Market overview: Banks pummeled as central banks wade into FX markets

1630:Close The Footsie outperformed its European peers on Thursday, to the scant comfort of investors. A larger-than-expected cut to interest rates by the Riksbank set off furious buying in the sovereignbond space, with the yield on 10-year Gilts hitting a record low. That came alongside reported FX intervention by the BoJ and a warning from the SNB that it might cut its own rates further. Financials were again lower, with the DJ Stoxx 600 Banks index dropping sharply and shares in Credit Suisse, Socgen and StanChart to be seen near their lowest levels since the late-1980s.

Oil futures continued to drift lower despite fresh market-chatter surrounding a possible deal at OPEC to freeze production. However, that was deemed unlikely by traders so long as Iran did not sign-up to such an agreement. On the plus side, strategists from various top brokers, said different asset classes might have touched bottom or were near to doing so. Time would tell, but in the meantime technical analysts would be fixated on the S&P 500's 200-week moving average, an important level of support for markets if it held (or of resistance, if it was lost). FTSE 100 down 135.33 points to 5,536.97.

1630: Three-month copper futures dipped 0.5% to $4,469 per metric tonne on the LME.

1444: The chairman of the Swiss National Bank told business magazine Bilanz the monetary authority "rules nothing out", in reference to the possibility of further interest rate cuts.

1432: Saudi Arabia was open to freezing its oil output at current levels if Iran did so as well, Reuters reported citing sources.

1330: Three-month copper futures are down by 0.8% to $4,465.75 per metric tonne on the LME.

1228: BoJ has reportedly waded in to the FX market for the second time this week, intervening in dollar/yen at 111.25 and sending the pair immediately higher to 113.0.

1139: Banks' valuations "now look appealing" Credit Suisse strategist Andrew Garthwaite is telling clients. Among the most negatively correlated stocks to oil prices are Axa, RyanAir and NN Group, he also points out.

1004: UBS's Nick Nelson is pointing out six signs that a capitulation was taking place in the market. Those were: 1) Banks – biggest net selling for close to 5½ years; (2) biggest net selling of Italy since 2014; (3) Hedge Fund net leverage at March 2009 lows; (4) US investors have turned net sellers of Europe through ETFs; (5) highest outflows from US-based equity funds since March 2009 and (6) net selling of cyclicals has hit the highest since August last year, just ahead of the market turn.

0904: The Footsie has started the session with steep losses after yesterday's bounce on Wall Street petered out in the last hour of trading. Although Tokyo markets are closed today for a holiday, traders awoke to find the yen had continued to strengthen sharply against the US dollar - a poor omen. A larger than expected interest rate cut by Sweden's central bank may have unnerved investors, with market chatter referencing a 'race to the bottom' by the world's central banks. Ten-year sovereign bond yields were also registering large falls, with German debt yields not too far from joining those of Japan in negative territory. Oil futures are also down. FTSE 100 down 152.40 points to 5,575.90.