General Motors Corporation
The automaker and Chrysler are seeing strong support from banks and other potential lenders for a potential merger. GM is aiming to get a deal done as soon as the end of October.

Google Inc
The tech giant reported revenue increased 31% on ad clicks, and profit rose 26% on slower hiring and capital expenses cutbacks.

Pfizer Inc
The drugmaker has reached an $894M deal to end most of the lawsuits over its two prescription pain relievers, Celebrex and, Bextra, which is no longer on the market.

International Business Machines
The computer-services company said new service contracts totaled $12.7B, last quarter, helped by deals with Royal Dutch Navy and Bristol-Myers Squibb Co.

"LEI was boosted by a one-time jump in M2, which was clearly visible in the Fed's data. This alone contributed 0.45% to the monthly gain, accounting for almost all the difference between the consensus and the outturn. The drop in building permits, rising jobless claims and falling stock prices were offset by the rebound in consumers' sentiment, the yield curve and ISM delivery times. But the trend is still downwards, and October's index will plunge."

The dollar rose against the euro for a fourth day as Federal Reserve Chairman Ben S. Bernanke endorsed consideration of a fiscal stimulus package.
The greenback rose against the South African rand and the Swiss franc on speculation U.S. government and central-bank efforts will help the world's largest economy recover from a recession before the rest of the world. The South Korean won strengthened versus the greenback as the government guaranteed $100 billion of lenders' foreign-currency debt.
``The U.S. is more actively taking measures to deal with the recession than others,'' said Jessica Hoversen, a currency analyst at MF Global Ltd. in Chicago. ``I am bullish on the dollar versus the euro.''
Bernanke's remarks in prepared testimony to the House Budget Committee today may give momentum to legislation being proposed by House Democrats. In January before the same panel, he said a stimulus ``could be helpful'' and urged lawmakers to act ``quickly.'' The impact of that $168 billion measure faded by July, and economists anticipate gross domestic product will contract in the current quarter.
The Conference Board's index of U.S. leading economic indicators increased 0.3 percent in September after a 0.9 percent decline in the prior month that was almost twice as large as previously estimated, the New York-based private research group said today. The index points to the direction of the economy over the next three to six months.

Skid lower in euro-yen earlier dragged the dollar pair back to Y101.55 area and thus to within striking distance of morning lows marked a pip or two below Y101.40 where bids were absorbed. With order books still described as scrappy and thin, risk may be that light stops positioned under Y101.25 area become a focus ahead of bids at Y101.00.

Stocks rallied Monday on Fed Chief Ben Bernanke's call for a second economic stimulus plan, a surprisingly upbeat economic report and signs that the lending market is improving.
In testimony before a House panel, Fed chairman Ben Bernanke urged Congress to consider a second economic stimulus plan to counteract the weakness in the economy.
The Fed chairman noted that "with the economy likely to be weak for several quarters and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate."
Investors seemed to like the notion, with stocks touching highs for the morning in the minutes after the testimony was released.
Also impacting early trade: a surprise jump in the index of leading economic indicators (LEI). September LEI rose 0.3% after falling a revised 0.9% in the previous month.
Treasury prices fell, raising the yield on the 10-year note to 3.93% from 3.92% late Friday. Treasury prices and yields move in opposite directions.
The yield on the 3-month Treasury bill, seen as the safest place to put money in the short term, rose to 0.89% from 0.80% late Friday, suggesting investors are still willing to take a meager return on their money rather than risk the stock market.
However, it was an improvement from last month, when the yield on the 3-month bill skidded to a 68-year low around 0%.
U.S. light crude oil for November delivery rose $1.07 to $72.92 a barrel on the New York Mercantile Exchange after hitting a 13-month low last week.
COMEX gold for December delivery rose $1.40 to $789.10 an ounce.

Stimulus should be significant but can't give a number.
Bernanke said it would be difficult for the govt to put a floor under housing.

