Fundamental Headlines • J.P. Morgan Sweeps WaMu Executive Suite – Wall Street Journal • Bank Lobbyists Regained Clout After Vote in House – Wall Street Journal • Hedge funds prey on rivals – Financial Times • Ainslie, Einhorn, Stock Hedge Funds Post Record Drops – Bloomberg • Toyota Has Worst Weekly Drop in 21 Years as U.S. Market Slumps – Bloomberg • GBPUSD – The U.K. Services PMI contracted for the fifth straight month, falling to a fresh record low of 46.0 from 49.2 in August. The data suggests that the downturn in Europe’s second largest economy will only get worse as services and manufacturing activity falters. Meanwhile, the BoE Housing Equity Withdrawal index slipped to -2.8B from 5.0B in the first quarter, which was the first negative reading in nearly a decade. The disappointing data suggests that credit conditions may weaken further as financial institutions continue to find themselves in troubled waters, and the downturn in the economy may last for a protracted period of time as the financial crisis spreads throughout the global economy. Market participants have already begun to speculate that the Bank of England could be forced to lower rates ahead of schedule 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. • EURUSD – Retail spending in the Euro-Zone improved, climbing to 0.3% from a revised reading of 0.1% in July. Meanwhile, on an annual basis, retail sales declined 1.8% from the previous year, signaling that economic activity may remain subdued as consumers continue to face higher living costs. Meanwhile, the Services PMI contracted for the fourth consecutive month, but was revised higher to 48.4 from a preliminary reading of 48.2. Furthermore, the PMI reading for Germany was also revised higher to 50.2 from an initial reading of 49.3. Amid the minor improvement, economic conditions have clearly deteriorate throughout the Euro-Zone, and has pushed investors to raise bets that the ECB will lower the interest rate at their next policy meeting. Discuss the topic and your trade ideas in the EUR/USD Forum. • USDCHF –The Swiss consumer price index increased 0.1% after falling 0.3% in August on the back of higher food costs. Meanwhile, the annual rate of inflation continued to hold steady at 2.9%. The data suggests that inflation may have peaked in September, and upward price pressures should ease over the coming months as commodity prices continue to pull back from their record highs. For more news and resources, visit the new Swiss franc Currency Room.
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