U.K. Manufacturing Slips to Record Low, Service Sector Contracts - Growth Concerns Deepen
• Congress, White House Weigh Increase in Deposit Insurance – Wall Street Journal
• Central Banks Step Up Globally – Wall Street Journal
• Banking’s crisis of confidence deepens – Financial Times
• UBS Said to Eliminate 1,900 Investment Banking Jobs – Bloomberg
• Money-Market Rates May Fall; Quarter-End Funding Squeeze Eases – Bloomberg
• GBPUSD – Manufacturing activity in the U.K. contracted for the fifth consecutive month, falling to a fresh record low of 41.0 from a revised reading of 45.3 in August. Meanwhile, services sector activity faltered for the first time in six years after rising 0.2% in June, signaling that BoE could be forced to lower rates as the economic downturn continues. The data suggests that the U.K. may slip into a recession in the third quarter as the housing and credit crisis gets worse. Discuss the topic and your trade ideas in the GBP/USD Forum.
• EURUSD – The unemployment rate in the Euro-Zone increased to 7.5% from a revised reading of 7.4% in July, which suggests that the economy may fall into a recession by the end of the year. Economic activity has certainly deteriorated over the past month as the downturn in the services and manufacturing sector accelerates, and may led the ECB to lower the benchmark interest rate in the near future as growth prospects turn bleak. Meanwhile, retail spending in Germany surged to a two year high of 3.1% from a revised reading of -1.0% in July on the back of falling oil prices. However, retail sales fell 3.0% on an annual basis, which suggests that the outlook for spending remains dim as Europe’s largest economy is on the brink of a recession. Discuss the topic and your trade ideas in the EUR/USD Forum.
• USDJPY – The Tankan large manufacturers index fell for the fourth consecutive quarter to -3 from 5 in June, falling into negative territory for the first time in five years as demands from the world’s largest economy weakened further. The dour outlook for the US has also led Japanese manufacturers to lower their outlook to -4 from 4, which suggests that economic activity may remain subdued for the rest of the year. Meanwhile, the non-manufacturing index plunged to 1 from 10, with the outlook falling to -1 from 8. For more news and resources, visit the new Japanese Yen Currency Room.