Key Event Risk Set to Reignite Currency, Capital Markets Volatility
A record high close and 9-year low in realized volatility for US equity markets this past week is drawing skepticism rather than confidence. And, important event risk ahead may settle the score.
Looking to the week ahead, we’ll probably see more data that’s coming in a bit better than it was relative to a few months ago, but only being of the ‘not so bad’ variety.
The Bank of England (BoE) Minutes are widely expected to show another 7-2 split within the Monetary Policy Committee (MPC) as the majority retains a wait-and-see approach, and the policy meeting minutes may do little to increase the appeal of the British Pound as the central bank curbs its growth and inflation forecast.
The Aussie’s good fortunes over the past week may be vulnerable to shifting as elevated volatility levels stand to detract from its yield appeal.
Gold prices are higher this week with the yellow metal rallying 1.11% to trade at $1189 ahead of the New York close on Friday.
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