Swiss Jobless Rate Unexpectedly Increases, Stoking Growth Fears

Fundamental Headlines

• U.S. Weighs Backing Bank Debt – Wall Street Journal
• Wells Fargo Grabs Wachovia as Citi Walks – Wall Street Journal
• Oil demand to weaken as countries tip into recession – Financial Times
• Yamato Life Files for Bankruptcy, Citing Investments – Bloomberg
• G-7, With `Backs Against the Wall,' Weighs Loan Guarantee Plan – Bloomberg

• USDCAD - The Canadian economy added 106.9K jobs in September, which far exceeds that 10.0K gain expected by economist. The breakdown of the report showed that part-time jobs increased 69.6K, which followed by a 10.3K gain in full time positions. Meanwhile, service sector jobs increased 60.6K, while manufacturing and goods-producing positions increased 46.3K. The data suggests that firms are still reluctant to create permanent positions as the growth outlook remains highly uncertain, but the surprising increase in labor demands have certainly helped to keep the unemployment rate steady at 6.1%. Discuss the topic and your trade ideas in the USDCAD Forum.

• GBPUSD – The clash between Great Britain and Iceland has intensified after the U.K. seized the assets of Icelandic banks operating in Europe’s second largest economy in order to safeguard depositors. The U.K. Treasury ensured that all deposits held at Icelandic banks are protected as accounts in Kaupthing Singer & Friedlander and Heritable have already been transferred to ING Direct. Meanwhile, U.K. authorities are still negotiating with Icelandic regulators about protecting deposits at Icesave, a U.K.-based subsidiary of Landsbanki which is not covered by the Financial Services Compensation Scheme (FSCS). Furthermore, as U.K. deposits in Iceland are not protected under the FSCS, Prime Minister Brown threatened to ‘take further action’ against Iceland if the money is not returned, which includes freezing assets of Icelandic companies that operate within Britain. U.K.'s Chancellor Darling and his Icelandic counterpart are scheduled to attend an IMF meeting over the weekend to discuss the situation. Discuss the topic and your trade ideas in the GBP/USD Forum.

• USDCHF - The seasonally adjusted unemployment rate in Switzerland rose for the first time in five years, climbing to 2.6% from 2.5%, while the unadjusted jobless rate continued to hold steady at 2.4%. Indeed, the surprising downturn in labor market suggests that the economic activity throughout Europe have slow considerably, and conditions may only get worse as Germany and the U.K. teeter on the brink of a recession. As a result, market participants are anticipating the Swiss Nation Bank, who joined the coordinated rate cut earlier this week, to lower rates further in the months ahead as growth prospects for the global economy deteriorates. For more news and resources, visit the new Swiss franc Currency Room.

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