Archived IMT (2008.10.24)

FREEFALL IN FX AND EQUITY MARKETS. Sterling collapses by over 800 points (8 cents) to $1.5260, posting its biggest intraday decline since exchange rates became freely floated in 1971, reinforced by a bigger than expected 0.5% q/q decline in UK Q3 GDP, and a 0.3% y/y rise, versus expectations of a 0.2% q/q decline and below expectations. EURs decline vs USD is not as pronounced as GBP, hence the prolonged spike in EURGBP to a 2-month high of 81.00 pence from Wednesdays 77.5 pence. World equity markets are in virtual free fall, with trading on S&P500 mini contracts suspended for reaching limit down. A key reminder that the JPY is the best performer in USDJPY plunges by 7 yen to a 13-year low of 91.10 yen against the USD. US Treasuries are also rallying at their strongest in 13 years. Europn mkts drop by over 9%. Major interventions from authorities must be expected at start of trading on US Friday trading. Central bank rate cuts are not ruled out today.