U.K. Home Prices Slip to 17 Year Low, Further Easing to Follow

Fundamental Headlines

• Borrowing Costs for Fannie Mae, Freddie Mac Are Rising Amid Debt Buyers' Jitters - Wall Street Journal
• Japan Unveils Economic Stimulus Package - Wall Street Journal
• Pension Fund Gap Hits $100B - Financial Times
• Money Rates Fall on Fed Cut, Emerging-Market Dollar Swap Lines - Bloomberg
• Deutsche Bank Posts Profit as Rules limit Writedowns - Bloomberg

EURUSD - Economic sentiment for the Euro-Zone slipped to its lowest level on record as the index plunged to 80.4 from a revised reading of 87.5 in September. A deeper look at the report showed that consumer confidence fell to -24 from -19, while sentiment among businesses declined to -1.34 from a revised reading of -0.82 in the previous month. Furthermore, the Bloomberg retail PMI for the Euro-Zone contracted for the fifth consecutive month to hold at 44.3 from 46.2, while retail activity in German ticked higher to 46.7 from 44.6. Despite mounting growth concerns for Germany, the unemployment rate fell to 7.5% from 7.6% as the number of jobless workers fell 26K from the previous month. The number of unemployed fell below the 3M level for the first time in 16 years, which suggests that economic activity may hold up amid increased fears of a global recession.

GBPUSD - The U.K.'s Nationwide home price index fell to its lowest level in 17 years as property values declined another 1.4% in October. The lack of recovery in the housing sector paired with the repercussion effects of the credit crunch suggests that conditions may only get worse as Europe's second largest economy slips into a recession, and has raised speculation that the Bank of England will ease policy further over the coming week to avoid further downturns in the economy.

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