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Pound crashes, it's jobs day and hurricane Matthew hammers Florida. Here are some of the things people in markets are talking about today.
Pound flash crash
In a two minute span in early Asia trading the pound plunged more than 6 percent, sending the currency to a new 31-year low. While the flash crash has traders baffled, the post-crash element of the trade is missing something — a full recovery to pre-crash levels. At 6:05 a.m. ET, sterling was trading at $1.2284, down almost 3 percent, adding to what has already been a very bad week for the currency.
At 8:30 a.m. ET the jobs report for September is released with economists expecting an increase in payrolls of 172,000, up from last month's 151,000. With the employment market already tightening, investors will be paying close attention to average hourly earnings, which are projected to rise 0.3 percent. With weekly jobless claims yesterday coming in at the lowest level in seven weeks, making it the longest streak below 300,000 since 1970, expectations for a Fed rate hike are already rising. The market-implied probability of a rate increase this year has climbed to 64 percent from 51 percent at the start of last week.
Millions of people in the southeastern U.S. were ordered to flee as the strongest storm since 2005 is set to hit the country. As of 5 a.m ET, the hurricane's western eyewall was approaching Cape Canaveral, according to the National Hurricane Center. Insurance companies were hit in trading yesterday ahead of the storm making landfall, while analysts used sophisticated models to calculate the amount of damage that would be inflicted as the violet weather passed through the region.
Overnight, the MSCI Asia Pacific Index lost 0.3 percent, while Japan's Topix index also dropped 0.3 percent as investors awaited payrolls data from the U.S. In Europe, the Stoxx 600 Index was down 0.9 percent at 6:14 a.m. ET as fears over more Fed tightening this year increase. The UK's FTSE Index was 1.0 percent higher, in local currency terms. S&P 500 futures retreated 0.3 percent.
Oil holds above $50
A barrel of West Texas Intermediate for November delivery was trading at $50.23 at 6:24 a.m. ET as Hurricane Matthew threatens to disrupt oil supplies in the Gulf of Mexico. The world's biggest oil company, Saudi Arabian Oil Co., is planning to sell shares in the entire business, its CEO said in an interview. The planned 5 percent listing could value the company in the trillions of dollars.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Foreigners 'horrified' by May's immigration vision.
- Goldman sees 'buying opportunity' if gold's slump gets worse.
- Bank of America says a major market change is coming.
- Jack Lew: Here's how to address America's concerns about globalisation.
- China property bubble could cause $600 billion in bad debts.
- The Bank of England used to (accidentally) kill people in the streets.
- Nobel Peace Prize awarded to Colombian President Juan Manuel Santos.