Why is GBP relatively strong this afternoon after plummeting earlier today as deleveraging reached insane proportions and UK economic data showed their first negative quarter of GDP in 16 years? Beats us, but we’d be willing to bet a profitable GBP short is being covered under duress to pay for a blow-up in another market. That’s what’s been driving these markets for days; margin call after margin call, hedge fund liquidation after hedge fund liquidation. Cable trades at 1.5900 from 1.5270 in London. while EUR/GBP sits at the lows of the day at 0.7925.
Even the all-knowing Bill Gross when quizzed on CNBC earlier this afternoon as to when the market will have finally delevered could only offer a waffle which equated to “I don’t know. No one does.”