 10 low on $1,3255. Below there is a probability of falling to Feb 2007 low on $1,3050. In case of restoration by the nearest resistance there will be an area $1,3520/40 (today's and yesterday's high). Above is possible growth to Wednesday and Tuesday on $1,3690 and $1,3770 accordingly.

EUR/USD $1.3500, $1.3700
USD/JPY Y100.00, Y102.00, Y98.00
GBP/USD $1.7500
EUR/CHF Chf1.5270

BONY analyst Michael Woolfolk says "Core CPI has been at or above 2.0% y/y since August 2004, but is no longer considered a problem given the rapid decline in commodity prices and expected slowdown in demand. The latest CPI and PPI data should not get in the way of further rate cuts."

The dollar fell, heading for its first weekly decline against the euro this month, before U.S. consumer and housing reports that may add to evidence the global credit squeeze is pushing the economy toward a recession.
The U.S. currency also dropped against the British pound and the Swiss franc as traders added to bets on a Federal Reserve interest-rate cut. The yen was poised for a weekly loss versus the euro as Asian stocks rose, restoring investors' confidence to buy higher-yielding assets
The dollar headed for weekly losses against nine of the 16 most-active currencies as U.S. housing starts declined to an annual rate of 870,000 in September, the fewest since January 1991, according to survey of economists. The Commerce Department will issue the report at 8:30 a.m. in Washington.
The Reuters/University of Michigan preliminary index of consumer sentiment, due at 10 a.m., likely decreased to 65.0 in October from 70.3 in September, a separate survey showed.
Losses in the dollar may be curbed on speculation financial institutions will seek more dollars in the foreign-exchange market amid the credit crisis, according to BNP Paribas SA.

EUR/USD having tested session high on $1,3520, the pair has decreased in area $1,3430.
GBP/USD the pair could not overcome area of yesterday's high on $1,7350 then has receded below a mark $1,7300.
USD/JPY the pair is corrected after yesterday's growth.

European data sees Italian August industrial orders at 0800GMT, though the main European releases are at 0900GMT with Eurozone construction production and the trade balance, which is seen moving to E5.3 billion for August.
US data sees the 1230GMT release of housing starts and building permits for September, followed by the 1355GMT release of the University of Michigan preliminary consumer sentiment data for October. Housing
starts are forecast to fall to an 885,000 annual rate in September after two sharp declines, while the Reuters/University of Michigan Consumer Sentiment Index is expected to fall to a reading of 65.0 in early-October on the intense market turmoil seen at the end of September and early-October.

Japanese stocks plunged the most in two decades as a drop in U.S. retail sales pointed to a deepening recession and Prime Minister Taro Aso reinforced concern a bank bailout will fail to stem a rout in global markets.
Honda Motor Co., which gets more than half its profit from North America, sank 10 percent, while Nintendo Co. tumbled by its daily limit in Osaka after retail receipts in the U.S. fell for a third month. JFE Holdings Inc., Japan's second-biggest steelmaker, declined 15 percent after UBS AG cut its price estimate by 64 percent. Oil explorer Inpex Corp. lost 14 percent, the most on record, after crude slid to the lowest in a year.
Toyota Motor Corp., Japan's biggest automaker, slumped 9.3 percent to 3,310 yen. Nintendo, which generates 90 percent of its revenue outside of Japan, retreated 10 percent to 34,550 yen on the Osaka Securities Exchange, and Sony Corp., the world's second-biggest maker of consumer electronics, dived 13 percent to 2,320 yen.
JFE plunged 15 percent to 2,075 yen, while Nippon Steel Corp., the world's second-biggest maker of the alloy, fell 9.4 percent to 300 yen. Kobe Steel Ltd. slid 9.4 percent to 154 yen. UBS lowered its investment ratings on the steelmakers to ``neutral'' from ``buy'' and cut 12-month price estimates on the companies, with JFE's reduced to 2,600 yen from 7,200 yen.
The Nikkei 225 Stock Average declined 1,089.02, or 11 percent, to close at 8,458.45 in Tokyo, the second-steepest plunge in its 59-year history. The broader Topix index fell 90.99, or 9.5 percent, to 864.52. Both gauges sank the most since October 1987. The Osaka Securities Exchange temporarily halted trading in Nikkei futures after a plunge in shares triggered a circuit breaker.
Sales at U.S. retailers fell 1.2 percent in September, the most since August 2005 and extending a drop to a third month, the first time that's happened since 1992. That coincided with the Federal Reserve's release of its Beige Book report, which said economic activities weakened last month throughout the country.


