Pound hit by UK political crisis

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Global stocks wavered on renewed concerns about rising interest rates while the British pound slumped over the UK’s political drama.

European stocks were mixed while Wall Street went from red to green after the open as investors weighed fresh company earnings and rising bond yields.

“It’s not a good look right now in sovereign bond markets and that is making things look less pretty in global equity markets,” said Briefing.com analyst Patrick O’Hare. Sterling slid beneath $1.12 after having bounced above $1.13 Thursday following the resignation of Prime Minister Liz Truss. The yield on the British government’s 30-year bond, or gilt, climbed back above four percent on Friday as the Conservatives’ race to replace Truss went into full swing, with her divisive predecessor Boris Johnson among the potential contenders.

The dollar also strengthened further against the yen as the US central bank is expected to pursue its aggressive rate hikes while its Japanese counterpart continues its dovish stance. —INP

 

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