Fundamental Headlines • Crisis Hits Europe's Banks As U.S. Seals Bailout Deal – Wall Street Journal • Lehman's Demise Triggered Cash Crunch Around Globe – Wall Street Journal • Goldman seeks to buy up to $50bn in assets – Financial Times • European Lenders Rescued by Authorities as U.S. Crisis Spreads – Bloomberg • Wachovia Option-ARM Mortgage Losses May Force Merger – Bloomberg • GBPUSD – U.K. mortgage approvals slipped to a fresh record low of 32K from 33K in July, signaling that the downturn in the housing market may get worse as U.K’s biggest mortgage lenders find themselves in troubled waters. Mortgage lending in August also added to growth concerns as the index plunged to 0.1B from a revised reading of 3.2B. Furthermore, consumer credit in Great Britain inched higher to 1.2B from 1.1B in July, which suggests that consumers are becoming more dependent on credit spending as they continue to face higher living costs. However, rising prices paired with mounting turmoil in the financial sector may prolong the economic downturn in Europe’s second largest economy, and the BoE could be force to act as conditions only get worse. Discuss the topic and your trade ideas in the GBP/USD Forum. • EURUSD – The economic outlook for the Euro-Zone slipped to a seven year low of 87.7 from a revised reading of 88.5 in August, which suggests that economic activity may remain subdued for the rest of the year as Germany and Spain is on the brink of a recession. Furthermore, business confidence slipped to -0.79 from -0.28, while consumer confidence continued to hold steady at -19 for the second consecutive month. Elsewhere, the Bloomberg Euro-Zone Retail PMI declined to 46.2 from 47.7 in August, while retail spending in Germany contracted for the fourth consecutive month, which strengthens the argument that Europe’s largest economy will face a recession in the second half of the year. Growth concerns for the 15 European nations have clearly accelerated, and may lead the ECB to cut rates ahead of schedule. Discuss the topic and your trade ideas in the EUR/USD Forum. • USDJPY – Retail spending in Japan slipped to 0.7% from 2.0% in the previous year as consumers continues to face higher living costs. The highest rate of inflation in a decade has clearly taken a toll on the world’s second largest economy, and conditions may only get increasingly difficult as the economy is on the brink of a recession. The slowdown in the global economy paired with fading domestic demands suggests that economic activity may remain subdued for the rest of the year. For more news and resources, visit the new Japanese Yen Currency Room.
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