[I]• Existing-Home Sales Rise; Prices Fall – Wall Street Journal
• U.K. GDP Shrinks More Than Expected – Wall Street Journal
• Asian markets cheered by US rally– Financial Times
• Blankfein Deflects Public Backlash by Paying Geithner’s Loans Back in Full – Bloomberg
• Euro Rises on Improved Confidence, Manufacturing; Stocks Gain for 10th Day – Bloomberg[/I]
[B]EURUSD [/B]– The outlook for the euro-Zone has significantly brightened as evidence by the Euro-Zone PMI and German IFO surveys. German business confidence rose to 87.3- its highest level since last October- as both current sentiment and expectations improved. Meanwhile, the manufacturing and service sectors showed that the rate of contraction has slowed with the composite PMI reading improving to 46.8 from 44.6. A reading above 50 signals growth and at the current pace we could see the mark eclipsed by the end of the year. Therefore, the ECB may signal an end to their accommodative policy and non-standard measures which could start to raise interest expectations lending support for the Euro. Discuss the topic and your trade ideas in the EUR/USD Forum.
[B]GBPUSD[/B] – The U.K. 2Q preliminary GDP reading showed that economic activity fell 0.8% which was more than double median estimates of 0.3%. The annual rate fell to -5.6% from -4.9% which was the largest contraction since record keeping began in 1955. A look at the breakdown revealed that the service sector contracted 0.6% on a quarterly basis, after a 1.6% decline for the prior three month period. Meanwhile Manufacturing output fell 0.3% compared to a contractions in excess of 5% the prior two quarters. The depth of the recession could cause the BoE to consider adding to their quantitative easing efforts which currently stand at £150 billion. Discuss the topic and your trade ideas in the GBP/USD Forum.