Fundamental Headlines
• U.S. Drafts Sweeping Plan to Fight Crisis As Turmoil Worsens in Credit Markets – Wall Street Journal
• SEC Issues Temporary Ban Against Short Selling – Wall Street Journal
• Stocks soar on Rescue Hopes – Financial Times
• Stocks Soar Worldwide on Bank Bailout, Short-Sales Curb; U.S. Futures Rise – Bloomberg
• Short Sellers Come Under Fire in U.S., U.K. After Collapse of Lehman, AIG – Bloomberg
• EURUSD - German producer prices pulled back from a 27 year high, falling 0.6% in August, which was slightly better than the 0.5% decline expected by economists. Meanwhile, the yearly figure slipped to 8.1% from the record high reading of 8.9%, which suggests that upward prices pressures have peaked and should moderate over the following months. Falling oil prices has helped to curb upside inflation risks for Europe’s largest economy, but after excluding energy, factory prices were still up 3.5% from last year, and remains well above the ECB’s 2% target. Slowing prices pressures suggests that the ECB may soften their hawkish bias going forward, but may continue to hold a neutral policy stance for the rest of the year as the central bank abides by their principal mandate to ensure price stability for the Euro-Zone. For more news and resources, visit our EUR/USD Forum.
• USDJPY – The leading economic index for Japan inched higher to 91.4 from 91.0 in June. Meanwhile, the coincidence increased to 103.5 from 102.4 in the previous month, which suggests that economic activity may slow further over the coming months. Rampant inflation paired with stagnant growth has certainly lowered growth expectations for the world’s second largest economy, and conditions may only get worse export demands from the global economy falters. Discuss the topic and your trade ideas in the USD/JPY Forum.
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