Biden Says U.S. Would Defend Taiwan in 'Unprecedented Attack'

Russia-Ukraine Conflict

China-U.S. Relations

Summary:

U.S. military forces would defend Taiwan if there is "an unprecedented attack", President Joe Biden said, underscoring America's commitment to the island.

Biden, speaking in a 60 Minutes interview that aired on Sunday (Sept 18), distanced himself from the question of whether Taiwan is or should be independent, but followed up with a pledge when asked by interviewer Scott Pelley if US forces would "defend the island".

"Yes, if in fact there is an unprecedented attack," he replied, according to a transcript provided by the broadcaster. Still, he reiterated earlier in the interview that the US' "One China policy" had not changed.

"We agree with what we signed onto a long time ago. And that there's One China policy, and Taiwan makes their own judgements about their independence. We are not moving. We're not encouraging their being independent," he said. "That's their decision."

Biden has made similar statements before, spurring outrage in Beijing by adding new chapters to Washington's long-standing policy of "strategic ambiguity" when it comes to Taiwan. In May, Biden said "yes" when asked if the US is prepared to become "involved militarily" if it had to. "That's the commitment we made," he said then, before White House officials walked back his comments.

A US official said on Sunday that Biden had made the same points before and stressed that US policy has not changed. The official was responding to the 60 Minutes interview on condition of anonymity.

Since Biden made his initial comments in May, tensions with China have flared after US House of Representatives Speaker Nancy Pelosi visited the island to signal support for its government and for democratic values. The White House sought to manage the potential fallout from the visit, which saw China renew its military exercises and missile launches in the Strait of Taiwan.

The US announced another round of weapons sales to Taiwan this month, totalling over US$1 billion (RM4.55 billion). "We've been adamant about being committed to Taiwan's self-defense and moving that forward," National Security Council spokesman John Kirby said last week.

The Senate Foreign Relations Committee also approved a bill last Wednesday to boost ties with Taiwan, and give it more military hardware to deter a Chinese invasion, though the final legislation will need to address White House objections if it has any chance of becoming law.

War in Ukraine

Biden also reiterated US financial commitments to Ukraine, saying the support will continue "as long as it takes".

The US has provided more than US$15 billion of aid to President Volodymyr Zelenskiy, with Biden pledging US$600 million in additional weaponry this month. The Ukrainian President on Sunday renewed his pledge to retake all Russian-controlled territory, after recent gains in Kharkiv and other regions.

Asked whether Ukraine is winning, Biden said it's "not losing the war", though the carnage and destruction make it "hard to count that as winning".

He warned President Vladimir Putin of a "consequential" response if Russia were to use chemical or tactical nuclear weapons in its war.

"It'll be consequential," Biden said. "They'll become more of a pariah in the world than they ever have been. And the extent of what they do will determine what response would occur."

Source: Bloomberg

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Daily News

【Quick Facts】

1. The Council of Heads of State of the SCO issued a statement on preserving international energy security.

2. The U.S. expands overseas M&A reviews.

3. Putin responds to concerns at the SCO summit, saying the continuing conflict is due to the unwillingness of Ukraine to negotiate.

4. Russian-led CSTO decides not to send troops after Azerbaijan and Armenia clash again.

5. Kyrgyzstan and Tajikistan shell each other at the border due to the disputed area.

6. Germany takes control of a Russian-owned oil refinery in Germany to ensure energy supply security.

【News Details】

The Council of Heads of State of the SCO issued a statement on preserving international energy security

On September 16, the Council of Heads of State of the Shanghai Cooperation Organization (SCO) issued a statement on preserving international energy security, according to China's Xinhua News Agency. The main points of the statement are as follows.

We, the leaders of the member states of the Shanghai Cooperation Organization ("SCO") - the Republic of Kazakhstan, the People's Republic of China, the Kyrgyz Republic, the Islamic Republic of Pakistan, the Russian Federation, the Republic of Tajikistan, and the Republic of Uzbekistan - emphasize that ensuring access to affordable, reliable, sustainable and modern energy for all is the Sustainable Development Goal 7 of the UN 2030 Agenda.

The U.S. expands overseas M&A reviews

The White House has urged U.S. government authorities to scrutinize overseas investments in the United States more closely. On September 15, local time, U.S. President Joe Biden signed an executive order citing five national security factors that the Committee on Foreign Investment in the United States (CFIUS) is required to take into account when reviewing foreign investments in the United States.

