The convergence of Central Bank action (US Fed rate shift, Swiss currency re-valuation, China, ECB QA etc.), regulatory changes to bank capital requirements and declining bond market liquidity will bring high levels of volatility to the markets. The attached report from Bloomberg hightlights 5 structural shifts that have already impacted the Rates market and which point to heightened volatility in the next 12 months.http://ow.ly/UyLJU
1) Global Volatility; 2) Strong Dollar impact on exports; 3) no hike priced in swap curve; 4) Lockhart, Dudley & Williams wavering; 5) there's still October and December; 6) Fed can still get its way before year end; 7) inflation remains dormant.
7 compelling reasons for a Fed no show in September.