The stock market dips from its best levels, but is still holding on to a solid gain of nearly 2%.
Fed Chairman Bernanke has finished his prepared remarks, and is currently participating in a question and answer session before the House Budget Committee.
Although Bernanke feels the recent efforts by the government will help restore the financial system, he noted the stabilization of the financial system will not quickly eliminate the economic challenges. However, he said the economic recovery will depend greatly on the pace at which financial and credit markets return to more-normal functioning.
Bernanke said consideration of a fiscal stimulus package by Congress is appropriate given the likelihood of a weak economy for several quarters. He feels that a fiscal package should be targeted to boost overall spending and economic activity, aimed at improving credit for consumers, home buyers, business and other buyers and limit long term effects on the government's budget deficit.

Bernanke's text reviews financial turmoil and Fed programs, says outlook weakened and "slowing in spending and activity spans most major sectors." Time to recovery will depend on getting mkts to more normal functioning, but even achieveing stability will not act quickly to help the economy. Uncertainty "is unusually large" and Congressional consideration of another fiscal package "seems appropriate" - fiscal package should incl ways to improve access to credit and should limit the long-term budget effects.

"It will take time to gauge the extent of this damage. However, it appears likely that global growth will contract this quarter and next, and result in the most severe recession since the early 1980s. The outlook beyond the next couple of quarters depends" on how mkts react to CB actions.

"We are closer to the beginning of the labor market downturn than to the end. We anticipate a sharper decline in employment in coming months and expect the unemployment rate to rise to
8% by the end of 2009."

European shares rose in morning trading after the Netherlands said it would inject $13.4 billion into ING. Asian markets finished the session higher after South Korea said it would guarantee up to $100 billion in foreign-currency loans and pump billions into the banking sector.


Although off their best levels of the morning, futures indicate a higher start (S&P futures vs fair value: +12.00. Nasdaq futures vs fair value: +20.00.) as credit markets continue to show signs of improvement. In corporate news, Exelon (EXC) offered to acquire NRG Energy (NRG) for $26.43 per share, or $6.2 billion, in an all-stock deal. In earnings news, Eaton (ETN), Halliburton (HAL), and Hasbro (HAS) all posted better-than-expected quarterly results. Mattel (MAT) and Novartis (NVS) reported earnings that missed Wall Street's expectations. There were additional moves to shore up the financial system by overseas countries. The Dutch government is injecting 10 billion euros in ING (ING) to improve its tier 1 ratio. South Korea said it will guarantee up to $100 billion in foreign debt held by its banks and inject another $30 billion into its banking system.
Crude gained $1.91 to $73.76 a barrel in electronic trading on the New York Mercantile Exchange. OPEC is expected to cut production quotas at a meeting later this week.

US recession should be protracted and might rival the 1970s or '80s recessions (16 months each). Still, RDQ says "Three-month LIBOR rates thawed by 40 basis points this week and we expect more thawing in the weeks ahead as new facilities, such as the Fed's CPFF, come on line."

Dollar gained as emerging markets tumbled after Lehman Brothers Holdings Inc. filed for bankruptcy, deepening a freeze in credit markets. Investors turned to the safest, dollar-denominated securities even though the U.S. economy is growing more slowly than those of developing nations and the Federal Reserve's 0.5 percent benchmark interest rate compares with 5 percent in South Korea, 8 percent in India and 13.75 percent in Brazil.
Three-month Treasury bill rates fell to 0.02 percent on Sept. 17, from 1.91 percent in August. The ICE futures exchange's Dollar Index, which tracks the greenback against the currencies of six U.S. trading partners, climbed 14 percent since June to 82.41, after falling 5.5 percent in the first half.
``It doesn't matter what your fundamentals are,'' said Sergey Dergachev, an emerging-market money manager at Union Investment in Frankfurt, which has $233 billion in assets. ``Investors are trying to get rid of anything that is associated with market risk.''
The three-month London interbank offered rate for dollars fell every day last week, to 4.42 percent from 4.82 percent. The Dow Jones Industrial Average climbed 4.8 percent for its best weekly performance since 2003.
``There's a funding problem in dollars worldwide,'' said Rajeev De Mello, head of Asian bonds in Singapore for Western Asset, which manages about $600 billion.



