In Asian Equity Markets Japanese stocks kicked off the final week of the quarter on a negative note, as investors resumed trading after an extended weekend to markets that were dented by Japanese authorities’ currency intervention and the collapse of the British pound. The Nikkei was down 1.97 percent at the break on Monday after falling as far as 26,515.06, its lowest level since July 14. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1 percent to a two-year low. It is heading for a monthly loss of 11 percent, the largest since March 2020.

In Currency Markets the British pound hit a record low on Monday, while the euro fell to a 22-year trough as growing concerns over worsening economic conditions in Europe saw the dollar flush with safe-haven trades. The pound fell as much as 5 percent to a lifetime low of $1.0384, with doubts over the UK’s fiscal stability growing after the country announced extensive tax cuts in the face of a looming recession. The euro lost 0.5 percent to a new 22-year low of $.09643. Weakness in the pound and the euro saw the dollar index touch a new 20-year high on Monday.

In US Equity Markets the blue-chip Dow fell to its lowest level since November 2020 on Friday, but narrowly missed ending more than 20 percent below its Jan. 4 closing record high. The Dow fell 1.62 percent, to end at 29,590.41. The S&P 500 and the Nasdaq Composite, already in bear market territory, fell 1.72 percent and 1.85 percent, respectively. Heightened fears of a U.S. economic downturn next year and its impact on corporate profits has prompted brokerages to downgrade their year-end targets for the S&P 500.

In Commodities Markets oil prices fell on Friday as the U.S. dollar hit its strongest level in more than two decades and on fears rising interest rates will tip major economies into recession, cutting demand for oil. Brent futures fell 4.8 percent, to settle at $86.15 a barrel, down about 6 percent for the week. U.S. WTI crude fell 5.7 percent, to settle at $78.74, down about 7 percent for the week. Spot gold was down 1.6 percent at $1,644.04 per ounce. Spot silver declined 4.1 percent to $18.84 per ounce, while platinum lost 4.8 percent to $857.46. Palladium fell 4.8 percent to $2,065.29.

In European Equity Markets energy and material stocks sank nearly 6 percent on Friday, pushing a broader index of regional shares to near two-year lows as dismal euro zone data pointed to an economic downturn, adding to worries over hawkish central bank moves. UK stocks lost 2 percent, with further losses capped by a 3 percent decrease in the pound after British finance minister Kwasi Kwarteng announced a series of tax cuts and measures aimed at boosting growth. The pan-European STOXX 600 index fell 2.3 percent, taking weekly losses to 4.4 percent – its worst week since mid-June.

In Bond Markets two-year yields hit 15-year highs on Friday and the yield curve inversion deepened as investors fretted that central banks globally will keep tightening monetary policy to tackle soaring inflation. Two-year yields reached 4.270 percent, the highest since October 2007. Five-year yields hit 4.084 percent, the highest since November 2007 and benchmark 10-year yields jumped to 3.829 percent, the highest since April 2010. Yields on 10-year Treasury Inflation-Protected Securities (TIPS) reached 1.426 percent on Friday, the highest since February 2011.