US Market Summary on April1st, 2008

Dollar managed modest gains vs euro, yen in seesawing, range-bound day. Though euro nearly eclipsed its all-time high of 1.5905 by tapping 1.5897 on strong euro-zone CPI, inability to push through caused pull back. "We made a stab at the highs, but we couldn't get through, so people are bailing out," said Win Thin, senior currency strategist at Brown Brothers Harriman in New York.

FX traders taking to sidelines ahead of market-moving reports such as US ISM Manufacturing Index tonight, US payrolls Friday. Dollar also largely shrugged off improved Chicago manufacturing report; euro reached record high vs sterling on weakening UK housing prices, poor consumer confidence reports which encouraging expectations BoE will ease rates next week. Late Monday in New York, EUR/USD 1.5784 vs 1.5796 late Friday, USD/JPY 99.73 vs 99.26, GBP/USD 1.9837 vs 1.9923, EUR/JPY 157.42 vs 156.77. Treasurys gain, powered by quarter-end flows, month-end portfolio rebalancing amid worries about further write-downs from financial institutions; uptick was tempered by higher stocks, improved manufacturing data. 2-year yields off 5.6 bp at 1.62%, 10-year off 3.8 bp at 3.43%.

Stocks rose on strength of financials after Treasury Secretary Henry Paulson unveiled plan to make vast structural changes to how government monitors financial markets; Citigroup +2.8% though Merck dropped 14.7%, Schering-Plough lost 26% after a panel of cardiologists reinforced case against widespread use of Vytorin and Zetia in fighting cardiovascular disease. In late trade, Lehman Brothers down 4.7%. Dow +0.4%, Nasdaq up 0.8%, Philly semicons +1.4%. Nymex May crude down $4.04 at $101.58/bbl on possible quarter-end profit-taking; Comex June gold fell $15 to $921.50/oz on quarter-end liqidation, falls in other commodities.