Login ID:
Password:
Partner Login
Contact Us : 7066511911

Global equity/currency markets update: Sterling collapses as investors fly into dollars

26 Sep 2022 8:03 am
 Comments 0 Comments  |  Comments Post Comment  |  Font Size A A A 

Mumbai, 26 Sep (Commoditiescontrol): Sterling slumped to a record low on Monday, prompting speculation of an emergency response from the Bank of England, as confidence evaporated in Britain's plan to borrow its way out of trouble, with spooked investors piling in to U.S. dollars.

Broadening worry that high interest rates will hurt growth hit Asia's currencies and equities too, with exporters from Japanese carmakers to Australian miners hit hard.

The pound plunged nearly 5% at one point to $1.0327, breaking below 1985 lows. Moves were exacerbated by thinner liquidity in the Asia session, but even after stumbling back to $1.05 the currency is still down some 7% in just two sessions.

The collapse sent the dollar higher broadly and it hit multi-year peaks on the Aussie, kiwi and yuan and a new 20-year top of $0.9528 per euro.

In stocks, MSCI's broadest index of Asia-Pacific shares outside Japan was down 1% to a two-year low. It is heading for a monthly loss of 11%, the largest since March 2020. Japan's Nikkei fell 2.2%. S&P 500 futures fell 0.5%.

Last week, stocks and bonds crumbled after the United States and half a dozen other countries raised rates and projected pain ahead. Japan intervened in currency trade to support the yen. Investors lost confidence in Britain's economic management.

The Nasdaq lost more than 5% for the second week running. The S&P 500 fell 4.8%.

Gilts suffered their heaviest selling in three decades on Friday and on Monday the pound made a 37-year low at $1.0765 as investors reckon planned tax cuts will stretch government finances to the limit.

Sterling is down 11% this quarter.

Five-year gilt yields rose 94 basis points last week, by far the biggest weekly jump recorded in Refinitiv data stretching back to the mid 1980s. Treasuries tanked as well last week, with two-year yields up 35 bps to 4.2140% and benchmark 10-year yields up 25 bps to 3.6970%.

The euro wobbled to a two-decade low at $0.9660 as risks rise of war escalating in Ukraine, before steadying at $0.9686.

In Italy, a right-wing alliance led by Giorgia Meloni's Brothers of Italy party was on course for a clear majority in the next parliament, as expected. Some took heart from a middling performance by eurosceptics The League.

Oil and gold steadied after drops against the rising dollar last week. Gold hit a more-than two-year low on Friday and bought $1,643 an ounce on Monday. Brent crude futures sat at $86.29.

(By Commoditiescontrol Bureau: +91-22-40015505)


       
  Rate this story 1 out of 52 out of 53 out of 54 out of 55 out of 5 Rated
0.0

   Post comment
Comment :

Note : This forum is moderated. We reserve the right to not publish and/or edit the comment on the site, if the comment is offensive, contains inappropriate data or violates our editorial policy.
Name :  
Email :  
   

Top | Post Comment  

Latest Market Commentary
Malaysia keeps Dec CPO export duty unchanged at 8%, but...
Indonesia sets crude palm oil reference price at $824.3...
DCE OIL COMPLEX AFTERNOON CLOSING 30 NOV 2022
30 Nov 2022 20:25 MDEX/CBOT/DCE/ZCE Daily Rates Update
Veg Oil Duty Calculation - 30 Nov 2022
more
Top 5 News
Polyester yarn prices ease due to cheaper fibre, altern...
Malaysia keeps Dec CPO export duty unchanged at 8%, but...
Govt raises base import price of crude palm oil, soyoil...
Indonesia sets crude palm oil reference price at $824.3...
Basmati rice exports likely to rise on firm demand from...
Top 5 Special Reports
Mumbai Lemon Tur (Pigeon Pea) Counter-trend Decline /...
Mustard Seed (Jaipur) Inflection Point: Retesting Key...
Groundnut Oil (Rajkot) Correction Underway / Next Sup...
Desi Moong (Jaipur) Failure at Key Resistance (Rs. 7,...
Mustard Cake (Jaipur) Counter-trend Rally / Key Resis...
Copyright © CC Commodity Info Services LLP. All rights reserved.