- UK bonds are imploding
- Pound recovers some poise after historic plunge
- Bank of England reportedly expected to make a statement today
- Dollar stays in control as the sell everything mood persists
- Germany September Ifo business climate index 84.3 vs 87.0 expected
- Ifo economist: German economy is facing a recession
- ECB's de Guindos: Future rate hikes will depend on incoming data
- BOJ's Kuroda: Intervention was the appropriate move
- Japan FX intervention last week estimated to be around ¥3.6 trillion
- USD leads, GBP lags on the day
- European equities lower; S&P 500 futures down 0.7%
- US 10-year yields up 7.8 bps to 3.775%
- Gold down 0.2% to $1,639.83
- WTI crude down 0.6% to $78.24
- Bitcoin flat at $18,857
It is shaping up to be another day for the record books as sterling plunged to a record low in Asia trading against the dollar. Cable hit a low of 1.0357 (depending on your platform, but definitely under 1.0400) before hanging around 1.0500-50 levels in volatile trading ahead of the European session.
The plunge continues from last week as there is little technical support for the quid at the moment after having hit its lowest levels since 1985 at the end of last week. Talks of potential intervention by the Bank of England is at least helping to see it salvage some losses during the session as cable moved back up to above 1.0700 now - still down 0.8% on the day.
If anything, I fear that if the central bank doesn't step in or if they do and it's not as convincing, the pound is going to resume its freefall in the sessions ahead given the ongoing backdrop currently.
Elsewhere, the dollar continues to hold firmer across the board with markets maintaining a sell everything mood.
USD/JPY is slowly picking up the pieces in a push back above 144.00 after the BOJ/MOF intervention last week. EUR/USD is down 0.6% to 0.9630 again but at least off earlier lows in Asia of 0.9570.
Meanwhile, commodity currencies are also struggling with USD/CAD up 0.6% to 1.3680 and AUD/USD down 0.6% to 0.6490 as the declines continue to play out.
Equities stay under pressure with the DAX threatening fresh lows since November 2020 while US futures are also pinned lower after last week's heavy selloff. The bond market continues to suffer a rout as well with UK gilts in particular imploding. 2-year yields are up 100 bps in two days now to 4.50% in quite a stunning blowup.
All eyes now are staying on the pound and whether or not we will get that anticipated BOE statement.