05:00 Japan BoJ monthly economic report (September)
06:00 Germany Current account (July) unadjusted, bln 9.0 11.5 12.9
06:00 Germany Trade balance (July) unadjusted, bln 13.5 13.0 14.1
07:00 UK Halifax house price index (August) 0.2% - 0.6%
07:00 UK Halifax house price index (August) 3m Y/Y 4.6% - 4.9%
08:30 UK Industrial production (July) 0.3% 0.3% -0.5%
08:30 UK Industrial production (July) Y/Y 1.9% 2.0% 1.3%
08:30 UK Manufacturing output (July) 0.3% 0.3% 0.3%
08:30 UK Manufacturing output (July) Y/Y 4.9% 4.9% 4.1%
10:00 Germany Industrial production (July) seasonally adjusted 0.1% 1.2% -0.6%
10:00 Germany Industrial production (July) not seasonally adjusted, workday adjusted Y/Y 10.9% 12.5% 10.9%
12:55 USA Redbook (04.09)
13:00 Canada BOC meeting announcement 1.00% 0.75% 0.75%
18:00 USA Fed Beige book
19:00 USA Consumer credit (July), bln -3.6 -5.3 -1.0 (-1.3)

The CRB Commodity Index finished modestly better today, despite the sizeable 1.5% sell of in the grains sector. Dec wheat futures plunged 3.3% to close at $7.11 per bushel on news of a bullish supply report in Canada.

Oct crude oil futures closed higher by 0.6% to $74.67 per barrel, after it pulled back from its best levels of the session heading into the close. Oct natural gas closed down 0.9% to $3.813 in what was an uneventful session. Dec silver closed higher by 0.3% to $20.01 per ounce. It traded to a fresh ~2.5 year high at $20.10, but sold off from those highs heading into the close.

Dec gold ended lower by 0.2% to $1257.50 per ounce. It put in highs at $1264.70 earlier in the session, just points from the continuous contract all time high at $1266.50, but gave back those gains to close modestly lower on the day.

"If the message from Friday's employment report was 'At least things are not getting any worse,' the message from today's Beige Book is, 'Oh yes they are.' The best news in this report is that car sales are holding up."

He says mkts need to know about the offsetting tax increases to evaluate the package.

Beige book prepared for the Sep 21 FOMC meeting says there was "continued growth in national economic activity" from mid-July to end-Aug, "but with widespread signs of a deceleration compared with preceding pds." Five areas-NY, Philly, Richmond, Atlanta, Chicago-"all highlighted mixed conditions or deceleration." Note that in July only Atlanta & Chicago areas said activity had slowed, and Cleveland & KC reported activity held steady. In Aug Consumer spending increased, tourism picked up; nonfinancial services was stable to up. Mfg saw further expansion, although the pace of growth eased. Farm/mining reported continued gains in demand and sales. Home sales slowed further, prompting a slowdown in construction. Demand for comml real est remained quite weak, and banks saw stable or slightly lower loan demand and noted modest improvements in credit quality. Price & wage pressures were quite limited. Book was summarized at SF Fed based on info gathered to Aug 30.

The S&P 500 has eased back a couple of points to the 1101 line after setting a session high just above the 1103 line.

Financials remain out in front. The sector is up 1.5%. In contrast to the prior session, bank stocks are particularly strong. In turn, the KBW Bank Index is up 2.1%. It still has a ways to go before it completely offsets its 3.2% dive in the prior session, however.

Industrials are also still in strong shape. The sector currently trades with a 1.5% gain, too. It is led by the likes of FedEx (FDX 84.44, +2.58) and Textron (TXT 18.70, +0.48).

The yen dropped from a 15-year high against the dollar after improved demand for European bonds eased concern the region’s debt crisis is worsening and speculation mounted that the Japanese government may move to curb the currency’s strength.

