- Resilient remains the word that best describes equity markets as we begin the week, after selected names shook off a fresh batch of distressing news and kept heading north. FDX guided lower on Friday after the close, citing higher energy costs and weak domestic demand; the name was seen recovering after opening down more than $2 in just the latest sign the markets are looking past $125 oil. MBI posted a sizable 13.03/shr loss in its first quarter this morning and saw its share price rise nearly 9% before leveling off. S reported a $505M loss and continued customer drain and was seen trading as much as +6% in morning trading before giving back some gains. ANN has surged 10% on raised guidance (but lower SSS guidance). Markets also got a boost from news that CCU trials in New York and Texas have been delayed for a day as parties to the litigation try to reach some sort of settlement. The Nasdaq was making gains in morning trading after RIMM introduced its latest Blackberry model and AAPL was cited in positive pre-market notes. In other news, markets seemed puzzled over CVC's $650M deal to acquire the Tribune Company's Newsday assets, with the name making a rapid advance and quick fall into the red in morning trading. Merrill Lynch's CFO noted that the firm has taken another $5.2B write-down onto its balance sheet since Q1, but added that some write-downs may be reversed in the future. Treasury futures were ticking lower at the open of pit trading but have since rallied. The 2-year yield is back below 2.25% while the 30-year is sub 4.50%. June traded below $124 heading into the open of floor trade but has since recovered back towards unchanged to trade back above $125.50. Silver +2% and Copper +1% futures are posting some decent gains today.

- The dollar started the European session on a firm note as dealers took notice of comments in the weekend press regarding a "possible" floor plan being worked out for the greenback. By midway through the New York morning, EUR/USD was seen rising above 1.5480 level after testing as low as 1.5363 prior to US trading. The USD shrugged off comments from the Fed' Evans, who noted that the Fed is "monitoring currency moves to see if they are feeding inflation." Dealers seem to be focusing on negative US economic comments as Evans said that US consumers were "under a lot of stress." Risk aversion was creeping back into overall sentiment. GBP/USD continued to hover around the 1.96 area after the release of UK pricing data, which came in above forecasts. The data confirmed UK press speculation that the BoE might unveil new economic forecasts this week, possibly predicting that CPI would top 3% over the next few months. The pound was broadly firmer following the inflation data. EUR/GBP off 40 pips at 7885, GBP/JPY up 240 pips at 202.70. The JPY was off its worst levels as the risk aversion theme crept back into sentiment. USD/JPY off overnight nights of 104 and moving back to 103.30 as European bourses and US equity markets drift into negative territory. Canadian Finance Minister Flaherty noted that Canada has sound economic fundamentals, but faces economic challenges from US slowdown, currency rates and aging population.