- UK House Prices Contract Further: Housing prices in the UK declined 10.9% year-over-year in the three months to August, down from both the 10.7% fall expected and the 8.8% drop recorded in the three months to July, the Halifax Bank of Scotland (HBOS) said in a press release. On a monthly basis, UK house prices slipped 1.8% in August, adding to the 1.7% fall seen in the previous month, thus bringing the average price down to £174,178.

- German Factory Orders Shrink: German factory orders fell 0.7% in July on an annualized basis despite expectations of a 2.2% decline, Germany's Economic Ministry said in a report on Thursday. June had seen factory orders fall 6.0%. In monthly terms, factory orders slipped 1.7% in July. However, economists had called for a 0.3% rebound in orders' levels after the latter contracted 2.9% in June.

- HBOS Welcomes Government Housing Bailout: The HBOS press release also pointed to the UK government's recent announcement that the lowest stamp duty threshold would be raised from £125,000 to £175,000 from Sept. 3 2008 to the same time next year. "This week's announcement on stamp duty is a welcome development and will benefit a significant number of homebuyers, particularly outside the south east of England," HBOS chief economist Martin Ellis said. "Market conditions, however, will remain challenging."

- French ILO Unemployment Rate Unchanged at 7.6%: The French unemployment rate, as measured by the International Labour Organization, remained unchanged at 7.6% in the second quarter of 2008, the National Institute for Statistics and Economics Studies (INSEE) said in a press release on Thursday. Economists had expected no change to Q1's unemployment figure, which had been revised up from 7.5%. Looking only at metropolitan France, INSEE reported that the number of unemployed rose by 19,000 individuals, keeping the mainland unemployment rate steady at 7.2% as expected. The previous quarter had seen 82,000 individuals leave the ranks of the unemployed, revised down from an initial loss of 77,000.

- Italian Retail Sentiment Bounces: Italian retailers' sentiment grew more optimistic in August, as reflected in the retailers' confidence indicator rebounding to 106.5 for the month, according to the Institute for Studies and Economic Analyses (ISAE) on Thursday. July had seen the indicator fall to 98.5, revised up slightly from an initial figure of 98.4.

- Dutch Inflation Holds Steady: Dutch inflation held firm at 3.2% year-over-year in August despite expectations of a 3.1% figure, Statistics Netherlands said in a report published on Thursday. In monthly terms, the consumer price index grew 0.2%, unchanged from July's rate but higher than the 0.1% gain expected. Meanwhile, July's figure was revised up from the 0.1% initially reported.

- Risksbank Hikes As Expected: As expected, Riksbank, the Sweden's central bank, announced that it would be raising its repo rate 25 basis points to 4.75% on Thursday. In a press release published following the repo rate decision, the central bank stressed that the tightening move was necessary to prevent high levels of inflation from becoming entrenched. "A higher repo rate will mean that inflation declines and is close to the 2 per cent target within a couple of years," the press release said. The rate is expected to remain at its current level for the remainder of 2008.

- Australian Trade Deficit Widens: A gas explosion in Western Australia and July's peak in oil prices are being blamed for the lower-than-expected trade deficit released by the Australian Bureau of Statistics. The trade deficit came in at -A$717 million, lower than the forecasted A$50 million surplus. Furthermore, the deficit is steeper than the lowest estimate in the consensus of -A$500 million.

- Japan Minister of Finance Weekly Stocks & Bonds Data: The foreign purchase of Japanese stocks rose ¥131.0 billion in the week ending Aug. 29 after falling ¥215.1 billion in the previous week. Buying of bonds rose ¥439.4 billion following the previous week's ¥557.9 billion buy-up. Meanwhile, the Japanese bought ¥0.5 billion in foreign stocks following the ¥82.8 billion sold in the prior week. The Japanese also sold ¥746.5 billion in foreign bonds following the previous week's ¥1419.3 billion buy-up.

At 6:22 a.m. EDT:

The euro was down 0.11 cents to 1.4487 USD.

The U.S. dollar was down 0.12 cents to 1.0615 Canadian Dollars.

The U.S. dollar was up 7.10 cents to 108.36 Yen.

The pound sterling was up 0.27 cents to 1.7795 USD.

The Australian dollar was down 0.14 cents to 0.8346 USD.

The U.S. dollar index was down 0.40 points to 78.08.

The U.S. ten-year note was down 4.7 ticks to 116.56 with yields down 0.0 bps to 3.70%.

The German ten-year bund was up 11.0 ticks to 114.52 with yields down 1.4 bps to 4.13%.

The British ten-year gilt was up 5.0 ticks to 111.81 with yields down 0.6 bps to 4.49%.

The Australian ten-year bond was up 1.5 ticks to 94.27 with yields up 7.2 bps to 5.76%.

The Japanese ten-year government bond was up 10.0 ticks to 137.60 with yields up 5.3 bps to 1.52%.

The Eurostoxx was trading down 2.62 points to 2881.10.

The FTSE 100 was trading up 21.80 points to 5521.50.

The Dax was trading down 71.11 points to 6396.38.

The Nikkei closed down 131.93 points to 12557.66.

The Australian ASX closed down 80.50 points to 4979.50.

The Hang Seng closed down 195.58 points to 20389.48.

The Shanghai Composite closed up 0.74 points to 2277.41.

Dow Jones Futures were down 41.00 points to 11500.00.

S&P 500 Futures were down 4.75 points to 1270.50.

WTI Crude oil is up $ 0.65 to $ 110.00 per barrel.

JP Foreign Buying Japan Bonds 29-Aug +¥439.4B vs. Prior: +¥557.9B

JP Foreign Buying Japan Stocks 29-Aug +¥131.0B vs. Revised: -¥215.1B Prior: -¥214.5B

JP Japan Buying Foreign Stocks 29-Aug +¥0.5B vs. Prior: -¥82.8B

JP Japan Buying Foreign Bonds 29-Aug -¥746.5B vs. Revised: -¥1419.2B Prior: -¥1419.6

AU Trade Balance July - A$717M vs. Exp: +A$50M Revised: +A$351M Prior: +A$411M

FR ILO Unemployment Rate 2Q 7.6% vs. Exp: 7.5% Revised: 7.6% Prior: 7.5%

FR ILO Mainland Unemployment Rate 2Q 7.2% vs. Exp: 7.2% Prior: 7.2%

FR Mainland Unemployment Change (000s) 2Q +19K vs. Exp: -13K Revised: -82K Prior: -77K

SE Riksbank will announce interest rates 4.75% vs. Exp: 4.75% Prior: 4.50%

IT Retailers' Confidence General August 106.5 vs. Revised: 98.5 Prior: 98.4

IT Services Survey August +7 vs. Prior: -8

GB HBOS Plc House Prices (SA) M/M Aug -1.8% vs. Exp: -1.8% Prior: -1.7%

GB HBOS House Price 3 Months/Year Aug -10.9% vs. Exp: -10.7% Prior: -8.8%

DE Factory Orders (M/M) (SA) July -1.7% vs. Exp: +0.3% Revised: -2.6% Prior: -2.9%

DE Factory Orders (Y/Y) (NSA) July -0.7% vs. Exp: -2.2% Revised: -6.0% Prior: -6.1%

By Erik Kevin Franco, This email address is being protected from spam bots, you need Javascript enabled to view it and Todd Wailoo, This email address is being protected from spam bots, you need Javascript enabled to view it with contributions from Megan Ainscow, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it

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