Nevertheless, he warns that while PMIs can be useful "at pinpointing inflection points and changes in sentiment, they provide little insight into orders of magnitude." Looking beyond the flashy headline, the subcomponents "reflect a more cautious picture" with the employment index falling to 51.6 from 52 and supplier deliveries rising to 47.5 from 39. "Supplier deliveries are counter-intuitive," Hall says, with low readings (slower deliveries) in the past corresponding "to periods of tight capacity constraints and high levels of activity in the economy" and high readings "associated with periods of economy slowdown."

Equity averages are currently challenging their morning highs after trading in a sideways range right around those highs for the past two hours.

U.S. corporate newsflow has been relatively light since the open. CNBC reported that Goldman Sachs's (GS) Principal Strategies prop trading group could go to KKR, Perella Weinberg, PIMCO, Carlyle or Blackrock (BLK). The report indicated that that the discussions are more individual traders talking to buy side firms about opportunities as opposed to GS actually selling something, so GS may not get any payment for relinquishing the unit.

EUR/USD had steadied around $1.2728 area ahead of the London close but now just taking a slight knock lower as a wire reports comments from ECB's Stark who reportedly told lawmakers that German banks are undercapitalized. Euro saw highs around $1.2763 with supply remain at $1.2770/80.

GBP/USD lifted to $1.5534 area before stalling. Pair gained lift earlier in the day on buying by a UK clearer name, with speculation that the end user may be Vodafone after it announced agreement to offload China Telecom assets. Area of $1.5490 now suggested to offer nearby support after capping earlier in the day.

Wells Fargo says world econ is slowing but still growing. In the US their current forecast "has the economy expanding at a 1.6% annual rate during the third quarter and gradually accelerating over the course of 2011. Inflation should continue to moderate."

The US Dollar Index fell to new session lows of around 82.429 in recent trade, but this has only benefitted select commodities.
October crude oil began to rally when pit trading began, pushing into positive territory, and extended its gains on weakness in the dollar index. Crude eventually hit new session highs of $74.78 per barrel this morning and is currently 0.3% higher at $74.31 per barrel.

USD/JPY saw lift to around Y84.05 before easing back slightly to Y83.92. Rebound in the pair driven by a combo of factors, better tone of risk, squeeze of existing positions and mild worry about intervention risk that facilitated the dollar short-squeeze, traders say. Dollar last at Y83.95.

EUR/USD spikes higher for trade to $1.2760 area despite earlier talk of selling of the pair. Some supply coming in ahead of earlier reported offers at $1.2770/80.

USD/JPY holds near Y83.92, a bit lower session highs on Y83.96. Rate holds higher overnight lows at Y83.35.

EUR/USD $1.2650, $1.2790, $1.2825
USD/JPY Y83.50, Y84.00, Y84.25, Y84.80, Y85.00
EUR/JPY Y107.50
GBP/USD $1.5400, $1.5475
AUD/USD $0.9240, $0.9100, $0.8960, $0.8950

USD/CAD skidded lower to C$1.0390 area in the wake of the BOC rate move and announcement that cites "unusual uncertainty" on the future outlook and which sees a more muted US recovery.

Stocks were poised to rebound Wednesday, as investors awaited an economic recovery proposal from President Obama and braced for the first batch of data this week.
Stocks fell more than 1% Tuesday as worries that European banks are in worse shape than previously believed hurt shares of financial institutions. The retreat came after stocks rallied last week on improved economic news.

Economy: The Federal Reserve's Beige Book, a snapshot of economic conditions across the central bank's 12 districts, comes out later in the day.
A separate report from the Fed on consumer credit is also due. Economists expect consumer debt fell by $5.25 billion in July after a drop of $1.3 billion in June, according to consensus estimates.
Obama: President Obama is expected to officially unveil three new proposals aimed at bolstering the shaky economic recovery in a speech in Cleveland.
They include an estimated $200 billion in tax breaks for businesses that invest in new plants and equipment; a $100 billion extension of the business tax credit for research and development; and $50 billion over the next decade to improve roads, rails and other infrastructure.
World markets: European shares gained in early trading. The CAC 40 in France rose 0.7%, the DAX in Germany added 0.4%, while Britain's FTSE 100 edged up 0.3%.

