U.K. Nationwide home price index fell another 2.5% in December following a 0.4% decline in the previous month. Meanwhile, on an annually basis, home prices declined 15.9%, which is the biggest drop since 1991.
Fundamental Headlines • Toyota Extends Production Halt, Announces Further Output Cuts – Wall Street Journal • China Approves Deutsche Bank Joint Venture – Wall Street Journal • Hyundai offers US buy back scheme – Financial Times • Morgan Stanley Loses Ground in M&A to Moelis, Perella Boutiques – Bloomberg • Merrill’s McCann Quits After Bank of America Purchase – Bloomberg GBPUSD – The U.K. Nationwide home price index fell another 2.5% in December following a 0.4% decline in the previous month. Meanwhile, on an annually basis, home prices declined 15.9%, which is the biggest drop since 1991. Nevertheless, service-based activity in the U.K. unexpectedly improved to 40.2 from 40.1 in November, but continues to hold near the record low. The breakdown of the report shows that employment component slipped to a new record low of 40.5, versus 43.1 in previous month. Despite the up tick in services, the data continue to highlight the dire state of the U.K. economy, and conditions are likely to remain weak throughout the foreseeable future as credit conditions remain far from normal. Therefore, the Bank of England may continue to to ease policy further in order to avoid a deep and prolonged recession. Discuss the topic and your trade ideas in the GBP/USD Forum. EURUSD – The Euro-Zone CPI estimate for December fell more than expected as the annual rate of inflation slipped to a two-year low of 1.6% from 2.1% in November. As price growth falls below the ECB’s 2% target, policymakers may step up their efforts over the coming months as the risks for deflation intensify. Furthermore, the Euro-Zone services PMI was revised slightly higher to 42.1 from an initial reading of 42.0 , while the PMI reading for Germany was revised up to 46.6 from 46.4. Despite the minor improvement, the data continues to reflect a dour outlook for the euro-region, and alleviating price pressures should allow the European Central Bank to ease policy further as they carryout their one and only mandate to ensure price stability. Discuss the topic and your trade ideas in the EUR/USD Forum.