As yesterday, all the action is likely to be in the currency and gilt markets, at least initially.
The FTSE 100 closed virtually flat, up just 2.35 points, and spread betters IG Index expect a riser of 10 points or so when trading begins today.
European Opening Calls:#FTSE 7030 +0.13%#DAX 12284 +0.46%#CAC 5792 +0.40%#AEX 643 +0.45%#MIB 21345 +0.65%#IBEX 7550 +0.55%#OMX 1818 +0.35%#SMI 10106 +0.33%#STOXX 3357 +0.44%#IGOpeningCall— IGSquawk (@IGSquawk) September 27, 2022
Meanwhile the pound, which at one point hit an all time low of US$1.0348 yesterday in the wake of the badly received mini-budget on Friday, has edged up 0.3636% to US$1.0806 this morning.
A statement from the Treasury late yesterday that there would be a spending statement on 23 November and an expected but do-nothing comment from the Bank of England has hardly helped sentiment.
But many in the City believe the Bank will have to act before its next scheduled meeting at the start of November if events get out of hand.
Jim Reid of Deutshe Bank said: "Markets are still expecting an incredibly fast pace rate hikes ahead, with around 150bps priced in by the time of the next policy meeting on November 3, albeit that was down from 200bps at one point in the day."
UK gilts also had another traumatic day.
Reid said: "The country’s government bonds were completely routed for a second day, with yields on 5yr gilts up by +47.8bps to a post-2008 high of 4.52%. Bear in mind that follows on from the +51.0bps move on Friday, which itself was the largest daily rise since January 1985 when there was a 200bps rate hike, so these are not the sort of moves we’re used to seeing every day."
In the US the S&P 500 fell 1.03%, down for a 5th consecutive session to close at its lowest level so far this year while the Dow Jones Industrial Average was down 1.11%.
In Asia, trading is mixed, with the Nikkei and Shanghai Composite moving ahead but the Hang Seng lower.