Looking back at the month of October in US equity markets, declines of over 13% and 16% for Dow and S&P respectively have certainly justified its notorious status. However, a near 11% gain seen in the last week amid continued commitment by global monetary authorities to pump liquidity into the system and gradual thawing of the deep freeze seen in credit markets could give investors something to cheer, particularly as sentiment of "change" kicks into high gear ahead of the US elections on Tuesday and more central banks meet to expectedly lower short term funding rates. Australia's RBA - the first central bank on the docket - is likely to lower rates by 50bps to 5.50%, according to 15 of 16 analysts surveyed by Bloomberg, with the lone dissenter calling for a 25bp cut. Monday's array of poor economic data from down under is likely to have sealed the deal for at least 50 however, with a slide of 1.1% in retail sales - a 42-month record - as well as a sharp decline in Q3 house price that follows another decline the prior quarter, suggesting that Australia may be just as susceptible to global economic malaise. European Central Bank and Bank of England are slated to follow RBA on Thursday with consensus estimates pointing to continued action in concert with the Fed for a 50bp rate cut. Analysts are unanimous in support of 50 for ECB, while 4 out of 18 surveyed see a deeper easing from the UK. The impact on currencies following this next round of coordinated rate cuts has been less consistent, however with the 10% rally seen last Wednesday was largely attributed to monetary easing, the risks could be on the upside. In fact, S&P looks to get the week started on a positive note and register a third consecutive session of gains, with 1% rally seen by mid-session trading in Asia for the front- month contract. The earnings calendar is relatively light early this week but picks up by Wednesay. Monday's pre-market notables include Sysco, OshKosh, and GoodYear Tire, while after-hours is highlighted by Anadarko Petroleum, MasterCard, and Viacom.

Asian central banks are also trading broadly higher on renewed risk appetite amid expectation of cheaper credit, with Hang Seng and S&P/ASX gaining over 5%. Japan's equity markets were closed due to Culture Day bank holiday, however Korea's Kospi traded in step with the other Asian bourses, gaining nearly 2% by mid- session. A new proposal of a fiscal stimulus announced by Korea's finance ministry was likewise encouraging buying, with over 14 trillion Won ($11 billion) allocated to reviving Asia's fourth largest economy from a global slump. Under the proposed terms, 11 trillion Won will be the result of additional government spending and 3 trillion attributed to tax cuts. 90% of capital will be appropriated to provincial and local governments for infrastructure projects, with nearly 2/3rd of spending planned to occur in the first half of 2009. Until recently, S. Korea was seen as being potentially safe from spillover from US subprime because of its banks immunity to bad debt, however the damage inflicted on consumer sector impacted export-depended Korean economy, prompting a Moody's downgrade earlier in October. According to the Finance ministry, 2009 growth was projected to slow to 3% with fiscal stimulus likely to have pushed it toward the 4% mark.

In currencies, risk aversion flow benefiting the US dollar and Japanese Yen until recently are being further reversed, with the Euro, Sterling, Aussie, Kiwi, and Swiss Franc accumulated at their expense. Economic data such as very poor retail sales and housing numbers from Australia as well as declining interest rate differential have indeed taken a backseat for the time being as risk appetite continues to dominate FX market trader sentiment. EUR/USD upheld support from Friday's upward inflection level at 1.2670, rallying as high as 1.2870 by mid-Asian trading hours. Likewise, GBP/USD failed to test Friday's lows below 1.6050, gaining broadly to test 1.63 before a moderate correction. Aussie dollar also shrugged evidence of deeper economic weakness from retail, housing, and employment data released earlier, rising as high as 0.6840, with last week's high of 0.6890 containing further upside for the time being. Meanwhile, a sell-off in the Yen relative to the declining USD has infused the Yen cross pairs against the European majors. EUR/JPY picked up over 2 big figures on the session toward the 128. 00 handle while GBP/JPY picked up over 350 pips, briefly testing 162 figure for the first time since early Asian hours trading on Friday. USD/JPY was up above 70 pips but appears to be constrained by last week's high of 99.70. Asia's emerging FX is also benefiting from carry appetite with SGD picking up 150 pips vs USD and Korean Won gapping by 0.5% in the wake of the stimulus package announcement below 1,250 in USD/KRW.

Crude oil is higher by more than 1.5% after reversing the losses seen earlier during the session. Crude currently trades above $68. 50/bbl. Over the weekend, OPEC's President noted that the cartel's recent output cuts will take a long time to lead to higher prices. These comments come as some are expecting OPEC to implement another production cut in Dec. Spot Gold is higher by more than 2% and trading above $733.50. Both crude and oil prices are tracking the declines in the USD and the gains in equities.