Buckle up, volatility should continue
Markets have hit an air pocket, with bonds in particular experiencing some extreme moves over recent days in reaction to the unfolding US regional banking situation. In our mind, the rather forceful emergency support measures unveiled yesterday by the US FDIC, Fed, and Treasury should help contain broader financial contagion risks. That said, while this should be somewhat of a short-term circuit breaker, and suggests that the scale and speed of the adjustment in some markets like bonds and the USD may be overdone, it doesn’t necessarily mean all is right in the world and that further market ructions shouldn’t...