Fundamental Headlines
• Failed Banks Weighing on FDIC – Wall Street Journal
• Japan's Economy Returns to Growth – Wall Street Journal
• China sell-off sparks move away from risk– Financial Times
• Credit tightening threatens China's 'giant Ponzi scheme'– Telegraph
• Stocks Slide on Economy Concern; Yen, Dollar, Treasuries Gain – Bloomberg
EURUSD – The Euro-Zone Trade surplus for June widened to 4.6 billion from a revised 2.1 billion as exports rose by 7.5 billion. It was the third straight month that the region posted a surplus adding to the evidence that the recession is easing. However, we did see the seasonal adjusted figure of 1.0 billion miss expectations of a 1.3 billion surplus, which could signal that the recovery may not be as robust as initial expected. Imports gaining over the month is an encouraging sign as concerns have surfaced that weak demand going forward will limit the scope of future growth. Discuss the topic and your trade ideas in the EUR/USD Forum.
GBPUSD – Rightmove LLC reported that U.K. home prices fell 2.2% in August which was the biggest drop in eight months. The sector has shown signs of improvement but this month’s set back could be a sign that banks remain reluctant to lend. Indeed, we saw the Bank of England add £50 billion to their assets purchase program as they continue to provide liquidity to the market. However, lending institutions are still repairing their balance sheets and trying to accumulate the necessary reserves to operate in the new post credit crisis environment. A regression in the housing sector could threaten an economic recovery which would put the central bank in a perilous position as they are running out of options. Discuss the topic and your trade ideas in the GBP/USD Forum.
