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Sterling has hit an eight-week low against the US dollar, as EU referendum worries hit the markets
Latest: European markets are fallingPound hit by referendum fears
Introduction: Investors fret about growth and Brexit
The cost of insuring against the pound tumbling against the euro over the next month has hit a record high this morning.
Euro/sterling one-month implied volatility, derived from an option that covers the June 23 referendum date and its aftermath, hit 26.3% according to Reuters data, exceeding the previous record of around 25% hit during the global financial crisis in 2008.
The equivalent sterling/dollar one-month implied volatility also rocketed to 28.1%, close to its 2008 peak of around 29%.
UK chip-maker ARM is the biggest faller in London this morning, along with financial stocks and miners.
ARM is being hit by fears that a global downturn would hurt demand for its semiconductors, helping to drag the FTSE 100 down to a three-week low.
The markets got off to a dreadful start this Monday….
A healthy dose of drag from the Brexit-fearing banking stocks (especially Barclays and Lloyds) is adding to the FTSE 100’s losses.
This chart shows how the London stock market has dropped back to its recent lows:
#FTSE100 back around May lows pic.twitter.com/FY4lqVYqtp
The London stock market is now at its lowest level since May 20.
The FTSE 100 has lost 200 points since last Wednesday; today’s selloff, plus the heavy losses on Thursday and Friday, have wiped out the gains of the last three weeks.
As feared, European markets are falling at the start of trading.
London’s FTSE 100 has already shed 43 points, or 0.7%. There are deeper losses across the channel, with the French CAC down 1% and Germany’s DAX losing 1.2%.
Investors continue to fret over global growth with China weekend data failing to inspire and the IMF sounding the alarm (again) over a Chinese corporate debt bubble.
Anxiety persists about the risks of a UK vote to leave the EU (Brexiety?) and traders prepare themselves for a hat-trick of central bank updates this week – from the US Federal Reserve (Wednesday), the Bank of Japan and the Bank of England (both on Thursday).
The pound is sliding against other major currencies this morning, as worries about a possible Brexit take hold.
Sterling hit a two-month low against the US dollar in early trading, losing 0.5% or 0.7 of a cent to $1.4182, a drop of 0.7 of a cent.
Pound sell-off continues after #Brexit polls show Leave in the lead…Flight to safety: yen, gold, USTs higher pic.twitter.com/KGbQ4TZT0k
“Ahead of the referendum, many look for sterling to underperform and the yen and Swiss franc to outperform,”
“The euro and central and eastern European currencies are vulnerable, while risk assets, in general, are expected to weaken on a Brexit victory,.”
Asian stock markets have already suffered chunky losses overnight, with Japan’s Nikkei tumbling by 3.5%.
Worries over the global economy, and Britain’s EU referendum, also sent China’s stock market down 2% and wiped almost 1% off the Australia market.
The market opened in Asia in the same spirit as it closed on Friday: equity markets were under heavy pressure losing more than 2% across the board
Yen crushing everything in its path — dollar, euro, pound – as #brexit fears ramp up. https://t.co/uRqEXVfvAu pic.twitter.com/URp0a1kqWS
Related: Markets braced for choppy week as pound falls amid Brexit fears
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Has #Brexiety reached fever pitch yet?
If the global economy does not slide towards recession, the Fed will eventually raise rates (timidly). That’s the best-case scenario, one in which oil-sensitive currencies can gain, but China-sensitive ones will struggle.
The risk is that growth slows more sharply in China, causing capital to take fright. Pity the currencies of nations with big current account deficits then [such as the UK]. There are other dangers lurking too, like the UK referendum, the US presidential election and rising anti-European sentiment into the 2017 elections.
Austerity and underinvestment have given us offices that are cold, ugly and miserable. It’s time for a change
The most depressing office environment I have ever witnessed was in a large London bank. Having passed through so many levels of security that Fort Knox would have been envious, I finally reached the nerve centre of the organisation. Open plan. Rows upon rows of forlorn faces. A dull, putrid green decor that was, perhaps, briefly fashionable in 1986. But only briefly. It was rumoured that some staff facing each other had never exchanged words. Studying the suicide-grey workstations, I could kind of understand why. The sad lament in the 1999 film Office Space summed it up: “We don’t have a lot of time on this Earth. We weren’t meant to spend it this way!”
Related: Why British offices are the worst in the world