3-27 FXH1
Fundamental Headlines

• Treasury Maps New Era of Regulation – Wall Street Journal
• Google to Link Ads for TV, YouTube – Wall Street Journal
• Barclays stress test signals no new funds – Financial Times
• Hedge Funds, Buyout Firms Say Regulation Unstoppable – Bloomberg
• King Becomes ‘Political Football’ in Spat With Brown – Bloomberg

– The KOF leading indicator for Switzerland plunged to -1.79 in March, which is the lowest level since the series began in 1991, while the reading for February was revised slightly higher to -1.37 from an initial reading of -1.41. The data continues to highlight a weakening outlook for the Swiss economy as growth prospects deteriorate at a record pace, and conditions are likely to get worse over the year as trade conditions falter. The Swiss National Bank has slashed its interest rate close to near zero, purchased corporate bonds and intervened in currency markets in a bid to stem the risks for deflation however, as the export-driven economy faces its worst recession in over a quarter century, the outlook for growth and inflation remains bleak. For more news and resources, visit the new Swiss franc Currency Room.

EURUSD – Industrial new orders in the Euro-Zone dropped for the sixth straigh month in January as the index dropped to 3.4% from a revised reading of 8.0% in the previous month. As result, the annualized rate slipped to -34.1%, which is the largest decline since the record began in 1994, and conditions are likely to get worse as the economic downturn in the global economy intensifes. Meanwhile, ECB Nowotny noted that there are deflationary tendencies world wide, and said that there will be price drops in some European countries over the coming months, which would put further pressure on the ECB to lower the benchmark interest rate in next week as they maintain their one and only mandate to ensure price stabilty. Discuss the topic and your trade ideas in the EUR/USD Forum.

GBPUSD – The final 4Q GDP reading for the U.K. was unexpectedly revised down to -1.6% from -1.5% in the preliminary release, which marked the largest decline since 1980, while the annual rate of growth was revised to -2.0% from -1.9%. The breakdown of the report showed consumer spending was slipped to -1.0% from an initial reading of -0.7%, which is the largest decline in at least 13 years, while government spending grew 1.3% compared to 1.5% in the preliminary report, and economic conditions in the region are likely to deteriorate further as consumers continue to face falling home prices paired a weakening labor market. Furthermore, the U.K. 4Q current account deficit narrowed to GBP 7.6B and the 3Q deficit was revised down to GBP 8.2B from an initial reading of 11.0B. Meanwhile, BoE's Dale noted that economic conditions may start to improve in late 2009, but said that the risks for the economy remains decisively to the downside, and stated that more policy action may be needed as Europe’s second largest economy faces a deepening recession. In addition, BoE's Governor King warned against rising public deficits, while the central bank dove, David Balnchflower, urged the government to put further fiscal stimulus in place as growth and inflation falter. Discuss the topic and your trade ideas in the GBP/USD Forum.
3-27 FXH2