Archived IMT (2008.10.09)

The correlation between equities and high yielding currencies remains extremely high, highlighted by the sharp decline in GBPUSD drops by more than a full cent to $17220 as US equities move from +1.4% to -1.0%. Same applies for Aussie and Yen crosses which lose over 2 yen across the board including USDJPY, AUDJPY to EURJPY. The ban on short sellers has proven to be no obstacle to a falling market. Now that the ban has expired today, prospects are dismal for stocks. This is the biggest Year-to-Date decline in the major equity indices in history.