It’s Time To Start Worrying About FX Vol
I think it's probably time to start getting concerned about FX vol.
This morning's dovish comments from Mario Draghi ("economic outlook on the downside," "no convincing upward trend in underlying inflation," etc. etc.) sent the euro tumbling, underscoring yet again how laser focused the market is on the utterances of policymakers.
"EUR/USD drops to fresh low under 1.0600, breached tech support from the 55-DMA and is testing the week’s low near 1.0580," Bloomberg wrote, recounting the market'
I guess we should not assume that Trump understands the importance of central bank independence. Other countries have more of it but we still manage to lecture them on its virtues. If I was generous I would assume that he has been confused by the combination of fiscal stimulus and QE.
Financial markets will penalize him (us) heavily if he leans too hard on ‘Mother’ (Volcker’s term). But then his ‘base’ might just yammer for a new Chair. Yeesh.
“I guess we should not assume that Trump understands the importance of central bank independence”…
No we should not.