Latest from Irwin Stelzer in The Times.

Gordon Brown is planning a final public spending spree to help pull the economy out of recession and put pressure on the Conservatives over their plans for deep cuts.

The Bank of England has been urged to increase its quantitative easing (QE) programme to a total of £225 bn - more than the gross domestic product of Greece.

Nobel Prize-winning economist Joseph E.Stiglitz says the U.S. recession is “nowhere near” an end and the economy’s third-quarter growth rate of 3.5%, the first expansion in more than a year, won’t carry into 2010.

Three new banks are to appear on Britain’s high streets as part of a major break-up of the sector to be announced by the Government this week, The Sunday Telegraph has learned.

You gotta love the Chinese. They hammer the US for rising deficits and low interest rates, but then caution that stimulus must not be removed until the economy is well and truly healed. Whatever…

• SNB buys USD/CHF, EUR/CHF, second month-end in a row
• PBOC’s Zhou: China has adopted “special Yuan policy” to deal with crisis; reforms to continue
• US consumer spending falls 0.5%; income flat; savings rate rises to 3.3%
• Canadian GDP falls 0.1% in August
• ECB’s Noyer: Currency fluctuations a concern for G7
• Chicago PMI rises to 54.2 in October from 46.1 in September
• Milwaukee PMI falls to 502 from 58; New York falls to 60.8 from 72.9
• University of Michigan consumer sentiment 70.6 in October from 73.5 in September
• Goldman Sachs forecasts nonfarm payrolls to fall 200,000 in October, more than consensus
• Citi may need to write-down $10 bln in tax-deferred assets
• Lisbon Treaty looks set for approval; Czechs won’t block
• S&P 500 falls 2.8%, Oil slides $2.90 to $77.00, Gold holds firm, at $1045

The dollar began to rebound late in the European morning after reports of SNB buying in USD/CHF helped give the dollar a lift, undermining the rebound in EUR/USD seen yesterday. The inability of the risk trade to rally in sustained fashion after a strong Chicago PMI figure helped undermine confidence and soon traders began to pick apart yesterday’s GDP data and pointed to the weak state of the consumer in today’s income and spending reports.Fears of further bank write downs helped send equities spiraling lower during the afternoon, keeping EUR/USD under pressure throughout the afternoon. Prices end the session close to 1.4698 uptrend support, the uptrend in place since last March.

JPY crosses were blasted at midday as risk appetites were severely trimmed via an uptick in volatility and fresh unwinding of risk trades, some just put back on during yesterday’s risk rebound. USD/JPY slumped to 89.93 while the crosses were even more heavily hit. EUR/JPY fell over 5.5 JPY on the day, AUD/JPY was obliterated, more than 2 JPY top to bottom, closing near 87.70. GBP/JPY fell to 147.70 from 151.70, dragging cable down to 1.6420 from above 1.6600 Thursday afternoon.

AUD/USD slumped below 0.9000 in New York afternoon with cross sales a major factor. USD/CAD rebounded to 1.0838.

Month-end illiquidity exacerbated moves today but risk appetites will likely remain subdued come Monday after very whippy price action in recent sessions. As noted earlier, markets are said to be the choppiest at tops and bottoms. so we may be seeing  dollar bottom and equity top forming for the medium-term.

Have a great Halloween, all. More treats than tricks, I hope.

EUR/USD dipped as low as 1.4710/12 as the S&P fell just over 3%, but know the gruesome twosome are making a mild comeback. The S&P is “only off 2.5% at the moment while EUR/USD has reverted to the low 1.4730s. Trend support at 1.4698 just may survive through the weekend. It rises to 1.4712 on Monday…

A really cool piece from Evans-Pritchard.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6461568/Central-banks-across-the-globe-tighten-credit-again.html

The S&P is down juts over 3% and EUR/USD has dipped through 1.4715 support. Trendline support dating back to March comes back in just below the 1.4700 level. Given that many jumped back into risk trades just yesterday, any move through trendline support could be that much more explosive.1.4710 is the low so far.

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