- The pound recovers after historical fall that generates panic.
- Equity markets continue to decline.
- Commodities under pressure, dollar firm.
Fear remains dominant in financial markets, keeping the dollar firm. Wall Street futures point to continued declines. The pound in the center of the scene. Sovereign bonds fall on both sides of the ocean.
Panic adds elements
In Europe the markets operate with mixed results. In the US, Dow Jones futures fell 0.58% and S&P 500 futures lost 0.69%. The weak economic outlook together with a rise in tensions keep the climate negative. Added to this was the sharp fall in the pound sterling which increased fears.
The GBP/USD hit record lows near 1.0300 before rebounding sharply. The currency began to slump following the “mini budget” announcement by Kwasi Kwarteng, the finance minister, to cut taxes and increase debt. The situation with respect to the pound generated so much fear that speculation arose about an intervention by the Bank of England and the possibility of rises in emerging interest rates.
The dollar was further favored by what is happening with the pound. DXY hit new highs in decades and remains strong, even against the yen despite the possibility of further intervention and risk aversion. USD/JPY is above 144.00.
On Sunday there were elections in Italy, where the right-wing alliance Brothers of Italy won, obtaining a majority in both chambers. Giorgia Meloni would thus become the next prime minister, who adopted a more conciliatory tone in celebrating the victory.
In the premarket, PG&E rises more than 5% after knowing on Friday that it will appear in the S&P 500 index to replace Citrix. Among the companies that will present results on Monday are Max Healthcare and Neil Industries.
The prices of Petroleum hit new lows since January before paring intraday losses. The barrel of WTI yields 0.65% and operates below $78.50. The bad economic outlook and the rise in the dollar threaten any price recovery.
You upload them in the treasury bond yields keep gold under pressure. The XAU/USD trades at $1643, after recovering from $1626, the new low for the year. The silver It is trading unchanged around $18.80. Metals in general are under pressure, as are raw materials.
Technical levels
Source: Fx Street
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