The Morning Brief: It's Not Going To Be Pretty
European stocks have opened around 3% lower, NYMEX crude is below $40/barrel and Brent is now under $45/barrel - neither has been there since the post sub-prime capitulation days of late 2008/early 2009.
The overnight grains are sharply lower across the board, with soybeans paddling us back into territory that also hasn't been chartered for 6-7 years, below $9/bu on the "premium" front month.
The euro is suddenly the star of the class, benefitting from the notion that maybe the US and UK won't start to raise interest rates as early as the market expected, not against a global economic meltdown like this.
The pound is now below 1.37 versus the single currency for the first time since Jun 10. The latter is also up close to 1.15 against the dollar.
That's a potential double whammy for the Paris grains market when that opens later this morning: stocks and crude have gone for a shit, the overnight grains are sharply lower AND the euro is sharply higher (OK, that's a triple or even a quadruple whammy).
The Russian rouble has fallen to new lows against the US dollar and euro this morning as their economy is heavily reliant on revenues from oil. (Didn't I read somewhere some time back that the entire Russian budget was drawn up on the assumption that crude oil prices would average $100/barrel over the next 12 months?)
That's an interesting development as it should also mean the tax that exporters have to pay on wheat exports will now be even higher than it was last week.
I expect that the grain market will take that as only a very small crumb of comfort today though.
In the words of Ronnie Barker "Have you got any O's" to which Ronnie Corbett replies "What sort of O's? Panty Hose? Garden Hoes? Water Hose?" only to be met with "No, letter O's"
I fear that we might need some number 0's to go in the middle for London wheat this week. Still at least we don't need the 9's. Not yet anyway!