Markets Hunker Down As Event Risk Minefield Looms
De-risking activities are dominating trading activity in financial markets this morning as participants brace for what could be the most momentous fortnight of the year. Treasury yields are climbing once again, with the ten-year now yielding 4.25 percent, the dollar is advancing against its major peers, and trade-sensitive currencies – like the Canadian dollar and Mexican peso – are flirting with year-to-date lows. Crude prices are down sharply after Israeli aircraft struck military targets in Iran over the weekend, avoiding any obvious harm to the country’s energy infrastructure and giving Tehran room to avoid another round of escalation. Implied volatility...