The White House has subdivided CFIUS's review on areas from the broad TID (technology, infrastructure, and data) in the Trump era into hot chips, biotechnology, food, and energy security in the more than two years since Biden took office, after experiencing the supply chain disruption during the pandemic and the Russia-Ukraine conflict, as well as events such as extreme weather and the food crisis.

The White House said the executive order is the first since CFIUS was established to provide formal presidential direction on the risks that should be considered in CFIUS reviews. "This Order explicitly ties CFIUS' role, actions, and capabilities with the Administration's overall national security priorities—including preserving U.S. technological leadership, protecting Americans' sensitive data, and enhancing U.S. supply chain resilience—to ensure that the United States' national security tools and objectives are consistent and mutually reinforcing."

Zhang Weihua, general counsel of United Energy Group, pointed out to Caixin that this is the first time that CFIUS is instructed by a U.S. presidential executive order on the areas and aspects to be reviewed. This is a strong and clear signal to the countries and companies involved: foreign investment in areas that compete for technology leadership and threaten U.S. technology leadership are subject to increased reviews.

Putin responds to concerns at the SCO summit, saying the continuing conflict is due to the unwillingness of Ukraine to negotiate

On September 16, the SCO Council of Heads held a summit in Samarkand, Uzbekistan.

The face-to-face meeting of 14 leaders of 8 full member states, 3 observer states, and 3 dialogue partners after the outbreak of the Russia-Ukraine conflict also became a platform for these leaders to express their positions and views of all sides on the Russia-Ukraine conflict. As a party to the conflict, Russian President Vladimir Putin also explained Russia's position in multilateral and bilateral meetings.

Turkish President Recep Tayyip Erdoğan called for the Russian-Ukrainian conflict to end "as soon as possible" during the SCO summit on Sept. 16.

Erdoğan, who has frequently mediated between Russia and Ukraine since the war began and has provided a venue for direct talks between the two countries, said he is making diplomatic efforts to end the war. "Our goal is to create a peaceful environment in the region and beyond in a spirit of aggressive diplomacy that focuses on human and humanitarian values. With this in mind, we are working through diplomatic means to end the conflict in Ukraine as soon as possible."

Russian-led CSTO decides not to send troops after Azerbaijan and Armenia clash again

Following the outbreak of an armed conflict that lasted more than 40 days in the fall of 2020, fighting has broken out again between Armenia and Azerbaijan, two former Soviet Union member states with disputed territorial sovereignty in the Caucasus.

The conflict between Armenia and Azerbaijan broke out in the early hours of September 13, the most violent escalation of the situation in two years since the ceasefire agreement reached between the two countries in 2020 around the local war in the Nagorno-Karabakh region ("NK region").

Both sides continue to disagree on the causes of the conflict. As of now, there is no sign of an agreement between the two sides. Instead, both countries accuse each other of undermining the ongoing regional peace process.

At the beginning of the current conflict, the Armenian Defense Ministry informed in the early hours of September 13 that at 00:05 local time on September 13, the Azerbaijani military "opened heavy fire on the cities of Goris, Sotk, and Jermuk using artillery, large-caliber firearms, and small arms." In addition, the ministry reported drone attacks by Azerbaijan.

A few minutes later, the Azerbaijani Defense Ministry refuted the Armenian side's claims, declaring that "the Armenian armed forces are responsible for everything that happened." According to Azerbaijan, the conflict began when Armenian forces opened artillery fire in the Dashkasan, Kalbajar, and Lachin areas near the borderline between the two countries, while "subversive groups of the Armenian armed forces" laid mines between the positions of Azerbaijani forces and along the supply line.

Kyrgyzstan and Tajikistan shell each other at the border due to the disputed area

While the SCO summit was held in Samarkand, Uzbekistan, a border firefight between two SCO members, Central Asian countries Kyrgyzstan and Tajikistan, spilled over into a large-scale conflict along the entire border between the two countries.

Two days after the conflict broke out on Sept. 14, the Kyrgyz side said on Sept. 16 that the clashes had left 24 people dead and 103 injured on the Kyrgyz side and that more than 130,000 people had been evacuated from the border area.

Tajik border forces, for their part, said Kyrgyzstan's army was shelling settlements in Tajikistan with various types of weapons and military equipment, including heavy weapons. The Tajik side has not released official figures on casualties on its side, and there are reports that one Tajik border guard was killed and several others were injured in the clashes.