European stocks fell, driving the Dow Jones Stoxx 600 Index to its biggest two-day drop since 1987, on growing concern bank bailout plans in the U.S. and Europe will fail to avert a global recession.
Rio Tinto Group and Vedanta Resources Plc tumbled more than 13 percent after a report showed U.S. industrial production fell in September by the most in almost 34 years. Total SA, Europe's third-biggest oil company, slid 9.2 percent as oil dropped below $70 a barrel. Barclays Plc and ING Groep NV sank more than 11 percent after Citigroup Inc. said loss rates on credit cards and mortgages may climb to records.
Vedanta Resources Plc, India's largest copper producer, sank 15 percent to 632.5 pence.
Copper futures for December delivery fell 4.55 cents, or 2.1 percent, to $2.165 a pound on the Comex division of the New York Mercantile Exchange. Earlier, the metal touched $2.0405, the lowest since Jan. 6, 2006.
U.S. production at factories, mines and utilities fell 2.8 percent last month, more than the 0.8 decrease predicted by economists. For the third quarter, output fell at an annual rate of 6 percent, the biggest decline since 1991.
Total lost 9.2 percent to 33.20 euros. Royal Dutch Shell Plc, Europe's biggest oil producer, fell 7.2 percent to 1,294 pence.
Crude oil for November delivery sank as much as $5.97, or 8 percent, to $68.57 a barrel on the New York Mercantile Exchange. It reached a record $147.27 on July 11.

Stocks swung widely Thursday, as the Dow was down almost 380 points at its session low, but was able to complete a near 800 point swing to close 400 points higher with a 4.7% gain. It finished at its high.
The session's gains were broad based, but the financial sector was a general laggard. It closed 1.7% higher.
Swiss banking giant UBS (UBS 17.33, +0.67) showed relative strength after the Swiss government said it will inject the equivalent of roughly $5 billion into the firm and the Swiss central bank will purchase nearly $60 billion worth of toxic assets. The moves mirror those made by governments and central banks across the globe to restore the financial system and credit markets.
Further reflecting the difficult conditions facing financial firms, Citigroup (C 15.90, -0.33) and Merrill Lynch (MER 18.35, +0.11) both posted losses for the latest quarter. The losses stem largely from asset write-downs and other impairment charges.
Outside the financial sector, the global leader in handset sales, Nokia (NOK 15.54, +0.43), met earnings expectations, as did health insurer UnitedHealth (UNH 22.63, +0.96). Conglomerate United Technologies (UTX 52.88, +3.63) topped earnings expectations with its results.
Airlines fared extremely well, Southwest Airlines (LUV 12.49, +0.93) and Continental Airlines (CAL 15.75, +2.91) both announced better-than-expected third quarter earnings per share results, helping lift the Amex Airline Index 21%. Meanwhile, competitors UAL (UAUA 10.30, +2.59) and US Airways (LCC 6.78, +1.49) rode the tailwind of their peers. Their gains helped the Russell 2000 advance 6.9%.
Lower oil prices also bode well for airlines. During the session, oil futures fell below $70 per barrel for a time, but settled closer to $72 per barrel. Concerns of a global slowdown continue to cut the price of the commodity, as did today's word that crude inventories grew by 5.61 million barrels. Analysts expected a build less than half that.
Despite oil's slide, the energy sector made the strongest gains, advancing 7.8% on strength in oil and gas exploration and production companies (+12.1%). The sector's advance comes in stark contrast to its 15.5% dive in the prior session.
In economic news, filings for jobless benefits declined 16,000 to 461,000, which was below the consensus 470,000 claims. The four-week moving average ticked up to 483,250 from 482,500 and leaves things on track for a 10th consecutive month of nonfarm payroll declines.
Industrial production for September decreased 2.8%, which is worse than the 0.8% downturn that was anticipated. It was the largest decline since 1974, but excluding extraordinary happenings (hurricanes and a strike at Boeing) industrial production would have been positive.
The core rate for CPI dropped to 0.1% in September and will probably stay at that level, or even drop to zero for the next few months. Total CPI was flat and may well be flat to down for several more months given the drop in energy prices.

