Fundamental Headlines • European Central Banks to Offer Unlimited Dollar Short-Term Funds – Wall Street Journal • Morgan Talks With MUFG on Sweeter Terms for Deal – Wall Street Journal • Banks’ mixed response to government bail-out – Financial Times • World's Economies May Be Lucky to Escape With Worst Recession in 25 Years – Bloomberg • Renaissance Says Rogue Trader Lost $10 Million Amid Market Rout – Bloomberg • GBPUSD – The U.K. producer price index declined for the second straight month to 8.5% from a revised reding of 9.1% in August. The release came in much lower than that 8.8% estimate projected by economists, with the breakdown of the report showing a decline in 3 of the 10 components. Meanwhile, core price ticked lower to 5.4% from 5.6% amid expectations for a gain to 6.0%. The data suggests that the prices pressures may moderate over the coming months, which would allow the BoE to lower the benchmark interest rate further as Europe’s second largest economy is on the brink of a recession.Discuss the topic and your trade ideas in the GBP/USD Forum. • USDCHF – Producer and import prices in Switzerland fell 0.5% for the second consecutive month in September, and crossed the wires much weaker than the 0.3% decline projected by economists. The headline reading slipped to 3.7% from 4.0% in August, indicating that upside price pressures have diminished on the back of falling commodity prices. Cooling prices pressures suggests that the SNB may opt to switch gears and to focus on growth over the coming months as economic activity deteriorates throughout Europe. The unexpected rate cut by the central bank last week has fueled expectations for further easing in policy as the Euro-Zone, Switzerland’s biggest trading parter, teeters on the brink of a recession. For more news and resources, visit the new Swiss franc Currency Room.
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