![]() ![]() ![]() Gold prices also suffered as Treasury yields rallied across the board, dampening the anti-fiat yellow metal. This brought Sterling’s exchange rate to its lowest since 1985. GBP/USD fell about 3.6 percent on Friday, the worst single-day outcome since March 2020 and the 2016 Brexit Referendum. The British Pound especially suffered against the US Dollar. This was the first time the government had to intervene in 24 years! This followed another status-quo Bank of Japan interest rate decision, opening the door for a divergence to continue growing between it and the Fed. Meanwhile, Japan’s government had to step in and physically intervene to prop up the Japanese Yen. And yet, markets continued to underprice how hawkish the central bank is expected to be in the coming years. The central bank didn’t just raise rates by 75 basis points, but Chair Jerome Powell basically in no uncertain terms said that the economy will have to go through some pain to get past the highest inflation in 40 years. Most of this could be traced back to the Federal Reserve. In the Asia-Pacific region, the Nikkei 225 and Hang Seng dropped 2.39% and 4.42%, respectively. Across the Atlantic Ocean, the DAX 40 and FTSE 100 fell 3.59% and 3.62%, respectively. On Wall Street, Dow Jones, S&P 500 and Nasdaq 100 futures fell about 4%, 4.6% and 4.6% respectively. Volatility remained the key theme for global stock markets this past week.
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