The US Treasury announced the next step of the TARP programme with investments into regional banks via preferred shares. $250bn was allocated for this phase of the TARP. Various reports suggest 18 regional banks have come forward to sell stakes worth US$35bn. The Treasury has also announced that insurance companies would be next to benefit from the TARF but details of the eligibility criteria has not been confirmed.

US FOMC: We are expecting a 25bp cut when FOMC release their rate decision on Wednesday. The accompanying statement should continue to highlight downside risks to growth and acknowledge easing inflationary pressures. Don't be surprised if we see an interim cut at some stage.

JPY: Japanese asset managers continue to sell EURJPY on repatriation flows despite hitting 6.5 year lows and building up structures for further downside protection in the 6 months horizon. The Nikkei reports that the government began discussing plans yesterday to give the Financial Services Agency the power to ban short-selling whenever the financial watchdog deems it necessary as part of emergency market stabilization measures. A break of 90.90 points to further downside. Near term support seen at 91.90 and topside resistance at 94.50.

EUR: Trichet warns that annual HICP is likely to remain above 2% for some time yet, hence the lingering potential for second-round effects. However, he accepts that inflation is likely to slow in 2009. ECB Trichet says ECB may cut rates again at Nov. 6 meeting. However we think 25bp would be make little difference. If the ECB cuts at its next meeting Nov. 6 - and there is a very very high probably that it will - we believe it will cut by 50bp. German Oct Ifo: The current assessment index was 99.9 from 99.8 and a forecast 97.0. Expectations were 81.4 from 86.5 and an expected 85.0. Ifo says sureveyed firms expect weakening of exports. The expectations component is the more relevant number because it leads GDP growth. Today's number of 81.4 is very weak in comparison, even below the bottom of the 1992-93 (post-reunification) recession.

GBP: Talks of calls for emergency rate cuts are weighing on the sterling. UK PM Brown says open to new moves to ensure firms' access to funds. He says he will do 'whatever it takes' to spur banks into onward lending. He also comments that government spending is needed to speed the economy back up.

AUD: AUSTRALIA: NAB business conditions fell 10 points in Q3 to -4, the lowest since mid-2001. Near term support stands at

Gold: extended upside has to wait until sellers lurking ahead of 750 are cleared out. Support seen at 715, 695 and 670. Resistances are 755, 775 and 810.

US Today : Aug S&P Case Shiller Home Price Index, Conference Board Confidence, Former Fed Volcker speaks, Richmond Fed survey, Paulson speaks , ABC Consumer Confidence.

While global markets continue experience significant declines, we are seeing a decline in long JPY's and USD's on a relative basis. We could see the strength of the two beast's begin to soften. Although, both technically and fundamentally, the notes suggest further declines in the unknown future.

Ref: UBS

Chris

Tags: Financial Crisis