Over the weekend, Bank of America's volatility experts Jason Galazidis and his team, pointed out that while US equity vol remains at historic low levels, it is not just equities where market participants are remarkably complacent, and write that both US credit & Chinese equity hedges "are pricing a world almost free of risk."
Authored by Salmon Ghouri via OilPrice.com,
Time is of the essence. If you fail to comprehend future market conditions and fail to steer the ship in the right direction, it can lead to disaster. This is what we have learned during the past few years. OPEC’s failure to understand the future market conditions and speed of technological advancements has resulted in economic setbacks.
8 years after the beginning of "Bull & Fed's Excellent Adventure", BofA's Michael Hartnett is starting to have his doubts.
The bull market catalyst - extraordinary, unprecedented central bank policies - is fading globally and the so-called "Humpty-Dumpty' Trade looms:
The Fed has hiked 2 times in past 10 years; March 15th will be the 2nd hike in 3 months and they will continue tightening until “event”
From the latest weekend notes from Eric Peters, CIO of One River Asset Management
"Some people blindly invested offshore and were in a rush to do so,” explained China’s central bank chief, justifying his recent capital controls.
“Some of this outbound investment was not in line with our own policies and had no real gain for China.” No doubt he’s right. The tycoons fleeing Chinese capital markets have done so selfishly. “So to regulate capital flows, I think it is normal,” concluded the central banker.
Looking at the most recent CFTC Commitment of Traders report, BofA makes two notable observations ahead of what may be a volatile week between the Fed's 25bps rate hike announcement on Wednesday, just hours after the Dutch General Election, and on the same day as the US debt ceiling expiration hits.