Resistance 3: Y104.30
Resistance 2: Y103.05
Resistance 1: Y101.80
Current price: Y101.15
Support 1: Y100.80
Support 2: Y99.20
Support 3: Y98.60
Comments: Growth of the US Stocks became the reason of decrease yen against dollar. Resistance is the session high on Y101,80. Above is possible growth to Y103,05 (October 14 high). Overcoming this level will open road to Y104,30 (50,0 % FIBO of decrease Y110,70-Y97,90). Intermediate support is located on Y100,80 (38,2 % FIBO of yesterday's growth). Overcoming of the given mark will open road to a yesterday's minimum on Y99,20 and further to Y98,60.

Resistance 3: Chf1.1730
Resistance 2: Chf1.1600
Resistance 1: Chf1.1500
Current price: Chf1.1345
Support 1: Chf1.1353
Support 2: Chf1.1185
Support 3: Chf1.1090
Comments: The U.S. currency also dropped on prospects the credit crisis will hurt growth in the world's largest economy, prompting traders to add to bets on a Federal Reserve interest-rate cut. Support is located on Chf1,1305 (23,6 % FIBO of growth Chf1,0680-Chf1,1500). Overcoming of the given mark will open road to Chf1,185 (38,2 %) and further to Chf1,090 (50,0 %). Above Chf1.1500 (strong area of resistance - October 6 high) is probability of growth to Chf1,1600 (area of November 2007 high) and further to Chf1,1730 (the top border of the ascending channel from July 17).

Resistance 3: $1.7630
Resistance 2: $1.7420
Resistance 1: $1.7360
Current price: $1.7326
Support 1: $1.7130
Support 2: $1.7020
Support 3: $1.6790
Comments: The rate continues to be consolidated in the field of yesterday's levels. The nearest support is located in a sessional low on $1,7130, below on $1,7020 the level of 76,4 % FIBO of growth $1,6790-$ 1,7630 is located. Overcoming of the given level will open road to October 10 low on $1,6790. The nearest resistance - area of a session high on $1,7360. Overcoming of the given mark will open road to $1,7420 (61,8 % FIBO of falling $1,7600-$ 1,7130). Resistance acts as strong area $1,7630/55 (area of October 7,8 and 14 highs).

High Low Close
EUR/USD 1.3537 1.3342 1.3479
USD/JPY 101.73 99.23 101.66
GBP/USD 1.7357 1.7135 1.7316
USD/CHF 1.1490 1.1280 1.1351

EUR/JPY 137.17 133.36 137.02
EUR/GBP 0.7848 0.7734 0.7782
GBP/JPY 176.23 170.40 176.05
GBP/CHF 1.9845 1.9402 1.9861

Change % Change Last
Nikkei -1089,02 -11,41% 8 458,45
TOPIX -90,99 -9.48% 864,52
FTSE -218.20 -5.35% 3,861.39
DAX -238.82 -4.91% 4,622.81
CAC -200.07 -5.92% 3,181.00
Dow +401.35 +4.68% 8,979.26
NASDAQ +89.38 +5.49% 1,717.71
S&P +38.59 +4.25% 946.43
10yr Note -0.7500 -0.187% 3.936%
NYMEX Crude Oil -4.69 -6.29% 69.85
Gold -34.50 -4.11% 804.50

Resistance 3:$1.3770
Resistance 2: $1.3690
Resistance 1: $1.3525
Current price: $1.3475
Support 1: $1.3340
Support 2: $1.3255
Support 3: $1.3050
Comments: The dollar headed for its first weekly decline against the euro this month, before U.S. reports that will probably show a deepening housing slowdown eroded consumer confidence. The nearest support remains in a yesterday's low on $1,3340. Further is possible decrease to Oct 10 low on $1,3255. Below there is a probability of falling to Feb 2007 low on $1,3050. In case of restoration by the nearest resistance there will be an area $1,3520/40 (today's and yesterday's high). Above is possible growth to Wednesday and Tuesday on $1,3690 and $1,3770 accordingly.

09:00 Е15 Trade balance (August) unadjusted, bln -2,3
12:30 USA Building permits (September), mln 0,850 0,854
12:30 USA Housing starts (September), mln 0,880 0,895
13:55 USA Michigan sentiment index (October) preliminary 66,0 70,3