EUR/USD posted session high at $1.3530 before fell back to session low $1.3400. Offers $1.3530,$1.3555/60, bids $1.3400.

- Rate cut has partly influenced the market
- Risk premia in market have decreased
- Believe ECB rate cut to gradually effect market rates

Reported demand area between $1.7360/45 able to contain the extended pullback, after rate had seen highs in early Europe of $1.7518, with rate currently trading around $1.7380. Stops remain in place on a break of $1.7340, which if triggered to open a deeper move toward $1.7300.

"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."

Holding steady around Y102.00 after the earlier rally to highs for the day at Y102.40. The pullback from here was cushioned at Y101.90. This level is the 50% retracement of today's move. Offers noted at Y102.50, more at Y103.00/25.

The dollar fell for the first time in four days against the euro and declined versus the pound on speculation a U.S. housing slump and a seizure in credit markets will tip the world's largest economy into recession.
Federal Reserve Chairman Ben S. Bernanke will testify at the House Budget Committee on the economic outlook and financial markets at 1400GMT in Washington today. A rebound in U.S. growth won't happen right away as the government tries to unfreeze credit markets roiled by losses on mortgage derivatives, he said on Oct. 15.
``Pessimistic comments on the economy could knock the dollar lower,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. ``There's a good chance the U.S. is in a recession.''
Economists surveyed by Bloomberg in the first week of October said U.S. gross domestic product contracted at a 0.2 percent annual pace in the three months through September and will shrink at a 0.8 percent rate in the final quarter of the year. Declines in consumer spending will tip the economy into a recession, the survey showed.
The U.S. index of leading indicators fell 0.1 percent last month as rising unemployment encouraged consumers to spend less, according to the median estimate in a separate Bloomberg survey before the Conference Board report at 1400GMT. The index, a gauge of the economy's direction in the next three to six months, has posted only two monthly gains this year.
Interest-rate futures show a 100 percent chance the Fed will lower its 1.5 percent target lending rate by at least a quarter-percentage point when the central bank announces its next policy decision on Oct. 29. That compares with no odds for a rate cut one month ago.

--Private Consumption Stabilized in 3Q; Construction Rather Weak;
--Investment Activity Rose in 3Q on Inventory Buildup

Resistance 3: Y104.30
Resistance 2: Y103.60
Resistance 1: Y103.20
Current price: Y102.08
Support 1: Y100.60
Support 2: Y99.20
Support 3: Y98.60

Comments: The yen fell as state-backed bank rescue plans in the U.S., Europe and South Korea helped alleviate a global credit crisis, encouraging investment in higher-yielding currencies.
The yen declined against the carry trades favorites Australian dollar and the South African rand as U.S. dollar borrowing costs in Singapore dropped the most in nine months. So the pressure on the yen likely to persist in the near time.
Closest resistance spotted at Y103.00/25 (Kijun line, 14 Oct high, 21-DMA, High 7 Oct high) zone. If broken Y103.60 September lows to be the next target. Further rise likely to be capped near Y104.10/30 (/50% of entire fall from Aug high at Y110.65 to Y97.91).
October 17 low Y100.60 is the closest support. Oct 16 low Y99.20 area looks like stronger one. March lows of Y98.60 remains the pivotal level. On longer-term charts, Y95.89 (76.4% of Y79.90 to Y147.60) looks pivotal, also marking the cycle low of 17 March.

Resistance 3: Chf1.1730
Resistance 2: Chf1.1600
Resistance 1: Chf1.1500
Current price: Chf1.1364
Support 1: Chf1.1280
Support 2: Chf1.1140
Support 3: Chf1.1090

Comments: No change in the tech picture. Resent highs in the Chf1.1490/00 area would need to be overtaken for fresh upside impetus to Chf1.1600 area. The nearest support is at Chf1,1290/80 zone. The key support remains at Chf1.1140 ( Oct 10, 14 lows) and its break is required to trigger the double-top formation, opening up a potential 250-point correction with the first target near Chf1.1095 (50% Chf1.0702-Chf1.1490).

