Fundamental Headlines • Options for Battling Crisis Narrow – Wall Street Journal • Olympics Boost China's Retailers, But Manufacturing Growth Dented – Wall Street Journal • Bank rally buoys Bourses – Financial Times • Lehman's Fuld Races to Find Buyer as Fed, Treasury Help in Quest for Deal – Bloomberg • Yen Declines as Gain in Stocks Spurs Demand for Carry Trades – Bloomberg • EURUSD - Euro-Zone employment increased 0.2% in the second quarter, while the yearly figure slipped to 1.2% from 1.6%. The employment data crossed the wires weaker than expected, and suggests that unemployment will increase throughout the second half of 2008. Meanwhile, industrial production fell more than expected, slipping to -1.7% from the previous year. Furthermore, the previous figure was revised lower to -0.8% from an initial reading of -0.5%, signaling that the slowdown in global demands has clearly taken a toll on the European economy. Fading labor demands paired with sluggish production suggests that economic activity could slow further as Germany and Spain are on the brink of a recession. For more news and resources, visit our EUR/USD Forum. • USDJPY – The Japanese economy contracted at its fastest pace in seven years, driven by a slump in domestic and foreign demands. Annualized GDP for the second quarter was revised lower to -3.0% from an initial reading of -2.4%. Meanwhile, the quarterly reading was ticked lower to -0.7% from -0.6%. Fading export demands has left the world’s second largest economy on the brink of a recession, while private-sector consumption may fall further as Japanese consumers deal with higher living costs. For more news and resources, visit the new Japanese Yen Currency Room.
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