Kyrgyzstan has long had border disputes and frictions with Tajikistan. The total length of the border between the two countries is more than 900 kilometers, but about half of it has not been specifically demarcated since the two countries gained independence from the Soviet Union - and about 30 percent of it is disputed by both sides. Because of the blurred border, there is sometimes friction between the two countries over water, roads, and pastures.

Germany takes control of a Russian-owned oil refinery in Germany to ensure energy supply security

Before the EU ban on Russian oil, Germany announced it was taking control of Russian oil refineries in Germany to ensure the security of energy supplies.

On September 16, the Federal Ministry for Economic Affairs and Climate Action (BMWK) announced on its official website that it had commissioned the Bundesnetzagentur to take over Rosneft's subsidiaries and corresponding refineries in Germany. The Bundesnetzagentur is the German regulator of the energy, telecommunications, postal, and rail markets.

"The takeover is in response to the imminent risks that Germany's energy supply security is currently facing," the BMWK explained, to ensure the maintenance and future normal operation of the refineries.

On the same day, German Chancellor Olaf Scholz, Vice Chancellor and Federal Minister of Economic Affairs and Climate Action Robert Habeck, and others held a joint briefing. At the briefing, Scholz said that this takeover was not done hastily, but to ensure the security of German energy supplies and to reduce dependence on Russian energy.

Rosneft responded that the German decision was "illegal" and that it was essentially an expropriation of Rosneft's equity assets, a situation deliberately created by EU sanctions and the confiscation of assets by German and Polish regulators.

【Today's Focus】

17:00 Eurozone Construction Output YoY (Jul)

22:00 U.S. NAHB Housing Market Index (Sept)

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Devin

Egypt's Suez Canal expects its annual revenue to increase by $700 million following an increase in transit fees in 2023, the canal authority's chairman told CNBC Arabia on Sunday.

Osama Rabie also said the authority is planning to list shares for 10 per cent to 15 per cent of its subsidiary Canal Mooring and Lights Company on the Egyptian stock exchange by the end of this year. It is one of eight of the authority's subsidiaries.

On Saturday, Mr Rabie said that the Suez Canal Authority will increase rates for most vessels crossing the waterway by 15 per cent, and by 10 per cent for dry bulk ships and cruise ships, starting on January 1.

The increases are due to the rise in freight rates, energy prices and time charter rates per day, the authority said.

The hike was "inevitable and a necessity" in light of global inflation that reached more than 8 per cent, "which translates into increased operational costs and the cost of the navigational services provided in the canal", Mr Rabie said in a statement on Saturday.

Average global inflation is forecast at 8.7 per cent this year, compared with 4.7 per cent last year, according to Euromonitor International.

In Egypt, urban consumer inflation rose to 14.6 per cent year-on-year in August, as it continues to struggle from the economic repercussions of the Russia-Ukraine war and soaring commodity prices.

About 10 per cent of global trade passes through the canal, a major source of foreign currency to the Arab world's most populous country.

The transit tolls were determined based on a number of factors, including the high freight rates of container ships, compared to those recorded before the Covid-19 pandemic.

The authority expects navigational lines to achieve high operational profits in 2023 in light of the continued global supply chain disruptions, congestion in ports worldwide and "the fact that shipping lines have secured long-term shipping contracts at very high rates", Mr Rabie said.

The increase in crude oil prices to more than $90 per barrel and average liquefied natural gas prices to above $30 per million thermal units have also led to a rise in the average prices of ship bunkers passing through the canal.

Daily charter rates for crude oil tankers increased on average by 88 per cent and LNG carriers by 11 per cent, compared to last year.

The Suez Canal remains the most efficient and least costly route compared to alternative routes, Mr Rabie said. It cuts the journey time between Asia and Europe by 15 days on average.

Annual revenue reached a record high of $6.3 billion in 2021 on the back of record tonnage and numbers of vessels transiting the canal.

Earlier this year, the authority raised transit fees and removed certain discounts, citing a rise in global trade and the need to expand the waterway.

Last month alone, the canal earned a revenue of nearly $745m with more than 2,120 ships passing through.

Source: The National News

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Devin

Central Bank

75bp at a minimum from the Riksbank

The 75 basis-point (bp) rate hike from the European Central Bank all but guarantees the same sized move from Sweden's Riksbank on Tuesday – and if anything it could go even more aggressively. Partly that's because the Riksbank has only one scheduled meeting left this year after this month, which is one less than most central banks. In that sense, it's got to make each one count, especially given expectations for further aggressive ECB tightening in the near term.

