European Inflation Quickens to 16-Year High; U.K. House Prices, Confidence Falter

Fundamental Headlines

GBPUSD - British home prices declined 1.7 percent from June and 8.1 percent from a year earlier, the largest drop since 1991. As the economy inched closer towards a recession, consumer confidence fell to a record low. Bank of England policy maker David Blanchflower expected “bad news” on retail sales and other indicators, suggesting that growth outlook has softened.

USDCHF - Rising energy costs bolstered inflation in July, sending the Swiss Consumer Price Index up 2.9 percent in June and up 3.1 percent from the year previous. This is the highest reading since 1991. According to a Bloomberg News survey, economists were anticipating an inflation rate of 3.0 percent, but increasing living costs are draining purchasing power. The Swiss ational Bank said last month that slowing economic growth should help curb inflation, thus the benchmark interest rate of 2.75 percent will likely remain unchanged.

EURUSD - German unemployment, in the midst of its longest decline since 1990, fell at a slower-than-recent pace as economic conditions cooled in Europe. Companies have found themselves weary of new employees, with 20,000 additional people losing jobs in July. The annualized rate sits at 7.8 percent decline, marking the July's drop the 38th decline in 40 months.

• Fed Extends Lending Programs as Threats Persist (link) - Wall Street Journal
• Trade Talks' Failure Weighs on Other Issues (link) - Wall Street Journal
• Deutsche Banks Takes Further €2.3bn Hit (link) - Financial Times
• European Inflation Quickened to 16-Year High in July (link) - Bloomberg
• Shell's Second Quarter Net Gains on Record Crude (link) - Bloomberg

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