Resistance 3: $1.7730
Resistance 2: $1.7640
Resistance 1: $1.7510
Current price: $1.7509
Support 1: $1.7280
Support 2: $1.7130
Support 3: $1.7050

Comments: Cable recovered over the steep falling trendline from 25 Sep and daily studies are encouraging. Sustained break above $1.7380 to target $1.7610/40 resistance zone (resent highs). Higher the bulls may push to test the 50%retracement level and 21-DMA at $1.7700/34. Hourly studies are also bullish, though one warning comes from the continuation triangle pattern formed last week. Minor support is hourly lows zone $1.7285/90. Stronger one remains at $1.7130 (Thursday's session low). $1.7050/40 comes further down. Break of the $1.6865/70 zone will open the way to the key level spotted at 10 October low $1.6785.

Resistance 3:$1.3770
Resistance 2: $1.3690
Resistance 1: $1.3530
Current price: $1.3478
Support 1: $1.3340
Support 2: $1.3260
Support 3: $1.3060

Comments: Tech on euro hasn't changed. Break above $1.3530/40 to target $1.3690/00 zone and may led to retest of October 9 high $1.3780. The key upside Fibonacci target is $1.3900/20 (Sept 11 low, neckline of head and shoulders reversal pattern and 21-DMA at $1.3920). If pierced, the $1.3990 (38.2% of $1.4860 to $1.3444) and $1.4060 (23.6% of $1.6039 to $1.3444) to be the next upside targets.
Sustained break of $1.3345/50 (last session's and Aug 2007 lows, respectively) zone to open the way to retest of $1.3260/65 ( 13 June 2007, 10 October 2008 lows). Further down there is no decent support to April 2007 low $1.3070/60.

--Sep PSNCR Stg12.646bn vs Stg8.719bn in Sep 2007;
--Sep current budget deficit Stg5.9bn vs Stg3.3bn in Sep 2007

The dollar fell for the first time in four days against the euro on speculation a U.S. housing slump and a seizure in credit markets will tip the world's largest economy into recession.
Federal Reserve Chairman Ben S. Bernanke will testify at the House Budget Committee on the economic outlook and financial markets at 1400GMT today. A rebound in U.S. growth won't happen right away as the government tries to unfreeze credit markets roiled by losses on mortgage derivatives, he said on Oct. 15. Pessimistic comments on the economy could knock the dollar lower
The U.S. index of leading indicators fell 0.1 percent last month as rising unemployment encouraged consumers to spend less, according to the median estimates. The Conference Board to publish the report at 1400GMT. The index, a gauge of the economy's direction in the next three to six months, has posted only two monthly gains this year.
Rates cut expectations may also pressure US currency. Interest-rate futures show a 100 percent chance the Fed will lower its 1.5% target lending rate by at least a quarter-percentage point when the central bank announces its next policy decision on Oct. 29. That compares with no odds for a rate cut one month ago.

EUR/USD from $1.3400 gained up to $1.3530, before fell back to $1.3480. Offers remain in place to $1.3530/50. Bids $1.3430, more between $1.3415/10 ahead of $1.3400 and area between $1.3395/85.

EUR/USD: $1.3600, $1.3700
USD/JPY: Y102.50, Y100.00, Y98.55

The Shanghai A-share Index was down 14.88 points or 0.73 pct at 2,013.15, while the Shenzhen A-share Index rose 1.53 points or 0.29 pct to 531.54. The benchmark Shanghai Composite Index ended the morning down 14.10 points or 0.73 pct at 1,916.55, after touching a low of 1,890.92.

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.

The benchmark Nikkei 225 was ahead by 311.77 points, or 3.59%, at 9005.59. The broader-based TOPIX gained 33.08 points to stand at 927.37.

