Fundamental Headlines • Fed Backs BoA Purchase of Merrill – Wall Street Journal • Daimler-Cerberus Talks on Chrysler Stake Falter – Wall Street Journal • Lehman’s Asia risk is revealed – Financial Times • Satellite Halts Hedge Fund Withdrawals, Fires 30 After Losses – Bloomberg • Former UBS Executives Repay $58.3 Million of Bonuses – Bloomberg • GBPUSD – The U.K. Nationwide home price index fell another 0.4% in November following a 1.4% decline in the previous month as credit conditions remain far from normal. The downturn in the housing market has certainly taken a toll on Europe’s second largest economy, and conditions may only get worse as banks continue to curb mortgage lending. As the U.K. heads into a recession, economic activity may remain subdued well throughout the next year, and may force the Bank of England to ease policy further in order to avoid a deep and severe downturn in the economy. Discuss the topic and your trade ideas in the GBP/USD Forum. • EURUSD – Economic confidence in the Euro-Zone slipped to 15 year low of 74.9 from 80.0 in October as market participants expect conditions to get worse next year. The dour outlook for the euro-region led business sentiment to reach its lowest level since 1993 as the index plunged to -2.14 from -1.34, while the consumer confidence ticked lower to -25 from -24. In addition, the retail PMI for the Euro-Zone fell at a record pace to 41 from 44 in October, whereas the PMI reading for Germany contracted for the sixth consecutive month as the index plunged to 41.3 from 46.7. Meanwhile, labor conditions in Germany improved more than expected as the number of unemployed workers fell another 10K in November, following a 26K decline in the previous month. The remarkable improvement in the labor market helped to keep the unemployment rate unchanged at a 16-year low of 7.5% however, employment opportunities may weaken over the coming months as demands from home and abroad deteriorate. Discuss the topic and your trade ideas in the EUR/USD Forum. • USDCHF – Employment opportunities in Switzerland increased 2.0% in the third quarter despite expectations for a 1.9% gain. Meanwhile, the employment reading for the second quarter was revised higher to 3.4% from 2.4%, which suggests that labor demands may have peaked during the first half of the year as fears of a global recession intensify. Economic conditions may weaken further throughout 2009 as the Swiss National Bank expects the economy to contract next year. Fears of a severe economic downturn led the SNB to surprise the market last week by lowering the 3-month LIBOR rate by 100bp to 1.00%, and may continue to ease policy further as the expect conditions to get worse. For more news and resources, visit the new Swiss franc Currency Room.