USD/CAD holds C$1.0486 area ahead of the BOC rate announcement at the top of the hour with most expecting a 25 bps rate hike. C$1.0550 seen as nearby resistance, bigger level at C$1.0680 area of recent highs perhaps a bit too distant on the day.

GBP/USD holds at $1.5411, consolidating after printing earlier high $1.5495. Offers remain in place at $1.5495/00. Weak talk suggesting that the $1.5500 holds barrier interest, and recent stalling ahead of this level in recent sessions is linked to protection of the level. Stops are noted on a break of $1.5500.

01:30 Australia Home Loans (Jul) 1.7% 1.0% -3.9%
05:00 Japan BoJ monthly economic report (September)
06:00 Germany Trade Balance (Jul) 12.7 12.4
06:00 Germany Current Account (Jul) 9.0B 11.5B 12.9B
07:00 UK Halifax HPI m/m +0.2% -0.3% 0.7%
08:30 UK Manufacturing Production (YoY) (Jul) 4.9% 4.9% 4.1%
08:30 UK Manufacturing Production (MoM) (Jul) 0.3% 0.3% 0.3%
08:30 UK Industrial Production (YoY) (Jul) 1.9% 2.0% 1.3%
08:30 UK Industrial Production (MoM) (Jul) 0.3% 0.4% -0.5%
10:00 Germany Industrial Production s.a. w.d.a. (YoY) (Jul) 10.9% 12.5% 10.9%
10:00 Germany Industrial Production s.a. (MoM) (Jul) 0.1% 1.0% -0.6%
11:00 US MBA Mortgage Applications (Sep 3) -1.5% 2.7%


The dollar weakened as signs the U.S. recovery is waning damped demand for assets in the world’s largest economy.
Morgan Stanley cut forecasts for the dollar against the euro, citing the increasing likelihood of the Federal Reserve further easing monetary policy.
The euro will end the year at $1.36 before weakening to $1.32 in the first quarter of 2011, $1.28 in the second quarter, $1.26 in the third quarter and $1.24 in the fourth quarter, Morgan Stanley currency strategists led by Stephen Hull in London, wrote in a research report today. The bank previously forecast a decline to $1.16, then $1.12, $1.12, $1.14 and $1.17 in the following quarters.
Futures on the CME Group exchange showed a 57 percent chance the Fed will keep its target rate for overnight bank lending between zero and 0.25 percent by its June 2011 meeting, up from a 50 percent probability a month ago.
“We expect that any further easing in U.S. monetary policy is likely to benefit the euro primarily, as many of the obvious currencies to own -– commodity currencies and those with strong domestic balance sheets -– are already very expensive,” Hull wrote.
The Swiss franc reached a record against the euro and the yen advanced to a 15-year high versus the dollar and as concern that European banks will struggle amid a slowing recovery prompted investors to seek refuge.
European Central Bank Governing Council member Axel Weber said today while he doesn’t expect a recession or a deflationary spiral, policy makers “shouldn’t be tempted to call an end to the crisis.” The yen also rose on speculation the Federal Reserve’s Beige Book business survey may add to evidence the U.S. economic recovery is stalling.
“It’s a risk off day, and that reflects in the performance of haven currencies,” said Jane Foley, a senior currency strategist at Rabobank International in London. “There’s still a lot of concern about the global economy as well as the fiscal outlook and the health of the banking sector in the euro region.”
Gains in the yen were tempered after Japan’s Finance Minister Yoshihiko Noda said he is prepared to take “bold” steps on currencies if necessary.

EUR/USD: posted sesion low at $1.2660, итуащку gained to $1.2700

Offers: $1.2720, $1.2730/35, $1.2750, $1.2770/80, $1.2820
Bids: $1.2660, $1.2650, $1.2625/20, $1.2600, $1.2525/20