But more importantly, core inflation has once again exceeded the Riksbank's forecast. Core inflation came in over a percentage-point higher in August than policymakers had projected back in June.

This is coinciding with a jobs market that looks unusually tight. With low unemployment and wage growth at 3%, policymakers are focusing increasingly on the upcoming wage negotiations, which are due to lock in pay growth for the next three years. All the signs currently point to a more generous outcome for workers than the last set of negotiations in 2020.

Sweden's Riksbank to Match ECB's 75bp Rate Hike on Tuesday_1

All of that means another 75bp hike in November also looks highly likely. Most members of the committee have been vocal about the need to get inflation lower, and indeed at least one member signalled they were willing to vote for 75bp in June had there been consensus for it.

For now, the bank also seems unperturbed by signs of weakness in the Swedish housing market, with Deputy Governor Martin Floden signalling in June that the fall in retail sales and house prices is a "necessary development". Nevertheless, the housing market is highly sensitive to interest rate hikes and it's a key risk to the economic outlook, not least given households' record debt-to-income ratios. The Riksbank's last monetary policy report accepted there was a risk of an abrupt fall in prices.

That – and the fact that we expect less ECB tightening than the market – suggests there is only so far the Riksbank can hike rates this cycle. We wouldn't be surprised if, after a 75bp rate hike both this month and in November, the central bank stops there. That suggests a peak in the region of 2.25%, something we suspect the Riksbank's new rate projection due on Tuesday will probably agree with.

SEK: Riksbank impact still contained

We recently published an update on our SEK view, where we highlighted how downside risks for the krona were set to remain relatively high, and that a recovery will likely have to wait until next year given the challenges to the European economic outlook (among other reasons).

This remains our core view for the krona, regardless of our expectations for a 75bp rate hike by the Riksbank next week. This is because firstly, central bank decisions and policy messages have had a rather limited impact on EUR/SEK of late, and secondly because SEK's high beta to global risk sentiment and Europe's economic woes may keep appetite towards the krona limited for now.

Incidentally, markets are fully pricing in a 75bp rate hike by the Riksbank and this means that even on the day of the release, there may not be much room for a SEK rally. We expect EUR/SEK to stay around 10.70 in the coming weeks, with risks of retesting the 10.78 July high or even the 10.86 March high if the external environment continues to deteriorate.

Source: ING

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Samantha Luan

The puzzle facing the zinc market is whether demand or supply will fall hardest this year.

Both were down in the first half of the year, according to the latest assessment by the International Lead and Zinc Study Group (ILZSG). An estimated 3.0% drop in global usage marginally outpaced a 2.6% slide in global production of refined metal.

The figures are preliminary and subject to revision but they capture zinc's conflicting dynamics and increasingly fractured pricing.

The London Metal Exchange (LME) three-month price is currently trading around $3,080 per tonne, a long way off March's record high of $4,896, as the market prices in Chinese demand weakness and the rising prospect of European recession.

LME time-spreads, however, remain volatile due to low stocks availability and physical buyers are still paying record premiums to get hold of metal.

Demand Hit

Zinc's usage hit so far this year has come largely from China, where a troubled property sector has depressed demand for steel, including zinc-coated galvanized steel.

China's national steel production fell by 6.4% year-on-year in the first seven months of 2022, according to the World Steel Association.

Attempts to revitalise the flagging commercial construction sector are being stymied by a combination of continued rolling COVID-19 lockdowns and power rationing in drought-affected parts of the country.

Broader manufacturing activity has also taken a hit, both official and Caixin purchasing managers indices indicating a contraction in factory activity last month.

Demand fears have now spread to Europe, which seems to be facing imminent recession due to soaring power prices.

The outright zinc price mirrors the macro pressures playing out across the LME base metals complex and is in part down to shifts in fund positioning as money mangers reduce their long exposure.

Investment funds have slashed their net long zinc position from a record high of 62,744 lots in April to 29,053 as of the Sep. 9 close. Other financial institutions, a category that includes pension funds and insurance players, turned net short of zinc in June for the first time since the LME started publishing a Commitments of Traders Report in 2018.

The position has since flipped back to a small net long of 5,024 lots, but it's now a fraction of what it was at its November 2019 peak of 42,334 lots.

Low Stocks

The outright price is falling despite low exchange inventory.

LME stocks currently stand at 75,700 tonnes, down by 123,625 tonnes on the start of the year. Almost a third of the remaining tonnage is earmarked for physical load-out.

