New alignments: Japanese yen
The inter connectivity of the global economy and financial system is being obvious to financial experts that understand the repo mechanism. Rising repo rates suggests strain at banks and broker dealers. Strain from exposure to Deutsche Bank's toxic book is rising fast and it's affecting the global banking system. Even high quality rate banks are paying above LIBOR and causing repo rates to rise in the US, while the headlines focus on meaningless distractions.
The fact that the Fed is getting involved shows that the liquidity crisis is spreading throughout the world. The Fed will back (bailout) US banks, but European ones, well, that's another story. European banks did not have the advantage of TARP in 2008, so all their worthless crap remains hidden in balance sheets across the continent. This should worry Europeans, because legislation passed years ago allows for confiscation of deposits rather than bailouts from the ECB or taxpayer. Europe talks about open borders, but their finances are separate, which means the invisible hand will attack the weak players rather than Europe as a whole. Targeted attacks raises questions about the sustainability of the EU that some Briton believe they can handle in loose association with it. I would not test that theory.