The dollar weakened as signs the U.S. recovery is waning damped demand for assets in the world’s largest economy.
Morgan Stanley cut forecasts for the dollar against the euro, citing the increasing likelihood of the Federal Reserve further easing monetary policy.
The euro will end the year at $1.36 before weakening to $1.32 in the first quarter of 2011, $1.28 in the second quarter, $1.26 in the third quarter and $1.24 in the fourth quarter, Morgan Stanley currency strategists led by Stephen Hull in London, wrote in a research report today. The bank previously forecast a decline to $1.16, then $1.12, $1.12, $1.14 and $1.17 in the following quarters.
Futures on the CME Group exchange showed a 57 percent chance the Fed will keep its target rate for overnight bank lending between zero and 0.25 percent by its June 2011 meeting, up from a 50 percent probability a month ago.
“We expect that any further easing in U.S. monetary policy is likely to benefit the euro primarily, as many of the obvious currencies to own -– commodity currencies and those with strong domestic balance sheets -– are already very expensive,” Hull wrote.
The Swiss franc reached a record against the euro and the yen advanced to a 15-year high versus the dollar and as concern that European banks will struggle amid a slowing recovery prompted investors to seek refuge.
European Central Bank Governing Council member Axel Weber said today while he doesn’t expect a recession or a deflationary spiral, policy makers “shouldn’t be tempted to call an end to the crisis.” The yen also rose on speculation the Federal Reserve’s Beige Book business survey may add to evidence the U.S. economic recovery is stalling.
“It’s a risk off day, and that reflects in the performance of haven currencies,” said Jane Foley, a senior currency strategist at Rabobank International in London. “There’s still a lot of concern about the global economy as well as the fiscal outlook and the health of the banking sector in the euro region.”
Gains in the yen were tempered after Japan’s Finance Minister Yoshihiko Noda said he is prepared to take “bold” steps on currencies if necessary.

EUR/USD $1.2650, $1.2790, $1.2825
USD/JPY Y83.50, Y84.00, Y84.25, Y84.80, Y85.00
EUR/JPY Y107.50
GBP/USD $1.5400, $1.5475
AUD/USD $0.9240, $0.9100, $0.8960, $0.8950

Resistance 2:Y85.10 (resistance line from Jul 14)
Resistance 1:Y84.30 (Sep 7 high)
Resistance 1:Y83.90 (session high)
Current price: Y83.72
Support 1:Y83.30 (15-years low)
Support 2:Y81.80 (low of May 1995)
Support 3:Y79.80 (historical low)

Comments: The pair posted updated new 15-year low. The nearest support - Y83.30. Below loss may extend to Y81.80. The nearest resistance - Y83.90. Above growth is possible to Y84.30 and further to Y85.10.

Resistance 3: Chf1.0220 (resistance line from Aug 11)
Resistance 2: Chf1.0180 (МА(200) for Н1)
Resistance 1: Chf1.0120 (session high)
Current price: Chf1.0081
Support 1: Chf1.0080 (session low, Sep 7 low)
Support 2: Chf1.0060 (Sep 1 low/support since March 16 2008)
Support 3: Chf0.9960 (December low)

Comments: The pair traded aropund Chf1.0100. The key support - Chf1.0060. Below loss may widen to Chf1.0030. The nearest resistance - Chf1.0120. Above is located Chf1.0170.

Resistance 3: $ 1.5580 (Aug 30 high)
Resistance 2: $ 1.5490 (session/ September 1 and 6 high)
Resistance 1: $ 1.5440 (hourly high)
Current price: $1.5431
Support 1 : $1.5340 (session low)
Support 2 : $1.5300 (Sep 7 low)
Support 3 : $1.5120 (50,0 % FIBO $1,4230-$ 1,6000)

Resistance 2: $ 1.2820 (61,2% FIBO $1.2920-$ 1.2660)
Resistance 2: $ 1.2800 (50,0% FIBO $1.2920-$ 1.2660)
Resistance 1: $ 1.2760 (31,8% FIBO $1.2920-$ 1.2660)
Сurrent price: $1.2671
Support 1 : $1.2660 (session low/Sep 1 low)
Support 2 : $1.2620 (Aug 31 low)
Support 3 : $1.2590 (Aug 24 low)

Comments: The pair is under pressure again. The nearest support - $1.2660, ahead of $1.2620. Below loss may widen to $1.2590. The nearest resistance - $1.2760. Above growth is possible to $1.2800.