Shanghai Futures Exchange inventory has been sliding as well, hitting a fresh 2022 low of 58,407 tonnes this week.

The Shanghai forward curve is in backwardation and so too is the London market. The LME cash premium over three-month metal has eased from its June peak of $218 to $27.50 per tonne at Thursday's close but the recent heightened spread volatility can be expected to continue until inventory rebuilds in a meaningful way.

LME inventory in Europe continues to comprise a single lot at the Spanish port of Bilbao, while U.S. warehouses hold just 2,100 tonnes, all of it cancelled and due to depart.

Both regions remain gripped by acute tightness. European buyers are currently paying record premiums of over $500 per tonne on top of the LME price to secure spot units, according to Fastmarkets. That's five times more than they were paying at the start of 2021.

Supply Hit

Europe is at the epicentre of the global zinc supply hit as smelters struggle to cope with soaring power prices.

Nyrstar's 315,000-tonne-per-year Budel smelter in the Netherlands is the second to close fully after Glencore placed its Italian smelter on care and maintenance at the end of last year.

"It is clear that European smelter cuts will come deeper and sooner than we anticipated," said analysts at Citi, forecasting regional capacity utilisation will drop to 66% over the second half of this year from 83% in 2021. ("Metals Weekly", Aug. 18, 2022)

Power problems have also hit Chinese production in the last couple of weeks with temporary curtailments due to rationing in Sichuan province earlier this month.

Most of that capacity has already restarted but Chinese refined zinc production is struggling this year, down 3.3% year-on-year in the January-August period, according to Shanghai Metal Market.

Shifting Balance

Zinc's micro dynamics are shifting fast and at the moment it seems that the demand hit is outpacing the supply hit.

The global market generated a supply surplus of 27,000 tonnes in January-June, according to the ILZSG, which was expecting a significant deficit of 290,000 tonnes this year at its April meeting.

While refined production has underperformed the Group's forecast for 0.9% growth this year, demand has deviated far further from expectations. An April forecast for 1.6% growth in usage this year now looks highly optimistic given the 3.0% estimated slide over the first six months of the year.

It's the demand outlook that's weighing on the outright zinc price. But the accumulating supply problems are preventing any rebuild in exchange inventory and keeping physical supply-chains tight.

Is zinc bullish or bearish right now? The answer depends on whether you ask a futures or a physical trader.

Source: Reuters

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Winkelmann

U.S. shale drillers are struggling to meet strong demand for gas from domestic generators as well as customers in Europe and Asia scrambling for replacement supplies following Russia's invasion of Ukraine.

Working inventories in underground storage amounted to 2,771 billion cubic feet on Sept. 9, the second-lowest for the time of year since 2010, according to data from U.S. Energy Information Administration (EIA).

Storage has been below the pre-pandemic five-year average continuously since late January and the deficit has shown no sign of closing despite prices well above long-term averages.

Inventories are currently 398 billion cubic feet below the pre-pandemic average, compared with a deficit of 316 bcf at the start of the injection season on April 1 ("Weekly natural gas storage report", EIA, Sept. 15).

Electricity generation is on track for a record this year as a result of the economy's recovery from the pandemic and slightly above-average temperatures this summer.

U.S. generators are burning record volumes of gas because coal-fired units have been retired and drought has limited hydroelectric output in the western states.

Generators consumed 4,372 bcf in the first five months of 2022, the second-highest on record after January-May 2020 ("Monthly energy review", EIA, Aug. 25).

Power producers' gas combustion has been even stronger over the summer months, setting a new daily record in July ("Daily U.S. electricity generation from natural gas hit a record in mid-July", EIA, Aug. 23).

At the same time, exports are running at record rates as new LNG liquefaction terminals meet soaring demand from importers in Europe and Asia.

Approaching Winter

Persistent scarcity has forced front-month futures prices up to more than $8 per million British thermal units, more than double the seasonal average for 2011-2020, and the highest after adjusting for inflation since 2008.

In real terms, prices have been trading for most of the time since late May in the 80-85th percentiles for all months since 1990, signalling a shortage of stocks and providing a strong incentive for more production.

The one-year calendar spread has been trading in an extreme backwardation of $2.50-$4.00 per million Btus (99th-100th percentiles for all trading days since 2007) underscoring the shortage of inventories.

The number of rigs drilling for gas has risen to 166, from 106 at the start of the year and a low of just 68 during the pandemic's first wave in 2020.

Oil rigs (likely to produce some associated gas) have climbed to 591, from a pandemic low of 172, according to field services company Baker Hughes.

