JPY

Treasury markets are pausing for breath after a sell-off that drove yields to post-2007 highs, equity futures are seeing a modestly-stronger tech-powered open, and the dollar is slightly softer against its major counterparts. One-month implied volatility in the equity and currency markets remains depressed relative to history, even as the level of turbulence in Treasury markets hits elevated levels. This is reflective of the extent to which global rates are moving in sync with US yields, but also looks fragile as we move through the typical late-August lull and enter more strained global conditions in the early autumn. We rarely...

Financial markets are facing headwinds this morning from higher interest rates and a slowing Chinese economy. Equity futures are setting up for a lower open, US Treasury yields are inching lower after again challenging multi-decade highs during yesterday’s session, and commodity prices are trading sideways as markets simultaneously downgrade Chinese demand forecasts and raise stimulus expectations. Foreign exchange markets are trading on a mixed footing, with risk-sensitive currencies fighting an increase in implied volatility expectations – partly seasonal, partly rates-driven, and partly China-related – even as domestic yields play catch up with the United States North America Expectations are rising ahead...