- Not talking about default, but higher refinancing costs
- EMU peripheral countries on track
- Countries need to show long-term consolidation commitment

Manufacturing Production (YoY) (Jul) 4.9%
Manufacturing Production (MoM) (Jul) 0.3%
Industrial Production (YoY) (Jul) 1.9%
Industrial Production (MoM) (Jul) 0.3%

Data:
01:30 Australia Home Loans (Jul) 1.7%
05:00 Japan BoJ monthly economic report (September)

The yen rose to a 15-year high against the dollar on speculation the Federal Reserve’s Beige Book business survey will add to evidence the U.S. economic recovery is stalling.
The Fed will today release its survey of conditions in its 12 districts before officials meet to review monetary policy on Sept. 21. The U.S. jobless rate is likely to approach 10 percent in coming months as the economy fails to grow enough to employ people rejoining the labor force, according to economists.
Japan’s currency climbed versus all its major counterparts after a report showed the nation’s current-account surplus widened in July by more than economists expected, underscoring the yen’s value as a refuge in times of economic turmoil.
The euro traded near a record low against the Swiss franc before a report forecast to show German exports stagnated in July.
The Australian dollar rose toward a four-week high before a report tomorrow that may show the country added jobs for a sixth month.

EUR/USD: the pair shown high in the field of $1,2730, but then returned back to around $11,2680

GBP/USD: the pair shown high in the field of $1,5490

USD/JPY: movement of pair has been limited by frameworks Y83,30-Y83,90


At 1000GMT, German industrial output is expected to rise 1.2% m/m, +12.5% y/y.
US data starts at 1100GMT with the weekly MBA Mortgage Application Index, which is followed at 1145GMT by the weekly ICSC-Goldman Store Sales and at 1255GMT by the weekly Redbook Average. Q2 Services data follows from the US, at 1400GMT. The US Beige Book is due at 1800GMT.

EUR/USD $1.22650, $1.2790, $1.2825
USD/JPY Y83.50, Y84.00, Y84.25, Y84.80, Y85.00
EUR/JPY Y107.50
GBP/USD $1.5475
AID/USD $0.9240, $0.8960, $0.8950

Japan's benchmark stock indices ended Wednesday's session lower, weighed again by the stronger yen. The Nikkei 225 ended down 201.40 points, or 2.18%, to stand at 9024.60. The broader-based TOPIX was 13.74 points lower at 821.18. Preliminary volume in the Nikkei constituents totalled 872.2 mn shares, with 9 issues trading higher and 214 lower. A total of 2 were unchanged.

The yen reached a 15-year high against the U.S. dollar as slowing economic growth increased demand for refuge assets and Japanese officials signaled their reluctance to halt the surge in the currency.
Japan’s currency strengthened against all 16 of its most- traded counterparts as central bankers in Japan and Australia indicated that slower U.S. economic growth limits their policy options.
The euro slid the most in more than two weeks against the dollar on weaker German factory orders and after the Wall Street Journal said European stress tests for banks understated some holdings of sovereign debt in the wake of Greece’s budget crisis.
The euro slid the most in more than two weeks against the dollar as weaker German factory orders and concern that government-bond assets will hinder European banks’ fiscal health undermined the outlook for economic growth.
The German Banking Association, which said the country’s 10 biggest lenders may need another €105bn of additional capital.
The euro extended its decline after a report showed German factory orders unexpectedly fell in July. Adjusted for seasonal swings and inflation, orders declined 2.2% from June, when they surged a revised 3.6%, the Economy Ministry said today. That’s the biggest drop since February 2009. Economists forecast a 0.5% gain.

EUR/USD: on results of yesterday's session the pair fallen below a mark $1,2700

GBP/USD: the pair shown low in the field of $1,5300, but restored later

USD/JPY: the pair updated a 15-years low reached mark a Y84,50


At 1000GMT, German industrial output is expected to rise 1.2% m/m, +12.5% y/y.
US data starts at 1100GMT with the weekly MBA Mortgage Application Index, which is followed at 1145GMT by the weekly ICSC-Goldman Store Sales and at 1255GMT by the weekly Redbook Average. Q2 Services data follows from the US, at 1400GMT. The US Beige Book is due at 1800GMT.

