Morning Economic News - October 20, 2008

Look for a week on Wall Street driven by political news including OPEC action, improvement or lack of improvement in the credit markets and a fair amount of rumor driven volatility. Monday looks promising based on trading in Asia, where the Nikkei was up over 3.5%, the Hang Seng was up more than 5% and Australia's S&P/ASX 200 was up more than 4%. The dollar is up against the yen and down against the euro and pound as Europe continues to get its own financial house in better order with several European bank bailout plans coming together in the wake of the US plan. Oil is trading up about 2.5% on the strength of OPEC related rumors, a trend that may reverse on the release of a weak Leading Index Monday. [Trading data as of 3:50 AM Eastern Monday]

Financial Roadmap: The Week Ahead October 20 to 24, 2008

This week markets will have even more reason to focus on geopolitical
news and the details of the credit crunch as only three major US
monthly economic indicators are released and the first of those is
almost a foregone conclusion.

Housing Starts - September 2008

• Housing Starts: 817,000


• Monthly Change: Down 6.3%


• Year-to-year Change: Down 31.1%


• 1-Family Monthly Change: Down 12%

Crisis Helps Stimulate the Dollar

The dollar has benefited from the global flight from risky assets as well as the unwinding of bets made with borrowed cash.

Threat of Deflation Looms

Policy
makers navigating the U.S. through the credit crisis may have a new
concern for 2009: deflation. The risk remains slim, but a faltering
economy can set the stage for a deflationary environment.

Europeans Step Up Bank Bailout

The Netherlands will inject $13.4 billion into ING. Meanwhile, Germany
reversed course and hastily cobbled together a rescue package.

Germany to approve bank package, China growth slows

HONG KONG
(Reuters) - Germany was set to approve a rescue package for banks on
Monday and top Dutch lender ING sought an injection of government
funds, but in a reminder that no country is immune from the global
crisis, China reported weaker-than-expected growth.

White House adviser says parts of U.S. in recession

China's Growth Eases to 9%, Slowest Pace Since 2003, on Financial Turmoil China's economy, the biggest
contributor to global growth, expanded at the slowest pace in
five years as the financial crisis cut demand for exports.

South Korea's Won Gains on $130 Billion Financial Rescue; Bank Stocks Rise South Korea's won and stocks rose
after the government announced Asia's biggest financial rescue
package to open access to overseas credit markets and allay
concern of a recession.

Trichet Says Europe's Banks Are on Path to Recovery After Cash Injections European Central Bank President Jean-
Claude Trichet urged banks to start lending again after policy
makers put them ``on the path'' to recovery by pumping record
amounts of cash into money markets.

U.K. Home Prices Fall Most in Six Years as Economy Slumps, Rightmove Says U.K. house prices posted the biggest
annual decline in at least six years in October as the British
economy stared ``into the abyss,'' Rightmove Plc said.

Cullen Says New Zealand Officials Working on Bank Wholesale Guarantee Plan New Zealand officials are working on
a plan to guarantee wholesale deposits at the nation's banks,
Finance Minister Michael Cullen said.

U.K. Government Will Step Up Spending, Borrowing to Soften Economic Slump The U.K. government will step up
public spending projects and increase borrowing in a bid to curb
the country's biggest economic slump since 1991, ministers
including Chancellor of the Exchequer Alistair Darling said.