Tag Archives: Volatility

The current financial market volatility increasingly reflects loss of faith in policy makers. Celebrity central bankers are learning that they must constantly produce new miracles for their followers. First, the measures implemented since 2009 created an artificial stability and an asset price boom in many markets. But the absolute rate of GDP expansion and level of price changes is inadequate to solve global debt problems. Second, new initiatives seem the risky response of clever...

With oil losing some of its euphoric oomph overnight, following the API report of a surge in US oil inventories, and a subsequent report that Iran's oil minister would skip the Doha OPEC meeting altogether, the global stock rally needed another catalyst to maintain the levitation. It got that courtesy of the return of USDJPY levitation, which has pushed the pair back above 109, the highest in over a week, as well as a boost in sentiment from the previously reported Chinese trade data where...

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke. Reportage in The Wall Street Journal on April 4th states that “A fund owned by China’s foreign-exchange regulator has been taking stakes in some of the country’s biggest banks, raising speculation that it may be a new member of the so-called ‘national team’ of investors the Chinese government unleashes to support its stock market.” Statists and interventionists around the world (read: `those who...

For Japan, the post "Shanghai Summit" world is turning ugly, fast, because as a result of the sliding dollar, a key demand of China which has been delighted by the recent dovish words and actions of Janet Yellen, both Japan's and Europe's stock markets have been sacrificed at the whims of their suddenly soaring currencies. Which is why when Japanese stocks tumbled the most in 7 weeks, sinking 3.5%, to a one month low of 16,164 (after the Yen continued strengthening and the Tankan confidence...

Following yesterday's dollar spike which topped the longest rally in the greenback in one month, the prevailing trade overnight has been more of the same, and in the last session of this holiday shortened week we have seen the USD rise for the fifth consecutive day on concerns the suddenly hawkish Fed (at least as long as the S&P is above 2000) may hike sooner than expected, which in turn has pressured WTI below $39 earlier in the session, and leading to weakness across virtually all...

Submitted by SaxoBank's Dembik Christopher via TradingFloor.com, Currency stability is a prerequisite for China's economic transition Defending the yuan is prohibitively expensive – China cannot beat the market Progressive devaluation managed by PBoC is the most probable scenario for 2016 Remember that the country is on the capitalism learning curve Exchange rates will inevitably be a key discussion point at Shanghai G20 China has moved from being a net importer to a net exporter of...

Submitted by SaxoBank's Dembik Christopher via TradingFloor.com, Currency stability is a prerequisite for China's economic transition Defending the yuan is prohibitively expensive – China cannot beat the market Progressive devaluation managed by PBoC is the most probable scenario for 2016 Remember that the country is on the capitalism learning curve Exchange rates will inevitably be a key discussion point at Shanghai G20 China has moved from being a net importer to a net exporter of...

A major turnaround in market sentiment appears unlikely in the short term, given continued concerns over growth and policy, as well as a likely poor corporate results season. Chinese equity markets experienced a substantial sell-off in early January, with the CSI 300 losing 7% on both 4 and 7 January. This sent jitters across global financial markets. The latest bout of market instability in China does not appear to have been related to any change in the country’s economic fundamentals....

It’s no secret that one of the best ways to be successful when investing in capital markets is to buy when everyone else is selling. But that doesn’t make it any easier, especially when market turbulence is coming from several sources at once. Already on edge as a result of China’s surprise devaluation in August and a potential rate hike by the Federal Reserve, investors have had to figure out how to navigate financial markets amid high levels of both volatility and uncertainty. Watch an...

Published: 15th October 2015 Download issue: The Vix, a widely used measure of equity-market volatility, was in a systemic risk regime for 15 days this year, compared with just two days in 2014 and none at all in 2013, as shown by the chart below. This year’s experience of volatility is still not extensive in a historical comparison, but it still represents a marked change from very subdued conditions in the previous two years. What explains the change? Higher market volatility at present...