As a result, gas production was up by around 4% in the second quarter of 2022 compared with the same period in 2021 but it was not enough to meet strong domestic and foreign demand and rebuild depleted inventories.

As a result, stocks are vulnerable in the event of a late-season hurricane in the Gulf of Mexico, a colder than normal winter, or an ice storm in the key producing areas of Texas.

In the last 10 years, the average winter drawdown has been around 2,182 bcf with a range from 1,541 to 3,010 bcf, compared with stocks of just 2,771 at present, with roughly two months' more injections to go.

Even so, hedge funds and other money managers have become progressively less bullish and even slightly bearish on gas prices since April.

The combined position in the two major contracts on NYMEX and ICE is equivalent to a net short position of 435 billion cubic feet, a major reversal from a net long of 1,394 bcf in early April.

With prices already well above the long-term average, many portfolio managers are betting there is scope for them to retreat if winter temperatures are close to normal and there are no major output disruptions.

But the low level of inventories means there are few shock absorbers; the system will quickly come under pressure if this winter's drawdown is towards the top end of the historic range or exceeds it.

Source: Reuters

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Damon

Share markets idled in Asia on Monday as investors braced for a week littered with 13 central bank meetings that are certain to see borrowing costs rise across the globe and some risk of a super-sized hike in the United States.

Markets are already fully priced for a rise of 75 basis points from the Federal Reserve, with futures showing an 18% chance of a full percentage point.

They also show a 50-50 chance rates could soar as high as 5.0-5.25% as the Fed is forced to tip the economy into recession to subdued inflation.

"How high will the funds rate ultimately need to go?" said Jan Hatzius, chief economist Goldman Sachs.

"Our answer is high enough to generate a tightening in financial conditions that imposes a drag on activity sufficient to maintain a solidly below-potential growth trajectory."

He expects the Fed to hike by 75 basis points on Wednesday, followed by two half-point moves in November and December.

Also important will be Fed members "dot plot" forecasts for rates which are likely to be hawkish, putting the funds rate at 4-4.25% by the end of this year, and even higher next year.

That risk saw two-year Treasury yields surge 30 basis points last week alone to reach the highest since 2007 at 3.92%, so making stocks look more expensive in comparison and dragging the S&P 500 down almost 5% for the week.

Early Monday, holidays in Japan and the UK made for a slow start and S&P 500 futures were up 0.1%, while Nasdaq futures were flat.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1%, after losing almost 3% last week.

Japan's Nikkei was shut, but futures implied an index of 27,335 compared to Friday's close of 27,567.

HIKES ALL ROUND

BofA's latest fund manager survey suggests allocations to global stocks are at an all-time low.

"But with both U.S. yields and the unemployment rate headed to 4-5%, poor sentiment isn't enough to keep the S&P from making new lows for the year," warned BofA analysts in a note.

"Our suite of 38 proprietary growth indicators depict a grim outlook for global growth, yet we are staring at one of the most aggressive tightening episodes in history, with 85% of the global central banks in tightening mode."

Most of the banks meeting this week - from Switzerland to South Africa - are expected to hike, with markets split on whether the Bank of England will go by 50 or 75 basis points.

"The latest retail sales data in the UK supports our view that the economy is already in recession," said Jonathan Petersen, a senior market economist at Capital Economics.

"So, despite sterling hitting a fresh multi-decade low against the dollar this week, the relative strength of the U.S. economy suggests to us the pound will remain under pressure."

Sterling was stuck at $1.1436 having hit a 37-year trough of $1.1351 last week.

The odd man out is the Bank of Japan which has so far shown no sign of abandoning its uber-easy yield curve policy despite the drastic slide in the yen.

The dollar was steady at 142.78 yen on Monday, having backed away from the recent 24-year peak of 144.99 in the face of increasingly strident intervention warnings from Japanese policymakers.

The euro was holding at $1.1021, having edged up from its recent low of $0.9865 thanks to increasingly hawkish comments from the European Central Bank.

Against a basket of currencies, the dollar was steady at 109.60, just off a two-decade high of 110.79 touched earlier this month.

The ascent of the dollar and yields has been a drag for gold, which was hovering at $1,678 an ounce after hitting lows not seen since April 2020 last week.

Oil prices were trying to bounce on Monday, having shed around 20% so far this quarter amid concerns about demand as global growth slows.

Brent was up 60 cents at $91.95, while U.S. crude rose 55 cents to $85.66 per barrel.