🇬🇧 pounded hard
the british pound is at an all-time low against the dollar
last friday, chancellor kwasi kwarteng revealed uk's £45b tax cut plan, the biggest in 50 years
while the package at its core aims to boost economic growth via tax cuts, the tax cut would have to be funded by government borrowing
even the imf chimed in and "openly criticised" the uk government, as the plan is likely to fuel already-red-hot inflation and further increase inequality
one british pound bought ~$1.35 at the beginning of this year, and it now only buys $1.07 as of writing
the pound is down 20.7% against the dollar year to date, 4.8% of it coming from just the last five days
uk 10-year note vs. us 10-year note
british goverment bond prices collapsed
because bond prices and yields move in the opposite direction, the 2-year british gilt yields rose as much as 54 basis points to 4.533%, the highest since sept '08
since friday, the uk 10-year yield (3.827%) has surpassed the us 10-year yield (3.688%), signifying that the market's already pricing in the event that the uk target rate would have to undergo a series of serious hikes to combat further inflation caused by the package
will most likely talk about a backtester tomorrow!
💡 something im thinking about
that's all, folks 🐒
