Earlier in the Asian trade today, currency movements gave the market a taste of what was to come in the overnight market.
Higher yielding currencies were sold in droves.
At print, the EURUSD lost 96 pips or 0.74%, the GBPUSD an even larger 234 pips or 1.58%.
EURJPY was down 262 pips or 2.03% and the GBPJPY 421 pips or 2.88%.
The Dow is tradding 221 pts or 2.72% lower.
Earlier in the day, UK Investment and Trade minister Davies said that export competitiveness via a cheaper GBP could pull the UK out of the recession, sending the GBPUSD and crosses spiralling lower.
He said the exact same thing on Friday but he was in Hong Kong. Today he is in Singapore.
You could make the same point in two different places, like holding a concert.
Again.. the market reacted. And EURGBP surged higher for the first time in days.
I guess the FX moves today pre-empted the selloff in stocks.
Being in the office staring at the interbank rates, I could almost feel risk aversion rearing its ugly head again. Just a few days ago, the NYSE CEO said the recent stock surge was not sustainable as 'real money' through the likes of pension funds are not yet back in the market.
Perhaps he is right. There will be a further stock correction coming in the next few days if so.
B0A announced better than expected earnings but this was a non-event as the market already priced in the 'good news'.
The mini bull run could very well be over.
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