Markets are tumbling into more turmoil, following a year of upheaval, as deficit/debt fiscal recklessness is causing massive inflation and market turbulence. The UK Mini-Budget was the latest example of economic incompetence, releasing a budget that massively increases deficits and has no way of paying for it. Markets are awake to this, with UK Gilts spiralling, while the GBP collapsed to record lows (1.0370). Italy has just elected a new Government, which may have plans to climb out of economic black hole, but it is very deep and dark?
The Bank of Japan admitted to intervention, for the first time in 24 years, which is an attempt to address the collapse in the currency. The surging US Dollar and rising interest rates globally are hurting the Yen, while the BOJ has refused to recognise inflationary pressures and maintain negative interest rates. Can the Central Bank stand against the markets? The EUR is also suffering, plunging to 0.9550, approaching all-time record lows. This is a melt-down.
Recessionary fears and the rising reserve have also crushed the commodity currencies, with the AUD falling to 0.6440, while the NZD plunged to 0.5630. This is a bit of a US Dollar story, as the cross rates reflect the reserve surge, but underlines the market turmoil.