China’s stocks rose to the highest in almost four months as speculation the government will curb overcapacity to meet energy efficiency targets fueled a rally for the nation’s biggest metal producers.

Resistance 2:Y85.10 (resistance line from Jul 14)
Resistance 1:Y84.30 (Sep 7 high)
Resistance 1:Y83.90 (session high)
Current price: Y83.92
Support 1:Y83.30 (15-years low)
Support 2:Y81.80 (low of May 1995)
Support 3:Y79.80 (historical low)

Comments: The Pair updated a 15-years low. The nearest support - Y83.30. Below loss may extend to Y81,80. The nearest resistance - Y83,90. Above growth is possible to Y84,30 and further to Y85,10.

Resistance 3: Chf1.0220 (resistance line from Aug 11)
Resistance 2: Chf1.0170 (МА(200) for Н1)
Resistance 1: Chf1.0120 (session high)
Current price: Chf1.0089
Support 1: Chf1.0080 (session low, Sep 7 low)
Support 2: Chf1.0060 (Sep 1 low)
Support 3: Chf0.9960 (low of December)

Comments: The Pair bargains in the field of Chf1,0100. The nearest support - Chf1,0080. Below loss may increase to Chf1,0060. The nearest resistance - Chf1,0120. Above is located Chf1.0170.

Resistance 3: $ 1.5470 (resistance line from Aug 16)
Resistance 2: $ 1.5420 (Sep 7 high)
Resistance 1: $ 1.5380 (session high)
Current price: $1.5376
Support 1 : $1.5340 (session low)
Support 2 : $1.5300 (Sep 7 low)
Support 3 : $1.5120 (50,0 % FIBO $1,4230-$ 1,6000)

Comments: The Pair slightly become stronger at the morning. The nearest resistance - $1.5380. Above growth is possible to $1,5420. The nearest support - $1,5340. Below loss may increase to $1,5300.

Resistance 2: $ 1.2830 (61,2% FIBO $1.2920-$ 1.2680)
Resistance 2: $ 1.2800 (50,0% FIBO $1.2920-$ 1.2680)
Resistance 1: $ 1.2770 (31,8% FIBO $1.2920-$ 1.2680)
Сurrent price: $1,2711
Support 1 : $1.2680 (session low)
Support 2 : $1.2660 (Sep 1 low)
Support 3 : $1.2620 (Aug 31 low)

Comments: The Pair receded from the low reached yesterday. The nearest resistance - $1,2770. Above growth is possible to $1,2800. The nearest support - $1,2680. Below loss may extend to $1,2660.

Change % Change Last

01:30 Australia Home Loans (Jul) 1.0% -3.9%
05:00 Japan BoJ monthly economic report (September)
06:00 Germany Trade Balance (Jul) €12.0B €12.3B
06:00 Germany Current Account (Jul) 11.5B 12.9B
08:30 UK Manufacturing Production (YoY) (Jul) 4.9% 4.1%
08:30 UK Manufacturing Production (MoM) (Jul) 0.3% 0.3%
08:30 UK Industrial Production (YoY) (Jul) 2.0% 1.3%
08:30 UK Industrial Production (MoM) (Jul) 0.4% -0.5%
10:00 Germany Industrial Production s.a. w.d.a. (YoY) (Jul) 12.5% 10.9%
10:00 Germany Industrial Production s.a. (MoM) (Jul) 1.0% -0.6%
11:00 US MBA Mortgage Applications (Sep 3) 2.7%
12:30 Canada Building Permits (MoM) (Jul) -6.0% 6.5%
13:00 Canada BoC Interest Rate Decision 1.00% 0.75%
14:00 Canada Ivey Purchasing Managers Index (Aug) 55.5 54.0
15:00 US API Crude Oil Inventories (Sep 3) -776K
19:00 US Consumer Credit (Jul) $-5.4B $-1.3B