NEWS / Foreign Exchange

Stocks and USD lower on concern about US Economic growth

Overnight News Bullets

• SZ Unemployment Rate (Oct) out at 2.6% vs. 2.5% expected. Prior at 2.5%.

• GE Trade Balance (Sep) out at 18.1B vs. 16.0B expected. Prior at 14.1B.

• JN Eco Watchers Survey (Oct): Current out at 41.5 vs. 42.9 prior. Outlook out at 43.1 vs. 46.0 prior.

• GE Current Account (Sep) out at 15.4B vs. 12.1B expected. Prior at 8.8B.

• CZ CPI MoM/YoY (Oct) out at 0.6%/4.0% vs. 0.4%/4.0% expected. Prior at -0.3%/2.8%.

• CZ Unemployment Rate (Oct) out at 5.8% vs. 5.9% expected. Prior at 6.2%.

• SW Industrial Production MoM/YoY (Sep) out at -0.6%/1.1% vs. 0.5%/2.9% expected. Prior at -0.5%/2.8%.

• UK BoE keeps rates unchanged at 5.75% as expected.

• EC ECB keeps rates unchanged at 4.00% as expected.

• CA Housing Starts (Oct) out at 219.5K vs. 228K expected. Prior at 281.3K.

• US Initial/Cont. Claims out at 317K/2579K vs. 325/2560 expected.

• CA New Housing Price Index MoM (Sep) out at 0.3% vs. 0.4% expected. Prior at 0.4%.

• US EIA Natural Gas Storage Change out at 36 vs. 30 expected. Prior at 66.

• UK Leading Indicator Index MoM (Sep) out at -0.1% vs. -0.2% prior.

• UK Coincident Indicator MoM (Sep) out 0.1% vs. 0.2% prior.

• US ICSC Chain Store Sales YoY (Oct) out at 1.6% vs. 2.0% expected. Prior at 1.7%.

• JN Industrial Production MoM/YoY (Sep F) out unchanged at -1.4%/0.8% as expected.

• JN Capacity Utilization (Sep F) out at 108.6 vs. 109.7 prior.

Markets

• FX: Further dollar weakness after Bernanke comments. GBPUSD over 2.11, EURUSD over 1.47.

• Fixed Income: US notes higher and JGBs complete second weekly gain. European bonds little changed.

• Stocks: Asian equities mixed, with Nikkei down about 1%, Hang Seng and ASX higher. American equities broadly lower with exception of S&P only up a marginal 0.07%

• Commodities: Crude prices higher with December contract again over $96 a barrel. Gold consolidates around $834 an ounce.

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week???‚¬?„?s Highlights:

What's going on?

• Federal Reserve Chairman Bernanke testified to lawmakers, acknowledging the economic expansion would cool. Speculation is reheating that further rate cuts would take place in US following 75 bp cuts over the past 2 months.

• Dollar depreciated against 13 most-traded currencies on rate cut speculation, with cable now above 2.11 and yuan heading for biggest weekly gain since 2005.

• Global equities are broadly lower on sentiment of slowing US economy, with financial in Asia leading losses. Commodity and energy stock gains balance the picture somewhat as rising commodity prices support the resource providers.

• An approaching storm in North Sea and weeks-long outage in Texas refinery pushed crude prices back to $100 a barrel trajectory, with December contract again trading over $96.

FX

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