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Why volatility is bad news for investment banks Recent market volatility isn’t good news for investment banks, JPMorgan’s Kian Abouhossein and team argued, and leaves Goldman Sachs and Morgan Stanley near the bottom of their pecking order. They explain: "Although volatility is good for investment banks, recent market turmoil has led to a spike in market volatility (avg VIX +100% since 15 Aug) which poses some residual short positioning risks such as correlation. Generally ...
Markets now believe Federal Reserve won't rise rates until 2016, and this is what experts are talking about: Economists at Barclays - expectation of a Fed rate rise to the first half of next year: "Given the uncertainty around the current global outlook, the timing of the rate hike seems more uncertain than usual. Should this episode of financial market volatility prove transitory, the FOMC could raise rates in December. On the other hand, ...
"While our economist Michelle Girard thinks the Fed may disappoint on giving a “firm” signal, which would fit with their data dependent outlook, she sees a risk that the FOMC minutes begin to put a greater emphasis on the pace of hikes being gradual. A clear discussion along those lines may be a “soft signal” that an earlier start to rate hikes, giving more assurance that a gradual pace can be taken, is the preferred path of the FOMC’s majority."" ...
Longtime stock-market bull Jeremy Siegel warned that equities could be in for a correction amid a possible rate hike by the Federal Reserve next month. "The next six or seven weeks are going to be very rough," the well-known Wharton School finance professor told CNBC Monday afternoon. Jitters over a likely September rate hike combined with weaker corporate earnings due to falling oil prices, a strong dollar and seasonal weakness in late August and September ...
Bank of Tokyo-Mitsubishi (BTMU) made their fundamental forecasts for EURUSD based on some fundamental factors: "The euro weakened in July with the focus in the foreign exchange market shifting away from the uncertainty related to ‘Grexit’ and back to the monetary policy divergence between the euro-zone and the US. That should mean that the euro reverts to being the funding currency of choice." "We suspect there’s a lot more potential ...
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