Just off the phone with one of our more astute contacts who tells a tale of woe like I’ve never heard. Banks are yanking credit lines to one another willy-nilly. In an age of continuously linked settlements it is as if we’ve turned the clock back twenty years or more. When credit is sparse, liquidity on the electronic systems we’ve all come to rely on is suddenly invisible. Money markets are still completely bunged up with spreads ballooning to levels usually reserved for Zimbabwean NDFs.
These are not you usual markets, folks. Unless you have very deep pockets I’d stronglt recommend retreating to the sidelines and watch the storm from the safety of a sturdy shelter.
The one flow of note this morning was talk of an “interesting” Mid-East seller above the 1.4520 level. we’d interpret interesting to mean not an active player, but someone more strategic.
