The inflation outlook for the Euro-Zone held steady at 0.6% in April, which is the lowest level since the euro was introduced in 1999, and the data continues to reinforce a weakening outlook for price growth as economic activity falters. Meanwhile, a separate report showed the German labor market weakened for the sixth month in April as unemployment increased another 58K during the month after rising 71K in March.
[U][B]Fundamental Headlines[/B][/U]
[I]• Chrysler Talks Falter;Chapter 11 Imminent [/I]– Wall Street Journal
[I]• Lewis Is Voted Out As Chairman of BofA[/I] – Wall Street Journal
[I]• Congress approves $3,400bn budget[/I] – Financial Times
•[I] GM Bondholders Said to Ask for Majority Stake in Counteroffer[/I] – Bloomberg
[I]• Deutsche Bank Chief Said to Remain After Deadlock [/I]– Bloomberg
[B]EURUSD[/B] – The inflation outlook for the Euro-Zone held steady at 0.6% in April, which is the lowest level since the euro was introduced in 1999, and the data continues to reinforce a weakening outlook for price growth as economic activity falters. Meanwhile, a separate report showed the German labor market weakened for the sixth month in April as unemployment increased another 58K during the month after rising 71K in March, and the downturn in employment pushed the jobless rate to 8.3% from 8.1% in the previous month. The detail of the report showed employment declined 43K in March, while the number of job vacancies is also dropping at a rapid pace. Moreover, the unemployment rate in the Euro-Zone increased for the ninth consecutive month to reach a three-year high of 8.9% in March, while the previous month’s reading was revised up to 8.7% from an initial projection of 8.5%. The data foreshadows a weakening outlook for the region as Europe’s largest economy is expected to shrink 6% this year as exports are projected to fall 23%, and firms may continue to scale back on production and employment as trade conditions falter. Discuss the topic and your trade ideas in the EUR/USD Forum.
[B]GBPUSD[/B] – The Nationwide house price index fell 0.4% in April, which was much less than the 1.2% drop expected by economists, while prices slipped 15.0% from the previous year, and the data foreshadow a dour outlook for the U.K. as households continue to face a weakening labor market paired with tightening credit conditions. As the region faces its worst economic downturn in over half a century, economic activity is likely to weakening further this year however, as the Bank of England holds the benchmark interest rate at the record-low and continues to purchase assets to jump-start the ailing economy, the extraordinary efforts should help to stem the downside risks for growth and inflation. Discuss the topic and your trade ideas in the GBP/USD Forum.
