“Not seeing a tsunami or an economic event coming is excusable; building something fragile to them is not.” [Nassim Nicholas Taleb] After an extended period of benign equity market conditions, February 2018 saw the return of volatility. Rather like seismologists, portfolio managers are continually monitoring for signals of a ‘financial earthquake’, but predicting the
Whilst accredited as being an old Chinese proverb, this phrase was first used by an influential British statesman, Sir Austin Chamberlain in 1936 referring to the “(G)rave injury to collective security by Germany’s violation of the Treaty of Locarno.” His quote “ It is not so long ago that a member of the Diplomatic Body
Sterling volatility has reached a six-year high as the EU referendum looms, while nearly all other volatility measures are also climbing, according to S&P Dow Jones Indices. The implied volatility of the CME/CBOE FX GBP Volatility index rose by a third compared to last month to 15.79, as the June referendum date came within the one
“A degree of volatility is okay. The market sorts things out eventually.” This was the response of the IMF’s Christine Lagarde when asked about market turmoil at January’s gathering of world leaders in Davos. Investors in current markets might be forgiven for thinking otherwise. The opening months of 2016 witnessed a brutal fall in risk
After falling to extraordinarily low levels in the middle of 2014, volatility in many of the world’s bond and currency markets has leapt in the past two months. Developed market investment grade and high yield corporate bond spreads are widening again, after the recovery from the January highs. Emerging markets are on the slide again,