Resistance 3: Y104.30
Resistance 2: Y103.60
Resistance 1: Y103.20
Current price: Y102.15
Support 1: Y100.60
Support 2: Y99.20
Support 3: Y98.60

Comments: The yen fell as state-backed bank rescue plans in the U.S., Europe and South Korea helped alleviate a global credit crisis, encouraging investment in higher-yielding currencies.
The yen declined against the carry trades favorites Australian dollar and the South African rand as U.S. dollar borrowing costs in Singapore dropped the most in nine months. So the pressure on the yen likely to persist in the near time.
Closest resistance spotted at Y103.00/25 (Kijun line, 14 Oct high, 21-DMA, High 7 Oct high) zone. If broken Y103.60 September lows to be the next target. Further rise likely to be capped near Y104.10/30 (/50% of entire fall from Aug high at Y110.65 to Y97.91).
October 17 low Y100.60 is the closest support. Oct 16 low Y99.20 area looks like stronger one. March lows of Y98.60 remains the pivotal level. On longer-term charts, Y95.89 (76.4% of Y79.90 to Y147.60) looks pivotal, also marking the cycle low of 17 March.

Resistance 3: Chf1.1730
Resistance 2: Chf1.1600
Resistance 1: Chf1.1500
Current price: Chf1.1338
Support 1: Chf1.1280
Support 2: Chf1.1140
Support 3: Chf1.1090

Comments: No change in the tech picture. Resent highs in the Chf1.1490/00 area would need to be overtaken for fresh upside impetus to Chf1.1600 area. The nearest support is at Chf1,1290/80 zone. The key support remains at Chf1.1140 ( Oct 10, 14 lows) and its break is required to trigger the double-top formation, opening up a potential 250-point correction with the first target near Chf1.1095 (50% Chf1.0702-Chf1.1490).

Resistance 3: $1.7730
Resistance 2: $1.7640
Resistance 1: $1.7380
Current price: $1.7409
Support 1: $1.7130
Support 2: $1.7020
Support 3: $1.6790

Comments: Cable recovered over the steep falling trendline from 25 Sep and daily studies are encouraging. Sustained break above $1.7380 to target $1.7610/40 resistance zone (resent highs). Higher the bulls may push to test the 50%retracement level and 21-DMA at $1.7700/34. Hourly studies are also bullish, though one warning comes from the continuation triangle pattern formed last week. Minor support is hourly lows zone $1.7285/90. Stronger one remains at $1.7130 (Thursday's session low). $1.7050/40 comes further down. Break of the $1.6865/70 zone will open the way to the key level spotted at 10 October low $1.6784.

Resistance 3:$1.3770
Resistance 2: $1.3690
Resistance 1: $1.3525
Current price: $1.3506
Support 1: $1.3340
Support 2: $1.3260
Support 3: $1.3060

Comments: Tech on euro hasn't changed. Break above $1.3520/40 to target $1.3690/00 zone and may led to retest of October 9 high $1.3780. The key upside Fibonacci target is $1.3900/20 (Sept 11 low, neckline of head and shoulders reversal pattern and 21-DMA at $1.3920). If pierced, the $1.3990 (38.2% of $1.4860 to $1.3444) and $1.4060 (23.6% of $1.6039 to $1.3444) to be the next upside targets.
Sustained break of $1.3345/50 (last session's and Aug 2007 lows, respectively) zone to open the way to retest of $1.3260/65 ( 13 June 2007, 10 October 2008 lows). Further down there is no decent support to April 2007 low $1.3070/60.

Cantor Index are calling the FTSE up 11, the DAX up 19, the CAC up 15 and the Eurostoxx 50 up 10

The front-month Nymex Nov '08 contract higher by $1.51 at $73.34 - just shy of the session high.

05:00 Japan Leading indicators diffusion index (August) final 20.0 20.0
05:00 Japan Coincident indicators diffusion index (August) final 11.1 11.1
05:00 Japan Leading indicators composite index (August) final 89.3 89.3
05:00 Japan Coincident indicators composite index (August) final 100.7 100.7
06:00 Germany PPI (September) -0.5% -0.6%
06:00 Germany PPI (September) Y/Y - 8.1%
08:30 UK M4 money supply (September) provisional - 1.4%
08:30 UK M4 money supply (September) provisional Y/Y - 11.5%
08:30 UK M4 lending (September) provisional, bln - +22.5
08:30 UK PSNCR (September), bln +10.2 +5.1
14:00 USA Leading indicators (September) -0.3% -0.5%