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The yen sank past the psychological level of 150 to 150.8 versus the dollar, a 32-year high as yields of US Treasuries surged. The large divide in monetary policies between the Bank of Japan which is determined to not raise its ultra-low interest rates and the US Federal Reserve which has embarked on its fastest-ever hiking cycle continues to support the dollar-yen pair moving higher. Despite warning markets that it will intervene, the Bank of Japan has been rather timid so far in its intervention, a sign it is either willing to let the yen lose more value or that it has judged it does not have the resources to support the yen versus a skyrocketing dollar. 

In a warning sign of what is ahead for the UK economy, retail sales plunged 1.4% month over month and 6.9% year over year, as consumer struggle with inflation. The pound is still struggling amid signs of a slowing economy and the Bank of England is still likely to raise rates much further given persistent inflationary pressures. For forex traders, the latest macro figure makes it more difficult to make long bets on the pound sterling.

As traders hope for a change in the fiscal course to be laid out by the newly appointed UK finance minister, the pound opened the day with a gap higher. The euro is marginally up against the dollar (+0.2%) as well. Meanwhile, USDJPY is a notable exception, with the yen under pressure, trading near 148.70, a new high since 1990. The 150 level is the next round number that traders will be watching.

The dollar-Swiss franc rose above parity for the first time since mid-June, a level which it has in the past not been able to hold for very long as investors rush to buy the CHF on 'discount'. Will it be different this time? Yes and no, really it depends on the picture for the dollar, which is trading at a very elevated level as investors anticipate the Fed to continue to rapidly raise interest rates (markets price more than 1.25% higher by year-end). The Swiss franc should continue to retain its appeal as the Swiss National Bank is expected to continue to raise interest rates. The head of the SNB will speak later today, which could add volatility to the pair.

Stocks are on the rise, supported by rapidly falling government bond yields as market participants scale back bets of Fed tightening. Stocks are also supported by largely oversold technical conditions and still elevated bets of a very hawkish Fed. Today we are watching the August US job opening data, the JOLTS, for clues on whether the jobs market strength is showing signs of easing, which could strengthen the case of a Fed pivot to less tightening.