Review U.S. stocks rose, sending the Standard & Poor’s 500 Index to a four-month high, after Lennar Corp. beat analysts’ earnings estimates and International Business Machines Corp. announced a $1.7 billion takeover. Lennar gained 8.4 percent after the third-largest U.S. homebuilder by revenue topped projections as margins widened. Apple Inc. climbed 2.9 percent after Kaufman Brothers LP raised its share-price esti-mate to $374. The S&P 500 advanced 1.5 percent to 1,136.50 at 4:30 p.m. in New York, the highest since May 13.

Strategy Looking ahead, we are expecting a continuation of yes-terday’s strong rally based on positive market sentiment. We think the U.S. macroeconomic pictures showed some improvement over the last couple of weeks and we saw a strong risk appetite coming into the market. Our view is bullish for Equities and we think to-day's FOMC meeting should be closely watched in order to better assess the current U.S. macroeconomic picture. We need positive economic data to see a continuation of the recent strong uptrend. Today’s Housing Starts and Building permits may both be interest-ing leading indicators, ahead of this week’s more significant New and Existing Home Sales.

Alternative Scenario Negative fundamental news flow could lead to a break-out of 1,126.50 opening the way for a more aggressive move to Friday’s Low at 1,117.00.

Review The dollar fell against most of its major trading partners as stocks and commodities gained, boost-ing investor appetite for higher-yielding currencies. Demand for the euro was tempered by widening spreads between so-called peripheral nations’ bonds versus European benchmarks before debt auctions this week. The dollar depreciated 0.1 percent to $1.3066 per euro at 4:30 p.m. in New York, from $1.3050.

Strategy Looking ahead we are expecting a continuation of the recent uptrend mainly due to a weak dollar rather than a strong eu-ro. Today’s main focus is on the FOMC meeting that may provide interesting details about any further potential quantitative easing measures. We think Federal Reserve may buy additional treasury securities by the end of this year in order to help sustain growth and support a still weak U.S. demand. This may add some pressure to the dollar and provide some support for the euro in the short-term. We are looking at $1.3159 as a first target for today’s session.

Alternative Scenario Negative euro-zone fundamental news flow could lead to a break-out of yester-day’s low at 1.3029 opening the way for a more aggressive move to Wednesday’s low at 1.2955.

Review German government bond prices fell on Monday as markets judged last week's safe haven rally to have been overdone, but persistent worries about Ireland's fiscal deficit pushed the country's spreads to euro lifetime highs. The Irish 10-year bond yield spread rose to a new peak of 412 basis points and the Portuguese spread also hit a euro lifetime high of 387 bps, while Italian and Spanish spreads over Bunds headed back to Friday highs. The December Bund future was down 28 ticks at 129.54, from 129.82 on Friday.

Strategy Looking ahead, we are expecting continuation of yes-terday’s downtrend as we think Friday’s rally is an over-reaction to the renewed concerns about the European financial health. Our long-term view is bearish for the Bund, as we saw some macroe-conomic improvements across the U.S. and E.U. that may provide some selling pressure to the Bund in the short term. We think the magnitude of this potential sell-off may be strongly correlated with the strength of the economic data that will be released this week, starting from today’s Housing Starts and Building permits in the U.S. We think bund yields have reached their lows as the recent bearish comments about the Eurozone financial health have been priced into the markets. This may help the Bund to reach our first target at 129.08 for today’s session.

Alternative Scenario Negative fundamental news flow could lead to a break-out of the previous re-sistance at 129.77 opening the way for a more aggressive move to last week’s high at 130.79.

Review Crude oil increased for the first time in five days as the Standard & Poor’s 500 Index advanced to the highest level since May, signalling that the U.S. economic recovery will accelerate. Oil climbed 1.6 per-cent and stocks gained after Lennar Corp., the fourth-largest U.S. homebuilder, beat profit estimates and In-ternational Business Machines Corp. announced a deal to acquire Netezza Corp. Crude oil for November de-livery advanced $1.27 to settle at $76.19 a barrel on the New York Mercantile Exchange, the biggest gain since Sept. 10.

Strategy Looking ahead we are predicting a continuation of yes-terday’s uptrend as we are looking for positive economic data this week that may positively impact the oil price. We are expecting a return to positive macro-economic fundamentals, so this week’s housing data and durable good orders may dictate the oil direction in the short term.. Also, a weak dollar may continue to provide a bit of support for the crude price helping oil to reach our first target at $76.75 per barrel.

Alternative Scenario Negative fundamental news flow could lead to a break-out of yesterday’s low at $74.57 opening the way for a move to Friday’s Low at $74.10.