[U][B]Fundamental Headlines[/B][/U]
• [B]USDJPY [/B]– Japan’s all-industries index increased 1.2%. The index which covers a broad range of economic data, was pushed higher by spending in the services sector. It rebounded from the previous months decline.
• [B]EURUSD [/B]– German business confidence fell more than expected as the IFO index fell to 103.0 from 104.2. Tight credit market conditions, higher energy costs and a strong Euro were the culprits. However, German producer prices increased 0.8% on a monthly basis. This and ECB President Jean-Cluade Trichet recent comments that his economy faced a “more protracted” period of elevated inflation shows that he isn’t ready to follow his counterparts and lower interest rates, depite the signs that the European ecomomy is slowing.
• [B]GBPUSD [/B]– The release of the BOE minutes signaled that more rate cuts may be on their way. They stated that the housing slowdown was more pronounced than expected and that market conditions had deteriorated futher. Thus, the turmoil in the financial markets “had increased the downside risks to activity and inflation in the medium term”.
• [I]Fed’s New Rules On Mortgages Draw Hostility[/I] (link) – The Wall Street Journal
• [I] Holiday Sales at U.S. Retailers Slow While Shoppers Go Online[/I] (link) – Bloomberg
• [I]Investors stunned by ECB’s €350bn /I – Financial Times
• [I]Bank of Japan seen holding rates steady /I – Marketwatch
• [I]Trichet Says Inflation Pickup to Be ”More Protracted” [/I] (link) – Bloomberg
• [I]German Business Confidence Drops to Two-Year Low[/I] (link)– Bloomberg
